The figures were reported during the recent earnings webcast for Block’s second quarter.
Block said it is also opening Wave’s APIs to third-party developers and will partner with Shopify to launch the first direct accounting integration in the Shopify app store
“It was a little softer than we would have liked, based on the mix of payment types but overall, we still feel very, very good about the health of the business, the way they're thinking about serving small business owners and the simplicity of their product, and the way they're thinking about the product road map and what's to come,” CEO Jeff Jones said during the webcast.
When it announced the deal, Block forecast Wave would add $40 million to $45 million to Block’s revenue for the year ending April 30. Block also said it would absorb Wave’s loss and transaction costs of $25 million to $35 million. Block executives said Wave has consistently grown at 40-percent plus for some time. Increased revenue and cost reductions to absorb the loss will be accomplished in the fourth quarter.
Block has been marketing Wave to what it called qualified H&R Block clients and vice versa. “So inside the installed base, we think there's a lot of opportunity that doesn't rely on a lot of incremental investment, and that's where we're focused for fiscal '20,” Jones said.
Since the quarter is outside of tax season, it is not a strong one for Block. The company lost slightly less than $188 million in the most recently completed quarter, compared to a loss of $176.3 million a year earlier. Second quarter revenue was $160.8 million, an 8 percent increase from $148.9 million.