On Thursday, the fintech firm led by Jack Dorsey– Block announced that they had not seen any decrease in overall consumer spending throughout April 2022. The company reported their first-quarter operating profit recently, and the figures have exceeded Wall Street targets.
The demand for Bitcoin has reduced significantly due to the decline in cryptocurrency prices. Due to this, Block (formerly known as Square) reported an adjusted profit which was lower than anticipated. Even after that, the shares of the company rose around 10% in extended trading.
Block Inc is a financial services and digital payments company which offers merchant payment services and an app using which people can trade cryptocurrency. During the quarter, the firm closed its $29 billion acquisition of Afterpay Ltd, the Australian Technology company known for its buy-now-pay-later service.
This deal has managed to create a transaction giant that is now competing with tech firms and banks in the fastest growing business of the financial sector.
According to the recordings made under the Square and Cash app units, there was a contribution of around $92 billion from Afterpay towards the first quarter’s gross profit. Cash app is a service that allows individuals to send payments, including Bitcoin. This contribution helped the app post a 26% jump in gross profit.
Chief Financial Officer Amrita Ahuja said that the team expects Cash app and Square to grow gross profit every quarter in 2022 sequentially. And this expectation stays strong even after excluding Afterpay with the assumption that the macroeconomic environment remains stable.
She added that there wasn’t any deterioration in overall consumer spending throughout April and said that the gross merchandise value of Afterpay (value of all goods sold) is expected to rise up to 15% in April.
Wall Street’s average expectation for the company was around $136 million. However, according to the IBES data received from Refinitiv, the operating earnings (adjusted EBITDA) posted by Block was around $195 million.