Square-parent Block crashed Friday on fourth-quarter earnings, revenue and key financial metrics that missed Wall Street estimates amid weak guidance for Square stock.
Released after the market close on Thursday, Square earnings for the period ended Dec. 31 were 71 cents per share on an adjusted basis, up 51% from the year-earlier period.
Also, Square said net revenue came in at $6.032 billion, up 4% from a year earlier, amid slower Cash App growth.
Wall Street analysts had predicted Block earnings of 88 cents a share on revenue of $6.295 billion.
Financial analysts also view gross profit as a key metric for Square stock. In Q4, gross profit rose 14% to $2.31 billion vs. estimates of $2.33 billion.
Square Stock: Key Metrics
Cost-cutting boosted earnings before interest, taxes, depreciation and amortization, a key metric known as EBITDA. It came in at $757 million vs. estimates of $740 million.
In Q3, gross payment volume from the transactions of merchant customers rose 10% to $61.95 billion versus estimates of $61.4 billion.
"Slight gross profit miss on softer Cash App growth — offsetting Square upside on a GPV beat. Fiscal 2025 guide for 15%-plus growth reiterated, but will feature a steeper ramp," said Jefferies analyst Trevor Williams in a report.
On the stock market today, Square stock plunged 17.7% to close at 68.35 amid a broad market sell-off.
For 2025, Square said it expects gross profit of $10.22 billion vs. estimates of $10.28 billion.
TD Cowen analyst Bryan Bergin said in a report: "Block delivered the needed acceleration in Square GPV growth, but a modest gross profit miss and below consensus Q1 guide understandably weigh on shares. Fiscal 2025 is to be more back-half weighted than expected and that breeds some consternation."
San Francisco-based Block's earnings included consumer lending firm Afterpay.
In its core businesses, Square operates a two-sided digital payments ecosystem, with products designed for both merchant sellers and consumer buyers.
At RBC Capital, analyst Daniel Perlin said in a report: "While Block delivered mixed results and a slightly underwhelming guide, we believe that the company is delivering product innovation, with plans to release a new Afterpay-enabled Cash App Card product, which management views as a gross margin tailwind, as well as heavily investing in both its sales force for Square to drive upmarket wins and marketing for Cash App to drive direct deposit attachment."
Block Stock: Technical Ratings
With Friday's loss, Block stock is down about 20% in 2025.
Block stock holds an IBD Composite Rating of 94 out of a best-possible 99, according to IBD Stock Check-up. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
Square stock, meanwhile, holds an Accumulation/Distribution Rating of C-minus. The rating runs from a best-possible A+ to a worst-possible E. The rating analyzes price and volume changes in a stock over the past 13 weeks of trading.
Further, Block changed its ticker symbol to XYZ from SQ on Jan. 21.
In late 2021, Square changed its name to Block. The move reflected the company's commitment to blockchain technology, which underpins cryptocurrency.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
