Jack Dorsey-led Block Inc is expected to increase its operating expenses in the second half of the year despite cutting roughly 40% of its workforce in February, leaving analysts to question whether the spending will translate into real growth.
Mizuho estimates that Block's adjusted operating expenses will rise from $4.48 billion in the first half to $4.56 billion in H2 based on the company's guidance.
The bank's analysts, led by Dan Dolev, said its own model suggested the workforce reduction alone could have lowered Block's quarterly operating expenses by around 18%.
"Although Block’s second quarter was very solid, a key question regarding operating expenses is still open," the Mizuho analysts wrote in a Thursday note.
Block (XYZ) tied the spending to initiatives it sees as offering potentially strong returns, including investments in sales, Cash App products and artificial intelligence infrastructure.
