Block’s total profits jumped 25%, masking a 31% profit drop inside its $1.8 billion Bitcoin arm

Block’s Bitcoin Ecosystem gross profit fell 31% year over year to $72 million in the second quarter, making it the only category in the company’s three-part gross-profit breakdown to contract while Block’s total gross profit rose 25% to $3.166 billion. Commerce Enablement gross profit rose 18%, while Financial Solutions gross profit increased 43%.

Bitcoin revenue held up better than profit. Bitcoin Ecosystem revenue fell about 13% to $1.894 billion from $2.172 billion a year earlier, according to Block’s Q2 shareholder letter. Based on the filing’s exact revenue and cost figures, the category’s implied gross margin narrowed to about 3.82% from 4.84%, a compression of roughly 102 basis points. That equates to about $38.20 of gross profit per $1,000 of revenue, down from $48.40 a year earlier. In dollar terms, revenue declined roughly $278 million while gross profit fell about $33 million.

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