Jack Dorsey’s Block shifts focus to Bitcoin mining hardware.
Q3 revenue of Block falls short at $5.98 billion in revenue.
Jack Dorsey’s payment venture, Block, formerly Square, is making strides in its commitment to Bitcoin mining and its self-custody wallet, Bitkey. In its Q3 2024 shareholder letter, the firm mentioned the demand for its mining initiative, described as having a “strong product market fit.”
This announcement was followed by Trump winning the U.S. presidential election. In light of his promise to provide a more crypto-friendly environment in the U.S. during his election campaign. Bitcoin mining is one of the industries he pledged to support.
Besides, the firm has been focusing on building a decentralized Bitcoin mining ecosystem, having completed the design of a 3-nanometer mining chip earlier this year. A partnership with Core Scientific was also announced to supply bitcoin mining hardware, further scaling the efforts.
Jack Dorsey’s Block restructuring comprised winding down its decentralized internet project, Web5, and scaling back investments in its music streaming service, Tidal. These cuts come after several layoffs across both divisions, reflecting a shift toward more profitable ventures, including crypto-focused initiatives.
Notably, Tidal was acquired for $300 million in 2021. It has struggled to meet its growth expectations, persuading the Block to reallocate resources to Bitcoin initiatives.
Financial Performance
In addition to its shareholder letter, Block reported its third-quarter financial results, with $5.98 billion in revenue. It falls short of analysts’ estimate of $6.24 billion. Moreover, its stock initially plunged around 10% in after-hours trading on Thursday.
For Q3, Jack Dorsey’s Block reported $2.25 billion in gross profit, up by 19% from a year ago. With a gross profit of $1.31 billion, Block’s Cash App businesses recorded a significant 21% increase compared to the same period last year.
Simultaneously, the monthly active users of Cash App Card have increased by 11% to more than 24 million. Furthermore, Cash App’s gross profit per monthly transacting active was $75, compared to $65 in the previous year.
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