Block reported weaker-than-expected gross payment volume, a measure of the total amount of money transacted using Block’s products. Shares slid as much as 7 per cent in late trading.
Block, formerly called Square, reported $US52.5 billion in transactions, missing the $US53.47 billion estimate.
Gross profit for the quarter, the company’s profit before subtracting costs like marketing and product development, was $US1.47 billion, in line with analysts’ estimates. Cash App, the app for sending money between individuals, accounted for roughly 48 per cent of that gross profit. The service now has 47 million active accounts.
Revenue was better than expected, but still declined in the second quarter thanks in large part to a drop in bitcoin-related transactions on Cash App. Revenue collected through bitcoin transactions was $US1.79 billion, down 34 per cent.
The company has warned that bitcoin revenue is a poor measure of its business health given the currency’s wild price fluctuations. Gross profit from bitcoin sales is only about 2 per cent of bitcoin revenue.
Dorsey has made bitcoin a key priority at the company, and Block previously purchased more than $US200 million in bitcoin to keep on its balance sheet. The price of the digital currency has fallen by over 50 per cent since the beginning of the year, leading Block to report a $US36 million bitcoin impairment loss in the second quarter.
Square slipped as much as 7.3 per cent to $US83.17, after closing at $US89.70. The stock has declined 44 per cent so r this year
Be the first to comment