Square-parent Block (SQ) reported first-quarter earnings and revenue that exceeded expectations, with guidance for Square stock also surpassing expectations, leading to a rise in SQ stock. The earnings report, released after the market close, revealed that Square earnings for the period ended March 31 were 74 cents per share on an adjusted basis, an 85% increase from the previous year. Analysts had expected earnings of 72 cents per share. Additionally, net revenue for Square came in at $5.96 billion, a 19% increase from the previous year, which included Cash App transactions for bitcoin. Analysts had predicted revenue of $5.83 billion for the quarter.
Financial analysts consider gross profit a key metric for SQ stock, and in the first quarter, gross profit increased by 22% to $2.09 billion, exceeding estimates of $2.02 billion. Cost-cutting measures contributed to earnings before interest, taxes, depreciation, and amortization (EBITDA), which came in at $705 million vs. estimates of $591 million. Despite this, gross payment volume from transactions of merchant customers in Q1 rose by 9% to $50.5 billion, below the predicted estimates of $55.81 billion.
Looking ahead, Square expects EBITDA of $680 million for the first quarter of 2024, surpassing analyst projections of $648 million. For Q2, Square forecasts gross profit of $2.175 billion, which aligns closely with estimates. SQ stock had experienced an 8% decline in 2024 leading up to the earnings report, which also included information on consumer lending firm Afterpay. Square operates a two-sided digital payments ecosystem targeting both merchant sellers and consumer buyers in its core business.
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