Block’s Growth Strategies: Cash App and Bitcoin Performance in 2022

Block’s Stellar Growth in 2022

Block, the cryptocurrency-loving parent company behind popular platforms like Cash App and Square, seems to be on a healthy growth trajectory. In their recent Shareholder letter, they proudly announced a whopping 34% increase in gross profits year over year, totaling around $1.29 billion. Sounds fantastic, right?

The Cost Conundrum: An Increase in Operating Expenses

But like that uncle who shows up at every family gathering to eat your leftovers, operating costs also decided to make an entrance, totaling $1.52 billion in the first quarter—up 70% year over year. The acquisition of Afterpay, a buy-now-pay-later service, is riding shotgun in this expense increase. Yeah, that’s something to chew on.

Revenue Ruffled by Bitcoin’s Sizzling Valuation

Speaking of ups and downs, Block’s revenues hit $3.96 billion from January through March 2022, marking a 22% drop compared to the same period last year. The company explained that this decline was fueled by the fluctuating performance of Bitcoin. It seems their love affair with Bitcoin may come with some emotional baggage.

Cash App’s Bitcoin Revenue: The Sinking Ship?

While Cash App continued to be a key player, selling off Bitcoin and generating $1.73 billion in Bitcoin revenue, that number took a hit, dropping 51% year over year. Its gross profit from Bitcoin also fell to just $43 million, a 42% decrease from last year. Ouch! But hey, at least they’re still in the game!

Beyond Bitcoin: Non-Crypto Revenues on the Rise

Amid the Bitcoin chaos, Block didn’t drown in a sea of despair. Non-Bitcoin revenues surged, crossing the $2.23 billion mark—up $44 year on year. Their ecosystem, which also features Tidal and the underdog TBD, provides a silver lining that isn’t entirely tied to the volatile world of crypto. Plus, their Square payment solutions did perform quite well, raking in a 41% increase year over year gross profit of $661 million.

The Bitcoin Maximalism Continues

Block remains firmly in the Bitcoin camp. Their latest report made a staggering 81 mentions of Bitcoin, but cryptocurrency in general? Not a peep. Jack Dorsey’s Bitcoin-maxi credentials are intact, as he and his crew of over 10 million Cash App users dabble solely in Bitcoin. Sorry, Ethereum and Dogecoin—better luck next time!