Block’s Q4: Bitcoin Revenue Falls, But Gross Profit Soars
• Blockchain Inc. experienced a rise in its share price through after-hours trading despite a 7% decrease in bitcoin revenue for Q4 compared to the same period last year.
• The company attributed the decline to the fall in the BTC/USD rate over 2022, with prices dropping by 65%.
• Block Inc. reported net loss of $114 million and adjusted profits before interest, tax, depreciation and amortization (EBITDA) of $281 million in Q4.
Block’s Q4 Bitcoin Revenue Drops
Block Inc. exceeded analysts’ expectations and saw a surge in its share price when their quarterly results were released on Feb. 23rd. However, their bitcoin (BTC) revenue dropped by 7% compared to the same period last year due to the decline in BTC/USD rate throughout 2022 which caused prices to drop by 65%.
Decrease In Cash App Bitcoin Sales
Block’s Cash App enables users to process mobile phone payments with functionality for transactions made via the Bitcoin Lightning Network added on Oct 25th. This app also allows consumers to purchase bitcoins which generates income for Block; however, bitcoin sales during Q4 totalled $1.83 billion – a 7% decrease from 2021’s figures. As a result, Cash App’s bitcoin gross profit decreased by 25%, reaching its lowest since Block started reporting earnings at $35 million for the quarter. Additionally, over 2022 as a whole, Cash App brought in $7.11 billion in bitcoin revenue but only $156 million in gross profit respectively – both down 28% and 29% from 2021’s numbers respectively.
Increased Net Loss & Adjusted Profits
Quarterly results showed that despite these losses, Block Inc.’s net loss increased significantly by nearly 50%, coming out at $114 million while its adjusted profits before interest, tax, depreciation and amortization (EBITDA) rose 53% to $281 million when compared with 2021’s figures across all quarters combined ($4.65 billion).
After Hours Trading Surge
Following these reports being released publicly; after-hours trading resulted in an impressive increase of share prices being attributed by some analysts to Block’s 40% rise in gross profit from Q4 2021-22 figures combined with above average expectations being met overall .
Conclusion
Despite an initial dip in bitcoin revenue during Q4 due mainly to falls within BTC/USD rates throughout 2022; Jack Dorsey’s payment firm still managed to exceed experts predictions resulting ultimately into an impressive jump within their stock prices seen during after-hours trading following reports release.
