Square Revenue More Than Triples, Driven by Bitcoin Sales

(Bloomberg) -- Square Inc.’s quarterly sales more than tripled, surpassing analysts’ estimates, driven by skyrocketing Bitcoin purchases through the company’s Cash App.

First-quarter sales were $5.06 billion, beating the $3.37 billion average projection from analysts, according to data gathered by Bloomberg. Revenue from Bitcoin sales -- which includes the total value of Bitcoin purchases on its Cash App -- climbed more than elevenfold to $3.51 billion, up from $306 million a year earlier, the company said Thursday in a shareholder letter. Still, gross profit from those Bitcoin transactions was just $75 million, reflecting the fees that Square collects.

Surging purchases of Bitcoin have been a major boon for the company over the past year as more consumers have flocked to the cryptocurrency. Square takes a transaction fee when users buy or sell the cryptocurrency through Cash App, but the profit Square makes on each transaction is small compared to the overall revenue generated.

San Francisco-based Square announced in February that the company had purchased roughly $170 million of Bitcoin, which amounted to about 5% of the company’s total cash, equivalents and marketable securities. Chief Executive Officer Jack Dorsey, who also runs social network Twitter Inc., is a vocal Bitcoin proponent, and has praised the idea of an unregulated, global cryptocurrency. The bio on Dorsey’s Twitter account simply says “#bitcoin.”

For the March quarter, Square’s gross payment volume, or the total cost of goods and services processed using its transaction products, increased 29% to $33.14 billion. Analysts had projected growth of 17%. Net income was $39 million, or 8 cents a share, the company said.

In the letter, Square said regional reopenings following the Covid-19 pandemic-related shutdowns helped seller GPV increase 144% in April, a sign that in-person businesses are starting to rebound in the current quarter.

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