Block’s shares jumped 7% despite falling Bitcoin revenue in the fourth quarter

Block (formerly known as Square) – an American multinational technology conglomerate founded by Jack Dorsey – disclosed $1.83 billion of bitcoin revenue generated from its Cash App payment service in Q4 2022.

The number was almost $2 billion in the fourth quarter of 2021, and the company blamed the decline in the crypto market for the decline.

However, Block’s shares climbed nearly 7% after reporting positive overall financial results.

BTC revenues fall 7% year-on-year

Block’s bitcoin revenue in the fourth quarter of last year slightly increased compared to $1.76 billion achieved in Q3. Nevertheless, the numbers in Q4 2021 (when BTC was on a bull run and reached an ATH of almost $70,000) were higher:

“The total sales amount of bitcoin sold to customers, which we recognize as bitcoin revenue, was $1.83 billion, a decrease of 7% year over year.”

Cash App – Block’s peer-to-peer payment application – generated over $7 billion of BTC revenue through 2022 and accounted for $156 million of BTC’s gross profit, down 29% and 28% year-over-year respectively. Bitcoin’s gross profit in Q4 2022 was $35 million, a 25% decrease compared to the last quarter of 2021.

“The year-over-year decline in revenue was driven by a decrease in the total dollar amount of bitcoin sold to customers, which we recognize as bitcoin revenue, and bitcoin gross profit was 2% of bitcoin revenue in the quarter,” Block said .

The firm explained that the decline comes as a result of the crash in the crypto market last year. Bitcoin started 2022 trading at around $47,000 and ended at about $16,500 (a 65% drop).

Shares heading north

In contrast to the bitcoin-related numbers, Block’s overall financial results were quite impressive. Gross profit for the whole of 2022 drained almost $6 billion, of which $1.66 billion was recorded in the fourth quarter. This has been the most successful quarter after Q1 accounted for $1.29 billion, Q2 – $1.47 billion and Q3 – $1.57 billion.

Gross profit generated from Cash App last year was $3 billion, 30% more than the figure in 2021. $848 million was collected in Q4 (again, the strongest quarter).

Earnings before interest, taxes, depreciation and amortization (EBITDA) decreased slightly from $1.01 billion in 2021 to $991 million in 2022.

The shares in the company climbed over 7% in premarket sales after the results were announced, rising to nearly $80. Shares are still far from their all-time high of over $275 reached in early 2021.