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Block said Bitcoin sales derived from its Cash App mobile service for the fourth quarter pulled in huge revenue numbers.
American financial services and digital payments firm Block announced on Thursday that it earned $1.96 billion in Bitcoin (BTC) sales during the fourth quarter (Q4) of 2021, representing a 12% YoY increase. According to the Jack Dorsey-led company, it realized this massive gain through its Cash App mobile service. Block also added that it produced $46 million in BTC gross profits for the same period. The reported figure shows a 14% YoY increase.
Furthermore, on an annual basis, Cash App had an excess of $10 billion in BTC sales for 2021, amounting to $218 million in BTC gross profit. Meanwhile, the total company gross profit for the fourth quarter was $1.18 billion.
Total revenue for the fintech and digital payments giant was $4.08 billion, a 29% YoY increase. In addition, it also edged out the analysts’ estimate of $4.04 billion. Excluding BTC, Block made $2.12 billion in revenue for the quarter, a 51% YoY jump. Furthermore, adjusted EPS stood at $0.27, compared to the consensus estimate of $0.19.
Block did not book an impairment loss on the $220 million worth of BTC listed on its balance sheet between late 2020 and early 2021. Consequently, the company’s full-year impairment charge remained at $71 million, with a carrying value of $149 million. At the end of the year, Block’s BTC investment fair value stood at $371 million, surpassing the carrying value by $222 million.
Block Provides Further Exposition into Bitcoin Q4 Performance
Touching on its earnings report, Block said:
“Bitcoin revenue and gross profit benefited from year-over-year increases in the price of bitcoin and number of bitcoin activities.
In addition, the company, formerly known as Square, added that volatility in the price of BTC for the Q4 period helped it outperform the third quarter. In Block’s own words:
“Compared to the third quarter of 2021, bitcoin revenue and gross profit increased on a quarter-over-quarter basis, driven primarily by increased volatility in the price of bitcoin, which affected trading activity compared to the prior quarter.”
Block also noted that Cash App pushed its Q4 earnings, net revenue, and gross payment volume beyond the consensus estimates. The company specifically pointed out that Cash App achieved this despite a slowdown in demand for its services.
The Block Name-Change Controversy
Back in early December 2021, Square changed its name to Block to reflect its business expansion scope to more crypto-centric endeavors. The payment giant explained that it was shifting its focus to emerging technologies like blockchain and the metaverse. However, this development did not come without controversy. About two weeks later, H&R Block, an American tax preparation services firm, filed a lawsuit against the company formerly known as Square. According to the tax company, the name change by Dorsey’s Block was confusing its own customers. The lawsuit asked the payment platform to stop using the ‘Block’ name and nearly identical green square logo.