Square, Inc. (SQ) reported earnings for the first quarter of 2021 this week, and the company's revenue far exceeded analyst expectations. Quarterly sales at the beginning of the year were over $ 5 billion, compared to an average analyst forecast of $ 3.37 billion. In the final quarter of 2020, the company bought $ 50 million worth of BTC, followed by another $ 170 million worth of BTC in the first quarter of this year.
Cash App & Crypto
The mobile app from Square, the Cash App, dealt fruitfully with Bitcoin in the app. Bitcoin volume has multiplied year over year, rising from $ 306 million last year to over $ 3.5 billion last quarter. Crypto transaction profits for the quarter were $ 75 million. Cash App does not focus on charging consumers with crypto transaction fees, and while the gross profit from these transactions appears small relative to total transactions (around a 2% margin), crypto gross profits accounted for nearly 8% of the company's total gross profit.
Those gains have also helped Square beat earnings per share. They reported 41 cents to analysts who had expected 16 cents per share. Quarterly gross income was $ 964 million for the first quarter, up 79% year over year.
The Cash App itself posted quarterly gross income of $ 495 million, up 171% year over year.
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Crypto purchases from Square
Arguably the juiciest meat on the bone for Square in terms of crypto was the company's direct BTC purchases. After buying around $ 220 million in BTC in the past two quarters, the company reported at the end of the first quarter that the market value of its Bitcoin investment was $ 472 million.
Square has also complemented these purchases with other broader initiatives, including the launch of COPA, the Cryptocurrency Open Patent Alliance. COPA aims to secure open access patents for crypto technologies.
BTC was a driver of Square's growth this year Source: BTC-USD on TradingView.com
The point of view of the place
Square CEO Jack Dorsey has shown an upbeat outlook on Bitcoin and broader crypto in the past, and the recent earnings call reflects his earlier views. Dorsey stated on the conference call that the company sees Bitcoin as the potential for the internet's home currency and that Square "wants to promote that as much as possible."
Dorsey also cited crypto, which offers "more opportunities for economic empowerment" and the ability to facilitate transactions with less friction. Meanwhile, the company still acknowledged that volatility and consumer preferences can make for a bumpy ride. However, Square remains committed and upbeat, particularly on Bitcoin, describing it as a "global economic empowerment tool" in the latest call for profits.
Related reading | This is why all companies should buy Bitcoin, says Square's CFO
Featured image from Pixabay, charts from TradingView.com