Block’s Third Quarter Financial Report
Block reported nearly $2 billion in Bitcoin revenue for the third quarter, which represents about a third of its total revenue of $6.11 billion.
According to its recent filing with the Securities and Exchange Commission, the fintech company achieved a net income of $461.5 million.
In a letter to shareholders, Block highlighted an 18% year-over-year increase in gross profit, driven by Cash App’s 24% rise and Square’s 9% growth.
“Block’s gross profit grew by 18% year-on-year in the third quarter, with Cash App leading at a 24% increase and Square following with a 9% rise,” the company stated.
However, shares saw a decline, closing at $70.94 on Wednesday and dropping further to $64.10 in after-hours trading.
Market analysts from Zacks had estimated sales at $6.34 billion and earnings per share of $0.63, but actual figures fell short at $6.11 billion in revenue and adjusted earnings per share of $0.54.
The gross profit reached $2.66 billion, representing an 18% year-on-year increase, while net profit surged by 64%. The company anticipates that fourth-quarter gross profit will be around $2.75 billion, indicating a 19% annual growth rate.
Adjusted operating income was reported at $409 million, below the consensus expectation of $473 million. Meanwhile, EBITDA rose by 3% to $833 million, slightly missing predictions of $840 million.
Bitcoin revenue was $1.97 billion, a decrease from $2.4 billion during the same period last year, though it remains the second-largest revenue source for Block, after subscriptions and services. The cost associated with Bitcoin fell from $2.36 billion to $1.89 billion.
As of September 30, Block’s Bitcoin holdings increased to 8,780 BTC from 8,485 BTC at the start of the year. These assets are worth over $1 billion but saw a remeasurement down of $59 million in the quarter and $178 million year-to-date.
The company continues to invest in expanding the Bitcoin ecosystem. Recently, they introduced new payment tools and merchant wallets to facilitate direct Bitcoin acceptance by merchants. Earlier this year, Block paid $40 million to settle complaints from the New York Department of Financial Services regarding compliance issues in its BTC operations.
Founded by Jack Dorsey in 2009, Block has transitioned from being a payment processor to a broader financial platform with significant exposure to digital assets. This year marked a milestone with its inclusion in the S&P 500, positioning it as a prominent player in Bitcoin integration in the United States.
Dorsey has often referred to Bitcoin as the “native currency of the internet,” expressing a desire to make it accessible for daily transactions. He mentioned that if he weren’t working at Twitter or Block, he’d dedicate his career entirely to Bitcoin’s development.
