Revenue at American digital payments company Block Inc. fell 6% year-on-year (YOY) in the second quarter (Q2) to $4.4 billion. Though the numbers still beat Wall Street’s expectations of $4.35 billion, it suffered a $208 million loss in the quarter, the Associated Press reported.
After Q2 ResultsBlock shares tumbled 5.35% to $84.90 in after-hours trading on Thursday.
BTC price lowers sales
However, what caused the Jack Dorsey-led company to decline in second-quarter revenue was the decline in bitcoin prices as well as consumer demand for the asset, the company said in its most recent earnings report.
“Cash App generated $1.79 billion in bitcoin revenue and $41 million in bitcoin gross profit in Q2 2022, down 34% and 24% year-on-year, respectively,” Block said in his letter to shareholders.
BTC revenue and gross profit actually increased by 143% and 168% on a 3-year CAGR basis, the company said. Block expects Bitcoin revenue and gross profit to fluctuate in the coming quarters depending on consumer demand movements or BTC prices.
“The year-over-year decline in bitcoin revenue and gross profit was primarily due to a decline in consumer demand and the bitcoin price, partly due to broader uncertainty surrounding crypto assets taking advantage of the volatility of the cryptocurrency Bitcoin price more than made up for in the quarter,” it said.
Without BTC, revenue increased
Excluding bitcoin, Block’s second-quarter revenue rose 34% to $2.62 billion. Earnings per share came in at 18 cents, beating Wall Street’s expectation of 17 cents. Block’s gross profit rose 29% year over year to $1.47 billion in the second quarter, with both Square and Cash App reporting a 29% increase in gross profit to $755 million and $705 million, respectively .
“Bitcoin revenue and gross profit were relatively flat compared to Q1 2022,” it said.
The food and beverage business posted the fastest gross profit among all of its industries.
Block Bullish on Bitcoin
The block led by Jack Dorsey has always been bullish on Bitcoin. In a new move to tap into the Bitcoin network, The Block Head (TBD), one of Block’s Bitcoin business units, announced in June uncovered plans to develop what it calls Web5 – an additional decentralized web platform. It aims to enable developers to create an improved user experience as they will continue to own and keep their data and digital identities.
Source: Crypto News Deutsch