• Block Inc. reported a 7% decrease in Bitcoin revenue in Q4, compared to the same period the previous year.
• This decrease was attributed to the decline in BTC prices throughout 2022.
• Block Inc. reported an increase in their gross profit of 40%, as well as an increase in their adjusted profits before interest, tax, depreciation, and amortization (EBITDA) of 53%.
Block’s Q4 Report Reveals Decreasing Bitcoin Revenue
Block Inc.’s Cash App business section reported a total of $1.83 billion in bitcoin sales during the fourth quarter, representing a 7% drop from the same period the previous year. The company attributed this drop to the decline in BTC prices throughout 2022, which resulted in a 25% decrease in its bitcoin gross profit for the quarter and 28% and 29% decreases for its full-year bitcoin revenue and gross profit respectively.
Increased Profits Despite Drop In Revenue
Despite these drops, Block Inc. experienced an overall rise in its share price during after-hours trading due to increased profits across other areas of their business. The company’s net loss for the quarter reached $114 million, while their adjusted profits before interest, tax, depreciation, and amortization (EBITDA) rose by 53%. Overall revenue increased by 40%, coming it at $4.65 billion for the quarter.
Functionality For Transactions Via Bitcoin Lightning Network Enabled
On October 25th 2021 functionality for transactions made via the Bitcoin Lightning Network was enabled to Cash App which allows users to buy bitcoins directly from Block’s app with U.S dollars via credit or debit card payments thereby bringing more money into Block’s business section .
Bitcoin Price Drops Contribute To Lower Revenues
The aggregate amount of revenue during this period was significantly impacted by decreasing prices of Bitcoins throughout 2022 which dropped by nearly 65%. These drops not only lead to lower revenues but also lower gross profit margins resulting from sales made through Cash App’s bitcoin sales feature .
Conclusion
Overall , despite experiencing decreased revenues due to declining BTC prices , Block Inc’s profitability has still risen significantly thanks to improved performance across other parts of their business . The addition of functionality enabling transactions through Bitcoin Lightning Network contributed positively towards increasing revenues while otherwise low price points have caused significant decreases in cash app’s bitcoin sales .