The shares of financial services company Block Inc. (NYSE: SQ) jumped as much as 14% during after-hours trading on Thursday following the release of better-than-expected fourth quarter financial results. The company, formerly known as Square, posted revenue of $5.77 billion, which topped Wall Street's estimates.

Block Surprises with Profitable Quarter

Perhaps most notably, Block reported a surprise profit for the quarter when analysts had projected a loss. The strong growth of Block's Cash App and Square products fueled the outperformance, and total net revenue that came in at $5.77 billion versus the forecasted $5.70 billion. Block raised its full-year adjusted EBITDA guidance to at least $2.63 billion, up from the prior outlook of $2.40 billion.

Usage metrics of Block's Cash App remained robust during the quarter. The peer-to-peer payments app had 56 million monthly active users in December, the majority of which actively utilized features like the Cash Card or direct deposits. Block said the Cash Card itself now boasts 23 million monthly active users.

The news caused Block shares on Wall Street to rise even after the official Thursday’s session hours:

“Cash App aims to become one of the top providers of banking services to households in the United States which earn up to $150,000 per year, a segment that represents approximately 80% of consumers and more than 50% of household income,” the company commented in the report.

The fourth quarter capped a transitional year for the payments firm. Formerly known as Square, the company rebranded as Block in December to better reflect its growing suite of products across areas like crypto and music. The year also saw a high-profile CEO, Jack Dorsey, step down from his dual role leading Twitter to focus solely on Block.

“We believe this strategy will enable us to build the largest network in the long run, with a highly engaged customer base using Cash App as their primary banking solution,” Dorsey commented.

Block’s Big Trim

Despite achieving strong financial results and positive market reactions in after-hours trading, Block Inc. faces challenges, including implementing layoffs as part of a cost-reduction strategy initiated in the previous year. Reuters recently cited an insider confirming that the company had began reducing its workforce in January to streamline operations and manage expenses.

In November 2023, Block Inc. disclosed plans to decrease its employee count from approximately 13,000 to 12,000 by the end of 2024, indicating the recent job cuts as the first step towards achieving this reduction through performance evaluations and structural adjustments. The company acknowledged that its workforce had expanded more rapidly than its primary business and revenue streams.

Owned by Dorsey, Block Inc. is known for being one of the most significant publicly traded corporations with investments in Bitcoin , holding over 8,000 tokens valued at around $342 million. Among its notable BTC investments was a purchase worth $170 million nearly three years ago, at an average price of $51,000 per Bitcoin, highlighting its significant position in the cryptocurrency market.