The data: Block’s gross payment volume (GPV) increased 23% year over year (YoY) in Q2, a slowdown from 88% YoY growth during the same period last year, per its shareholder letter. However, total net revenues fell 6% YoY compared with a 143% YoY increase in Q2 2021.
Here’s what happened: The firm’s revenue drop was primarily driven by a 34% YoY decline in its Bitcoin revenues.
Block attributed these losses to widespread volatility in the cryptocurrency space and softened consumer crypto demand. As a result, it reported a $36 million Bitcoin impairment loss for the quarter. Block tried to increase crypto engagement during the quarter with new Bitcoin services in early April like Bitcoin Roundups and Paid in Bitcoin.
But expanding services helped Block drive up spending and led to healthy seller retention in Q2, CFO Amrita Ahuja noted on the company’s earnings call. These factors may have also offset some of Block’s revenue losses.
What’s next? Going into Q3, Block plans to double down on growth initiatives while keeping a pulse on macroeconomic conditions.
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