Bitcoin Cash App revenue reached $2 billion in the first quarter
Block, the fintech business founded by Twitter founder Jack Dorsey, recorded a stunning $2.16 billion Bitcoin revenue of $29,265 in Q1 on its flagship product Cash App.
Block (NYSE:SQ) said in a shareholder letter showing its Q1 2023 earnings that its Bitcoin revenue — defined as total sales of the cryptocurrency to consumers — was up 18% from $1.83 billion in Q4 and 25% from Q1 2022.
Cash App’s overall revenue exceeded $931 million in the first quarter of 2023, representing a 49% year-over-year gain. Notably, Cash App’s profits paled in comparison to the company’s $1.71 billion gross profit. The Block also owns Square, a leading commercial payments service which reported a small revenue decline (3.8%) in the fourth quarter of 2022.
Bitcoin’s multibillion-dollar revenue, according to a shareholder letter, was driven by “an increase in the number of Bitcoins sold to customers,” and “partially offset” by a decrease in Bitcoin’s market price, compared to the same period. in 2022.
The fintech startup also posted earnings per share of 40 cents, 14% higher than analysts’ projection of 35 cents per share, with first-quarter sales up 26% year on year. During an earnings conference call, Block CEO Jack Dorsey mentioned artificial intelligence and “open protocols” as technologies that will help companies respond proactively to “significant shifts” in the global financial system. He blamed continuing bank failures in the United States and de-dollarization.
The stock market reacted positively to Block’s earnings report. The fintech startup’s share price was temporarily up 5% to $63.50 in after-hours trading before dropping to a 2.5% gain at press time.
The rise was the first evidence of relief from Block’s share price, which fell 25% after the publication of a damning study by the well-known short seller Hindenburg Research.
On March 23, Hindenburg criticized Block for “systematically leveraging the demographics it claims to be helping”, claiming that Block’s success with Cash App was based solely on its “willingness to facilitate consumer and government fraud”.
In response to Hindenburg’s accusations, Block stated, “Hindenburg is known for this type of attack, which is designed solely to allow short sellers to profit from falling stock prices.” “We reviewed the entire report based on our own data and believe it is intended to deceive and confuse investors.”