Square Reports $2.39 Billion in Bitcoin Revenue in Q3 Earnings Figures

Giant payment solution company Square Inc. recently published its earnings report, highlighting some positive Bitcoin (BTC) figures.

In its Q3 2021 Shareholder Letter, Square reported total net revenue of $3.84 billion in the third quarter, a 27% from the same time last year (YoY).

Meanwhile, the company generates its Bitcoin revenue from its mobile payment platform, Cash App. The service generated $2.39 billion in revenue and $512 million in gross profits in Q3, 2021, a 16% and 33% jump in figures year-on-year, respectively. In an official statement, Square noted that:

“Cash App generated $1.82 billion of bitcoin revenue and $42 million of bitcoin gross profit during the third quarter of 2021, up 11% and 29% year over year, respectively.”

Interestingly, Bitcoin gross profits accounted for about 2% of the company’s total Bitcoin revenue in Q3. Square explained that its Bitcoin revenue comes from the title sale amount of BTC to customers and that BTC costs are the total amount of Bitcoin it purchases. The company added that: “We purchase bitcoin to facilitate customers’ access to bitcoin.”

Square Reports Drop in Bitcoin Revenue on QoQ Basis

However, the company’s BTC revenue and gross profits dropped on a QoQ basis. Square detailed that this drop was “driven primarily by relative stability in the price of bitcoin, which affected trading activity compared to prior quarters.”

The payments company further cautioned that in subsequent quarters, “Bitcoin revenue and gross profit may fluctuate as a result of changes in customer demand or the market price of bitcoin, particularly as we lap strong growth rates on a year-over-year basis in the fourth quarter of 2020.”

Finally, Square revealed that it invested $50 million in BTC in Q4 2020 and $170 million more in Q1 2021. However, as of Q3, the company recorded an impairment loss of $6 million on its BTC investment, noting that:

“As of September 30, 2021, the fair value of our [Bitcoin investment] was $352 million based on observable market prices, which is $203 million greater than the carrying value of the investment.”

 

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