Block Q1 EPS Tops Estimates; Shares Jump After Hours

Block reported first-quarter earnings per share of $0.85, topping the $0.68 consensus estimate, and its stock rose 7.9% in after-hours trading to $75.70. The company recorded a net loss of $309 million for the quarter as the price of bitcoin fell 23.8% over the period.

The net loss included a $172.8 million bitcoin remeasurement loss tied to 8,883 bitcoin held as of March 31. Revenue tied to bitcoin through Cash App and other products fell to $1.8 billion from $2.33 billion a year earlier, a decline the company attributed to trading conditions and a deliberate reduction in certain Cash App fees.

Gross profit for the quarter reached $2.9 billion, up 27% year over year. Cash App bitcoin payments accounted for $63 million of gross profit. The Square segment did not have a meaningful impact on the company’s bitcoin business in the quarter.

Operating expenses rose 57.2% year over year to $3.08 billion. The company completed a restructuring in late February that reduced its workforce by about 4,000 employees, roughly 40% of staff, and moved to rely more on AI-driven tools for some functions.

During the quarter Block introduced several bitcoin-related products and transparency measures. The company launched a proof-of-reserves system for its corporate bitcoin treasury and added a user-facing verification tool for Cash App and Square balances. It unveiled a Bitkey hardware wallet with a touchscreen, added a feature to let some Cash App users automatically convert payments into bitcoin, began offering 5% bitcoin cash-back rewards for Square merchants, and raised customer withdrawal limits to $10,000 per day and $25,000 per week. The company said more than 800,000 U.S.-based merchants had enabled bitcoin transactions for everyday purchases.

Market reaction to the results was positive despite the quarterly loss and the drop in bitcoin’s price. “Block had a strong quarter,” wrote Sean Emory, founder and chief investment officer of Avory & Co., adding the company had “beat and raised” its guidance.

Company management described the quarter as a period of investment and product expansion that weighed on near-term profitability. Management also noted that changes in the value of the company’s bitcoin holdings contributed to volatility in reported results.

Investors and analysts will watch how fee changes, new product rollouts and cost reductions affect cash flow and profitability in coming quarters and whether increased merchant and user bitcoin adoption translates into sustained revenue growth.