- After Block reported better-than-expected third-quarter earnings, the company saw its stock price rise over 20% to more than $52 after market close.
- The strong performance was largely attributed to a 37.5% annual growth in Bitcoin
revenue through Block’s main product, Cash App.
- Excluding Bitcoin revenue, Cash App revenue increased 26% annually to $1.16 billion. The company’s other payment platform, Square, reported revenue of $1.98 billion, marking an 8% annual increase.
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The fintech company led by former Twitter CEO Jack Dorsey, Block, has released its 3rd-quarter reports: The company’s Bitcoin revenues are on the rise!
Block Releases 3rd Quarter Reports
Block, formerly known as Square, announced its 3rd-quarter earnings, which surpassed expectations and caused its stock price to increase by over 20% to more than $52 after the market’s close.
The company reported a net revenue of $5.62 billion, indicating a 24% increase compared to the same period last year. Additionally, the adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) was reported as $477 million, marking a 32% increase compared to the same period last year.
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The strong performance was largely attributed to a 37.5% annual growth in Bitcoin revenue through Block’s main product, Cash App. This boosted Block’s revenue to $2.42 billion in the 3rd quarter of 2023, accounting for over half of the company’s total net revenue, increasing from $1.76 billion in the previous year.
Cash App is a mobile payment service that allows users to send and receive fiat money, buy and sell Bitcoin, and invest in stocks. The service celebrated its 10th anniversary last month.
Block’s Q3 earnings report states: “The year-over-year increase in Bitcoin revenue and gross profit was driven by increases in the average market price of Bitcoin and the quantity of Bitcoin sold to customers.”
In general, Cash App generated revenue of $3.58 billion with a gross profit of $984 million, marking a 34% annual increase. Excluding Bitcoin revenue, Cash App revenue increased 26% annually to $1.16 billion. The company’s other payment platform, Square, reported revenue of $1.98 billion, marking an 8% annual increase. Square is a point-of-sale system that allows merchants to accept card payments and manage their businesses.
Block’s gross profit from Bitcoin increased by 22%.
Despite following asset management rules, Block’s Bitcoin assets created a discrepancy of $216 million between market value and book value, assessed as $114 million. Nevertheless, no impairment was recorded in Q3 2023 because the company follows either the cost or market method, only recording losses when the market value falls below the cost base.
Block revised its full-year guidance for 2023, increasing adjusted EBITDA to a range of $1.66 billion to $1.68 billion from $1.5 billion, and raising operating income to a range of $205 million to $225 million from $25 million. The company also provided an adjusted operating income guidance of $875 million for 2024 and projected a gross profit expectation of $7.44 billion to $7.46 billion for 2023.
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In a letter to shareholders, Dorsey mentioned that the company had been quiet recently because they were focused. He added that Block aims to build “simple, fair, and accessible financial services for everyone” and wants to provide “economic freedom to people.” According to Dorsey, there are several things holding the company back, and they are considering focusing more on artificial intelligence in terms of future growth. Dorsey said, “We believe AI can be a powerful assistant in helping sellers grow their businesses because it can enable greater creativity, efficiency, and productivity.”