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Like many other companies, Block invested in Bitcoin when the digital asset price was skyrocketing.
Multinational technology conglomerate Block (NYSE: SQ) said the Bitcoin gross profit from its Cash App declined 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 representing a 7% drop. Block said Cash App accounted for losses in Bitcoin revenue and gross profit compared to the same period of the previous year. The significant decline in Bitcoin’s price triggered the YoY drop in Bitcoin revenue and gross profit for Cash App in Q4.
Block Releases Q4 2022 Results
According to the Q4 2022 report on Cash App, Block noted that the mobile payment service provider’s revenue jumped 12% year-over-year to $2.86 billion. At the same time, its gross profit surged 64% YoY to $848 million. Cash App generated a total of $10.63 billion of revenue for the entire year, dropping 14% YoY. The business arm also had $2.95 billion of gross profit for 2022, which equals a 43% rise YoY. Out of the total revenue for Q4 2022, 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 Q4 2022 was $135 million, the net loss attributable to common stockholders was $114 million. More so, the adjusted operating loss for the period was $32 million, and $145 million for the full year 2022.
Block’s Bitcoin Impairment Loss
Like many other companies, Block invested in Bitcoin when the digital asset price 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 Q4 2022.
“In the fourth quarter of 2022, we recognized a bitcoin impairment loss of $9 million on our bitcoin investment, and for the full year of 2022, we recognized a bitcoin impairment loss of $47 million on our investment. As of December 31, 2022, the fair value of our investment in bitcoin was $133 million based on observable market prices, which was $30 million greater than the carrying value of the investment after cumulative impairment charges.”
Currently up 7.92% at the pre-market session, Block stock trades at $80.02. The multinational technology conglomerate’s shares have increased 18% this year and jumped nearly 17% in the last three months. Despite the gains, Block has shed 11.55% over the past month and declined 1.16% in the last five days.