(Bloomberg) — Shares of Block Inc. fell in late trading after the digital payments company posted third-quarter revenue that was below analysts’ forecasts.
The Cash App provider also said that it is winding down TBD, a decentralized finance business, as it shuffles resources toward other cryptocurrency-focused ventures.
Block, which was previously known as Square, said it is dedicating more resources to its Bitcoin mining initiative and self-custody wallet for Bitcoin, called Bitkey. Block is also scaling back investments in Tidal, its music streaming platform.
“Within our emerging initiatives, we are refining our investments based on our progress,” the company’s Thursday shareholder letter said.
Block also disclosed in a separate filing in August that the company received a draft consent order from the Consumer Financial Protection Bureau linked to an ongoing investigation of Cash App’s handling of customer complaints and disputes. The company noted it is engaging with the agency to determine if the matter can be settled, the filing said.
Block’s shares fell as much as 15% in late trading before paring the decline to less than 3%. The stock is down about 2.7% this year.
The firm reported net revenue rose about 6% to $5.98 billion, missing the average forecast of $6.24 billion from analysts surveyed by Bloomberg. Bitcoin and Cash App revenue also fell short of expectations at $2.43 billion and $3.93 billion, respectively, for the most recent three-month period.
Last year, Block Chief Executive Officer Jack Dorsey announced a 12,000 person employee cap at the company and Tidal has laid off staff in the past.
Block is known for its person-person money transfer service Cash App and its payments terminal Square. Block competitors include PayPal, the parent company of peer-to-peer money transfer app Venmo, and Stripe.
The company is leaning further into lending as it sets its sights on offering a full banking suite to Cash App customers, it said when reporting earnings. Block said it is adding its buy now, pay later offering, Afterpay, on its Cash App cards.
(Updated with earnings results in the seventh paragraph.)
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