TLDR
Block’s total gross profit rose 25% to $3.166 billion in the second quarter.
Bitcoin Ecosystem gross profit fell 31% to $72 million, the only category to shrink.
Bitcoin Ecosystem revenue dropped about 13% to $1.894 billion.
Block blamed lower Cash App bitcoin fees and trading dynamics, but gave no numbers for either.
Block also recorded an $88.474 million bitcoin remeasurement loss, a swing from a $212.165 million gain last year.
Block reported its second quarter earnings this week. The results showed a mixed picture for the payments company.
Total gross profit across the company rose 25% to $3.166 billion. One part of the business did not follow that trend.
Block’s Bitcoin Ecosystem gross profit fell 31% year over year. It dropped to $72 million.
This was the only category in Block’s three-part breakdown to shrink. Commerce Enablement gross profit grew 18%, and Financial Solutions gross profit grew 43%.
Revenue Drop and Narrower Margins
Bitcoin Ecosystem revenue also fell. It dropped about 13% to $1.894 billion from $2.172 billion a year earlier.
The gross margin for this category narrowed too. It fell to about 3.82% from 4.84%, a drop of roughly 102 basis points.
In simple terms, Block earned about $38.20 in gross profit for every $1,000 of Bitcoin revenue. That is down from $48.40 a year earlier.
In dollar terms, revenue fell by about $278 million. Gross profit fell by about $33 million.
What Caused the Decline
Block pointed to two causes. One was a decision to lower fees on some Cash App bitcoin transactions.
The other was described only as bitcoin trading dynamics. Block did not explain that phrase in numbers.
The company did not say how much each factor added to the decline. The full drop cannot be tied to fee cuts alone.
Cash App had announced in February that it was lowering fees. It removed fees and spreads entirely for bitcoin purchases over $2,000.
That February announcement did not set an end date. Block’s second quarter filing referred to lower fees on certain transactions, a broader term than the February offer.
Block reported 59 million monthly transacting active users on Cash App in June. The filing did not say how many of those users bought bitcoin.
There was no data on bitcoin transaction volume or fee revenue per trade. The filing cannot show if more trading offset the lower fees.
Block also recorded a separate bitcoin remeasurement loss of $88.474 million. A year earlier, it recorded a gain of $212.165 million on the same measure.
That swing totaled about $300.639 million. This figure is separate from the Bitcoin Ecosystem revenue and gross profit numbers.
The remeasurement loss reflects a change in the value of bitcoin held on Block’s balance sheet. It is not the same as the drop in Bitcoin Ecosystem gross profit.
Block has not released updated data on bitcoin transaction counts. The latest public numbers remain those in this week’s second quarter shareholder letter.
