Block Inc. Stock Suffers Biggest Drop in Five Years

Block Inc. (NYSE: SQ) saw its steepest single-day decline since March 2020, with shares plunging 18% to $68.35. The drop followed disappointing fourth-quarter results, where both profit and revenue fell short of analyst expectations.

Q4 Earnings Miss Estimates

The digital payments firm, which operates Cash App and Afterpay, reported:

• Revenue of $6.03 billion, missing analysts’ $6.28 billion estimate.
• Net income of $1.95 billion ($3.05 per share), up from $102 million (16 cents per share) last year.
• Adjusted earnings per share of 71 cents, below the expected 89 cents.

“In this market, people want more than just ‘okay.’ They want ‘wow,'” said Dan Dolev, Mizuho Securities analyst.

Cash App Growth Slows

• Cash App monthly active users remained relatively flat, raising concerns about user engagement.
• Cash App cardholders increased to 25 million, up from 24 million in Q3.
• Direct deposit users grew 25% YoY, reaching 2.5 million out of 57 million active users.

Despite these numbers, stagnant user growth and cautious profit guidance overshadowed any positive takeaways.

Bitcoin Revenue and Afterpay Expansion

• Bitcoin revenue hit $2.4 billion, missing analysts’ expectations of $2.63 billion.
• Block plans to expand Afterpay integration within Cash App in the coming weeks.

“The company originated $150 million in loans while testing Cash App-Afterpay integration,” said CFO Amrita Ahuja.

Regulatory Challenges and $130M Settlement

Block is still grappling with regulatory scrutiny after settling with the U.S. Consumer Financial Protection Bureau (CFPB) for:

• $75 million in consumer redress.
• $55 million in civil penalties.
• Ongoing negotiations with the New York Department of Financial Services.

Outlook for 2025

Block provided unchanged guidance of at least 15% gross profit growth in 2025, which failed to excite investors.

Key Takeaways:

• Weak Bitcoin revenue and flat Cash App growth weighed on sentiment.
• Regulatory issues remain a risk factor.
• Investors expected stronger guidance for 2025.

Bottom Line: Block Inc. faces pressure to accelerate growth, boost user engagement, and resolve regulatory concerns to regain investor confidence.