Fintech and digital payments giant Block, formerly Square, reported second-quarter results that beat analysts' average estimates, but its bitcoin-related revenue fell.
Total revenue for the quarter was $4.4 billion, compared with the $4.3 billion that analysts were expecting on average according to FactSet. Revenue fell 6.6% from the second quarter a year ago, driven by a decrease in bitcoin revenue, the company said.
Excluding bitcoin, net revenue was $2.62 billion. Adjusted earnings per share were 18 cents, compared with analysts' average estimate of 16 cents.
Cash App, a peer-to-peer payments service that allows users to directly buy and sell bitcoin, generated $1.79 billion in bitcoin transactions and $41 million of gross profit in the quarter, down 34% and 24% year over year, respectively.
The company said the decrease was the result of “a decline in consumer demand and the price of bitcoin, related in part to broader uncertainty around crypto assets, which more than offset the benefit of volatility in the price of bitcoin during the quarter.”
Electric car maker Tesla sold roughly 75% of its bitcoin holdings in the second quarter, but Square held on to its bitcoin. As a result, it took a $36 million impairment against the value of its bitcoin holdings. As of June 30, the fair value of its investment in bitcoin was $160 million, versus the carrying value of the investment of $113 million.
Shares of Block fell 6.5% to $83.83 in after-hours trading on Thursday. The stock is down almost 45% year to date.
The company will be holding an earnings conference call with analysts at 5 p.m. ET.
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