Block Unveils Bitcoin Conversion Feature for Square Merchants

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Block posts 34% increase in Bitcoin revenue in Q2 but shares stumble

August 4, 2023 Coin Telegraph

Bitcoin profits on Block’s Cash App dropped slightly from the first quarter of 2023 but remain up 7% from this time last year.

Shares in payment technology firm Block Inc. tumbled after hours despite its second-quarter results beating earnings expectations, including a 34% year-on-year increase in Bitcoin (BTC) revenue.

In a Q2 earnings call, Block reported a whopping $2.4 billion in Bitcoin sales on its Cash App platform, with gross profit from Bitcoin sales coming in at $44 million, a 7% increase from the same time last year.

Block’s revenue for the quarter increased 25.6% from $4.4 billion to $5.53 billion year over year, meaning nearly half came from Bitcoin sales alone.

Our Q2 earnings are now available. $SQ https://t.co/oGcnRuzFb3
— Block Investor Relations (@BlockIR) August 3, 2023

The company attributed the increase in Bitcoin revenue to customers continuing to purchase the crypto asset despite a decline in price over the course of the last year.

“The year-over-year increase in bitcoin revenue and gross profit was driven by an increase in the quantity of bitcoin sold to customers, partially offset by a decrease in the average market price of bitcoin compared to the prior-year period.”

However, the market failed to register a positive response, with the price of Block shares closing down 5.6% in after hours trading, according to data from Google Finance.

Despite beating earnings expectations, Block's share price fell 5.6% in after hours trading. Source: TradingView

Block also highlighted its own Bitcoin investments, noting a purchase of $50 million in Q4 2020 and an additional $170 million in Q1 2021.

"As of June 30, 2023, the fair value of our investment in Bitcoin was $245 million based on observable market prices, which was $142 million greater than the carrying value of the investment after cumulative impairment charges," read the earnings report.

Overall, Block Inc. reported a gross profit of $1.87 billion — a 27% increase year over year — while Cash App continued to show strength with $968 million in gross profits, up 37% on the year.