•Block Inc. exceeded analysts expectations and saw a rise in its share price through after-hours trading, despite a 7% decrease in Bitcoin revenue for Q4.
•The decrease in sales was attributed to the decline in the price of BTC throughout 2022.
•Despite this, Block Inc. reported an increased net loss for the quarter of $114 million, as well as a significant 40% rise in gross profits compared to 2021’s Q4 results.
Block Inc.’s Q4 Report
Decrease in Bitcoin Revenue
Block Inc.’s Cash App business section reported $1.83 billion in bitcoin sales for the fourth quarter of 2022, which is a 7% decrease compared to the same period the previous year. This was attributed to the 65% drop that Bitcoin’s price took throughout 2022. As a result, Cash App’s bitcoin gross profit decreased by 25%, coming in at $35 million for the quarter; this is also the lowest quarterly total since Block began reporting earnings from bitcoin transactions. For 2022 overall, Cash App made $7.11 billion from bitcoin sales and $156 million from bitcoin gross profit; both figures represent decreases of 29% and 28%, respectively when compared to 2021’s figures.
Increase in Gross Profit
Although there were losses recorded due to the reduction of BTC sales revenue, Block Inc.’s adjusted profits before interest, tax, depreciation, and amortization (EBITDA) rose by 53% to reach $281 million during Q4; this figure was significantly above expert estimates. The aggregate amount of revenue during this period was $4.65 billion while its net loss amounted to $114 million – an increase from 2021’s figure of $77million dollars. After releasing these results, Block’s share value experienced an increase through after-hours trading activity due largely to its higher than expected gross profit rate which rose by 40%.
Lightning Network Enablement
Cash App enabled functionality for transactions made via Bitcoin Lightning Network back on October 25th . In addition it offers consumers with access to buy bitcoins directly from within their app platform – providing another source of income for Block Inc..
In conclusion Blockchain Inc., although experiencing a decrease in its bitcoin revenue due largely because of falling prices throughout 2022 slightly exceeded expectations with regards to its adjusted EBITDA rate as well as its gross profit rate – both rising significantly above their respective estimates In spite of these positive factors however it still recorded higher than expected losses which may be cause for concern going forward into 2023 unless further measures are taken to counteract them