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Shares of payment technology company Block Inc. declined in after-hours trading, even though its second-quarter results surpassed earnings forecasts, which included a 34% year-over-year rise in Bitcoin (BTC) revenue.
During a Q2 earnings call, Block disclosed an impressive $2.4 billion in Bitcoin transactions on its Cash App platform, with gross profit from Bitcoin sales reaching $44 million, reflecting a 7% increase compared to the same period last year.
Block’s revenue for the quarter rose by 25.6% from $4.4 billion to $5.53 billion year over year, indicating that nearly half of this revenue was derived from Bitcoin sales alone.
Our Q2 earnings are now available. $SQ https://t.co/oGcnRuzFb3
— Block Investor Relations (@BlockIR) August 3, 2023
The firm credited the rise in Bitcoin revenue to customers continuing to acquire the cryptocurrency despite a drop in its price over the past 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.”
Nonetheless, the market did not react positively, with Block’s share price closing down 5.6% in after-hours trading, as reported by Google Finance.
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Despite exceeding earnings expectations, Block’s share price fell 5.6% in after-hours trading. Source: TradingView
Block also emphasized its own Bitcoin investments, mentioning 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 higher than the carrying value of the investment after cumulative impairment charges,” stated the earnings report.
Related: Cathie Wood’s ARK loads up crypto bags, buys $19.9M Block shares
In total, Block Inc. reported a gross profit of $1.87 billion — a 27% increase year over year — while Cash App continued to demonstrate strength with $968 million in gross profits, up 37% compared to the previous year.
Block Inc. gross profits Q2 2023. Source: Block
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