This is the latest news. Check back for more updates.
Block’s shares were reeling Thursday, falling nearly 10% in after-hours trading after reporting third-quarter revenue of $5.98 billion, below analyst expectations of $6.24 billion.
The payments company also reported $2.25 billion in gross profit for the quarter ended September 30, up 19% from the prior year. Net income was $283 billion, up from a loss of $88.7 billion last year, and earnings per share of $0.88, compared to analyst forecasts of $0.87.
Block’s Cash App transfer app, which powers payments for Block’s consumer and retail customers, reported gross profit of $1.31 billion, up 21% from the previous year. The company said the number of active monthly users of Cash App’s card users has exceeded 24 million, an increase of 11% from 2023.
Block’s stock was trading at about $68 per share Thursday evening. Last year, Block’s stock rose from about $55 per share to its current level. That followed a decline from about $247 per share in 2021 to just $43 per share in October 2023.
Block reorganized are activities to stimulate growth after a technological delay in 2022 and 2023, impacting most of the fintech payments industry following rapid growth during the Covid-19 pandemic. Block has cut costs and cut about 1,000 jobs over the past year.
The company earlier this year ditched an organizational structure that focused on business units such as the Cash App transfer service, the enterprise-focused Square, the Tidal music streaming company, the digital assets unit (called TBD) and others.
Instead, there is a structure that organizes functions such as engineering, product development, sales, customer service, marketing, and additional tasks. The change determines the reporting structure and project management strategy.
Dorsey appointed Nick Molnar, co-founder of BNPL lender Afterpay, as head of sales earlier this year. Block has owned Afterpay since 2021 and the company has been performing solidly for Block. The BNPL lender’s gross merchandise revenue, or company value, has grown more than 20% in the past year.
“Since Purchase AfterpayConsumers have spent more than $72 billion through the platform,” Block CEO Jack Dorsey said in a press release on Thursday. Block’s goal with the reorganization is to increase the speed at which new technology comes to market, with an emphasis on quickly responding to emerging trends in artificial intelligence. Analysts had criticized Block’s development speed, saying the company’s traditional product-oriented structure was slowing down projects.
Block faces stiff competition from traditional payments companies such as FIS and Fiserv, which sell payment processing and banking technology; and other payment fintechs like Stripe and PayPal. PayPal is in the middle of its own restructuring, as new CEO Alex Chriss has focused on embedding AI into the company’s cash register technology. Among fintechs, BNPL lender Affirm also reported profits on Thursday afternoon.
