Block, Inc. (NYSE: XYZ) experienced a significant drop in its stock price following the release of its third-quarter 2025 earnings. Despite the company raising its full-year guidance, the financial technology firm failed to meet analyst expectations for both earnings per share and revenue, leading to a sharp decline in after-hours trading.
Key Takeaways
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Block's Q3 adjusted earnings per share (EPS) of $0.54 missed the analyst consensus of $0.63 by 14%.
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Revenue for the quarter was $6.11 billion, falling short of the expected $6.33 billion.
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Despite the miss, Block raised its full-year 2025 gross profit guidance to $10.24 billion.
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The company's stock fell nearly 12% in after-hours trading.
Financial Performance and Analyst Expectations
Block reported third-quarter earnings of $0.54 per share, a miss compared to the Zacks Consensus Estimate of $0.63 per share. This represents an earnings surprise of -14.29%. Revenue for the quarter stood at $6.11 billion, also below the Zacks Consensus Estimate of $6.34 billion, marking a 3.58% shortfall. The company has not consistently surpassed revenue estimates in recent quarters.
Operational Highlights Amidst Miss
Despite the earnings and revenue miss, Block showcased strong operational metrics. Gross profit grew 18% year-over-year to $2.66 billion. The Cash App ecosystem saw its gross profit increase by 24% year-over-year to $1.62 billion, while Square's gross profit rose 9% year-over-year to $1.02 billion. Square's Gross Payment Volume (GPV) accelerated to 12% growth, and Cash App reached 58 million monthly active users in September.
Raised Guidance and Future Outlook
In a move that somewhat offset the disappointing earnings, Block raised its full-year 2025 guidance. The company now anticipates a gross profit of $10.24 billion, reflecting over 15% year-over-year growth, and adjusted operating income of $2.06 billion with a 20% margin. For the fourth quarter, Block projects gross profit of $2.76 billion, a 19% year-over-year increase.
Innovation and New Ventures
Block also reported that its new Proto ecosystem generated its first revenue during the quarter. Management views Proto as a potential "next major ecosystem" for the company. Furthermore, Block is actively expanding its artificial intelligence (AI) capabilities across both Cash App and Square platforms, introducing features like AI voice ordering and AI-powered procurement tools.
Sources
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Jack Dorsey's Block stock drops as earnings fall short of analyst expectations, TheStreet.
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Block shares tumble as Q3 earnings miss estimates; company raises guidance, Yahoo Finance.
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Block shares tumble as Q3 earnings miss estimates; company raises guidance By Investing.com, Investing.com.
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Block shares tumble after-hours on Q3 earnings miss — TradingView News, TradingView.
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Block (XYZ) Misses Q3 Earnings and Revenue Estimates, Finviz.
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