Shares of Block Inc (SQ) are up nearly 6% in premarket trading Friday after the company reported better-than-expected Q1 results.
SQ reported Q1 adjusted EBITDA of $195 million, down 17% YoY, but above the consensus estimates of $157.4 million. Adjusted EPS stood at 18c, down from 41c in the year-ago period and missing the expected 21c per share. Net revenue came in at $3.96 billion, down from $5.06 billion in the year-ago quarter and missing the analyst consensus of $4.15 billion.
Bitcoin revenue stood at $1.73 billion, down 51% YoY, short of the expected $1.92 billion. The company generated a Cash App revenue of $2.46 billion, down 39% YoY, while analysts were looking for $2.6 billion.
On the guidance front, Block commented:
"For the second quarter of 2022, we expect non-GAAP operating expenses across product development, sales and marketing, general and administrative expenses, and transaction, loan and consumer receivables losses, in aggregate, to increase by approximately $245 million compared to the first quarter of 2022.”
“For the month of April, in aggregate, Square GPV is expected to be up 29% year over year. On a three-year CAGR basis, GPV growth is expected to be 24% in April, compared to 22% growth in the first quarter.”
Goldman Sachs (NYSE:GS) analyst Michael Ng reiterated a Buy rating and lowered the price target to $152.00 per share, down from the prior $173.00.
“We are encouraged by continued momentum in Cash App in-flows into April & reiterated expectations for sequential gross profit growth in Seller & Cash App throughout the year,” Ng commented in a note.
BTIG analyst Mark Palmer said the company demonstrated “resilience amidst challenging market.”
“The 1Q22 report the company released today after the market close helped to demonstrate that its Cash App and Square seller ecosystems remain relevant to their users and that international markets could provide the avenue through which it could generate sustained growth in the quarters and years ahead,” Palmer wrote in a note.
By Senad Karaahmetovic