Block, Coinbase Release Positive Q4 Results Amid Growing Market Uncertainty

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The fourth quarter 2021 results of payment giant Block were positive, indicating a very bright outlook for the year. The major crypto exchange Block also reported quarterly results that were above analyst expectations. However, its expectations of lower trading volumes and monthly transacting customers in the first quarter 2022 lowered its shares’ value.

Block was previously known as square. In an earnings report, Block stated that its fourth quarter net revenue was USD 4.08bn. This is 29% more than the year before.

The firm’s total net revenues were USD 2.12bn excluding Bitcoin (BTC) revenue. This is 51% more than 2020.

Block’s quarterly gross profits totaled USD 1.18bn, which is a strong increase of 47% year on year, according to data in the report.

Gross profit for the firm’s flagship peer to peer payment service Cash App was USD 518m, an increase of 37% over last year. According to the report, Square ecosystem made a gross profit of USD 657 million, an increase of 54% over the previous year.

Block’s total profit for the year was USD 4.42bn. This is 62% more than last year.

Coinbase reported net revenues of USD 2.49bn in the fourth quarter 2021. This was a substantial increase over analyst estimates of approximately USD 2bn. According to the company, it reported USD 840m in net income and USD 1.2bn in Adjusted earnings before taxes, depreciation and amortization (EBITDA), for the October-December 2021 period.

Coinbase’s shareholder letter stated that “We ended 2011 with 11.4 Million Monthly Transacting Users… 32% of which both invested and engaged in a noninvesting product.”

Alesia Haas (CFO at Coinbase, ) stated during the 2021 earnings calls that the company is “anticipating massive sector growth to continue over time.” This is the background for our 2022 investment strategy.

CFO acknowledged that the volume trend in the first quarter 2022 was lower than the previous quarter due to lower crypto asset prices, and lower volatility.

Haas also stated that it was difficult to predict our business, and that we are entering this year with more unknowns than I would have predicted last year.

“It is too early to have a precise view of the year. This informs the way we approach things. We promise transparency with all of you. She said that she had provided an annual retail MTU [monthly transacting users] range of 5 to 15 millions for the full year 2022.”

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