By Byron Kaye and Hannah Lang
SYDNEY/WASHINGTON -Block Inc, the payments company of Twitter Inc founder Jack Dorsey, posted better than expected fourth-quarter profit thanks to a highly volatile bitcoin market and booming online retail, sending its shares soaring.
The company, which offers merchant payment services and an app that lets people trade the cryptocurrency, recently took a secondary listing in Australia after buying that country’s top payments company, Afterpay.
Though the results announcement came after the close of trading on the New York Stock Exchange, where Block has its main listing, the company’s Australian stock leapt as much as 40%, the biggest gainer in a flat overall market.
The move followed months in which companies linked to internet shopping have seen valuations shrink due to expectations of rising interest rates and unwinding government stimulus payments as COVID-19 restrictions ease.
Block, formerly called Square, disclosed plans for an all-stock buyout of Afterpay in August. Its shares fell by two-thirds by the deal closing in January, pushing down the value of the stock that went to owners of the Australian company.
The fourth-quarter pre-tax profit, which did not include earnings from Afterpay, beat forecasts of analysts at RBC Capital Markets and Jefferies, according to their research notes.
Total revenue hit $4.08 billion in the quarter from $3.16 billion a year earlier, while “gross profit” jumped 47% to $1.18 billion, the company said.
Its unit that sells terminals and software for businesses to process payments, Square, generated gross profit of $657 million, up 54%. Cash App, which lets individuals send payments including in bitcoin, grew gross profit 37% to $518 million.
Cash App generated $1.96 billion of bitcoin revenue in the quarter, up 12% from a year earlier despite the cryptocurrency’s sharp swings in value late last year. Dorsey founded Block, remains a large shareholder and serves as company chairman.