Jack Dorsey’s Block Inc. Beats Operating Estimate for Q1 2022

Block Inc., formerly Square, the fintech company led by Twitter co-founder Jack Dorsey, said on Thursday that the firm has not seen a decline in overall consumer spending through April. This was after reporting first-quarter operating returns that topped Wall Street targets.

Moreover, Block shares increased by 10% and reported a lower than anticipated adjusted profit. This happened as demand for Bitcoin weakened as the entire crypto market crashed.

Block Inc. offers merchant payment services and an app that allows people to trade cryptocurrency which helped close its $29 billion acquisition of Australian buy-now-pay-later pioneer Afterpay Ltd during the quarter.

Meanwhile, Afterpay contributed $92 million to the first-quarter gross profit, which was recorded under the Square and Cash app units – posting a 26% growth jump in gross profit.

Chief Financial Officer Amrita Ahuja said.

We expect Cash App and Square to sequentially grow gross profit each quarter throughout the year, even excluding Afterpay, assuming the macroeconomic environment remains stable. Through April, we have not yet seen a deterioration in overall consumer spending, adding that Afterpay’s gross merchandise value – the value of all goods sold – was expected to rise 15% in April.

As of March 31, revenue fell 22% to $3.96 billion. Block Inc. earned an adjusted profit of 18 cents per share, which were below analysts’ estimates of 21 cents.

Furthermore, the company’s Bitcoin revenue halved to $1.73 billion, hit by a drop in interest from retail traders as cryptocurrency price retreated after a strong rally last year that was driven by its rising acceptance in the mainstream.