Bitcoin
Block to add more bitcoin to its treasury, raises annual forecast
(Reuters) -Block raised its full-year adjusted core profit forecast on Thursday and revealed plans to add more bitcoin to its balance sheet as the Jack Dorsey-led company bets big on the cryptocurrency.
The company’s shares jumped 7.9% after the bell.
The once-nascent asset class moved closer to the mainstream following the approval of several bitcoin exchange-traded funds by the Securities and Exchange Commission in January.
Block will invest 10% of its gross profit from Bitcoin products each month into purchasing the asset class, CEO Dorsey wrote in a letter to shareholders.
“We believe the world needs an open protocol for money that is not owned or controlled by any single entity,” Dorsey said in the note.
The company currently dedicates less than 3% of its resources to bitcoin-related projects, he said.
Block now expects adjusted annual profit to be at least $2.76 billion, up from its previous forecast of $2.63 billion.
Payments companies benefited from a tight job market and wage growth that allowed Americans to put aside worries about an economic slowdown and continue spending on travel, shopping and dining out.
The results exceeding Block’s estimates cap off a very strong quarter for the payments sector, whose fortunes are closely linked to the strength of consumer spending.
The company reported a 19% jump in total net revenue to $5.96 billion in the reported quarter.
Earlier this week, bigger rival PayPal also raised its forecast for full-year adjusted profit, signaling resilience in consumer spending.
On an adjusted basis, Block earned 85 cents per share in the three months ended March 31, beating analyst expectations of 72 cents per share.
The company’s shares are down 9.1% so far this year since their last close, underperforming PayPal, which is up 9%.
(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Pooja Desai)