Shares in Block Inc. rose in late trading after the payments company delivered mixed results in its latest quarterly earnings.

The payment services firm reported adjusted earnings per share of 22 cents in its fourth quarter, down from 30 cents in the same quarter of 2021, on revenue of $4.65 billion. Analysts had expected 30 cents and $4.61 billion. Block’s gross profit in the quarter rose 40%, to $1.66 billion, higher than an expected $1.53 billion, while its net loss came in at $115 million, down from $77 million a year ago.

By market segment, Square saw its gross profit increase 22% year-over-year, to $801 million, and Cash App profit grew 64%, to $848 million. Block’s Buy Now, Pay Later segment, based primarily around Afterpay, the Australian company it acquired in 2021, delivered $132 million and revenue and $98 million in gross profit.

Adjusted earnings before interest, taxes, depreciation and amortization came in at $281 million, up from $184 million a year ago but down from $327 million in the previous quarter.

For the full year 2022, Block reported a net loss of $541 million compared with a profit of $166 million last year. 2022 is the first time Block, previously known as Square, has reported a net loss since 2018. Gross profit across the year came in at $5.99 billion and adjusted earnings before interest, taxes, depreciation and amortization was $991 million.

Highlights included midmarket sellers continuing to be Square’s fastest-growing segment, with gross profit up 16% year-over-year, outpacing total Square gross profit growth, excluding BNPL. Cash App had 51 million monthly active users, up 16% year-over-year and the Cash App Card generated $750 million in gross profit in 2022, up 56%.

“Over the last year, our ecosystem model helped drive resilience as we continued to serve a diverse base of global customers across a wide range of verticals, complementary products and use cases,” Block said in a letter to shareholders. “Looking ahead to 2023 and beyond, we are focused on balancing growth and efficiency and will prioritize speed, agility and accountability.”

Block expects adjusted expenses of $1.43 billion for the quarter ahead, a quarter-over-quarter increase of $30 million. Adjusted EBITDA for 2023 is expected to be $1.3 billion and it expects and adjusted loss of $130 million.

Block may have missed onearnings, but strong revenue and gross profit were enough to convince investors that the company remains a good long-term play. Block shares rose more than 6% after the market close.

Image: Block