By
Bena Ilyas
April 25th, 2024
Block saw increased earnings on several fronts for Q1 2023 due to the success of its other businesses, including Cash App and Square.
Block (NASDAQ: SQ) announced its Q1 2023 earnings report, which showed $2.16 billion in Bitcoin (BTC) revenue realized from its Cash App service. Block reported in a shareholder letter that BTC revenue grew 18% from $1.83 billion in the fourth quarter of 2022. In addition, the Jack Dorsey-founded multinational tech conglomerate also reported that its latest Bitcoin revenue haul was up 25% year-over-year (YoY).
Block Highlights Q1 2023 Performance in Shareholder Letter
For Q1 2023, Block also said:
“In the first quarter of 2023, we generated gross profit of $1.71 billion, up 32% year over year. Cash App generated gross profit of $931 million, up 49% year over year, and Square generated gross profit of $770 million, up 16% year over year.”
Extolling the accomplishments of Cash App in the last quarter, Block also added:
“Cash App Card has continued to expand its reach and engagement: In March, there were 20 million monthly Cash App Card actives, up 34% year over year, with the average spend per active increasing as well.”
Block stated that Cash App boasts an extensive, highly engaged network rooted in peer-to-peer payments. This structure facilitates viral growth, with increasing monthly transactions being a component of the inflows framework. The company also added that in March, it oversaw 53 million transactions within its Cash App community.
Block Bitcoin Revenue
In its shareholder letter, Block pointed out that its staggering BTC revenue was driven by an increase in the quantity of the coin sold to customers. Furthermore, the company added that the Bitcoin revenue was partially counterbalanced by the token’s market price decrease YoY.
Block’s first-quarter total revenue rose 26% YoY to nearly $5 billion. However, minus its sizable BTC income haul for the period, the company’s revenue came in at $2.83 billion, representing a 27% increase YoY. For the year’s first quarter, the fintech platform also reported 40 cents in earnings per share (EPS). This development beat out the consensus estimate of 35 cents per share by 14%, as Block expanded its business visibility in Q1.
Square New Products & Features in Q1 2023 to Diversify Seller Revenue Streams
The company said it launched approximately 100 new products, features, and partnerships across Square’s ecosystem in the first three months of the year. According to Block, facilitating its small and medium business-oriented financial services platform was to help sellers diversify revenue streams. Furthermore, Block added that it enhanced Square’s ecosystem to assist sellers in automating more of their operations.
Addressing investors in an earnings conference call, Block CEO Dorsey identified technologies that could be pivotal to its continued prosperity. According to him, artificial intelligence and “open protocols” would aid the fintech giant in efficiently keeping pace with global financial system “significant shifts”.
Dorsey explained that increased global efforts will shift to “creative endeavors as AI continues to automate mechanical tasks away”. Regardless, the Block chief executive also opined that his company remains well-positioned for that shift.