Block's second-quarter profit rises as consumer spending stays resilient
XYZ•Cost cuts and operating income improve
The industry's endurance typically becomes strained only when labor market conditions weaken, reducing consumer spending as unemployment rises.
Block has also stepped up its cost-cutting efforts. In February, it announced plans to cut more than half its workforce as part of a broader overhaul to embed AI across its operations.
Adjusted operating income rose to $864 million, or $1.02 per share, in the three months ended June 30. That compares with $550 million, or 62 cents per share, a year earlier.
Cash App and Square both post higher gross profit
Payments firms have continued to process healthy transaction volumes even as consumers rein in discretionary spending and prioritize everyday essentials, since both transactions flow through the same networks.
Gross profit at Cash App, which offers peer-to-peer payments, banking and investing services, surged 31% in the second quarter. Gross profit at its Square merchant business rose 13% from a year earlier.
Second-quarter profit rises on resilient spending
Aug. 5 (Reuters) - Jack Dorsey-led Block posted a higher second-quarter profit on Wednesday as sturdy consumer spending underpinned payment activity despite economic uncertainty, sending its shares up nearly 5% in extended trading.
The results cap a strong earnings season for the U.S. payments industry and underscore resilience in the face of inflationary pressures fueled by the Middle East conflict and elevated borrowing costs.
