Block Inc., formerly known as Square, the payment technology company, experienced robust growth in both Bitcoin revenue and profit during the second quarter of 2023.
This positive outcome remained unaffected by the prevailing downward trend in the cryptocurrency market. Despite these promising results, unfortunately, the market reaction was negative, as Block’s shares fell 5.6% in after-hours trading.
During its Q2 earnings call, Block reported a surge in Bitcoin sales on its Cash App platform. The sales reached $2.4 billion, marking a 34% increase from the same period last year.
Additionally, the gross profit from Bitcoin sales amounted to $44 million, showcasing a 7% YoY growth. Block credited the increased revenue and profit to higher Bitcoin sales, partly countered by a lower average market price compared to the previous year.
Block also highlighted its own investments in Bitcoin. The company disclosed that it acquired $50 million worth of Bitcoin during Q4 2020 and an additional $170 million during Q1 2021.
On June 30, 2023, the fair value of its Bitcoin investment stood at $245 million. This amount exceeded the carrying value of the investment by $142 million after considering cumulative impairment charges.
Block’s Overall Performance And Outlook
Block’s total revenue for the quarter experienced a significant growth of 25.6%, soaring from $4.4 billion to $5.53 billion year on year. It is noteworthy that nearly half of this remarkable increase stemmed solely from Bitcoin sales.
— Block Investor Relations (@BlockIR) August 3, 2023
The company experienced a significant boost in gross profit, totaling $1.87 billion, marking an impressive 27% year-over-year increase. Block’s Cash App excelled, generating an impressive $968 million in gross profits, up 37% YoY.
The company experienced positive growth in its seller ecosystem, generating $1.31 billion in gross profits. This represents a 15% increase compared to the previous year.
Block’s CEO, Jack Dorsey, expressed the company’s vision of establishing an inclusive and easily accessible financial system for all individuals.
Additionally, he made a significant announcement about Block’s ongoing development of TBD54566975—a decentralized exchange platform specifically designed for Bitcoin.
Dorsey emphasized that their drive stems from the belief that everyone should have the opportunity to participate in the economy, thereby encouraging them to create user-friendly tools to facilitate this objective.
According to Block’s CFO, Amrita Ahuja, the company forecasts a mid-single-digit percentage increase in both Q3 revenue and gross profit compared to the previous period.
This growth reflects the strong momentum across all of Block’s business sectors. Ahuja emphasized their continued focus on long-term investment for sustainable expansion and generating lucrative returns for shareholders.