Block reported first-quarter earnings after the bell that exceeded analysts’ estimates. The stock rose about 10% in extended trading.

Here’s how the company did, compared to analysts’ consensus from LSEG.

• Earnings per share: 85 cents adjusted vs. 72 cents adjusted that was expected
• Revenue: $5.97 billion vs. $5.82 billion expected

Block posted $2.09 billion in gross profit, up 22% from a year ago. Analysts tend to focus on gross profit as a more accurate measurement of the company’s core transactional businesses.

The company reported net income of $472 million, or 74 cents per share, more than quadruple the net income of $98.3 million, or 16 cent per share, a year earlier.

The company raised its adjusted EBITDA forecast for the second quarter to $690 million from $670 million.

Block, formerly known as Square, ended the year with 57 million monthly transacting actives for Cash App in March, up 6% year-over-year. Inflows per transacting active were $1,255, up 11% year over year.

The Cash App business, which is the company’s popular mobile payment platform, reported $1.26 billion in gross profit, a 25% year-over-year jump. Block, run by Twitter co-founder Jack Dorsey, said its Cash App Card monthly active users increased to 24 million in March.

Block is also more focused on integrating Afterpay, the buy-now, pay-later company it bought for $29 billion in 2021. Afterpay struggled following the deal, posting big losses.

Block has slimmed down operations in recent months. In January, Dorsey reportedly said in a note to staffers that the company had laid off a “large number” of workers. This followed another round of layoffs in December.

Chief financial officer Amrita Ahuja said in a call with CNBC that the company is raising its outlook for the year to reflect its strong performance in the first quarter.

Dorsey’s note to shareholders began by directly addressing a question that he often fields: “Why the hell are you all spending so much time on bitcoin?”

“Less than 3% of company resources are dedicated to bitcoin-related projects,” Dorsey wrote. “But why spend time on bitcoin at all? We believe the world needs an open protocol for money, one that’s not owned or controlled by any single entity.”

Bitcoin, said bitcoin will ultimately help Block “serve more people around the world faster.” He added that going forward, Block will be investing 10% of its gross profit from bitcoin products into purchases of bitcoin for investment.

“We were one of the first public companies to put bitcoin on our balance sheet,” he wrote.

The $220 million the company invested into bitcoin has grown 160% to $573 million as of the end of the first quarter, according to Dorsey.

Shares in Block dropped 8% percent on Wednesday after an NBC investigation claimed that U.S. prosecutors were probing the company’s compliance practices based on information leaked to them by a former employee of the company.

“Most of the transactions discussed with prosecutors, involving credit card transactions, dollar transfers and bitcoin, were not reported to the government as required,” the NBC story alleged.

The whistleblower reportedly gave the government materials showing breaches in know-your-customer and anti-money laundering rules, as well as evidence indicating that management ignored these lapses.

Unlike past reports of possible wrongdoing at the company, the latest allegations encompass both Cash App and the company’s Square point-of-sale technology. It also includes within its scope international payments, sanctioned nations, and breaches of the Office of Foreign Assets Control. In September, Alyssa Henry stepped down as Square CEO. Dorsey stepped in to fill the role and no successor has been announced.

A separate report in February published by the same NBC reporter found that two whistleblowers had gone to the U.S. Treasury’s Financial Crimes Enforcement Network, or FinCEN, to share similar allegations. The popular payment app “had no effective procedure” to establish the identity of its customers, two whistleblowers told officials, according to NBC.

Analysts for Macquarie wrote in a note on Wednesday that should the Federal probe find merit in these claims, they see greater potential for fines or behavioral remedies such as robust oversight teams and infrastructure rather than “something structural like limitations on the types of business it can do.”

Last year, short seller Hindenburg Research levied similar claims, alleging that Block allowed criminal activity to operate with lax controls and “highly” inflates Cash App’s transacting user base, a key metric of performance.

Hindenburg described Block’s internal systems as a “‘Wild West’ approach to compliance.”

— CNBC’s Michael Bloom and Kate Rooney contributed to this report.

WATCH: Block shares pop on earnings beat

Coinbase reported better-than-expected revenue in its first-quarter earnings report on Thursday. The stock was trading about 4% lower in extended trading.

Here’s how the company did, compared to analysts’ consensus from LSEG.

• Earnings: $4.40 per share. That may not be comparable to the $1.09 average analyst estimate.
• Revenue: $1.64 billion vs. $1.34 billion expected

Coinbase, the primary marketplace in the U.S. for buying and selling digital tokens, reported net income of $1.18 billion, or $4.40 per share, compared to a year-ago loss of $78.9 million, or a loss of 34 cents a share. In February the company reported its first profit in two years.

Profit in the quarter includes a $650 million mark-to-market gain on crypto assets held for investment in connection with the company’s adoption of updated accounting standards.

Consumer transaction revenue was $935 million for the quarter, up well over 100% from a year earlier. Total transaction revenue almost tripled in the quarter to $1.07 billion.

Transaction revenue has historically been a primary driver of revenue, with subscription and services revenue bringing in $511 million for the quarter.

Coinbase shares climbed almost 9% on Thursday ahead of the report and have jumped roughly 32% this year after soaring almost fivefold in 2023. The stock tends to benefit from big gains in bitcoin as large rallies in the cryptocurrency lead to increased trading volumes and demand for other services.

During the first quarter, bitcoin hit a new all-time high above $73,000 in March, and ethereum, the second-biggest digital asset, underwent its first major upgrade in over a year.

The industry has also seen an influx of institutional investors since the SEC approved a raft of new U.S. spot bitcoin exchange-traded funds. Many of the ETFs have partnered with Coinbase as their custody partner. By the end of the first quarter, the funds had collectively brought in more than $50 billion.

Cumulative net inflows peaked on Apr. 8, according to Raymond James analysts, and have fallen since then, alongside a slippage in bitcoin.

“The price of Bitcoin peaked as the pace of inflows moderated, and has been drifting modestly lower since mid-March,” Raymond James analysts wrote in a note this week. “Indeed, trading volumes on Coinbase’s platform have come well down from early-March levels.”

Coinbase also remains mired in a legal fight with the SEC. In March, a judge ruled that the regulator’s claim that the crypto exchange engaged in unregistered sales of securities could be heard by a jury at trial.

Another potential headwind is new competition from Crypto.com, which has re-gained market share in recent months.

Multiple insiders at Coinbase, including four members of the C-suite, collectively sold $383 million of the company’s shares during the first quarter, according to analysts from Raymond James. This was more than double the amount sold in the fourth quarter of 2023 and the greatest amount of insider selling since the company listed on the Nasdaq in 2021.

Raymond James noted that the biggest seller has been co-founder and board member Fred Ehrsam, who netted $129 million for his shares.

— CNBC’s Michael Bloom and Kate Rooney contributed to this report.