Block shares jump after better than expected results
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More news: ASX-listed shares of Block jumped 9.5% to $116.10, tracking the gains in after-hours trading in New York.
Block shares jumped after the US fintech giant reported its net profit quadrupled from a year ago and lifted its annual earnings forecast.
The company, which acquired buy now pay later firm Afterpay in 2021, also revealed plans to add more bitcoin holdings to its balance sheet.
Block lifts forecast and looks to boost Bitcoin holdings
The news: US-listed fintech firm Block, which owns Afterpay, has lifted its forecast after better than expected first quarter results and revealed plans to add more Bitcoin to its balance sheet.
The numbers: The company posted net income of USD472 million ($719 million), or 74 US cents per share, more than quadruple the USD98.3 million a year earlier. It also reported a 19% jump in total net revenue, to USD5.96 billion.
Block now expects annual adjusted core earnings to be at least USD2.76 billion, higher than its previous forecast of USD2.63 billion.
Block shares jumped 7.9% in after-market trade in New York.
The context: Block said its BNPL platform, which includes Afterpay, saw gross merchandise value of USD6.98 billion in the quarter, up 25% year on year. Block acquired Australian buy now, pay later pioneer Afterpay in August 2021 in an all-scrip deal but the business has posted big losses since the deal.
The Cash App business, which is Block’s popular mobile payment platform, reported a 25% year-on-year jump in gross profit .
Block said it would invest 10% of its gross profit from Bitcoin products each month into purchasing the asset class, CEO Dorsey wrote in a shareholder letter. The company currently dedicates less than 3% of its resources to Bitcoin-related projects.
On Thursday, Block's shares tumbled on the ASX after NBC reported that US federal prosecutors were digging into the fintech over alleged compliance breaches.
What they said: "We believe the world needs an open protocol for money, one that’s not owned or controlled by any single entity," CEO Jack Dorsey said in a letter to shareholders.
