On Thursday evening, investors were surprised with unexpectedly good figures from Block, the parent company of Square and Cash App. In response, the share price on NASDAQ rose significantly. In the fourth quarter, Block reported a net income of 10 million US dollars or 2 cents per share. Compared to the same period last year, when a loss of 541 million US dollars or 93 cents per share was recorded, this is a significant increase.

Although analysts had expected Block to reduce its deficit, a loss of 1 cent per share had been forecast. It was unforeseen that the payment service provider would narrowly enter into profit territory. Adjusted earnings were 45 cents per share for the company, which, however, fell short of strategists' expectations of 0.58 US dollars. Additionally, Block boasted an adjusted EBITDA of 562 million US dollars, exceeding the consensus estimate of 448 million US dollars.

Overall, Block achieved a gross profit of $7.5 billion in 2023, of which $3.1 billion was attributed to the subsidiary Square. The remainder of the profit amounting to $4.32 billion was credited to Cash App. Block also provided a forecast for the current first quarter of fiscal year 2024. Accordingly, a gross profit between $2 and $2.02 billion is expected, as well as an adjusted EBITDA of $570 to $590 million. These figures exceed the expectations of analysts mentioned on FactSet.

For the entire fiscal year 2024, Block issues an "initial" forecast that anticipates a gross profit of at least 8.65 billion US dollars, thereby exceeding analysts' expectations, who had previously projected 8.75 billion US dollars. The adjusted EBITDA is expected to be at least 2.63 billion US dollars, surpassing the 2.4 billion US dollars analysts had anticipated earlier.

Chief Financial Officer Amrita Ahuja explained to "MarketWatch" following the release of the figures that the company's ongoing growth is the driving force behind these strong numbers. However, she also emphasized that different growth rates are expected for the two services, Square and Cash App.

The Growth of the Cash App Ecosystem is Expected to Accelerate Past Square's in 2023, but It is Anticipated to Slow Down Due to Price Adjustments and Other Measures to Improve Cost Structure Starting in 2023. For 2024 and Beyond, Block's Focus is on Increasing Engagement through Adoption and Speed of Products.

The unexpectedly positive figures in the fourth quarter have caused great enthusiasm among investors in the company led by Twitter founder Jack Dorsey. The value of Block's stock rose on Friday, trading at the NYSE, by as much as 19.95 percent to 81.52 US dollars at times. Despite the loss already recorded over the course of the year of 12.14 percent, investors can be pleased with the recent share price gains.