Why Payments Provider Block’s Stock Is Down 10% Friday

Block (XYZ) shares slumped Friday after the fintech company’s quarterly results fell short of Wall Street’s expectations on the top and bottom lines.

The stock was down about 10% in recent trading, leading decliners in the S&P 500. Read Investopedia’s full daily markets coverage here.

Block reported adjusted earnings of 54 cents a share on revenue that rose about 2% year-over-year to $6.11 billion in the third quarter. Both figures came in below analysts’ estimates. The payments provider’s gross profit grew 18% to $2.66 billion. Cash App’s 24% gross profit growth accounted for the majority of those gains, while gross profit at payments unit Square increased a more modest 9%.

Block raised its full-year guidance, citing strong trends across the business. The company now expects gross profit of $10.24 billion, up from its prior estimate of $10.17 billion. Block also boosted its forecast for full-year adjusted operating income to $2.056 billion from $2.03 billion. 

Still, investors focused on its earnings miss and rising expenses, including a nearly $70 million increase in general and administrative costs that the company attributed partly to “an in-person company event.” According to Block, general and administrative expenses would have been roughly flat year-over-year without that event. 

With Friday’s plunge, shares of Block have lost about one-quarter of their value since the start of the year.