Like many other companies, Block invested in Bitcoin when the price of digital assets was skyrocketing.
Multinational technology conglomerate Block (NYSE: SQ) said gross Bitcoin profit from its Cash App decreased by 25% to $35 million in Q4 2022. According to the report, the total Bitcoin sold, which the company refers to as Bitcoin revenue, was $1.83 billion, a 7% drop. Block said Cash App accounted for both revenue losses and gross Bitcoin gains compared to the same period a year earlier. The significant drop in the price of Bitcoin triggered the year-over-year decline in Bitcoin revenue and Cash App gross profit in the fourth quarter.
Block Releases Fourth Quarter 2022 Results
According to the Cash App Q4 2022 report, Block noted that the mobile payment service provider’s revenue increased 12% year-over-year to $2.86 billion. At the same time, its gross profit rose 64% year-on-year to $848 million. Cash App generated a total of $10.63 billion in revenue for the full year, down 14% year-over-year. The trading arm also had $2.95 billion in gross profit for 2022, which equates to a 43% year-over-year increase. Of total Q4 2022 revenue, Block said the Buy Now Pay Later (BNPL) platform contributed $132 million of revenue and $98 million of gross profit to Cash App. And for the year, Cash App received $406 million of its revenue and $294 million of gross profit from the BNPL platform.
While the operating loss in the fourth quarter of 2022 was $135 million, the net loss attributable to common stockholders was $114 million. Furthermore, the adjusted operating loss for the period was $32 million and $145 million for the full year 2022.
Block Bitcoin Impairment Loss
Like many other companies, Block invested in Bitcoin when the price of digital assets was skyrocketing. The company’s first BTC investment was $50 million in Q4 2020, after which it added another $170 million in Q1 2021. As Bitcoin lost most of its value over the past year, Block wrote about its impact on the company in the fourth quarter of 2022.
“In the fourth quarter of 2022, we recognized a $9 million Bitcoin impairment loss on our Bitcoin investment, and for the full year of 2022, we recognized a $47 million Bitcoin impairment loss on our investment. As of December 31, 2022, the fair value of our bitcoin investment was $133 million based on observable market prices, which was $30 million greater than the book value of the investment after accumulated impairment charges.”
Currently up 7.92% in the pre-market session, Block shares are trading at $80.02. Shares of the multinational technology conglomerate have risen 18% this year and jumped nearly 17% in the past three months. Despite the gains, Block has lost 11.55% over the past month and is down 1.16% over the past five days.
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Ibukun is a crypto/finance writer interested in conveying relevant information, using non-complex words to reach all kinds of audiences. In addition to writing, he enjoys watching movies, cooking, and exploring restaurants in the city of Lagos, where he resides.