Square-parent Block reported third-quarter earnings that met Wall Street estimates while revenue missed. Square stock tumbled on Friday as some key financial metrics missed estimates and guidance also came in below views.
Released after the market close on Thursday, Square earnings for the period ended Sept. 30 were 88 cents per share on an adjusted basis, up 60% from the year-earlier period. Analysts had projected earnings of 88 cents a share.
Also, Square said net revenue came in at $5.98 billion, up 6% from a year earlier, including Cash App transactions for Bitcoin. Square stock analysts had predicted revenue of $6.24 billion.
Square Stock: Gross Profit, EBITDA
Financial analysts also view gross profit as a key metric for SQ stock. In Q3, gross profit rose 19% to $2.25 billion vs. estimates of $2.24 billion.
Cost-cutting boosted earnings before interest, taxes, depreciation and amortization, a key metric known as EBITDA. It came in at $807 million, up 69% from a year earlier, vs. estimates of $708 million.
In Q3, gross payment volume from the transactions of merchant customers rose 7.5% to $59.9 billion, missing estimates of $64.33 billion.
"Q4 outlook was shy of consensus, but embeds transitory headwinds to gross profit growth from a delay in transaction cost benefit from a Square partner and push-out of expansion of Cash App Borrow," said TD Cowen analyst Bryan Bergin in a report. "Importantly, management sees these landing in 2025 and supports Square's preliminary 2025 outlook for 15% gross profit growth, satisfying the Street bogey."
On the stock market today, Square stock tumbled 4.4% to 71.96 in early trading.
For the fourth quarter of 2024, Square said it expects EBITDA of $725 million. Analysts had projected September-quarter EBITDA of $750 million.
Square predicted gross profit of $2.31 billion versus estimates of $2.35 billion.
In 2025, the company forecast 15% gross profit growth.
"Q4 gross profit guide is the primary surprise as expected drivers (transaction costs) are pushed into 2025," said Jefferies analyst Trevor Williams in a report, "though U.S. GPV expected to accelerate based on October trends."
Block Stock: Technical Ratings
Also, SQ stock was about even in 2024 heading into the Block earnings report. 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.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
