Despite strong growth in Cash App and Square profits, Block Inc.’s third-quarter results fall short of Wall Street estimates, sending shares down over 11% in after-hours trading.
Introduction: Block Reports Strong Growth but Misses Estimates
Block Inc. (NYSE: XYZ) saw its shares tumble 11.53% in after-hours trading to $70.93 after reporting third-quarter earnings below analyst forecasts. The fintech company, led by Jack Dorsey, posted earnings per share (EPS) of $0.54, missing estimates of $0.63, while revenue reached $6.11 billion, slightly below the expected $6.33 billion.
The stock had already fallen 3.7% during regular trading, extending its year-to-date decline to over 18% in 2025, as investors reacted to weaker-than-expected top- and bottom-line figures despite robust profit growth.
Body: Profit Growth Overshadowed by Revenue Miss
While overall earnings disappointed, Block reported solid profitability across its business segments.
The company’s gross profit rose 18% year-over-year to $2.66 billion, supported by its flagship digital payment platforms, Cash App and Square.
- Cash App accounted for $1.62 billion in gross profit, up 24% year-over-year, maintaining its position as Block’s leading growth engine.
- Square, the firm’s merchant payments arm, generated $1.018 billion, marking a 9% annual increase.
The firm’s operating income climbed 26% to $409 million, showing resilience in core operations.
Despite these gains, investors appeared focused on the revenue miss, highlighting concerns about slowing transaction volume growth and competitive pressures within the digital payments space.
“While our revenue fell slightly short, the profitability strength across our ecosystem shows that we’re building for sustainable long-term growth,” said Amrita Ahuja, Block’s Chief Financial Officer.
Block’s Bitcoin Mining Expansion Shows Early Promise
Ahuja also revealed that Block’s Bitcoin mining division, Proto, is beginning to contribute modest revenue.
“We generated our first revenue, seeding what has the potential to become our next major ecosystem,” she said, referencing hardware and software sales of ASICs and mining rigs.
Proto, launched in late 2024, marks Block’s move deeper into Bitcoin infrastructure development, with the company pursuing an “active pipeline” expected to expand through 2026.
Analysts note that while short-term sentiment remains cautious, Block’s continued growth in peer-to-peer payments, merchant services, and Bitcoin infrastructure may provide a long-term recovery path.
Still, the earnings miss and share price drop underscore investor sensitivity to revenue guidance and competition in the fintech sector, as Block navigates a challenging market environment heading into 2026.
Block’s next quarterly results will be closely watched for signs of stabilization and whether its Bitcoin initiatives can translate into meaningful revenue growth.
Disclaimer
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