Jack Dorsey-led Block, a Bitcoin-focused fintech company, published its third-quarter earnings report on Nov. 2 that revealed a profitable quarter for the firm, surpassing analyst estimates.
The firm saw $5.62 billion in revenue in the third quarter of 2023, boosted by strong revenue growth in Cash App and Square and made $44 million in profit on its Bitcoin holdings thanks to the surge in price of BTC over the past three months.
In a shareholder letter, Jack Dorsey shed light on the company’s focus and future plans, especially with Square, along with key financial metrics of the third quarter. Dorsey said the company has authorized the repurchase of $1 billion in shares to offset a portion of dilution from share-based compensation.
In the third quarter of 2023, Block generated a gross profit of $1.90 billion, up 21% year over year. On the other hand, Cash App, the mobile payment service, generated a gross profit of $984 million, up 27% yearly, and Square generated a gross profit of $899 million, up 15% year over year.
Bitcoin revenue accounted for approximately 43% of the total $5.6 billion in revenue for Block. The fintech firms’ growth in the third quarter was also aided by strong consumer demand and positive spending
Block’s Bitcoin gross profit stood at $45 million, up by 22% year on year, where the firm sold $2.42 billion worth of BTC to customers via Cash App. The company’s Bitcoin gross profit stood at 2% of Bitcoin revenue. The firm claimed that the rise in BTC revenue was fueled by an increase in the average market price of Bitcoin and the quantity of Bitcoin sold to customers.
Block stated it has not seen any impairment loss on its Bitcoin holding since the previous quarter. Block’s investment in Bitcoin had a carrying 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 carrying value.