Block Inc., Jack Dorsey’s payment business, reported fourth-quarter earnings missing expectations but touching revenue goals.
Block’s gross earnings for Q4 2022 increased by 40% year-on-year to $1.66 billion. The company produced a total gross profit of $5.99 billion for the entire 2022, up 36% from the previous year.
Block’s stock price increased by roughly 8.8% in extended trading after the earnings release.
Cash App and Square’s Contribution
The shareholders’ letter notes that the company’s Cash App generated a gross profit of $848 million in Q4, an increase of 64% from last year. Parent company Block produced a gross profit of $801 million, up 22% from the same period last year. For all of 2022, Block’s gross profit was $3 billion, while gross profit from Cash App was $2.95 billion.
The Jack Dorsey-led company noted, “In 2022, Cash App continued to efficiently grow its network: We ended the year with 51 million monthly transacting actives in December, with two out of three transacting each week on average.”
According to Block’s balance sheet, it had $7.5 billion in available liquidity at the end of the fourth quarter of 2022. The figure included $6.9 billion in cash, cash equivalents, restricted cash, investments in marketable debt securities, and $600 million that could be withdrawn from our revolving credit line.
The company noted that adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) made a significant positive contribution to its total liquidity in the fourth quarter of 2022.
Block’s Bitcoin Story Shifts Focus
Mizuho Senior Financial Technology Analyst Dan Dolev told Yahoo Finance that Block’s superior EBITDA performance was expected. Dolev explained, “But the most important KPIs which is the Cash App and point of sale seller, there were kind of like, eh, right? They sort of missed on seller. They kind of met on cash, that they actually missed on number.”
The analyst so explained his bearish attitude toward crypto. He said, “I think Bitcoin has been a huge problem for Square or Block.”
He believes that the excessive focus on Bitcoin has undermined Block’s story. And with less of a focus on Bitcoin, the analyst claims that the story is changing. Dolev remarked, “And you’re not seeing them talk that much about Bitcoin. If you go back to their analyst day last year, it was all about Bitcoin.”
At press time, Bitcoin remains just north of $23,800. CoinGecko shows a trading volume of $39.8 billion in the past 24 hours. BTC is down 2.60% on the day but has still gained nearly 5% since the same time last month.
However, since BTC’s peak in 2021, it still remains down by more than 65% in value.
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
