Shares of Block Inc (NYSE:SQ) are up over 4% in premarket Friday after the fintech company reported better-than-expected Q1 results.
Earnings per share (EPS) came in at $0.40 on revenue of $4.99 billion, topping the average analyst estimate for a profit per share of $0.35 on sales of $4.6B. Overall, revenue rose 26% year-over-year as Cash App revenue surged 33% to easily top analyst estimates.
Subscription & services-based revenue jumped 43% to $1.37B, topping the $1.28B expected.
For FY23, the company raised its full-year adjusted EBITDA forecast to $1.36B, up from the prior $1.3B. The adjusted operating loss is now seen at $115 million, better than the previous $150M.
Morgan Stanley analysts weighed in positively on Block’s Q1 earnings report.
“Seller trajectory consistent with rest of industry while Cash App services continue to expand; upside from revenue and expense timing. We think Cash App’s long-term potential adequately valued,” the analysts wrote.
JPMorgan analysts see more room for further upside after solid Q1 results.
“SQ remains one of our favorite ideas, and framework for 100% GP retention + Rule of 40 inclusive of stock comp supports operating leverage potential that we feel is underappreciated by the market,” they said.