Investing.com – Block raised its full-year forecast after the financial services group reported better-than-expected fourth-quarter earnings, thanks in part to efforts to accelerate monetization of its Cash App money transfer service.
Shares of Block Inc (NYSE:) jumped in premarket trading on Friday.
The company said it expects to post adjusted operating income of at least $1.15 billion in 2024. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) are also projected to be at least $2.63 billion.
Previous guidance called for adjusted operating income of $875 million and adjusted EBITDA of $2.4 billion.
“[M]Management’s focus on true profitability remains clear as the company reported FY24 profitability figures that were notably above the Street, driven by headcount reductions, additional overhead efficiencies and structural cost advantages,” Wolfe Research analysts said in a note.
For the three months ended Dec. 31, Block’s adjusted EPS was $0.45 per share on revenue of $5.77 billion, compared with analyst estimates for adjusted EPS of $0.67 on revenue of $5.71 billion.
The revenue outperformance was driven by the performance of Cash App, which generated $3.91 billion in revenue and $1.18 billion in gross profit, up 31% and 25% year-over-year, respectively. Cash App’s monetization rate was 1.48%, up 9 basis points year-over-year and up 5 basis points quarter-over-quarter.
For the first quarter, the company forecast adjusted operating income of $225 million to $245 million and adjusted EBITDA of $570 million to $590 million.