Shares in Block Inc. were up in late trading after the payments company delivered mixed results in its latest quarterly earnings.
For the fourth quarter of 2022, Block reported adjusted earnings per share of 22 cents, down from 30 cents in the same quarter of 2021, on revenue of $4.65 billion. Analysts had expected figures of 30 cents and $4.61 billion. Block’s gross profit in the quarter was $1.66 billion, up 40% year-over-year and higher than an expected $1.53 billion, while its net loss came in at $115 million, down from $77 million in Q4 2021.
By market segment, Square saw its gross profit increase 22% year-over-year to $801 million and Cash App profit grew 64% to $848 million. Block’s Buy Now, Pay Latest segment, based primarily around Afterpay, the Australian company it acquired in 2021, delivered $132 million and revenue and $98 million in gross profit.
Adjusted earnings before interest, taxes, depreciation and amortization came in at $281 million, up from $184 million in Q4 2021 but down from $327 million in the previous quarter.
For the full year 2022, Block reported a net income loss of $541 million compared to a profit of $166 million last year. 2022 is the first-time Block, previously known as Square, has reported a net income loss since 2018. Gross profit across the year came in at $5.99 billion and adjusted EBITDA was $991 million.
Highlights included mid-market sellers continuing to be Square’s fastest-growing segment, with gross profit up 16% year-over-year, outpacing total Square gross profit growth, excluding BNPL. Cash App had 51 million monthly “actives,” up 16% year-over-year and the Cash App Card generated $750 million in gross profit in 2022, up 56%.
“Over the last year, our ecosystem model helped drive resilience as we continued to serve a diverse base of global customers across a wide range of verticals, complementary products and use cases,” Block said in a letter to shareholders. “Looking ahead to 2023 and beyond, we are focused on balancing growth and efficiency and will prioritize speed, agility and accountability.”
Block expects adjusted expenses of $1.43 billion for the quarter ahead, a quarter-over-quarter increase of $30 million. Adjusted EBITDA for 2023 is expected to be $1.3 billion and adjusted operating income is expected to be a loss of $130 million.
Block may have missed on EPS, but strong revenue and gross profit were enough to convince investors that the company remains a good long-term play. Block shares were up 6.31% as of 6:26 p.m. EST.