Cash App Bitcoin revenue tops $2 billion in first quarter
Fintech firm Block, owned by Twitter founder Jack Dorsey, has reported a staggering $2.16 billion in Bitcoin (BTC) revenue on its bellwether product Cash App in Q1.
According to a shareholder letter announcing its Q1 2023 earnings, Block (NYSE:SQ) reported that Bitcoin revenue — which counts BTC revenue as total sales of the cryptocurrency to customers — was up 18% from $1.83 billion in Q4 and 25% from Q1 2022.
Cashapp’s total profit reached over $931 million in the first quarter of 2023, an increase of 49% year-over-year. Notably, Cash App profits paled in comparison to the company’s gross profit, which came in at $1.71 billion. Block also owns the popular business payment service Square, which reported a slight (3.8%) decline in profits from the fourth quarter of 2022.
According to the shareholder letter, the multibillion-dollar Bitcoin revenue was driven by “an increase in the amount of Bitcoin sold to customers” and was “partially offset” by a decline in the market price of Bitcoin compared to the same. timeframe in 2022.
The fintech firm also reported earnings per share of 40 cents, beating analyst expectations of 35 cents per share by 14%, and first-quarter revenue rose 26% year over year.
In an earnings conference call with investors, Block CEO Jack Dorsey identified both artificial intelligence and “open protocols” as technologies that would help the company proactively respond to the “significant changes” in the global financial system, referring to the continued Bank of America. failures and de-dollarization as the primary culprits.
The stock market took kindly to Block’s earnings. The fintech firm’s share price briefly rose 5% to $63.50 in after-hours trading, before settling to a 2.5% gain at press time.
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This rally marked the first instance of relief from a steady decline in Block’s share price, which took a significant 25% hit following the release of a scathing report written by famed short-sellers Hindenburg Research.
On March 23, Hindenburg criticized Block for “systematically exploiting the demographics it claims to help,” and declared that Block’s success with the Cash App depended only on a “willingness to facilitate fraud against consumers and the government.”
“Hindenburg is known for this type of attack, which is designed solely to allow short sellers to profit from a falling stock price,” Block wrote in response to Hindenburg’s claims. “We have reviewed the entire report in conjunction with our own data and believe it is designed to mislead and confuse investors.”
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