Block Inc. (NYSE: SQ) saw its stock tumble 7.2% in after-hours trading on Thursday after the company’s Q4 earnings missed analyst expectations and its 2025 guidance fell short of market projections. The parent company of Square and Cash App struggled to meet profit targets despite strong gross payment volume and a push into AI-powered financial tools.
Q4 2024 Earnings: Block Falls Short of Expectations
- Adjusted EPS: $0.71 (missed analyst consensus of $0.87)
- Gross Profit: $2.31B (slightly below Visible Alpha estimate of $2.32B)
- Gross Payment Volume (GPV): $62.0B (beat estimate of $61.2B)
- Adjusted EBITDA: $757M (topped the $738.1M estimate but fell from $807M in Q3)
Despite showing year-over-year growth, Block’s Q4 profits and revenue trends failed to meet Wall Street’s bullish expectations. Cash App generated $1.38B in gross profit (+16% YoY), while Square posted $924M (+22% YoY).
Block’s 2025 Guidance Disappoints Investors
Block’s projections for Q1 and full-year 2025 sent shockwaves through the market:
- Q1 2025 Gross Profit: $2.32B (missed consensus of $2.38B)
- Full-Year 2025 Gross Profit: $10.22B (below estimate of $10.27B, but up from $8.89B in 2024)
- Adjusted Operating Income for Q1: $430M (higher than Q4’s $402M)
CEO Jack Dorsey emphasized that Cash App and Square will improve in the latter half of the year, but near-term concerns over slowing growth weighed on investor sentiment.
Block’s Bold AI and Expansion Strategy
Dorsey’s shareholder letter outlined a new strategic vision:
- “Neighborhood network” approach: Connecting sellers, buyers, staff, and artists
- Expanding Square’s global footprint through new partnerships
- Boosting AI investments to enhance payment and financial services
Block increased marketing spend in H2 2024, which delivered a strong return on investment, but higher non-GAAP operating expenses ($1.57B) signaled rising costs.
Investor Takeaway: A Tough Road Ahead for Block?
Despite strong growth in Square and Cash App, Block’s earnings miss and conservative outlook for 2025 sparked a sell-off. With rising AI investments, global expansion, and a long-term focus on profitability, investors will be watching closely to see if Dorsey’s vision can turn the tide.
