Block Inc. (NYSE: XYZ), formerly known as Square, reported its Q1 2025 earnings on May 1, revealing a mixed performance. Adjusted earnings per share (EPS) rose 19% year-over-year to $0.56 but fell short of the projected $0.97.Net revenue decreased 3% from the prior year to $5.77 billion, missing the $6.19 billion analysts forecasted. Gross profit grew 9% to $2.29 billion, slightly below the estimated $2.32 billion. Despite cost-cutting driving EBITDA to $813 million—exceeding the $791 million estimate—gross payment volume fell short at $54.1 billion compared to expectations of $57.99 billion.
In terms of segment performance, the Cash App segment generated a gross profit of $1.38 billion, reflecting a 10% year-over-year increase, though it missed the $1.42 billion consensus. The Square segment produced a gross profit of $898 million, surpassing the projected $885 million. Square’s gross payment volume grew 7.2% to $54.1 billion, with international GPV increasing 15% and U.S. GPV rising 5.6%.
Looking ahead, Block revised its full-year 2025 gross profit guidance to $9.96 billion, down from the previous estimate of $10.22 billion, citing underperformance in its Cash App segment and a challenging macroeconomic landscape. For Q2, Block forecasts gross profit of $2.45 billion, short of analysts’ $2.54 billion estimate.
Following the earnings release, Block’s stock dropped over 15% in after-hours trading to $49.37 and remains down about 30% for the year.
CEO Amrita Ahuja emphasized the company’s focus on operational efficiency and projected margin expansion for the rest of the year. She noted that non-discretionary categories like groceries and gas held up better than discretionary spending categories like entertainment and travel.
