Dorsey-led Block allays slowdown worries after mixed quarterly results
Feb 23 (Reuters) - Payments firm Block Inc (SQ.N) said it is "meaningfully slowing" the pace of hiring this year to control costs and gave an upbeat forecast for a key profit metric, allaying some investor fears about a fallout from a weak economy and cryptocurrency market.
Shares in the company, led by Twitter founder Jack Dorsey, jumped 7% in volatile post-market trading in which the stock changed direction a few times.
Block said it expects adjusted EBITDA to surge 30% to about $1.3 billion in 2023.
While Americans were largely resilient to inflationary pressures through 2022, the outlook for the payments industry has been murky amid worries that customers would put off discretionary spending as the economy weakened.
"Amidst this uncertainty, we intend to hold to our stated profit targets for 2023. If growth slows, we'll exercise discipline and look for cost initiatives to pull back," Chief Financial Officer Amrita Ahuja said on a call with analysts.
The fintech, which offers merchant payment services and an app that lets people trade cryptocurrency, said gross profit in the fourth-quarter rose 40% to $1.66 billion.
Block also said it was slowing the pace of hiring this year but still expecting headcount to tick up, bucking a broader weakness among rival fintech firms which have cut jobs in recent months.
"In 2023, we expect to increase our headcount by 10% compared to the prior year period, a significant change compared to a 46% growth in 2022," Ahuja said.
On an adjusted basis, Block earned 22 cents in the quarter ended Dec. 31, missing analysts' estimates of 30 cents, according to Refinitiv IBES data.
The company reported net revenue of $4.65 billion, a touch above Wall Street expectations.
Taking some shine off gains from resilient spending trends, full-year bitcoin revenue fell nearly 29% to $7.11 billion, as prices of the cryptocurrency retreated amid market volatility.
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