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Jack Dorsey's company Block, formerly known as Square, saw its shares rise in after-hours trading Thursday after a first-quarter earnings report that beat analysts' expectations.
Block's Bitcoin Investment Strategy Boosts Shares
The company reported adjusted earnings of 85 cents per share, beating the consensus estimate by 13 cents and generating revenue of $5.97 billion, topping Wall Street's projection of $5.82 billion. Gross profit in this quarter increased by 22% compared to the previous year, reaching $2.09 billion.
In a notable move, the Jack Dorsey-led company announced plans to increase its Bitcoin holdings and open source its treasury blueprint to encourage others to do the same.
Block will invest 10% of the gross profit it makes from Bitcoin products into Bitcoin purchases each month. The company's original Bitcoin investment of $220 million has already increased by nearly 160% to $573 million.
“We believe the world needs an open monetary protocol that is not owned or controlled by any single entity,” Dorsey said.
“We believe Bitcoin is the best and only candidate to be this protocol and ultimately the native currency of the internet.”
The company's Cash App unit recorded a 25% increase in gross profit in the first quarter compared to the same period a year ago.
This growth was primarily driven by strong performance in Cash App Card, BNPL platform, Bitcoin products and Cash App Borrow, as well as inflows and monetization rate per asset.
While the total amount of Bitcoin sales sold to customers and recorded as Bitcoin revenue was $2.73 billion, a gross profit of $80 million was achieved in the first quarter.
*This is not investment advice.