Despite Lower-Than-Expected Profit And Cash App Softness, Block Remains Bullish

Block Inc. remains bullish that its Cash App financial-services platform will remain a growth driver this year, despite its posting lower than projected gross profits during the first quarter, the company said during a conference call late Thursday to discuss its first-quarter results. Block is the parent company of the Square and Cash App businesses.

While Cash App gross profit totaled $1.38 billion for the quarter, a 10% year-over- year increase, Block saw changes in consumer behavior the company believes impacted inflows and Cash App Card spend, Block chief operating and chief financial officer Amrita Ahuja told analysts. One change Block saw was softness in Cash App disbursements from late February through March, a period when Cash App users typically receive tax refunds through the platform, according to Ahuja.

“Tax refunds are an important seasonal driver of Cash App inflows,” Ahuja said. “This year, we saw a pronounced shift in consumer behavior during the time period that we typically see the largest disbursements, late February and into March.”

While non-discretionary Cash App Card spend in such product categories as groceries and gas was more resilient, Block “saw a more pronounced impact to discretionary spending in areas like travel and media. We believe this consumer softness was a key driver of our forecast miss,” Ahuja added.

Despite Cash App’s softer-than-expected gross profits during the quarter, Ahuja said Block expects to “accelerate growth across both Cash App and Square.”

Factors expected to accelerate Cash App growth in the back half of 2025 include the rollout of new features Block has been testing for some time. These include Cash App Borrow, which offers small-dollar, short-duration loans. The rollout here will go to “millions more Cash App actives,” “nearly doubling the number of actives” Block can serve after the company received FDIC approval to use Square Financial Services to issue consumer loans for Cash App Borrow nationwide, Dorsey said in his letter to shareholders. Block received FDIC approval for its Square Financial Services Inc. industrial bank to make consumer loans through its Cash App Borrow feature in March.

In addition, Block is evolving the terms for Cash App Borrow loans, which is expected to allow Block to “increase limits and improve the customer experience,” Dorsey said in the shareholder letter.

Ahuja also expressed confidence in Block’s “product and go-to-market strategies.” As the company works to expands share in its targeted vertical markets, “we analyze incremental market share across various consumer-spending and small-business volume benchmarks,” Ahuja told analysts. “Across the verticals we operate in, we saw improved growth relative to these benchmarks.”

Block will host a product showcase later this month where it says it will display more than 100 products and features, such as new Square Online features, improved food-delivery integrations, and better support for sellers with large invoices. “From a go-to market perspective, we signed several upmarket sellers and continued to add partners across horizontal, vertical, and third-party sales organizations,” Ahuja added. “Field sales and partnerships are key channels for us going forward, and we’re very encouraged by recent success.”

Block also expects to deliver its Proto open-source Bitcoin mining system during the second half of 2025 “What’s unique about Proto is that … it will allow even consumers and tinkerers to play with mining and build novel platforms and experiments and products of their own,” Dorsey told analysts, according to a Seeking Alpha transcript of the call.

As an open-source bitcoin-mining platform, Block can get a lot of immediate feedback from the bitcoin-mining community, quickly integrate any improvements, “and just build an entirely new developer ecosystem around mining, which really hasn’t been done at scale before, which we’re also super excited about,” Dorsey added.

Block remains bullish but is taking a more cautious approach to its earnings forecast as a result of a more dynamic macro environment. Block is now forecasting profit growth of 12% for 2025, or $9.96 billion and gross profit growth of 9.5% for the second quarter.

“We continue to expect gross profit growth to accelerate in the back half of the year, into the low double digits in the third quarter, and end the year with mid-teens gross profit growth in the fourth quarter,” Ahuja said. “We recognize we’re operating in a more dynamic macro environment, so we’ve reflected a more cautious stance on the macro backdrop into our guidance.”