Block Stock Soars as Cash App Bitcoin Revenue Hits $2.42 Billion – Decrypt

Block, the fintech company led by former Twitter CEO Jack Dorsey, saw its stock price jump more than 20% to over $52 after hours on Thursday, after reporting better than expected Third quarter results.

The company, formerly known as the Placereported net revenue of $5.62 billion, up 24% year-over-year (y-o-y), and adjusted EBITDAearnings before interest, taxes and depreciationof $477 million, up 32% over the same period.

This solid performance is largely explained by annual growth of 37.5%. Bitcoin revenue thanks to Block’s key product, Cash App, which accounted for more than half of Block’s total net revenue in the third quarter, reaching $2.42 billion, up from $1.76 billion the year before .

Cash App, which last month celebrated its 10th anniversary since its launch, is a mobile payments service that allows users to send and receive fiat currency, buy and sell Bitcoin, and invest in actions.

“The year-over-year increase in Bitcoin revenue and gross profit is driven by an increase in both the average market price of Bitcoin and the amount of Bitcoin sold to customers,” Block said in his report. Third Quarter Earnings Report.

Overall, Cash App generated $3.58 billion in revenue and $984 million in gross profit, up 34% and 27% year-over-year, respectively. Excluding Bitcoin revenue, Cash App revenue was $1.16 billion, up 26% year over year.

The company’s other payments platform, Square, reported revenue of $1.98 billion, up 8% year-over-year. Square is a point-of-sale system that allows merchants to accept card payments and manage their business.

Block’s Bitcoin gross profit saw a 22% increase, reaching $45 million from $36 million the previous year, according to the report.

No loss of value on Block’s Bitcoin holdings

Despite the surge in profits, accounting rules created a $114 million gap between the market value and book value of Block’s Bitcoin holdings, valued at $216 million.

However, no impairment losses were recorded in the third quarter of 2023, as the company follows the lower-of-cost or market method, meaning it only recognizes losses when the market value falls below cost. basis, but not gains when the market value exceeds the basis price. cost basis.

Block revised its full-year 2023 guidance, increasing its adjusted EBITDA by $1.5 billion to between $1.66 billion and $1.68 billion and its operating profit by $25 million to between 205 million and 225 millions of dollars.

The company also provided adjusted operating profit guidance of $875 million for 2024 and forecast 2023 gross profit of between $7.44 billion and $7.46 billion.

In his letter to shareholders, Dorsey said that “we have been quiet lately because we have been focused,” adding that Block aims to “create simple, fair and accessible financial services for everyone” and to “give people economic freedom. .”

According to Dorsey, “a number of things” have held the company back, and as for future growth, the company is looking to focus more on artificial intelligence.

“We believe that artificial intelligence can be a powerful assistant in helping sellers further grow their business, as it can enable greater creativity, efficiency and productivity,” the report said.


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