Block Shares Plummet 18% Amid Earnings and Revenue Miss
New York, Saturday, 22 February 2025.
Block Inc. faced a significant stock drop on February 21, 2025, as its Q4 earnings fell short, prompting a 18% decline. Increased competition and growth challenges add to investor concerns.
Financial Performance Details
Block Inc. (NYSE: XYZ) reported earnings of 71 cents per share [1][2], marking a significant shortfall from analyst expectations of 87 cents [1]. The company’s revenue reached $6.03 billion, falling short of the projected $6.29 billion [2]. The Q4 2024 results, released on February 19, 2025, showed gross profit of $2.31 billion, representing a 14% year-over-year increase [1][2], yet still below consensus estimates.
Market Impact and Stock Performance
The earnings miss triggered the company’s worst trading day since 2020, with shares plunging 18% on February 21, 2025 [1]. The stock closed at $68.35, contributing to a 20% decline year-to-date, significantly underperforming against the Nasdaq’s 1.1% gain [1]. This dramatic decline reflects growing investor concerns about Block’s competitive position in the fintech space, particularly facing pressure from rivals like Toast, Fiserv’s Clover, and Shift4 [1].
Cash App Performance and User Growth
A key concern for investors is the flattening user growth in Cash App, which has maintained 57 million monthly transacting users for four consecutive quarters [1]. Despite this stagnation, Cash App’s gross profit showed resilience with a 16% year-over-year increase to $1.38 billion [1]. The platform’s recent integration with Afterpay, launched on February 19, 2025, aims to expand credit options for customers [2].
Future Outlook and Strategic Initiatives
CEO Jack Dorsey remains optimistic about Block’s future, particularly regarding the company’s upcoming Bitcoin mining system, Proto, scheduled for launch in the second half of 2025 [1]. For fiscal 2025, Block projects gross profit growth of 15% to $10.22 billion and adjusted operating income of $2.1 billion [2]. However, Barclays analysts note that the turnaround ‘has been messier than expected,’ with meaningful improvements not anticipated until later in 2025 [1]. The company also faces increased regulatory scrutiny, having agreed to pay $80 million to 48 U.S. states over anti-money laundering control deficiencies in January 2025 [7].