A Malaysian Web3 pioneer defies downturn with 33x profit surge since 2019

In a world where major media corporations struggle to get advertising, a Web3 company based in Malaysia seems an odd choice for a success story.

But Block Solutions, the parent firm of Ethereum blockchain explorer and analytics platform Etherscan, is putting up numbers that would make most media companies scream with jealousy.

Its profit after tax has grown by over 33x in the last four financial years, as per the company’s filings for the financial year ended (FYE) June 2023.

Block Solutions was founded in 2015 and is headquartered in Shah Alam, located just west of Malaysia’s capital. The firm has raised US$500,000 in two seed rounds.

Ad revenue fuels growth

The company’s revenue has seen substantial gains, jumping by over 22x in its last five financial years. That said, the figure saw a minor 3% year-on-year decline in FYE 2023.

Its revenue growth is largely due to the success of its main product. Etherscan is one of the world’s most popular free Web3 utilities, with over 14 million users visiting the site monthly, according to SimilarWeb, a web analytics platform.

In the US, Etherscan ranks as the 56th most popular website for investing.

While web traffic doesn’t always equal profits, Block Solutions has turned those numbers into solid financials.

In FYE 2023, the company earned 123.3 million ringgit (US$25.8 million) in revenue from online advertising fees, which is the firm’s only source of revenue.

Its largest expense is operating expenses, which was about US$3 million in FYE 2023. However, a breakdown of its operating expenses wasn’t disclosed in its filings.

This is followed by server and website hosting fees, which amounted to around US$2 million during the same year.

That said, the company has paid more taxes than its operating expenses, as it incurred taxes of US$3.7 million in FYE 2023.

Block Solutions booked a net profit of US$18.6 million in its latest financial year, an increase of 4% compared to FYE 2022. This is a much smaller growth in its net profit from a few years before and could be due to the minor revenue decline it incurred during the year.

The company’s profit had more than doubled in FYE 2022 from a year earlier, and it experienced an over 13x year-on-year rise in FYE 2021. In FYE 2019, net profit was only about US$560,000.

The profit has seen the group’s cash and cash equivalents grow to US$51.4 million in FYE 2023.

Don’t change what isn’t broken