Shares of Block Inc. (XYZ) plummeted over 11% in pre-market trading on Friday, following the fintech company's fourth-quarter earnings falling short of analyst expectations. The miss was attributed to weaker-than-anticipated consumer spending growth during the holiday season and lower gains from bitcoin trading.
Despite a robust labor market and steady wage growth, Block's Cash App business, which enables peer-to-peer mobile payments, reported gross profit growth of only 16% in Q4, down from 25% a year earlier. The company's business-focused Square unit also saw gross profit growth slow to 12% from 18% in the prior year.
Analysts pointed to the uncertain trade policy environment under the new Trump administration and persistently high interest rates as key factors weighing on consumer sentiment. The slowdown in spending has raised concerns over Block's ability to drive profits through its planned expansion of buy-now-pay-later (BNPL) lending services in 2025.
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