Square-parent Block reported second-quarter earnings and revenue that slightly missed Wall Street targets. But Square stock popped as some key financial metrics beat expectations while the company raised its 2025 gross profit outlook.
In May, the digital payments company lowered fiscal 2025 guidance amid weakness in the consumer Cash App business. But some Cash App operating trends improved in Q2, especially in its new banking business.
"We see Cash App emerging as a best-in-breed digital traditional bank alternative, offering seamless low-cost saving, borrowing, spending, and bitcoin solutions," said William Blair analyst Andrew Jeffrey in a report. "Importantly, the company disclosed a new (metric) indicating that it has 8 million banking actives, defined as people who have either deposited a paycheck or spent more than $500 per month."
He added: "Square is proving its relevance following several quarters where it appeared to be losing share to software-integrated competitors. Square seems to be on the front foot, and we expect second-half GPV (gross payment volume) growth acceleration driven by new software, hardware, and distribution."
Released after the market close on Thursday, Square earnings for the period ended June 30 were 62 cents per share on an adjusted basis, up over 10% from the year-earlier period.
Also, Square said net revenue came in at $6.054 billion, including Bitcoin transactions, down 1.6% from a year earlier. Wall Street analysts had predicted Block earnings of 63 cents a share on revenue of $6.297 billion.
Square Stock: Gross Profit, EBITDA Beat
Financial analysts also view gross profit as a key metric for Square stock. In Q2, gross profit rose 14% to $2.537 billion, topping estimates of $2.461 billion. The Cash App segment reported gross profit of $1.501 billion, up 15.6%, improving from Q1's 9.6% growth.
Cost-cutting boosted earnings before interest, taxes, depreciation and amortization, a key metric known as EBITDA. It came in at $891 million, up 17%, blowing past estimates of $828 million.
In Q2, gross payment volume from the transactions of merchant customers rose 10% to $64.25 billion, below estimates of $66.318 billion.
The company raised its gross profit guidance for 2025 to $10.17 billion, up 14% year over year. Its earlier guidance was $9.96 billion, up 12%.
Square Stock: Banking Business Grows
At Jefferies, analyst Trevor Williams said in a report: "Broad-based strength in Q2, and the big Q3 guide-above signals momentum continues to build."
In Q2, Cash App monthly average users came in flat at 57 million. Wall Street analysts have focused on Square's banking business and direct deposit users.
In a letter to shareholders, Square said: "As of June, we had 2.7 million paycheck deposit actives. If we define a banking customer based on how people use money in their everyday lives — depositing a paycheck or spending at least $500 per month across Cash App — we would have 8 million banking actives, growing 16% year over year. And if we count anyone who deposits $200-plus in paychecks or transacts 15-plus times a month, we'd have ended June with 11 million banking actives, adding over 1 million actives in the past year. However you define it, our banking scale is significant."
On the stock market today, Square stock popped 8.3% to 83.20 in early trading.
In its core businesses, Square operates a two-sided digital payments ecosystem, with products designed for both merchant sellers and consumer buyers. San Francisco-based Block's earnings included consumer lending firm Afterpay.
The Square Cash App helps individuals manage money, buy stocks and cryptocurrency, and more. The company recently added a pooled payments feature to the app that allows groups of users to split payments.
Square Stock Technical Ratings
Heading into the Block earnings report, Square stock was down about 11% in 2025.
Square stock holds an IBD Composite Rating of 90 out of a best-possible 99, according to IBD Stock Checkup. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
Square stock, meanwhile, holds an Accumulation/Distribution Rating of A-minus. The rating runs from a best-possible A+ to a worst-possible E. The rating analyzes price and volume changes in a stock over the past 13 weeks of trading.
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