Block (formerly known as Square) – an American multinational technology conglomerate founded by Jack Dorsey – disclosed $1.83 billion of bitcoin revenue generated from its Cash App payment service in Q4, 2022.
The figure was nearly $2 billion in the fourth quarter of 2021, and the company blamed the decline of the crypto market for the downturn.
However, Block’s shares climbed nearly 7% after reporting positive overall financial results.
BTC Revenue Drops 7% YoY
Block’s bitcoin revenue in the fourth quarter of last year slightly increased compared to the $1.76 billion reached in Q3. Nonetheless, the numbers in Q4 2021 (when BTC was on a bull run, reaching an ATH of almost $70,000) were higher:
“The total sale amount of bitcoin sold to customers, which we recognize as bitcoin revenue, was $1.83 billion, down 7% year over year.”
Cash App – Block’s peer-to-peer payment application – generated over $7 billion of BTC revenue throughout 2022 and accounted for $156 million of BTC gross profit, down 29% and 28% year-over-year, respectively. Bitcoin gross profit in Q4 2022 was $35 million, a 25% decline compared to the last quarter of 2021.
“The year-over-year decline in revenue was driven by a decrease in the total dollar amount of bitcoin sold to customers, which we recognize as bitcoin revenue, and bitcoin gross profit was 2% of bitcoin revenue in the quarter,” Block stated.
The firm explained the dwindling comes as a result of the crypto market crash last year. Bitcoin started 2022 trading at around $47,000 and finished at approximately $16,500 (a 65% drop).
Shares Headed North
Contrary to the bitcoin-related figures, Block’s overall financial results were quite impressive. Its gross profit for the entire 2022 tapped almost $6 billion, $1.66 billion of which were recorded in Q4. This has been the most successful quarter after Q1 accounted for $1.29 billion, Q2 – $1.47 billion, and Q3 – $1.57 billion.
Gross profit generated from Cash App last year equaled $3 billion, 30% more than the figure in 2021. $848 million were collected in Q4 (again, the strongest quarter).
Earnings before interest, taxes, depreciation, and amortization (EBITDA) slightly decreased from $1.01 billion in 2021 to $991 million in 2022.
The shares of the company climbed over 7% at pre-market sales after announcing the results, rising to nearly $80. The stocks are still far from their all-time high of over $275 reached at the beginning of 2021.