Block Beats Q2 Estimates but Bitcoin Revenues Fall

Despite beating projections, the payments company said its overall revenue fell because of a decrease in bitcoin revenue.

AccessTimeIconAug 4, 2022 at 8:36 p.m. UTC
Updated Aug 5, 2022 at 12:09 a.m. UTC

Nelson Wang is CoinDesk's news editor for the East Coast. He holds BTC and ETH above CoinDesk's disclosure threshold of $1,000.

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.

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

Nelson Wang is CoinDesk's news editor for the East Coast. He holds BTC and ETH above CoinDesk's disclosure threshold of $1,000.

CoinDesk - Unknown

Nelson Wang is CoinDesk's news editor for the East Coast. He holds BTC and ETH above CoinDesk's disclosure threshold of $1,000.