Block Reports Profitable Q3 Earnings, Surpassing Analyst Expectations
Block, a Bitcoin-focused fintech company led by Jack Dorsey, released its third-quarter earnings report on November 2nd. The report revealed a profitable quarter for the firm, exceeding analyst expectations.
During the third quarter of 2023, Block generated $5.62 billion in revenue. This growth was primarily driven by strong revenue growth in Cash App and Square. Additionally, the company made a $44 million profit on its Bitcoin holdings, benefiting from the recent surge in Bitcoin’s price.
Company Focus and Future Plans
In a shareholder letter, Jack Dorsey highlighted Block’s focus and future plans. He specifically mentioned Square and shared key financial metrics from the third quarter. Dorsey also announced that the company had authorized the repurchase of $1 billion in shares to offset dilution caused by share-based compensation.
Strong Financial Performance
Block achieved a gross profit of $1.90 billion in the third quarter, marking a 21% year-over-year increase. Cash App, the mobile payment service, generated a gross profit of $984 million (up 27% YoY), while Square generated $899 million (up 15% YoY).
Bitcoin revenue accounted for approximately 43% of Block’s total revenue. The firm’s growth was driven by strong consumer demand and positive spending trends.
Rise in Bitcoin Revenue
Block’s Bitcoin gross profit increased by 22% YoY to reach $45 million. The company sold $2.42 billion worth of BTC to customers through Cash App. Bitcoin revenue represented 2% of Block’s total Bitcoin revenue.
The rise in BTC revenue was attributed to the higher average market price of Bitcoin and an increase in the quantity of Bitcoin sold to customers.
No Impairment Loss on Bitcoin Holding
Block reported no impairment loss on its Bitcoin holding since the previous quarter. As of September 30, 2023, the carrying value of Block’s Bitcoin investment was $102 million. However, its fair value, determined by observable market prices, was $216 million, representing a $114 million increase.
Hot Take: Block’s Profitable Q3 Reflects Growing Demand for Bitcoin
Block’s third-quarter earnings report showcased a profitable quarter and exceeded analyst expectations. With solid revenue growth in Cash App and Square, the company’s revenue reached $5.62 billion. The surge in Bitcoin’s price contributed to a $44 million profit on Block’s Bitcoin holdings.
Block’s focus on repurchasing shares and strong financial performance demonstrate its commitment to shareholders. The rise in BTC revenue, driven by increased market prices and customer demand, further solidifies Block’s position as a leading Bitcoin-focused fintech company.
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