U.S.-based financial services firm, Square Inc, reports that its quarterly earnings doubled analyst expectations amid booming demand for crypto assets.
Global financial data provider Refinitiv had predicted Square would see earnings of 16 cents per share in Q1 2021, but the firm ended up earning 41 cents per share. Square saw $5.06 billion in revenue, dwarfing Refinitiv’s prediction of $3.36 billion.
Bitcoin alone drove $3.5 billion in revenue, an astonishing increase of 1,000% in just 12 months.
Square’s quarterly gross profit also surged 79% year-over-year to tag $964 million. More than half of the firm’s profits can be attributed to its crypto-friendly payment application, Cash App, which drove $495 million in gross profits — a 171% increase when compared to Q1 2020.
While Bitcoin turnover was in the billions, the cryptocurrency represented 2% of the firm’s total gross profit with $75 million.
“Bitcoin revenue and gross profit benefited from a year-over-year increase in the price of Bitcoin, Bitcoin activities, and growth in customer demand,” noted the firm.
During an earnings call, Square CEO, Jack Dorsey, emphasized the firm’s mission of supporting BTC to become the native currency of the internet, stating:
“Our focus, first and foremost, is on enabling […] Bitcoin to be the native currency. It removes a bunch of friction for our business. And we believe fully that it creates more opportunities for economic empowerment around the world.”
Despite predicting Cash App will continue to see triple-figure growth year-over-year in 2021, Square’s CFO, Amrita Ahuja, noted that government stimulus likely bolstered the recent performance of its payments application.
“We believe our customers had greater spending power from government funds, which drove an uplift in inflows in March,” he said, adding: “We have since seen a normalization with inflows down 16% in April, compared to March.”
Square became one of the first firms to invest a portion of its treasury into Bitcoin when the firm purchased 4,709 BTC for $50 million in October.
While the company’s first BTC buy is now worth $263.7 million, the firm is down $20 million on a further 3,318 BTC it bought in February for $170 million. The firm currently holds $472 million worth of BTC in total.