Block, the financial services company led by Jack Dorsey, has raised its full-year adjusted core earnings forecast and announced plans to increase its investment in bitcoin. The news sent shares of the company soaring by 7.9% after the bell.
The decision to add more bitcoin to its balance sheet comes as Block sees the cryptocurrency as a key part of its future strategy. CEO Jack Dorsey stated in a shareholder letter that the company will invest 10% of its gross profit from bitcoin products each month into purchasing the asset class.
Dorsey emphasized the importance of having an open protocol for money that is not controlled by any single entity, highlighting the company’s commitment to the decentralized nature of bitcoin.
The move comes as the cryptocurrency market gains more mainstream acceptance, with the approval of several bitcoin exchange-traded funds by the Securities and Exchange Commission earlier this year.
Block now expects its annual adjusted core earnings to reach at least $2.76 billion, up from its previous forecast of $2.63 billion. The company’s strong performance is reflective of the broader trend in the payments sector, which has seen a boost from a strong labor market and robust consumer spending.
With a 19% increase in total net revenue to $5.96 billion in the reported quarter, Block’s results have exceeded expectations and underscore the resilience of the payments industry. Larger rival PayPal also raised its forecast for full-year adjusted profit earlier this week, signaling a positive outlook for the sector as a whole.