money Block soars on upbeat guidance
Block (SQ) reported fourth-quarter adjusted earnings per share of $0.45, well below Street expectations of $0.59. Net revenue of $5.77 billion was about in line with estimates. Adjusted EBITDA was $562 million, well above the $447 million estimate. The fintech company also raised its full-year 2024 adjusted EBITDA guidance to $2.63 billion from $2.4 billion.
Yahoo Finance's Julie Hyman and Josh Lipton break down the report.
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Editor's note: This article was written by Stephanie Mikulich
Video Transcript
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JULIE HYMAN: Now, some earnings from Block coming out after the close. The fintech company raising its outlook for 2024 adjusted EBITDA, now looking for that figure to reach at least $2.63 billion. $2.4 billion was the prior forecast coming to us from Block here. This after fourth quarter adjusted earnings per share actually missed estimates. Although, adjusted EBITDA beat estimates in the fourth quarter. Revenue coming in at $5.77 billion. That too beating estimates as did Cash App revenue specifically. The shareholder letter from Jack Dorsey quite interesting here, Josh Lipton.
Well, first of all, he says-- he starts with saying we've done a lot recently to reduce our costs. Now we're going to focus on growth. He says they've reached their cap-- their workforce cap of 12,000. And so they're working with that number of people. But he talks about that the focus now, the goal for the company is how to grow Cash App. And he talks about doing that in a three-part strategy, banking our base, moving up market by serving families, and building the next generation social bank. Lots of big--
JOSH LIPTON: Big ideas.
JULIE HYMAN: Big ideas.
JOSH LIPTON: Jack is big on big ideas.
JULIE HYMAN: There you go.
JOSH LIPTON: Well, it's interesting too to see this move in the after hours because it's been kind of let's call it muted, the expectations for this one. I mean, heading into this print, this stock was already down around 10% this year. It was in the red over the past 12 months as well, down 7% or 8%. But you did have-- it's interesting if you look at the financial analysts who cover this name, most were actually bullish. And I think because you would hear them talk about listen, we think they would say there's some new cost discipline at the company. We did hear about them cutting jobs, and I believe that was last month. So they had been more bullish.
Another thing I'm going to be interested to hear about, that Cash App unit. We did get those reports that federal regulators were kind of looking into, whether the Cash App leaves the door open it was to money laundering, to terrorism financing. So I'd be interested on the call. Do they give any more color insight about-- about those reports and what's happening there.
JULIE HYMAN: Yeah, some of the new products and services they're trying to offer are interesting too. I'm curious exactly how much that contributed to growth in the quarter. In other words, one of the things they're doing is some sellers get free hardware up front in exchange for a higher processing rate. So that's one of the-- they're just trying different experimenting it sounds like to try to increase some of their services, some of their flow. So we'll see if that stuff actually worked.
JOSH LIPTON: I mean, at least initially, investors happy.
