Block shares plunge 18% as company takes ‘cautious stance,’ issues weak guidance for year

Published

11 hours ago

May 1, 2025

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Block reported first-quarter results that missed Wall Street expectations on Thursday and issued a disappointing outlook. The stock tumbled 15% in extended trading.

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

Earnings per share: 56 cents adjusted. That figure may not be comparable to estimates.
Revenue: $5.77 billion vs. $6.2 billion expected

Revenue decreased about 3% from $5.96 billion a year earlier. Gross profit rose 9% to $2.29 billion from $2.09 billion a year earlier. That missed analysts’ forecasts of $2.32 billion for the quarter.

Block provided weaker-than-expected profit guidance for the second quarter and full year, reflecting challenging economic conditions. A growing number of tech companies are warning investors about the rest of the year following President Donald Trump’s announcement of sweeping tariffs on imported goods last month.

“We recognize we are operating in a more dynamic macro environment, so we have reflected a more cautious stance on the macro outlook into our guidance for the rest of the year,” the company wrote in its quarterly report.

The company expects gross profit in the second quarter of $2.45 billion and $9.96 billion for the full year. Analysts were expecting $2.54 billion and $10.2 billion, respectively, according to StreetAccount.

In the first quarter, gross payment volume, or a measure of money moving through Square and Cash App, came in light at $56.8 billion, versus expectations of $58 billion, according to StreetAccount.

Despite Cash App’s broader push into financial services and lending, the segment’s gross profit was a bit softer than expected. CFO Amrita Ahuja cited lower inflows and muted tax-season spending, but said the company expect a pickup later this year, in part because of the nationwide expansion of the Cash App Borrow program following approval by the Federal Deposit Insurance Corporation.

While Wall Street is selling on the results, Ahuja said Block delivered its most profitable quarter ever, which she said is “a reflection of the continued discipline across our business and the efficiency with which we operate.”

Square faces the same risks as many others in the payments space due to its reliance on consumer spending. But international markets, now nearly 18% of its volume, remain a bright spot, and a recent survey of small and medium-sized businesses showed strong adoption and satisfaction, even as price sensitivity grows and tariff risks linger.

Block, an early leader in point-of-sale systems for small businesses, faces growing competition from rivals like Toast and Fiserv‘s Clover — though Square still gained share during the quarter in its target verticals including retail, as well as food and beverage.

Cash App continues to push deeper into banking. This quarter marked the debut of Afterpay’s buy now, pay later integration on the Cash App Card, part of Block’s broader effort to expand credit access.

With regulatory approval for Borrow, the company can effectively double the number of users eligible for the product, Ahuja said, while also improving unit economics by bringing loan servicing and origination fully in-house.

Cash App gross profit was up 10% from a year earlier to $1.38 billion. Competition in peer-to-peer payments is heating up, after Venmo reported a 20% jump in revenue.

Block CEO Jack Dorsey said Cash App is focused on offering more products, while at the same time still targeting additional users.

“We of course want to deepen engagement with our customers through banking services and Borrow — and I have no doubt we will,” Dorsey said on the earnings call. “But at the same time, we need to make sure that we continuously grow our network, and that starts with peer-to-peer.”

Analysts view lending as a key piece of monetization, alongside growing opportunities in merchant services and advertising. Morgan Stanley noted that about half of surveyed Square merchants now use Block’s banking products.

Block recorded bitcoin holdings of $2.3 billion at the end of the quarter. The company expects to deliver its first bitcoin mining chips with Proto in the second half of the year.

Block shares are down 31% this year as of Thursday’s close.

— CNBC’s Robert Hum contributed to this report.

Technology

Amazon’s ad business grew 19% in first quarter, topping estimates

Published

10 hours ago

May 2, 2025

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Amazon’s ad business grew 19% in first quarter, topping estimates

A woman cleans the store window of the Amazon house after activists sprayed paint on its logo during a protest on the opening day of the 55th annual meeting of the World Economic Forum in Davos, Switzerland, on Jan. 20, 2025.

Yves Herman | Reuters

Amazon reported a 19% increase in online ad revenue in the first quarter, beating analysts’ estimates.

Ad sales climbed to $13.92 billion, while analysts on average were expecting $13.74 billion, according to StreetAccount.

The numbers were contained in Amazon’s first-quarter earnings report. The company reported total first-quarter sales of $155.67 billion, compared to Wall Street projections of $155.04 billion.

Although Amazon’s online ad business represents a fraction of overall sales, it has emerged in recent years to become the third-biggest platform in the global digital advertising market, behind only Alphabet and Meta.

Online advertising is a particular area of focus for investors due to economic uncertainty and increasing tensions between the U.S. and China over trade. While President Donald Trump’s China tariffs will likely affect Amazon’s core retail business, the company’s online ad unit could also feel some pain.

So far, tech companies with online ad businesses have reported solid first-quarter earnings, but warned of potentially tougher times later in the year.

Meta reported stronger-than-expected first-quarter earnings this week, but said ad sales in the Asia-Pacific region came in at $8.22 billion for the quarter, trailing analysts’ estimates of $8.42 billion.

The company’s finance chief Susan Li said during an earnings call that “Asia-based e-commerce exporters” have slowed their online ad spending likely due to the de minimis trade loophole ending this Friday.

When Alphabet reported first-quarter earnings last Thursday, it revealed that ad sales grew 8.5% year over year to $66.89 billion and YouTube ad revenue increased 10% to $8.93 billion. But Alphabet executives told analysts that it expects headwinds to its Asia-Pacific-focused advertising business.

Snap on Tuesday said it had “experienced headwinds to start the current quarter,” which resulted in the company saying it would not provide guidance.

Last week, Microsoft reported its latest quarterly earnings and said search and news advertising sales, minus payments to its affiliates, grew 15% year over year to $449 million.

Reddit also reported first-quarter earnings on Thursday that beat on sales and guidance. The company’s first-quarter sales soared 61% year over year to $392 million.

Although Reddit’s second-quarter guidance topped analysts’ projections, CEO Steve Huffman said there is some economic shakiness.

“Ever-shifting macro environments like these create both challenges and opportunities,” Huffman wrote in a letter to shareholders. “We’ve grown through challenging times before — people need connection and information just as much in uncertain times.”

Pinterest reports earnings on May 8.

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Technology

Apple has managed tariffs so far, but Cook says it’s tough to predict beyond June

Published

10 hours ago

May 1, 2025

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Apple has managed tariffs so far, but Cook says it's tough to predict beyond June

Apple CEO Tim Cook, after nearly a month of anticipation from investors, on Thursday finally revealed how Apple was navigating the Trump administration’s tariffs.

The company only saw a “limited impact” on tariffs between January and the end of March, Cook told investors on an earnings call for the company’s second quarter results.

For the current quarter which ends in June, Apple is predicting about $900 million in additional costs for those tariffs — assuming nothing changes, Cook said. That surprised analysts who said on the call that they expected the costs to be higher.

The vast majority of Apple’s products are “currently not subject” to Trump’s reciprocal tariffs, Cook said. But beyond June, he didn’t say much.

“I don’t want to predict the future because I’m not sure what will happen with tariffs,” said Cook, adding that “it’s very difficult to predict beyond beyond June.”

Apple doesn’t usually give a lot of details or guidance beyond the current quarter, but investors didn’t like Thursday’s lack of clarity. Apple shares fell as much as 4% in extended trading on Thursday despite the company reporting results that beat Wall Street expectations for revenue and showed strong sales growth for iPads and Mac computers.

“As we look ahead, we remain confident,” Cook said.

Apple’s uncertainty highlights how even a company with a reputation for world-class operations can get whacked by the unpredictability of the Trump administration’s shifting tariff rates and dates.

Cook, who built his reputation in Silicon Valley as Apple’s operations guru, discussed how the company has dealt with the tariffs to minimize their impact so far on Thursday. He praised his old division on a call with analysts.

“‘l’ll just say that the operational team has done an incredible job around optimizing the the supply chain and the inventory,” he said.

Apple is currently sourcing American-bound products from India and Vietnam, Cook said. Those countries currently have 10% tariffs on them, and the company is sourcing Apple computers for rest of the world from China, which the Trump administration has hit with a 145% tariff rate.

Cook also said that Apple had built up inventory ahead of the tariffs, which would be reported as manufacturing purchase obligations in the company’s filings with the Securities and Exchange Commission. Cook said there was no “obvious evidence” that consumers were buying more Apple products ahead of tariffs.

“We do expect the majority of iPhones sold in the U.S. will have India as their country of origin,” Cook said. “Vietnam will be the country of origin for almost all iPad, Mac, Apple Watch and AirPods products sold in the U.S.”

Apple will still pay higher 145% tariffs on some Chinese imports for AppleCare, its extended warranty program, and accessories, Cook said.

One issue for forecasting tariffs going forward is that both Vietnam and India are in line to get hit with hefty tariffs on imported goods as soon as July.

Trump previously targeted both countries under his “reciprocal tariffs” on April 2, but a week later, he paused the tariffs for 90 days. Apple expanded its supply chain to those countries in recent years as a hedge for its business, but the Vietnam and India strategy won’t work if Trump’s tariffs ultimately take effect.

Cook also mentioned the possibility that technology products such as semiconductors might receive additional tariffs under a process called a Section 232 Investigation.

Apple is not the only big tech company to get rattled by the Trump administration’s tariffs.

Amazon finance chief Brian Olsavsky said Thursday that Amazon would offer a wider range of guidance because of tariff uncertainty, and he also alluded to the possibility of weakening consumer demand. Microsoft raised Xbox prices on Thursday, despite tariffs coming up just once on the company’s Wednesday earnings call.

Apple didn’t offer guidance for its profitable Services division on Thursday, but offered the same kind of top-line forecast that it has in previous quarters. Apple expects overall revenue to grow “low to mid-single digits” on an annual basis during the current quarter. Apple reported $85.78 billion in sales during the June quarter last year.

And at least during that quarter, Apple investors will know what to expect.

WATCH: Deepwater’s Gene Munster digs into Apple post-earnings

Technology

Nvidia CEO Jensen Huang gets first salary raise in a decade

Published

11 hours ago

May 1, 2025

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Nvidia CEO Jensen Huang gets first salary raise in a decade

Nvidia’s CEO Jensen Huang delivers his keystone speech ahead of Computex 2024 in Taipei on June 2, 2024.

Sam Yeh | AFP | Getty Images

Nvidia CEO Jensen Huang has made tens of billions of dollars in recent years from his stake in the chipmaker, but he’s getting his first salary increase in a decade.

Huang’s base salary rose to $1.5 million, a 49% increase from 2024, according to a proxy filing with the SEC on Thursday. His variable cash also went up by $1 million, or 50%, from the 2024 fiscal year. Stock awards grew to $38.8 million, bringing total pay to $49.9 million.

The compensation committee “believed this was appropriate in consideration of internal pay equity with the base salaries” of other top executives, the filing said, and “it represented Mr. Huang’s first base salary increase in 10 years.”

Nvidia is in the midst of a boom that’s turned it into one of the most valuable companies in the world, thanks to its graphics processing units (GPUs) that power the most powerful artificial intelligence models and workloads. Revenue in the 2025 fiscal year jumped 114% to $130.5 billion, the company reported in February.

The company’s stock price increased more than ninefold between the end of 2022 and the end of last year. Huang’s roughly 3.5% stake is currently worth about $94 billion.

Huang’s 2025 pay also included $3.5 million in residential security and consultation fees and driver services, the company said in the filing. In the previous year, residential security and consultation fees for Huang totaled $2.2 million.

Google in a recent filing said it paid $8.27 million for CEO Sundar Pichai’s personal security and travel, representing a 22% increase from the year prior.

WATCH: Nvidia-Anthropic feud