Block, the fintech company with a primary focus on Bitcoin and led by Jack Dorsey, has reported impressive financial results for the third quarter of 2023. These results have exceeded the expectations of analysts and have marked a profitable period for the company.
In Q3 2023, the company achieved a total revenue of $5.62 billion, a remarkable accomplishment driven by significant growth in both Cash App and Square. This success translated into a $44 million profit from the company’s Bitcoin holdings, benefiting from the recent surge in Bitcoin prices.
In a shareholder letter released on November 2, Dorsey outlined the company’s strategic priorities and plans, with a particular emphasis on its commitment to Square. He also highlighted key financial metrics from the third quarter, including the approval of a $1 billion share repurchase program to counter the dilution caused by share-based compensation.
During Q3 2023, Block achieved a gross profit of $1.90 billion, reflecting a substantial 21% year-over-year increase. Notably, Cash App, the mobile payment service, played a significant role in this success, generating a gross profit of $984 million, representing a 27% year-over-year increase. Square, another essential component of Block’s ecosystem, contributed a gross profit of $899 million, showcasing a commendable 15% year-over-year growth.
The total net revenue for Q3 2023 reached $5.62 billion, indicating a 24% year-over-year growth. Excluding Bitcoin revenue, the revenue amounted to $3.19 billion, a 16% year-over-year increase. Transaction-based revenue and gross profit saw gains of 9%, totaling $1.66 billion and $674 million, respectively. Block processed $60.08 billion in Gross Payment Volume (GPV), reflecting a 10% year-over-year increase.
Subscription and service-based revenue also experienced substantial growth, reaching $1.49 billion, up 25% year-over-year. Correspondingly, gross profit in this category surged to $1.23 billion, a 28% year-over-year increase.
Block’s Strong Q3 Performance with Bitcoin Revenue Leading the Way
During this standout quarter, Block, the fintech company, demonstrated significant growth, reporting $5.6 billion in revenue for Q3. Bitcoin revenue played a significant role, accounting for approximately 43% of the total revenue. The company’s robust performance was attributed to strong consumer demand and increased spending.
Block’s Bitcoin gross profit notably increased by 22% year-over-year, reaching $45 million. This growth was driven by the sale of $2.42 billion worth of BTC to customers through Cash App. The company’s Bitcoin gross profit represented 2% of Bitcoin revenue.
Furthermore, Block emphasized that it did not experience any impairment losses on its Bitcoin holdings in the previous quarter. As of September 30, 2023, Block’s investment in Bitcoin had a carrying value of $102 million. However, its fair value, determined by observable market prices, was $216 million, indicating a $114 million surplus over its carrying value.
The surge in BTC revenue was attributed to both an increase in the average market price of Bitcoin and a rise in the quantity of Bitcoin sold to customers.