Block, a payments company is also diversifying into music and bitcoin mining.

Block Inc. (NYSE: SQ), a digital payments company led by Jack Dorsey, has increased its forecast for full-year profit after its Cash App product saw a surge in usage during Q1 2023. Earnings at the company also beat Street estimates.

Revenue surged 26% over the year-ago quarter to $4.99 billion, beating the Street’s estimate of $4.58 billion.

Block, which is the parent company of Square, posted a 32% year-over-year jump in gross profit at $1.71 billion. Gross profit linked to Cash App rose 49% YoY to $931 million, driven by an increase in active users and higher average spending on debit cards tied to the app; Square’s gross profit was up 16% at $770 million.

Net loss per share in the quarter was $0.03, well ahead of Wall Street’s expectations of a loss per share of $0.34.

The company now expects adjusted EBITDA to reach $1.36 billion, up from the $1.3 billion previously forecast, due to the growth in gross profit momentum and operating expense discipline. (Bloomberg)

Last month, Block bought a large quantity of semi-conductors from Intel (NASDAQ: INTC) to support a bitcoin mining operation aimed at entrepreneurs. Previously, the company acquired rapper Jay-Z’s music streaming service Tidal.

In March, Hindenburg Research, a financial research firm, had accused Block of facilitating fraud for criminals and inflating user metrics by failing to enact mandatory know-your-customer (KYC) procedures. The report alleged that the company allowed users to have multiple Cash App accounts (alleged to run into the hundreds in some cases), with criminals taking advantage of the platform’s eagerness to serve the underbanked and underserved.

After the Q1 numbers, Block is trading at $59.63 (down 1.32%) at the time of writing.

Related Story:  Feared Hindenburg Research Targets Block, Stock Plunges 17%

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