Shares of Block Inc (NYSE:XYZ) jumped 8% in premarket trading on Friday following the company’s second-quarter report that showcased impressive gross profit growth, even as adjusted earnings per share fell short of forecasts. Investor confidence was buoyed by solid performance in the Cash App and Square divisions, along with an upgraded full-year outlook.
Block recorded adjusted EPS of $0.62, missing the $0.67 consensus estimate.
Nevertheless, gross profit climbed 14% year-over-year to reach $2.54 billion. The Cash App segment contributed $1.5 billion, marking a 16% increase, while Square’s gross profit rose 11% to $1.03 billion.
Operating income came in at $484 million, with adjusted operating income hitting $550 million, reflecting a 22% margin. Adjusted EBITDA reached $891 million, fueled by ongoing margin expansion and accelerated product development across both business units.
“We’re back on offense,” CEO Jack Dorsey said in the shareholder letter. “Our shipping velocity has accelerated and I’m confident in our ability to sustain strong growth at scale.” He highlighted Cash App’s evolution as a comprehensive financial platform, stating, “We believe we’re the only company that can deliver a complete money hub to customers.”
A core pillar of Block’s strategy is the Cash App ecosystem, which saw gross profit per transacting active user rise 15% to $87, supported by a stable 57 million monthly active users. Square reported a 10% rise in gross payment volume to $64.2 billion, with international GPV surging 25% year-over-year due to product innovation and go-to-market initiatives.
Cash App Borrow originations reached an $18 billion annualized rate, while Buy Now, Pay Later (BNPL) gross merchandise volume increased 17% to $9.11 billion. Additionally, Cash App Pay volume doubled year-over-year, and Cash App Card active users grew to 26 million.
Block raised its fiscal 2025 outlook, projecting gross profit of $10.17 billion—a 14.4% year-over-year increase—with a full-year adjusted operating income target of $2.03 billion at a 20% margin. For Q3, the company expects gross profit of $2.60 billion and adjusted operating income of $460 million.
“XYZ exits 2Q on a strong footing that makes its 1Q print feel very distant, and 2H catalysts are attractive as it accelerates growth into a November Investor Day,” noted TD Cowen analysts.
Though adjusted EPS fell short, management’s positive tone and strong performance across key metrics bolstered investor optimism. The company’s results surpassed expectations on multiple profitability fronts, reinforcing its standing as a next-generation financial platform.
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