Block’s share price soared in after hours trading after the payments company surpassed analyst expectations for its third quarter earnings, which included news of a double digit jump in Bitcoin revenue.
The company’s Bitcoin revenue grew 37.5% to $2.42 billion from $1.76 billion in the same period last year. Gross profit the company reaped from Bitcoin rose to $44 million, compared to $36 million last year.
Block also touted the value of the Bitcoin holdings in its corporate treasury, which amounted to $216 million based on market prices. The value of its holdings based on market prices were $114 million higher than the value on its books.
The discrepancy between book value and market value is due to a quirk in accounting rules (set to be changed) that require firms to record any decreases in Bitcoin price as an impairment charge, but prevents them from recognizing increases in the value of their Bitcoin holdings until the assets are sold. In the third quarter of 2023, the company did not recognize a Bitcoin impairment loss.
In total, Block’s net revenue grew 24% year-over-year to $5.62 billion from $4.52 billion a year ago. Bitcoin revenue made up about 43% of total revenue. The jump in revenue that came from the cryptocurrency was fueled by strong performance of the company’s CashApp product.
Cash App revenue grew 34% to $3.58 billion, up from $2.68 billion a year ago.
Block shares were trading at about $50, up 15% after market close on Thursday.
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