Block’s shares tumbled in early after-hours trading as its Bitcoin revenue flatlined in the third quarter compared with the previous year and total revenue missed Wall Street expectations.
Block shares dropped 12.3% to $66 about 10 minutes after the closing bell on Nov. 7, after closing the day down 3.05% at $75.27, according to Google Finance.
It has since recovered to a loss of 1.7%, and its share price is up 4.2% so far this year.
The company, which operates the point-of-sale system Square and the retail fintech app Cash App, reported that Q3 revenue rose 6.4% from the year-earlier quarter to $5.98 billion, which missed analyst expectations of $6.17 billion by more than 3%.
Block’s Bitcoin (BTC) revenue — what it makes in fees from customers buying the cryptocurrency, its biggest money maker — flatlined compared with Q3 2023, hovering at about $2.43 billion.
Block, formerly Square, saw a significant dip early in after-hours trading on Nov. 7. Source: Google Finance
The firm said it is “winding down” its decentralized finance software business TBD and “scaling back” its investment in music streaming service TIDAL so it can shift money to its crypto services.
“This gives us room to invest in our Bitcoin mining initiative, which has strong product market fit and a healthy pipeline of demand, and Bitkey, our self-custody wallet for Bitcoin,” Block said in a shareholder letter.
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Block did see its quarterly gross profit jump 19% year-on-year to $2.25 billion, with a net income of $283.7 million, which was in line with analyst estimates.
Its revenue miss came as Bitcoin traded relatively flat through the third quarter, which ran from July through to Sept. 30, when it hovered around an average price of $60,000.
The cryptocurrency has since gone on to break new highs, with its current peak reaching almost $77,000 on Nov. 7, per TradingView.
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