Block Stock Soars as Q4 Earnings Meet Estimates, Revenues Increase Y/Y

Core Insights - Block (XYZ) reported fourth-quarter 2025 adjusted earnings of 65 cents per share, meeting the Zacks Consensus Estimate and showing an increase from 47 cents per share in the prior-year quarter [1][9] - The company announced over 4000 layoffs as part of a restructuring initiative aimed at improving efficiency, which positively impacted investor sentiment, resulting in a nearly 20% increase in stock price during pre-market trading [1] Financial Performance - Net revenues for the quarter were $6.25 billion, slightly missing consensus estimates but reflecting a year-over-year increase of 3.6% [2] - Gross profit rose 24.3% year over year to $2.87 billion, with Square generating $992.7 million (up 7.5%) and Cash App generating $1.83 billion (up 33.1%) [5][9] - Adjusted EBITDA was $929.7 million, up 22.8% year over year, while operating expenses increased by 3.9% to $2.39 billion [6] Segment Performance - Commerce enablement revenues grew 11.1% to $3.05 billion, while financial solutions revenues increased significantly to $1.22 billion [3] - Bitcoin ecosystem revenues decreased by 19.6% to $1.98 billion [3] - Gross Payment Volume (GPV) was $66.94 billion, up 8% year over year, with Square's GPV at $65 billion (up 10.3%) and international GPV increasing by 24% [3][9] Cash App Insights - Cash App's GPV was $1.98 billion, showing a significant year-over-year decline [4] - Cash App's primary banking actives grew 22% year over year to 9.3 million, with monthly transacting actives reaching 59 million [6] Guidance and Future Outlook - For Q1 2026, Block expects gross profit of $2.80 billion, indicating a year-over-year growth of 22%, and adjusted operating income of $600 million with an operating margin of 21% [11] - For the full year 2026, the company anticipates gross profit of $12.20 billion, reflecting an 18% increase from 2025, and adjusted operating income of $3.2 billion with an operating margin of 26% [11] Share Repurchase Program - In Q4 2025, Block repurchased 11.9 million shares of its Class A common stock for $790 million, with an additional $5 billion authorized for share repurchase [10]