Block Inc. Reports Q3 Earnings and Cash App User Growth
In its shareholders’ letter, Block Inc., led by Jack Dorsey, announced an increase in third-quarter earnings, with total net revenue reaching $5.62 billion, representing a 24% YoY growth. Excluding bitcoin operations, the company’s revenue experienced a surge to $3.19 billion, a 16% increase from the previous year. Notably, bitcoin revenue rose to $2.42 billion, highlighting the significant impact of crypto assets on the firm’s profits.
Cash App Pay Transactions and Bitcoin Revenue Soar
The shareholder letter also revealed that Cash App Pay transactions have been on the rise, with over two million monthly active users recorded by September, doubling since June. Additionally, Q3 saw a substantial increase in bitcoin revenue, reaching $2.42 billion, a 37% YoY growth. Bitcoin’s gross profit also experienced a gain of 22%, amounting to $45 million.
Block Aims for ‘Rule of 40’ by 2026
Block Inc. expressed its ambitions in the shareholder letter, stating that it aims to achieve the “Rule of 40” by 2026. This entails mid-teens gross profit growth and a mid-20% Adjusted Operating Income margin. The company has revised its full-year 2023 forecasts upward for both Adjusted Operating Income and Adjusted EBITDA.
Industry-Wide Success: Coinbase and Microstrategy
The positive financial performance is not limited to Block Inc., as Coinbase and Microstrategy also reported strong Q3 earnings. Furthermore, Block Inc.’s shareholder letter mentions that the company will not hire more than 12,000 employees unless there is significant business growth.
Bitcoin Investments and Impairment Losses
Block Inc. holds bitcoin as an asset on its balance sheet, with investments of $50 million in Q4 2020 and $170 million in Q1 2021. While bitcoin is susceptible to impairment losses when its market value falls below its book value, Block Inc. reported no impairment losses on its bitcoin holdings in Q3 2023.
Hot Take: Block Inc. Sees Strong Q3 Earnings Amid Bitcoin Boom
Block Inc., led by Jack Dorsey, has announced impressive Q3 earnings, driven by the soaring popularity of bitcoin and the growth of Cash App Pay transactions. The company’s total net revenue reached $5.62 billion, with bitcoin revenue alone accounting for $2.42 billion. With ambitions to achieve the “Rule of 40” by 2026, Block Inc. is poised for continued success in the crypto industry. This positive performance aligns with the broader trend seen in Coinbase and Microstrategy’s financial reports. As cryptocurrencies continue to gain traction, companies like Block Inc. are reaping the rewards.
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