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Fintech company Block, owned by Twitter founder Jack Dorsey, reported a staggering $2.16 billion in bitcoin (BTC) revenue from its flagship Cash App product in the first quarter.
According to a shareholder letter announcing first quarter 2023 earnings, Block (NYSE:SQ) reported that its Bitcoin revenue, which accounts for BTC revenue as total cryptocurrency sales to customers, rose 18% from $1.83 billion in the fourth quarter. quarter and by 25% from 1 sq. 2022
Our Q1 earnings are now available. $SQ https://t.co/oGcnRuzFb3
— Block Investor Relations (@BlockIR) May 4, 2023
Cashapp’s total earnings reached over $931 million in the first quarter of 2023, up 49% year-over-year. Notably, Cash App’s earnings paled in comparison to the company’s $1.71 billion gross. Block also owns the popular business payment service Square, which reported a slight (3.8%) decline in earnings compared to the fourth quarter of 2022.
According to the shareholder letter, the multibillion-dollar Bitcoin earnings were driven by “an increase in the amount of Bitcoin sold to customers” and were “partially offset” by a decline in the market price of Bitcoin compared to the same period in 2022.
The fintech firm also reported earnings per share of 40 cents, beating analysts’ expectations of 35 cents per share by 14%, while its first-quarter revenue rose 26% year-on-year.
Speaking to investors on an earnings conference call, Block CEO Jack Dorsey cited both artificial intelligence and “open protocols” as technologies that will help the company proactively respond to “major shifts” in the global financial system, citing the continuation of the US bank. failures and de-dollarization as the main culprits.
The stock market reacted favorably to Block’s earnings reports. The fintech firm’s share price briefly surged 5% to $63.50 after business hours before dropping to 2.5% at press time.
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The surge was the first relief from a steady decline in Block’s share price, which dropped a significant 25% following the release of a scathing report written by celebrity short sellers Hindenburg Research.
On March 23, Hindenburg lashed out at Block for “systematically exploiting the demographic advantage it claims helps” and stated that Block’s success with the Cash App depends only on “a willingness to facilitate consumer and government fraud.”
“Hindenburg is known for these types of attacks, which are solely designed to allow short sellers to profit from declining stock prices,” Block wrote in response to Hindenburg’s accusations. “We have reviewed the full report in the context of our own data and believe it is intended to deceive and mislead investors.”
