Block’s profit misses estimate as holiday spending, bitcoin gains fall short

Block’s fourth-quarter profit fell short of estimates as spending growth during the holiday season and gains from a post-election surge in bitcoin lagged expectations, sending the payment firm’s shares down 8% in extended trading on Thursday.

While a robust labor market and steady wage growth have supported consumer spending – bolstered further by holiday travel and retail splurges – uncertainty surrounding trade policy under a new administration and the Federal Reserve’s rate cuts has kept sentiment in check.

Block’s results come on the same day that retail giant Walmart WMT.N fueled concerns over consumer spending with a sales and profit forecast for the current year that .

Block CEO Jack Dorsey, however, emphasized the payments company’s attempts to streamline operations and said investing in artificial intelligence tools was a top priority.

“Our number one initiative on our strategic roadmap … is to invest heavily in building applied AI tools to remove the toil of mechanical tasks,” he said.

�ճ����company reported a profit of 71 cents per share, excluding one-time costs. Analysts had expected a figure of 87 cents per share, according to estimates compiled by LSEG.

Its transaction-based revenue was $1.68 billion, compared with the expectations of $1.70 billion. Bitcoin revenue of $2.43 billion also missed estimates of $2.62 billion.

Block facilitates bitcoin purchases on its platform by acquiring the cryptocurrency through private broker dealers and reselling it at a small premium.

Founded in 2009 as Square before rebranding in 2021, the company is expanding into crypto mining while also deepening its presence in the buy now, pay later market. – Reuters