Jack Dorsey’s Block, Inc. reported a 37% rise in bitcoin revenue for Q3 late yesterday, bringing in $2.42 billion compared to $1.77 billion during the same period in 2022. The financial services firm's Q3 bitcoin gross profit followed suit, marking a 22% increase from the previous year’s $37 million to reach $45 million.
The revenue represents the total amount from the sale of bitcoin to customers, whereas the gross profit corresponds to the fees or spread generated from these transactions.
The reported growth is attributed to a rise in the average market price of bitcoin and an uptick in the volume of bitcoin sold to customers via its Cash App mobile payment service, according to the company’s shareholder letter.
The value of Block’s corporate treasury bitcoin holdings in Q3 also rose compared to the same period last year. “As of September 30, 2023, the carrying value of our investment in bitcoin, after cumulative impairment charges, was $102 million, while the fair value, based on observable market prices, was $216 million, which was $114 million in excess of our carrying value,” the company wrote in the letter.
The discrepancy is due to current accounting rules measured at impairment — adjusting for when the price went down but not up — whereas fair market value describes an asset's most recent valuation.
The Financial Accounting Standards Board, a U.S. regulating body that sets general accounting practices, recently approved new rules allowing companies to report their crypto holdings at fair market value.
Block invested a total of $220 million in bitcoin for its corporate treasury between 2020 and 2021.
Block’s share price jumped 18% in after-hours trading, rising from $43.98 to $51.78, according to the latest pre-market data from TradingView.
SQ/USD price chart. Image: TradingView.
While Block’s bitcoin revenue was a highlight, the firm's overall financials also posted strong results in Q3. Excluding bitcoin, Cash App revenue saw a 26% year-over-year increase, reaching $1.16 billion, with gross profit rising to $939 million. The platform's monthly transacting active users climbed to 55 million, an 11% year-over-year rise, with inflows per active user reaching $1,132.
The company's Buy Now, Pay Later (BNPL) platform also made a notable contribution, adding $129 million in revenue and $94 million in gross profit.
Block's total net revenue reached $5.62 billion in Q3, a 24% increase year-over-year, with bitcoin revenue making up 43% of that figure.
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