Jack Dorsey’s fintech company Block took a hit in its Bitcoin business during the latest quarter after reducing some of the trading fees charged on Cash App, but strong growth across the rest of the company helped offset the decline.
The company said gross profit from its Bitcoin ecosystem fell 31 percent to $72 million, reflecting the lower fees it now earns from Bitcoin trades made through Cash App.
Even so, Block’s overall business delivered a much stronger performance.
Total gross profit climbed 25 percent to $3.17 billion, encouraging the company to raise its financial outlook for the rest of the year.
Investors responded positively to the results, sending Block (NYSE: XYZ) shares up about 4.5 percent in after-hours trading.
The results show how Block’s business has evolved beyond cryptocurrency.
Non-crypto businesses continue to power Block’s earnings
While Bitcoin remains an important part of the company’s strategy, most of its profits now come from products such as Cash App’s broader financial services, merchant payment solutions and software for businesses.
Those businesses continued to grow during the quarter, helping make up for the weakness in Bitcoin-related revenue.
Cash App remains one of the largest retail platforms in the United States for buying and selling Bitcoin, allowing users to trade the cryptocurrency directly from their smartphones.
But by lowering certain trading fees, Block now earns less from each Bitcoin transaction.
Although that reduced the profitability of its crypto business in the short term, the move could make the platform more attractive to customers by lowering trading costs.
The company did not suggest it was scaling back its commitment to Bitcoin.
Under co-founder Jack Dorsey, Block has consistently invested in the broader Bitcoin ecosystem, including mining technology, open-source development and infrastructure designed to support wider adoption of the cryptocurrency.
Instead, the latest earnings suggest the company is becoming less dependent on Bitcoin trading alone.
Block’s growing fintech business offsets volatility in Bitcoin revenue
Like many fintech firms, Block has spent the past few years expanding into a broader range of financial services, giving it additional sources of revenue when cryptocurrency markets become less active.
That diversification appears to be helping.
Even with Bitcoin profits falling sharply, the strength of the company’s core businesses was enough to lift overall earnings and improve its outlook for the year ahead.
The results also reflect a wider trend across the crypto industry.
Many companies that built their businesses around digital assets are increasingly looking for more predictable sources of income, particularly as cryptocurrency markets remain volatile.
For Block, that means continuing to support Bitcoin while relying on a much broader financial ecosystem to drive long-term growth.
The latest quarter suggests that strategy is working.
Although its Bitcoin business faced a difficult period, investors appeared more focused on the company’s overall momentum, rewarding the stronger earnings and improved guidance with gains in the stock after the results were released.
