Shares of Block, formerly called Square, were up more than 1
percent in extended trading on Thursday, paring gains after rising more than 4
percent. Prior to market close, its stock was down more than 10 percent from
the beginning of this year.
The company posted total net revenue of $4.99 billion in the
quarter ended March 31, up 26 percent from the prior year and beating analysts'
estimate of $4.59 billion, according to Refinitiv data.
The San Francisco-based fintech, which offers merchant
payment services and an app that facilitates peer-to-peer payments and lets
people trade cryptocurrency, said gross profit in the first-quarter rose 32
percent to $1.71 billion.
Hindenburg, whose report this year triggered a rout of more
than $100 billion in shares of India's Adani Group companies, had accused Block
of overstating its user numbers by allowing fake or duplicate accounts to exist
on its Cash App platform. The allegations sent shares in the company down 22
percent.
Reuters could not verify the claims raised in the report.
Block has denied the allegations and has said it would explore legal action
against the short seller. Short sellers like Hindenburg typically sell borrowed
securities and aim to buy these back at a lower price.
In a call with analysts, Block CEO Jack Dorsey said the firm
stands by its response to the report.
"We will not be distracted from our strategy and from
our prioritizations," he said. "We have a pretty compelling roadmap
ahead of us in every one of our ecosystems."
Block's revenue growth has moderated over the past few
quarters as inflation prompted consumers to defer big-ticket purchases. In its
previous earnings report, the payments firm said it was "meaningfully
slowing" the pace of hiring this year to control costs. © Reuters