SQ stock drops as operating profit, payment volume of Square stock shortage estimates

square-parent To block (SQ) reported June quarter earnings and revenue that fell from a year earlier but beat estimates. SQ’s stock fell as two other financial measures, operating profit and gross payment volume, missed sights.




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San Francisco-based Block reported its second-quarter results after the market closed Thursday. The results include Afterpay, a recently acquired Australian consumer lending start-up.

“This is the second quarter in a row where gross earnings are missing as well as GPV (gross payment volume), which likely reflects SQ’s end-market consumer/merchant profile, which is struggling in the current environment of high inflation,” Wedbush analyst Moshe Katri said in a statement. note to customers.

Squared earnings were 18 cents per share on an adjusted basis, down 72% from the prior year period. Analysts had expected earnings of 16 cents per share.

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

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

Stock SQ: Payment Volume Failure Estimates

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

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

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

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

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

As part of the Afterpay acquisition, Square’s transaction and loan losses increased 225% year-over-year to $157 million.

SQ stock had fallen 51% in 2022 before the earnings report. The square stock holds 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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