Block, Led by Jack Dorsey, Reports $66 Million Profit from Bitcoin Sales
Block, the fintech firm headed by former Twitter CEO Jack Dorsey, saw a 90% increase in gross profit on its Bitcoin sales through Cash App in the last quarter. The company’s earnings report for the fourth quarter of 2023 revealed that it made $66 million in gross profit, a significant rise from the previous year. Block’s stock price also experienced a rally following the release of the report, with NASDAQ:SQ increasing by 12.35% in after-hours trading.
Bitcoin Revenue and Profit Driven by Market Price Increase
The earnings report highlighted that the total amount of Bitcoin sold to customers, which is recognized as Bitcoin revenue, reached $2.52 billion—a 37% increase compared to the previous year. This surge in revenue and gross profit was primarily driven by the average market price of Bitcoin rising and the appreciation of Block’s Bitcoin inventory during the quarter.
Investments and Mobile Cash App Performance
Block invested $50 million and $170 million in Bitcoin during late 2020 and early 2021, respectively. By the end of 2023, the company held 8,038 Bitcoins worth approximately $340 million on its balance sheets. Additionally:
- The mobile Cash App generated $205 million in Bitcoin gross profit and $9.50 billion of Bitcoin revenue in 2023—a 31% and 34% increase year over year.
- Dorsey emphasized that connected banking features that are easy to use and trustworthy are crucial for driving growth.
Revenue Growth and Future Plans
In comparison to the previous fiscal year, Block’s revenues increased by 33.54% to $9,498,302 for the fiscal year ending December 31, 2023. However, revenues had fallen by 28.96% in the previous year. Block’s stock price rose by 20% following the release of its third-quarter earnings report in November 2023.
Hot Take: Artificial Intelligence and Future Financial Services
Dorsey highlighted the increasing role of artificial intelligence (AI) in future financial services during the earnings call. He emphasized that AI would have a significant impact on Block’s productivity and ability to bring together complex systems. Dorsey believes that AI enables faster learning, shipping, and error correction, allowing the company to stay ahead of the market.
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