Block, the Bitcoin-focused fintech company led by Jack Dorsey, recently released its third-quarter earnings report, impressing analysts with its strong performance. In Q3 2023, Block generated a total revenue of $5.62 billion, exceeding expectations.
The company achieved substantial revenue growth in both its Cash App and Square divisions, earning a profit of $44 million from its Bitcoin holdings. Overall, Block recorded a gross profit of $1.90 billion in the third quarter, representing a 21% year-over-year increase.
Cash App, which allows users to buy, sell, and store Bitcoin, generated a gross profit of $984 million, a 27% increase from the previous year. Meanwhile, Square, Block’s payment processing unit, saw a 15% increase in gross profit, reaching $899 million.
Notably, Bitcoin revenue accounted for approximately 43% of Block’s total revenue during this period. The company’s Bitcoin gross profit reached $45 million, a 22% year-over-year increase. Block sold $2.42 billion worth of BTC through Cash App, benefiting from both the higher market price and increased quantity sold.
As of September 30, 2023, Block’s investment in Bitcoin had a carrying value of $102 million but a fair value of $216 million. This significant increase in value reflects the growing market demand for cryptocurrencies.
To mitigate the dilution caused by share-based compensation, Block has authorized the repurchase of $1 billion in shares. This move aims to maximize shareholder value and ensure the company remains focused on its long-term vision.
Dorsey, in a shareholder letter, emphasized Block’s dedication to its future plans and highlighted the potential of Square. The company’s strong profits in Q3 were driven by robust consumer demand and positive spending trends.
It is noteworthy that Block has not incurred any impairment loss on its Bitcoin holdings since the previous quarter. This indicates the company’s sound investment strategy and ability to navigate the volatility of the cryptocurrency market.
Overall, Block’s positive earnings report signifies the growth and potential of the Bitcoin-focused fintech sector. The company’s ability to exceed expectations and maintain a profitable position demonstrates the increasing mainstream acceptance and utilization of cryptocurrencies.
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