Block raises annual profit forecast on resilient consumer spending; shares jump
Businesses and individuals have continued to spend on essential products, even as they have cut back on discretionary expenses amid macroeconomic uncertainty.
The Jack Dorsey-led firm now expects 2025 gross profit of $10.17 billion, up from the $9.96 billion it forecast earlier.
Its Cash App, which enables peer-to-peer mobile payments, reported a gross profit growth of about 16 per cent in the second quarter ended June 30. This was slower than the 23 per cent growth it reported in the year-ago period.
Block's Square segment — which provides payments solutions to small and medium-sized businesses - reported a 11 per cent rise in gross profit from the year-ago period. This was driven primarily by the company's software and integrated payments and banking products, as it continued to move upmarket and expand market share in target verticals, Block said.
The company also allows its users to buy and sell bitcoin, the transaction fees of which directly affects its profit. Bitcoin revenue fell to $2.14 billion in the quarter ended June 30, from $2.61 billion in the year earlier.
The crypto industry rebounded, and bitcoin touched several record highs, in the quarter as users got more regulatory certainty over their holdings through bills like Genius Act and Clarity Act.
This led to investors holding on to their digital assets in hopes of higher returns, and in turn, hurting the buying-selling volume. Market volatility usually pushes trade volumes up.
On an adjusted basis, the company reported net profit of $385 million, or 62 cents per share, in the second quarter, compared with $301 million, or 47 cents per share, in the year-ago period.
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