Block Inc. Earnings Preview Shows Potential Profit Pressure
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Nov 05 2024
0mins
Should l Buy XYZ?
Block Inc. shares fell 5.02% as it crossed below the 5-day SMA amid broader market declines.
Analysts forecast Block, Inc. to report earnings of 49 cents per share for Q4 2025, down from 71 cents in the same quarter last year, indicating potential pressure on profitability that may affect investor confidence. Despite this, the company is expected to report quarterly revenue of $6.32 billion, reflecting nearly a 5% year-over-year increase, suggesting that despite the earnings decline, Block maintains a certain level of revenue growth that could attract long-term investors. Additionally, short interest in Block fell slightly, indicating a neutral to positive market sentiment that may provide support for the stock price.
The upcoming earnings report on February 26, 2026, will be crucial for Block Inc. as it navigates these challenges. Investors will be closely watching the results to gauge the company's ability to sustain revenue growth while addressing profitability concerns.
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Analyst Views on XYZ
Wall Street analysts forecast XYZ stock price to rise
30 Analyst Rating
25 Buy
3 Hold
2 Sell
Strong Buy
Current: 51.940
Low
55.00
Averages
86.51
High
108.00
Current: 51.940
Low
55.00
Averages
86.51
High
108.00
About XYZ
Block, Inc. builds technology to increase access to the global economy. The Company operates through two segments: Square and Cash App. The Square includes managed payment services, software solutions, hardware, and financial services offered to sellers, excluding those that involve Cash App. The Cash App segment includes the financial tools available to individuals within the mobile Cash App, including peer-to-peer payments, bitcoin and stock investments. The Cash App also includes Cash App Card, which is linked to customer stored balances that customers can use to pay for purchases or withdraw funds from an ATM. Cash App also includes the BNPL platform. Its Afterpay business is transforming the way customers manage their spending over time. Its TIDAL business is a music platform that empowers artists to thrive as entrepreneurs. Its Bitkey business is a simple self-custody wallet built for bitcoin. Proto business is a suite of bitcoin mining products and services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Financial Performance Boost: In Q4, Block generated $2.87 billion in gross profit, a 24% year-over-year increase, with total gross profit for the year reaching $10.36 billion, reflecting a 17% growth, indicating ongoing improvements in revenue growth and profitability.
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- Financial Performance Boost: In Q4, Block generated $2.87 billion in gross profit, a 24% year-over-year increase, with total gross profit for the year reaching $10.36 billion, reflecting a 17% growth, indicating ongoing improvements in revenue growth and profitability.
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- Optimistic Outlook: The company expects an 18% increase in gross profit for 2026 to $12.2 billion and has raised its adjusted operating income guidance to $3.2 billion, reflecting strong confidence in future growth, particularly in the application of AI and intelligence tools.
See More
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- Market Pullback: Bitcoin reversed after Wednesday's relief rally, with trading volume dropping 22% over the past 24 hours, indicating weakened market sentiment that could undermine investor confidence and lead to further sell-offs.
- Ethereum Performance: Ethereum sharply fell in early trading but recovered later, with its Market Value to Realized Value ratio dropping to 0.78, a level historically signaling market bottoms, potentially attracting investor interest.
- Market Liquidation: Over $240 million was liquidated from the market in the last 24 hours according to Coinglass, primarily affecting bullish long traders, reflecting extreme fear sentiment prevailing in the market.
- Market Capitalization Changes: The global cryptocurrency market capitalization reached $2.26 trillion, increasing by 3.02% in the last 24 hours, despite major cryptocurrencies losing market share, highlighting the volatility and uncertainty in the market.
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- Adjusted Earnings: Excluding special items, Block Inc. reported adjusted earnings of $402 million, or $0.65 per share, aligning with analyst expectations, which reflects the company's efforts in cost management amidst declining profits.
- Revenue Growth: Despite the profit decline, Block Inc.'s revenue increased by 3.6% year-over-year to $6.252 billion from $6.033 billion last year, demonstrating the company's strong sales capabilities in the market.
- Future Outlook: The company anticipates a 54% year-over-year growth in adjusted diluted EPS to $3.66 by 2026, showcasing management's confidence in future performance recovery despite current challenges.
See More
Block Cuts Workforce by Over 40%, Stock Surges 24%
- Layoff Announcement: Block has announced a workforce reduction of over 40% due to the efficiency gains from intelligent technology, which allows fewer employees to accomplish more, expected to significantly lower operational costs and enhance profit margins.
- Stock Market Reaction: Following the announcement, Block's stock surged by 24%, indicating a positive market response to the company's transformation strategy and increased investor confidence in future growth potential.
- Employee Compensation Package: Affected employees will receive severance equal to 20 weeks of salary plus one week for each year of tenure, along with health insurance and transition funds, aimed at mitigating the negative impact of layoffs and preserving the company's reputation.
- Leadership Decision: CEO Jack Dorsey stated that opting for immediate layoffs rather than gradual cuts was to avoid long-term damage to employee morale and customer trust, demonstrating the company's decisiveness and transparency in facing challenges.
See More
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- Block Layoffs Impact: Block announced layoffs of over 4,000 employees, about half of its workforce, leading to a 24% surge in after-hours trading, indicating strong market confidence in its cost-cutting measures.
- Monster Beverage Earnings: Despite reporting adjusted earnings of 51 cents per share, exceeding the expected 48 cents, Monster Beverage's fourth-quarter operating margin of 29% fell short of the 29.8% consensus estimate, resulting in a 3% drop in stock price, reflecting investor concerns over profitability.
- Dell Strong Performance: Dell Technologies reported a fourth-quarter earnings per share of $3.89, surpassing analyst expectations of $3.53, with revenue of $33.38 billion exceeding the $31.73 billion forecast, leading to a 10% increase in stock price, showcasing its competitive strength in the market.
- Autodesk Outperformance: Autodesk's full-year revenue guidance of $8.10 billion to $8.17 billion exceeded the market expectation of $7.97 billion, resulting in a stock price increase of over 6%, indicating strong performance and growth potential in the software market.
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