While Block’s fourth-quarter earnings report showcased an overall strong performance with the company beating estimates in most categories. Its Bitcoin revenue and profit, however, continued to decline and the company logged a $47 million impairment for the entire year on its cryptocurrency. The firm’s shares skyrocketed in after-hours trading after closing just under 2% in the green.
Cash App BTC Profit Down 25%, Revenue Down 7%
Block, the Jack Dorsey co-founded fintech firm formerly known as Square Inc released its Q4 earnings report on Thursday afternoon. The report showcases that the company managed to beat analyst expectations both in terms of revenue and gross profit, but underperformed when it comes to per-share earnings.
The firm reported $1.66 billion in profit while analyst estimates stood at $1.53 billion. Similarly, Block’s revenue for the fourth quarter was $4.65 billion instead of the forecast $4.61 billion. The company’s earnings per share were however lower than expected and amounted to $0.22—8 cents below estimates.
Another area where the company revealed decreasing numbers was Cash App’s Bitcoin profit and revenue. The platform saw a decrease in its BTC revenue of 7% as it amounted to $1.83 billion. Furthermore, its Bitcoin gross profit fell to 35%. Due to the decline in the price of the world’s largest cryptocurrency, Block logged a $7 million impairment for the fourth quarter, and acknowledged $47 for the entire year.
Are Cryptocurrency Platforms Bound For a Strong Q1?
The final quarter of 2022 proved, as many have expected, very damaging to companies involved with digital assets. Robinhood, an online broker that started offering cryptocurrency last September, reported its digital asset trading revenue decreased from $51 million to $39 million from the third to the third quarter.
Similarly, MicroStrategy, a company well-known for its ever-growing Bitcoin holdings, reported in its earnings report a $197.6 million impairment loss on the investment into the world’s largest cryptocurrency. The company, however, also stated that it will continue buying Bitcoin despite the loss and is optimistic about its future performance.
Coinbase, one of the largest cryptocurrency exchanges, revealed after publishing its own lukewarm Q4 report that 2023 is already proving a far stronger year for the industry. The claim is also backed up by the price of most major digital assets, and most companies heavily involved with digital assets which rose drastically in a rally in January.
Year-to-date, the price of Bitcoin rose 44% and the value of Ethereum jumped nearly 38%. Similarly, since 2023 started, Microstrategy is up by a staggering 83 % and Coinbase by an even more impressive 85%.
This article originally appeared on The Tokenist
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