Square’s Cash App Reports $2.7B In Quarterly Bitcoin Revenue, A 200% Jump
August 02 2021 - 12:54AM
NEWSBTC
Square has had a busy weekend. The company made headlines for it’s
purchase of Australia-based fintech firm, Afterpay, in an all-stock
deal. Square then went on to release it’s Q2 2021 Shareholder
Letter, filled to the brim with company insights – including some
strong growth numbers in crypto transactions on Square’s mobile
product, Cash App. Breaking Down The Numbers Square’s gross profit
in Q2 was a healthy $546M, reflecting a 91% increase
year-over-year. Bitcoin gross profit on Cash App specifically
accounted for roughly 10% that, coming in at around $55M; this
reflected a substantial increase from the $17M in bitcoin gross
revenues that the company saw in Q2 last year. Bitcoin yearly
revenue saw exceptional jumps as well, rising over 200% to ring in
$2.72B. This time last year that number was at $875M. While some
may call out the relatively thin margin of gross profit relative to
revenues, Square maintains that driving company profits from
bitcoin transactions are clearly low-priority. Bitcoin gross
profits reflected only roughly 2% of bitcoin revenues for Cash App
in Q2. In fact, the company explicitly calls out net revenues
exclusive of bitcoin transactions. According to the shareholder
report, Square deducts bitcoin revenue because their “role is to
facilitate customers’ access to bitcoin.” The company is seemingly
playing the “long game” with crypto, encouraging accessibility and
minimizing fees. Square has seen substantial growth and with new
acquisitions, looks primed for future fintech disruption. | Source:
NYSE: SQ on TradingView.com Related Reading | TA: Bitcoin Corrects
Gains, Why BTC Must Could Extend Losses It’s Not All Green Days
Despite substantial growth from the reported numbers
year-over-year, bitcoin’s price has seen declines relative to the
first quarter of the year. As such, both bitcoin revenue and gross
profit from bitcoin for Cash App saw declines relative to Q1 2021 –
as Cash App only charges a small margin on the market cost of
bitcoin. Accordingly, the letter notes that bitcoin price
volatility in the quarters ahead, along with changes in customer
demand, will likely continue to impact Cash App profits and
revenues from crypto. Additionally, Square has purchased $220M
worth of bitcoin between Q4 2020 and Q1 2021. Because bitcoin is
considered an “indefinite-lived intangible asset”, the company
recognized a $45M impairment loss on the quarter on the firm’s
bitcoin investment. In all, Cash App’s continued success beyond
bitcoin will likely bode well for the company’s crypto engagement,
too. Cash App revenue excluding bitcoin in Q2 came in at around
$600M – an increase of 87% year-over-year. Square’s broader Q2
numbers showed strong growth as well, with the quarter being the
second-best in the past 5 quarters with regards to net income.
There is clearly more growth on the horizon when it comes to Jack
Dorsey-led Square. Related Reading | Bear Market Over? Why Bitcoin
Could Soar TO $45K As Strong Holders Grow Featured image from
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