Block, formerly known as Square, announced on Thursday that its Cash App generated $1.73 billion in bitcoin purchases in the first quarter of 2022.

On Thursday, Block Inc, the fintech company led by Twitter founder Jack Dorsey, missed market expectations for first-quarter profit as demand for bitcoin slowed owing to a drop in cryptocurrency prices.

According to a shareholder letter posted after the market closed, these sales produced $43 million in bitcoin gross profit during that time.

“Cash App generated $1.73 billion of bitcoin revenue and $43 million of bitcoin gross profit during the first quarter of 2022, down 51% and 42% year over year, respectively. On a two-year CAGR basis, bitcoin revenue and gross profit grew 138% and 155%, respectively,” Block said in its shareholder letter, adding:

“The year-over-year decrease in bitcoin revenue and gross profit was driven primarily by relative stability in the price of bitcoin during the quarter, which affected consumer demand and trading activity compared to the prior year period. Bitcoin revenue and gross profit were relatively consistent compared to the fourth quarter of 2021. In future quarters, bitcoin revenue and gross profit may fluctuate as a result of changes in customer demand or the market price of bitcoin.”

In the three months ended March 31, Block’s sales dropped 22% to $3.96 billion. According to IBES statistics from Refinitiv, the company generated an adjusted profit of 18 cents per share, falling short of analysts’ expectations of 21 cents.

The firm reported a first-quarter net loss of $204 million, or 38 cents per share, compared to a year-ago quarter net income of $39.0 million, or 8 cents per share.

However, the company’s Cash App, which allows individuals to transmit payments in bitcoin, saw a 26% increase in gross earnings.

Related article | Block, Formerly Square, Announces It’s Building A Bitcoin Mining System

Consumers spent extensively on vacation and dining out after two years of the pandemic, despite inflationary pressures, underpinning the company’s solid profitability.

According to Block, more than 10 million Cash App accounts had purchased bitcoin since the program was launched as of the end of the quarter.

In after-hours trading on Thursday, Block’s stock increased roughly 4% to $99.50. On Thursday, shares tumbled more than 10% ahead of the company’s results report, while the Nasdaq sank 5%.

Cash App made $46 million in gross earnings from bitcoin sales in the fourth quarter of 2021, bringing in $1.96 billion in revenue. When broken down annually, the firm’s bitcoin sales in 2021 were just over $10 billion, totaling $218 million in gross profit.

At 5 p.m. ET, Block will have an investor call to discuss the results.

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