In a shareholder letter published on Thursday, financial technology company Block Inc. revealed that it earned $1.83 billion in Bitcoin in its fourth quarter — a seven percent year-on-year decline.
Despite the year-on-year plunge, its Bitcoin price increased marginally from previous quarters, jumping from $1.76 billion in the third quarter to its current revenue value.
However, some of the company’s units still declined in Bitcoin value since the last quarter. Block’s Cash App unit made around $35 million in Bitcoin this quarter, a little less than its $37 million in the third quarter and down 25 percent year-over-year.
Block attributes the falling price of Bitcoin as a primary reason for its revenue plunging. The value of Bitcoin shrank by 65 percent in 2022, during the tech world’s crypto winter.
Profits and losses
While Block saw significant falls from its Bitcoin sector, it has profited in many other sectors. Last year, Block earned $5.99 billion in gross profit — a 36 percent year-on-year growth.
It also reported a 64 percent year-on-year rise in Cash App’s gross profit, going from $518 million in 2021’s fourth quarter to $848 million in 2022’s fourth quarter.
On the other hand, in terms of Bitcoin alone, the company noted that its Cash App unit earned $7.11 billion in revenue and $156 million in profit during the 2022 crypto winter, a decrease of 29 percent and 28 percent from previous years.
“As an indefinite-lived intangible asset, bitcoin is subject to impairment losses if the fair value of bitcoin decreases below the carrying value during the assessed period,” Block said in a shareholder letter.
Block’s initial Bitcoin investment hovered at $133 million on December 31, 2022. The company acknowledged that its investment went $30 million above the asset’s carrying value.
Despite its Bitcoin losses, the company’s share increased by 0.6 percent in trading after its shareholder letter was released.