Block shares surge after Q3 earnings, Bitcoin revenue up 37% YoY

Block, Inc. shares rose sharply on Thursday during after hours trading as the company’s third-quarter earnings beat analyst estimates.

Having closed at $43.98 on Thursday, the stock price rose 18% in after hours trading to reach $51.99, with the market reacting positively to revenue growth for both Cash App and Square.

Block, co-founded by Jack Dorsey, reported earnings per share of $0.55, adjusted, compared to expected estimate of $0.47, while total revenue was $5.62 billion compared to $5.44 billion expected. Revenue growth represented a 24% upside from $4.52 billion. Gross profit grew 21% from $1.57 billion to $1.9 billion.

Block's Q3 bitcoin gross profit up 22% YoY

Meanwhile, Bitcoin (BTC) revenue jumped from $1.76 billion to $2.42 billion.

The company’s revenue from its Bitcoin bet therefore showed a 37% increase for Q3 compared to the same period last year. Gross profit from Bitcoin in the third quarter rose 22% from $37 million to $45 million, the financial services firm noted.

Block invested $220 million in Bitcoin and notes that the company did not recognise an impairment loss in the bitcoin bet in Q3. The value of BTC holdings in its corporate treasury rose year-over-year in the third quarter.

According to the company, the growth in its bitcoin revenue came as the flagship cryptocurrency’s price rose. Block also benefited from an increase in BTC sales volume via Cash App, with these coming as Bitcoin price broke to highs of $31k in August before a slight retreat in September.

It is notable that gross payment volume was $60.08 billion vs. the $61.04 billion estimated, and Cash App revenue for the quarter was $3.58 billion vs. $3.39 billion estimated.