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Square’s Bitcoin (BTC) revenue up 11 times to $3.51B for Q1

Square's total Q1 revenue of $5.06 billion outpaces analysts' forecast of $3.36 billion.

Image by: QuoteInspector.com / Flickr

Mon, 10 May 2021, 03:15 am UTC

Square Inc. recently released its quarterly earnings report revealing better than expected performance. The U.S.-based financial services firm was able to beat analyst expectations thanks to its soaring Bitcoin (BTC) revenues.

Square’s total first-quarter revenue soared to $5.06 billion or an increase of 266 percent year over year, according to CNBC. The company also revealed its earnings per share of 41 cents.

The firm’s performance dwarfed the predictions of global financial data provider Refinitiv, which expected Square’s earnings per share to only reach 16 cents. Refinitiv also predicted Square’s first-quarter revenue to reach $$3.36 billion.

The company’s stellar performance is largely thanks to its Cash App’s bitcoin revenue. The app generated $3.51 billion in Bitcoin revenue, an eleven-fold rise compared to last year’s figure.

“Cash App generated $3.51 billion of bitcoin revenue and $75 million of bitcoin gross profit during the first quarter of 2021, each up approximately 11x year over year,” Square wrote in its report. “Bitcoin revenue and gross profit benefited from a year-over-year increase in the price of bitcoin, bitcoin actives, and growth in customer demand.”

However, Square told shareholders that it might not replicate the same success in the future due to the volatility of crypto prices. “In future quarters, we recognize that bitcoin revenue may fluctuate as a result of changes in customer demand or the market price of bitcoin,” the company added.

While Cash App’s BTC revenue accounts for a huge chunk of Square’s total revenue of $5.06 billion, net income from its crypto business is only $39 million. The figure is only around 2 percent of the company’s total gross profit for the quarter of $964 million.

“Our focus, first and foremost, is on enabling ... bitcoin to be the native currency,” CEO Jack Dorsey said Dorsey. “It removes a bunch of friction for our business. And we believe fully that it creates more opportunities for economic empowerment around the world.”

Square is among the first publicly listed firms that started to invest in Bitcoin last year. The company bought $50 million worth of the crypto in October last year and another $170 million worth of BTC in February this year.

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