SQ shares fall as operating profit, Square stock misestimates payment volume

square father Block (SQ) reported June quarter earnings and revenue that fell from a year earlier but beat estimates. SQ shares fell as two other financial metrics, operating profit and gross payment volume, lost sight of it.


San Francisco-based Block reported second-quarter earnings after the market closed on Thursday. Results included newly acquired Australian-based consumer lending company Afterpay.

“This is the second quarter in a row that gross profit and GPV have been missing, likely reflecting SQ’s end-market consumer/merchant profile, which is struggling during the current high-inflation environment.” Wedbush analyst Moshe Katri said in a statement. he notices customers.

Square’s earnings were 18 cents a share on an adjusted basis, down 72% from the same period a year ago. Analysts had projected earnings of 16 cents per share.

Additionally, Square said revenue fell 6% to $4.4 billion as Cash App transactions for the digital cryptocurrency Bitcoin fell. Analysts had forecast revenue of $4.33 billion.

Shares of Square fell 5.8% to 84.45 in extended trading on the stock market today. SQ shares had gained in seven straight trading sessions before Square’s earnings report.

Stock SQ: Checkout Volume Error Estimates

Financial analysts also see operating profit as a key metric for SQ shares. Operating profit was $1.47 billion, 29% higher than estimates of $1.495 billion.

Gross payment volume from business customers increased 23% to $52.5 billion, versus estimates of $53.187 billion.

Additionally, Cash App gross profit increased 29% to $705 million. Excluding Afterpay, Cash App gross profit increased 15%.

The company said earnings before interest, taxes, depreciation and amortization, or EBITDA, came in at $187 million. Analysts had estimated $140 million.

“Gross profit of $1.47 billion was missed by $20 million,” Jefferies analyst Trevor Williams said in his note to clients. “But EBITDA exceeded $50 million, with failures in Afterpay and Seller (segments).”

Amid the Afterpay acquisition, Square’s transaction and lending losses jumped 225% year over year to $157 million.

SQ shares had fallen 51% in 2022 before the earnings report. Square stocks have a relative strength rating of 12, according to IBD Stock Check-up.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity, and cloud computing.


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