Block’s Q4 Bitcoin revenue down 7% on crypto price decline

Mar 10, 2023 | wjb news

Jason Dorsey's three-party payment platform Block Inc. Bitcoin revenue from all its Cash App divisions was $1.83 billion in the fourth quarter, down 7 per cent from the same period last year.

In its fourth-quarter and full-year sales results released on Feb. 23, Block attributed the decline in bitcoin revenue to the drop in bitcoin prices. The price of bitcoin fell by about 65% for the whole of 2022.

The decline in revenue caused Cash App's bitcoin gross margin to fall by 25% compared with the same period, falling to $35 million in the first quarter.

Cash App is a mobile payment solution developed and designed by Block. On Oct. 25, Block strengthened its support for buying and selling transactions through Bitcoin Lightning. Bitcoin revenue is generated mainly by selling bitcoin to customers through applications.

For the whole of 2022, Cash App generated $7.11 billion in bitcoin revenue and $156 million in bitcoin gross profit, down 29% and 28% respectively from 2021.

Besides, Block Inc. The quarterly loss widened to $114 million, compared with a loss of $77 million in 2021. Compared with the same period last year, its modified earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 53% to $281 million. The monthly total income is $4.65 billion.

Block's shares rose rapidly in after-hours trading after the earnings report was released.

Some investment analysts attributed the increase to the company's higher gross profit, which rose 40 per cent in the fourth quarter from a year earlier, far exceeding the expectations of investment analysts.