Square-parent Block reported March-quarter earnings, revenue, operating profit and gross payment volume that missed analyst estimates amid lowered expectations. SQ stock edged up on Friday amid another down day for the Nasdaq Composite.
San Francisco-based Block reported first-quarter earnings after the market close on Thursday. Square stock edged up 0.7% to close at 96.19 on the stock market today.
While Square stock missed on some metrics, "Importantly, Cash App began to reaccelerate, with gross profits up 11% sequentially, and strong 'health' metrics including 1.5 million consumers using Direct Deposit," said Lisa Ellis, analyst at MoffettNathanson in a report.
Many analysts are looking ahead to an investor day Square will hold on May 18. The company is expected to update its long-term outlook with the Afterpay acquisition.
SQ Stock: Revenue Below Expectations
Q1 results included recently acquired Australia-based consumer lending startup Afterpay.
Square earnings for the first quarter were 18 cents per share on an adjusted basis, down 56% from the year-earlier period. Analysts had projected earnings of 20 cents a share.
Square said revenue dropped 21% to $3.96 billion, as Cash App transactions for digital cryptocurrency Bitcoin fell. Analysts had predicted revenue of $4.14 billion.
Financial analysts also view operating income as a key metric for SQ stock. Operating income came in at $1.29 billion, up 34%, versus estimates of $1.30 billion.
Gross payment volume from merchant customers rose 31% to $43.5 billion, versus estimates of $45.39 billion.
Afterpay Contributions To Profits
In a letter to shareholders, management said: "Afterpay contributed $92 million of gross profit in the months of February and March, with $46 million of gross profit recognized in each of Cash App and Square."
Excluding Afterpay, the company said "gross profit was $1.20 billion, up 25% year over year."
In Thursday's regular session, Square stock fell 10.5% amid a broad sell-off in the Nasdaq. SQ stock has retreated 50% in 2022 heading into the earnings report.
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