Yahoo Finance Block sees Q1 revenue rise despite short-seller report
Yahoo Finance Live anchors Brad Smith and Julie Hyman break down the decline in stock for Block.
Video transcript
JULIE HYMAN: We're watching shares of Block this morning, the artist formerly known as Square. The company seeing a boost in revenue for the quarter driven by its popular payment platform, Cash App, despite battling a short seller report from Hindenburg Research. Man, Hindenburg's been busy lately, hasn't it? Block shares are not moving, though, this morning.
We're not seeing much movement at all. They were up more in pre-market trading, though. Interesting. EBIT topping estimates, so that's something that was positive for the company.
Net revenue up 26% and beating estimates as well. And I'm looking at the different sectors here. Subscription and services revenue up 43%.
Hardware revenue up 1.2%, that missed estimates. Bitcoin revenue up 25% beating estimates. And Cash App, which I mentioned, up 33%, beating estimates as well.
BRAD SMITH: Yeah and really pointing to Cash App card as well, saying that they continue to expand some of the engagement there. 20 million monthly Cash App card actives, that's up 34% year-over-year. That Cash App card was pulled into question by Hindenburg Research as well, as they were able to sign up for a Cash App card and ultimately receive one with the name of somebody else on it.
JULIE HYMAN: That's right.
BRAD SMITH: That was an interesting part of the thread that they had put forward in their own research and kind of casting a ton of cold water, putting Block through the Ice Bucket Challenge, essentially. But at the end of the day, I think it's still going to come back to where this company is able to maintain an operating income gain here. They're still looking at losses here.
It was $6 million, which is kind of the lowest that I believe we've seen in a good deal of time for Square, for Block, $6 million in this most recent quarter. But the adjusted operating income, that came in at about $51 million there. So that's some bright spot.
JULIE HYMAN: Yeah, it's interesting that it's not moving more. I've been trying to sort of piece out what the disappointment was. I do see a number of price target decreases here this morning in the wake of that. So I'm going to have to do a more digging to get to the bottom of it.
