The Block, run by Twitter co-founder Jack Dorsey, reported $195 million in operational profitability, or adjusted EBITDA, exceeding Wall Street’s average estimate of $136 million.
However, the company’s headline sales and profitability fell short of expectations. Revenue fell 22% to $3.96 billion in the three months ending March 31st.
In its first quarter, the company purchased Afterpay Ltd. for $29 billion. The founder of buy-now pay-later contributed $92 million to the first quarter’s gross profit, and its gross merchandise value was forecast to climb 15% in April.
This increase was recorded under Block’s Square and Cash App divisions, which led to the latter’s 26% increase in gross profit.
Additionally, even without Afterpay’s contribution, Cash App outperformed the payments industry, posting a $578 million gross profit, including a 15% year-on-year increase in April. “We anticipate Cash App and Square to expand gross profit sequentially each quarter throughout the year, even minus Afterpay, providing the macroeconomic environment stays steady,” said Amrita Ahuja, Chief Financial Officer.
Block’s first-quarter financial figures also revealed that the company’s bitcoin revenue had already been cut in half, to $1.73 billion, owing to a reduction in retail trading interest. The cryptocurrency’s popularity has dropped since it peaked at the end of last year, when it skyrocketed and led to a rising general acceptance of digital assets.
This was recently proved when a non-fungible token representing Jack Dorsey’s first-ever tweet found no resale demand. The NFT, which sold for $2.9 million last year, received just $280 in bids.
