Jack Dorsey-led Block, a Bitcoin-focused fintech company, released its third-quarter earnings report on November 2, revealing a profitable quarter and exceeding analyst expectations.
The company posted $5.62 billion in revenue in the third quarter of 2023, driven by strong revenue growth at Cash App and Square, with $44 million in gains on its Bitcoin (BTC) holdings thanks to a price increase in recent months.
In a letter to shareholders, Dorsey shed light on the company’s future focus and plans, especially with Square, along with key financial metrics for the third quarter. Dorsey said the company had authorized the buyback of $1 billion in stock to offset some of the dilution from stock-based compensation.
In the third quarter of 2023, Block generated gross profit of $1.9 billion, an increase of 21% year-over-year. Elsewhere, mobile payment service Cash App generated gross profit of $984 million, up 27% year over year, and Square generated gross profit of $899 million, up 15%.
Bitcoin revenue accounted for approximately 43% of Block’s $5.6 billion in revenue. Growth for fintech companies in the third quarter was also helped by strong consumer demand and positive spending.
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Block’s Bitcoin gross profit stood at $45 million, up 22% year-over-year, and the company sold $2.42 billion worth of BTC to customers via Cash App. The company’s Bitcoin gross profit represented 2% of Bitcoin revenue. The company claimed that the increase in BTC revenue was driven by an increase in the average market price of Bitcoin and the amount of Bitcoin sold to customers.
Block stated that it has not seen any impairment losses on its Bitcoin holding since the previous quarter. Block’s investment in Bitcoin had a book value of $102 million as of September 30, 2023, but its fair value, determined by observable market prices, was $216 million, or $114 million more than its book value.
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