Block Inc, formerly known as Square, faced a setback in Q3 as it missed revenue estimates, leading to a 12% drop in shares. The company announced plans to wind down its DeFi business and redirect funds towards Bitcoin mining and wallet operations.
Despite reporting a 6.4% increase in Q3 revenues to $5.98 billion, Block fell short of Wall Street expectations by over 3%. Its Bitcoin revenue remained flat compared to the previous year at around $2.43 billion.
The company’s strategic shift involves phasing out its decentralized finance software TBD and reducing investments in music streaming service TIDAL to focus on crypto services like Bitcoin mining and Bitkey, its self-custody wallet solution.
Although quarterly gross profits rose 19% to $2.25 billion, Block’s net income of $283.7 million aligned with analyst predictions. The revenue miss coincided with a period of stable Bitcoin prices, hovering around $60,000 in Q3.
Considering the recent surge in Bitcoin value, reaching nearly $77,000, Block aims to capitalize on the cryptocurrency’s momentum. The company’s shares experienced volatility, initially dropping by 12.3% in after-hours trading on Nov. 7 before partially recovering.
With a commitment to enhancing its crypto-related ventures, Block strives to leverage the growing interest in Bitcoin and strengthen its position in the market.
