Block, Inc. (SQ) delivered mixed results for the first quarter of 2025, with a total net revenue of $5.77 billion, down 3% year-over-year (YoY) due to a decline in bitcoin-related sales. However, excluding bitcoin, revenue grew a solid 8% YoY, underlining strength in core business segments. Gross profit climbed 9% YoY to $2.29 billion, supported by broad-based growth across both Square and Cash App, while adjusted EBITDA rose 15% to $812.8 million.

Operating income increased to $329.3 million, up from $249.7 million a year earlier, and adjusted operating income reached $466.3 million, reflecting effective cost control and improved efficiency. Net income attributable to common stockholders came in at $189.9 million, sharply lower than the prior year’s $472.0 million, which benefited from a large bitcoin remeasurement gain.

Segment-wise, Square generated $1.85 billion in revenue (+7% YoY) and $897.9 million in gross profit (+9% YoY), driven by momentum in software, banking, and integrated payments. Gross Payment Volume (GPV) rose 7.2%, with balanced growth in both online and in-person transactions. Continued traction among upmarket sellers, new partnerships, and product enhancements—such as Square Online upgrades and delivery integration—further fueled performance.

On the consumer side, Cash App posted $3.88 billion in revenue, down 7% YoY due to a 16% drop in bitcoin revenue. Excluding bitcoin, revenue increased 9% YoY, supported by growth in financial services such as the Cash App Card, Instant Deposit, and Afterpay. Gross profit grew 10% YoY to $1.38 billion, with bitcoin comprising a significant portion of revenue but only 5% of gross profit. Consumer behavior during tax season, including weaker discretionary spending, slightly dampened inflows and card usage. Gross profit per monthly transacting active user stood at $81.

Afterpay (BNPL) contributed $312.9 million in revenue, up from $283.5 million last year. Integration into Cash App progressed meaningfully, with two key rollouts: retroactive BNPL for Cash App Card purchases and the U.S. launch of Cash App Afterpay. Early traction suggests strong engagement, and management expects this channel to become more impactful in 2026.

From a profitability standpoint, Block reaffirmed its full-year adjusted operating margin guidance of 19%, aided by restructuring efforts that include a 12,000-employee cap and centralized operations. $66.9 million in severance and related costs were recorded in the quarter. The company maintains strong flexibility, with variable expenses like go-to-market and risk loss accounting for roughly 35% of its cost base. Available liquidity totaled $9.2 billion, including $8.5 billion in cash and equivalents.

User growth has slowed for Cash App, particularly in transacting actives, prompting a renewed focus on expanding its reach—especially among younger demographics and families. For Square, seller acquisition remains efficient, with payback periods between five and seven quarters.

On the innovation front, Block plans to unveil over 100 new features at an upcoming event, including enhancements to Square Online and tools supporting large invoices. AI is also becoming a cornerstone, with the introduction of an internal tool named “Goose” now live in Square and poised for rollout in Cash App. A key regulatory milestone was achieved as Square Financial Services received FDIC approval to issue consumer loans for Cash App Borrow nationally, a move expected to significantly expand its user base.

Looking ahead, Block projects 12% gross profit growth for 2025, reaching $9.96 billion, with acceleration through the back half of the year. Square’s GPV grew 9.6% YoY in April, and further momentum is anticipated. Cash App Borrow and BNPL are viewed as pivotal growth levers in H2 2025 and into 2026. Full-year adjusted operating income is expected to reach $1.9 billion.

While management remains optimistic, it is incorporating macroeconomic caution into its guidance following softer seasonal trends in consumer spending. No material deterioration was noted post-tax season, but uncertainties remain, particularly for Cash App engagement.