Block, Inc. (XYZ) shares fell about 15% in premarket trading on Friday after the company posted mixed third‑quarter results and profitability at the Square seller business trailed its volume growth. Square’s gross payments volume (GPV) rose 12% year over year, but its gross‑profit growth slowed to ~9%, a dynamic that concerned investors heading into the session. [1]
By the numbers (Q3 FY2025)
- Total net revenue:$6.115B
— Transaction revenue $1.873B; Subscription & services $2.205B; Bitcoin revenue $1.966B; Hardware $70M. [2] - Gross profit:$2.66B (+18% YoY)
— Cash App GP $1.62B (+24%); Square GP $1.02B (+9%). [3] - Operating income:$409M (15% margin on GP). [4]
- GAAP net income:$462M; GAAP EPS: $0.76 basic / $0.74 diluted. [5]
- Adjusted EBITDA:$833M. [6]
On a non‑GAAP basis, adjusted EPS was $0.54, below the $0.67 LSEG consensus cited by Reuters, and Block booked a $59.6M bitcoin remeasurement loss in the quarter. The company also noted bitcoin revenue fell to $1.97B from $2.43B a year earlier, reflecting crypto volatility. [7]
Segment check: Cash App vs. Square
- Cash App: Monthly actives hit 58 million in September, with strong engagement from teens and new savings features. Management also highlighted growth in “primary banking actives” to 8.3 million (+18% YoY) and said Cash App Borrow originations rose 134% YoY with a 24% annualized net margin. [8]
- Square (seller ecosystem): GPV accelerated to 12% YoY, but gross‑profit growth (≈9.2%) lagged volume for the first time since early 2023, a key reason analysts flagged pressure on the shares. Additionally, transaction, loan, and consumer‑receivable losses jumped 89% to $363.5M, in part tied to higher short‑term borrowings in Cash App—another focal point for risk‑sensitive investors. [9]
Guidance and macro color
Block raised its 2025 gross‑profit outlook to $10.24B (from $10.17B), while noting only “isolated impacts from tariffs” and a “strong” October start to Q4. The company was added to the S&P 500 earlier this year, though shares remain down for 2025 leading into this report. [10]
Strategic updates you may have missed
- Ecosystem leverage: Block said Proto, its bitcoin‑mining hardware/services initiative, generated its first revenue in Q3. [11]
- Commerce partnerships: Square announced a new integration with Grubhub, including embedded order management in Square and Cash App Pay for Grubhub customers—an example of cross‑brand flywheel effects the company wants to scale. [12]
Why it matters
The quarter underscores a split narrative: Cash App continues to compound users and monetization, while Square is contending with a tougher mix, competitive pricing, and macro‑sensitive small‑business trends. The jump in credit‑related losses and bitcoin‑linked volatility add guardrails to near‑term multiples, even as management modestly lifted guidance and pointed to improving momentum into October. [13]
Key takeaways for readers
- Top line steady, quality mixed: GP up 18% with strong Cash App; Square’s GP lagged GPV. [14]
- Profitability the swing factor: Miss on adjusted EPS vs. LSEG consensus weighed on sentiment. [15]
- Risk watch:Credit losses +89% and bitcoin remeasurement add earnings variability. [16]
- Execution lanes: Banking features, teen adoption, and partner integrations (e.g., Grubhub) remain growth levers. [17]
Disclosure: This article is for informational purposes only and is not investment advice. Figures are from Block’s Q3 2025 shareholder materials and reputable news outlets cited above.
References
1. www.reuters.com, 2. s29.q4cdn.com, 3. s29.q4cdn.com, 4. s29.q4cdn.com, 5. s29.q4cdn.com, 6. s29.q4cdn.com, 7. www.reuters.com, 8. s29.q4cdn.com, 9. www.reuters.com, 10. www.reuters.com, 11. s29.q4cdn.com, 12. s29.q4cdn.com, 13. www.reuters.com, 14. s29.q4cdn.com, 15. www.reuters.com, 16. s29.q4cdn.com, 17. s29.q4cdn.com
