The US-based financial services firm. U.S., Square Inc., reports that its quarterly earnings doubled analysts’ expectations amid growing demand for cryptocurrencies.
Global financial data provider Refinitiv had predicted that Square would make gains of 16 cents per share in the first quarter of 2021, but the company ended up earning 41 cents per share. Square saw $ 5.06 billion in revenue, downplaying Refinitiv’s $ 3.36 billion forecast.
Bitcoin only generated $ 3.5 billion in revenue, a staggering 1,000% increase in just 12 months.
Square’s quarterly gross profit also rose 79% year-over-year to $ 964 million. More than half of the company’s profits can be attributed to its cryptocurrency-enabled payment app, Cash App, which generated $ 495 million in gross profits, an increase of 171% compared to the first quarter of 2020 .
While Bitcoin’s turnover was billions, digital currency accounted for 2% of the company’s total gross profit of $ 75 million.
“Bitcoin’s gross revenue and earnings benefited from a year-over-year increase in the price of Bitcoin, Bitcoin activities and the growth in customer demand,” the firm noted.
During a earnings call, Square CEO Jack Dorsey emphasized the firm’s mission to support BTC so that it becomes the Internet’s native currency, stating:
“Our approach, first and foremost, is to allow […] Bitcoin to be the native currency. It eliminates a lot of friction for our business. And we fully believe that it creates more opportunities for economic empowerment around the world. ”
While predicting that Cash App will continue to experience three-digit growth year-over-year in 2021, Square chief financial officer Amrita Ahuja noted that the government stimulus is likely to bolster the recent performance of its payment app.
“We believe our customers had greater purchasing power from government funds, which boosted an increase in revenue in March,” he said, adding: “Since then, we have seen a normalization with a fall of 16 % in the entrances in April, in comparison with March ».
Square became one of the first companies to invest a portion of its cash in Bitcoin when the company bought 4709 BTC for $ 50 million in October.
While the company’s first BTC purchase is now worth $ 263,700,000, the company has dropped $ 20 million in another 3,318 BTC it bought in February for $ 170 million. The firm currently has $ 472 million in BTC in total.