• Block Inc. reported $1.83 billion of Bitcoin revenue from its Cash App in Q4, representing a 7% fall from the same time last year.
• The fall in revenue led to a 25% year-on-year drop in Bitcoin gross profit for Cash App, which fell to $35 million in the quarter.
• Block attributed the fall in Bitcoin revenue to the decline in BTC price during the year, which fell approximately 65%.
Block Inc’s Q4 Bitcoin Revenue Falls 7%
Block Inc., Jack Dorsey’s payment company, reported $1.83 billion of Bitcoin revenue from its Cash App business unit for Q4 2021, representing a 7% decrease compared to the same period last year. The main reason for this fall was attributed to a 65% decrease in Bitcoin prices throughout 2022. This caused an overall 25% drop in Bitcoin gross profit for Cash App, falling from $47 million to $35 million.
Cash App Adds Support for Lightning Network
Cash App added support for transactions via the Bitcoin Lightning Network on October 25th 2021. This allows customers to buy and sell Bitcoins through the app and generate revenue by selling them at market prices.
Q4 Results Outperform Analyst Expectations
Despite this decrease in revenue, Block Inc.’s share price still rose significantly during after-hours trading due to their results outperforming analyst expectations across multiple metrics including earnings per share and total revenues.
Crypto Price Decline Affects Revenue
The cryptocurrency market performed poorly during 2022 due to various factors such as increased regulatory scrutiny and increased competition between crypto exchanges and other investment products like stocks and ETFs. This resulted in an overall decline of 65%, causing Block Inc.’s fourth quarter bitcoin revenues to dip too despite outperforming analyst expectations otherwise.
Overall, Block Inc surpassed analyst expectations with its fourth quarter results but suffered a 7% decrease in bitcoin revenues due to declining cryptocurrency prices throughout 2022, resulting in a 25% reduction of gross profits from their Cash App business unit compared with the previous year’s results