Fintech giant Block, owned by Twitter founder Jack Dorsey, has announced a massive $2.16 billion in Bitcoin revenue on its flagship product Cash App for Q1. According to the earnings report, the Bitcoin revenue increased by 25% compared to Q1 2022 and 18% from Q4 of 2022. The report also revealed that Cash App bagged over $931 million in total profits, showing a 49% YoY increase. Notably, Cash App’s profit was inferior to the firm’s gross profit of $1.71 billion. Although the firm’s earnings have been positive, its Square business payment service posted a slight decline of 3.8% in profits since Q4 of 2022.
Block’s shareholders, institutional and individual investors alike, took kindly to the announcement, as the fintech firm’s share price surged 2.5% to $63.50 in after-hours trading at the time of publication. As per the earnings report, a boost in the number of Bitcoins sold to customers also contributed to the multi-billion-dollar revenue. However, this growth was partially negated by a drop in the Bitcoin market price compared to the same duration in 2022.
Speaking on the earnings conference call, Block CEO Jack Dorsey highlighted the importance of artificial intelligence and the usage of open protocols to tackle significant transformations in the global finance system due to continued U.S. bank failures and de-dollarization. The equities market responded positively to Block’s earnings announcement, reversing a steady decline in the company’s share price. The report by Hindenburg Research had negatively impacted the share price earlier.
To clarify, Block responded to Hindenburg’s allegations by stating that the report was designed to confuse and deceive investors and that the company’s data did not support their allegations. Block’s gross profits increased significantly by 32% compared to the same period last year.
The recent earnings report by Block clearly highlights the dominance of the fintech industry and its ability to capitalize on the growing interest of crypto asset investors. With the increase in Bitcoin revenue reported by the company, the stock market now looks to benefit from the growing demand for crypto.