Fintech firm Block, owned by Twitter founder Jack Dorsey, has reported a staggering $2.16 billion in Bitcoin (BTC) sales for its flagship product, Cash App, in the first quarter.
According to a shareholder letter announcing earnings for Q1 2023, Block (NYSE:SQ) reported that its Bitcoin earnings — which count BTC earnings as total cryptocurrency sales to customers — rose 18% from Q1 $.83 billion in Q4 and up 25% from Q1 2022.
Cash App’s total earnings hit over $931 million in the first quarter of 2023, a year-over-year increase of 49%. Notably, Cash App’s earnings paled in comparison to the company’s gross profit, which came in at $1.71 billion. Block also owns popular business payments service Square, which saw a slight decline in profits (3.8%) as of the fourth quarter of 2022.
According to the letter to shareholders, the multi-billion dollar Bitcoin revenue was driven by “an increase in the amount of Bitcoin sold to customers” and “partially offset by a decline in Bitcoin’s market price in comparison.” Period 2022.
The fintech also reported earnings per share of 40 cents, beating analysts’ expectations of 35 cents per share by 14%, with first-quarter revenue rising 26% year over year.
Block’s gross profits are up 32% year over year. Source: Shareholder Letter Block
Speaking to investors on the earnings call, Block CEO Jack Dorsey identified both artificial intelligence and “open protocol” as technologies that would help the company proactively respond to the “significant shifts” in the global financial system. He cited persistent bank failures in the United States and de-dollarization as the main culprits.
The stock market took Block’s earnings news positively. The fintech’s stock price briefly rose 5% in after-hours trading to $63.50 before settling for a 2.5% gain at the time of publication.
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That surge was the first relief from a steady decline in Block’s stock price, which took a substantial 25% plunge following the release of a damning report from famed short seller Hindenburg Research.
On March 23, Hindenburg criticized Block for “systematically exploiting demographics that supposedly help,” stating that Block’s success with the Cash App depends only on its “willingness to enable fraud against consumers and the government.” “.
“Hindenburg is known for these types of attacks, aimed solely at allowing short sellers to profit from a decline in stock prices,” Block wrote in response to Hindenburg’s allegations. “We have reviewed the full report in the context of our own data and believe it is intended to mislead and confuse investors.”
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