Shares in payment technology firm Block Inc. tumbled after hours despite its second-quarter results beating earnings expectations, including a 34% year-on-year increase in Bitcoin (BTC) revenue.
In a Q2 earnings call, Block reported a whopping $2.4 billion in Bitcoin sales on its Cash App platform, with gross profit from Bitcoin sales coming in at $44 million, a 7% increase from the same time last year.
Block’s revenue for the quarter increased 25.6% from $4.4 billion to $5.53 billion year over year, meaning nearly half came from Bitcoin sales alone.
Our Q2 earnings are now available. $SQ https://t.co/oGcnRuzFb3
— Block Investor Relations (@BlockIR) August 3, 2023
The company attributed the increase in Bitcoin revenue to customers continuing to purchase the crypto asset despite a decline in price over the course of the last year.
“The year-over-year increase in bitcoin revenue and gross profit was driven by an increase in the quantity of bitcoin sold to customers, partially offset by a decrease in the average market price of bitcoin compared to the prior-year period.”
However, the market failed to register a positive response, with the price of Block shares closing down 5.6% in after hours trading, according to data from Google Finance.
Block also highlighted its own Bitcoin investments, noting a purchase of $50 million in Q4 2020 and an additional $170 million in Q1 2021.
“As of June 30, 2023, the fair value of our investment in Bitcoin was $245 million based on observable market prices, which was $142 million greater than the carrying value of the investment after cumulative impairment charges,” read the earnings report.
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Overall, Block Inc. reported a gross profit of $1.87 billion — a 27% increase year over year — while Cash App continued to show strength with $968 million in gross profits, up 37% on the year.
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