Block, Headed by Jack Dorsey, Reports a Profitable Q3 2023, Fueled by Strong Cash App and Bitcoin Performance
Summary:
Block, the fintech company led by Jack Dorsey, reported a profitable third quarter in 2023 with revenues of $5.62 billion, surpassing expert predictions. The earnings were driven largely by robust growth in Cash App and Square, and a $44 million profit from Bitcoin holdings. Block's Bitcoin investment alone yielded a book value of $102 million, with a fair market value of $216 million. The company also authorized a $1 billion share buyback to dilute the effect of share-based rewards.
Block, the financial technology institution spearheaded by Jack Dorsey, released its Q3 earnings report on November 2, showcasing a fruitful quarter that outshone predictions from market experts. The report indicated revenues of $5.62 billion for Q3 of 2023, bolstered by pronounced growth in Cash App and Square's revenue streams, and an impressive $44 million profit gleaned from Bitcoin holdings amid a notable three-month price increase.
In a letter addressed to stakeholders, Dorsey expounded on the strategic thrust and future aspirations of the company, with a primary emphasis on Square. He also delineated key Q3 financial landmarks. Dorsey confirmed the firm's decision to buy back $1 billion worth of shares as a strategy to mitigate the dilutive effect of rewards based on shares.
According to the report, Block posted a gross profit of $1.90 billion in Q3 2023, marking a 21% increment from the previous year. Out of this, Cash App, the digital payment application, reported a gross profit of $984 million, up by 27% from last year, while Square announced a gross profit of $899 million, showing a 15% YoY increment. Revenues from Bitcoin constituted around 43% of Block's total $5.6 billion revenue.
Positive consumer behaviour and impressive spending trends significantly contributed to the FinTech company's third-quarter growth. Bitcoin's gross profit for Block was pegged at $45 million, a 22% YoY rise, with the firm selling $2.42 billion worth of Bitcoin to customers via Cash App. Block also confirmed that they experienced no impairment loss on its Bitcoin holding since the last quarter.
Block's Bitcoin investment had a book value of $102 million as of September 30, 2023, but at prevailing market prices, its fair value was $216 million. This suggests Block's Bitcoin investments generated $114 million more than their recorded value.
Published At
11/3/2023 10:15:22 AM
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