Block's Q1 Bitcoin Revenue Down 50% Y/Y - Key Takeaways

Block Inc SQ reported a first-quarter revenue decline of 22% year-over-year to $3.96 billion, driven by a decrease in bitcoin revenue, missing the consensus of $4.14 billion. Adjusted EPS was $0.18, below the consensus of $0.21.

The gross margin expanded to 32.7% from 19.1% in 1Q21. The company reported an operating loss of $(226.79) million for the quarter, compared to an income of $67.74 million a year ago.

Transaction-based revenue was $1.23 billion, up 28% Y/Y, and gross profit was $514 million (+19% Y/Y). Subscription and services-based revenue were $960 million, up 72% Y/Y, and gross profit was $764 million (+63%Y/Y), including contributions from Afterpay.

Bitcoin revenue was $1.73 billion, down 50.1% Y/Y. 

Mid-market sellers continued to show strong momentum in the quarter, with gross profit up 47% Y/Y.

Adjusted EBITDA was $195.36 million (-17.3% Y/Y), and the margin expanded by 26 bps to 4.9%.       

Blocks’ net cash provided by operating activities for Q1 totaled $229.42 million, compared to cash used of $(29.19) million in 1Q21.

Block ended the quarter with $6.9 billion in available liquidity, with $6.3 billion in cash, cash equivalents, restricted cash, and investments in marketable debt securities.

Square GPV is expected to be up 29% year over year. On a three-year CAGR basis, GPV growth is expected to be 24% in April, compared to 22% growth in Q1.

Cash App gross profit, excluding Afterpay, is expected to grow on a year-over-year and three-year CAGR basis, driven by growth in monthly transacting actives, engagement across our ecosystem, and inflows into Cash App.

Price Action: SQ shares are trading higher by 1.31% at $96.86 during the post-market session on Thursday.

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