Square Reports $1.81B in Bitcoin Revenue, Reveals Plan to Increase BTC Offerings
The company’s bitcoin revenue was an 11% increase year-over-year. Bitcoin gross profit was $42 million, approximately 2% of bitcoin revenue.
- Square’s Cash App reported $2.39 billion of revenue and $512 million of gross profit
- During the earnings call, company executives mentioned plans to delve deeper into the digital assets space
Digital payments company Square reported $1.81 billion in bitcoin-generated revenue and detailed plans to increase digital asset investments and exposure in its third quarter earnings report Thursday.
The bitcoin revenue was an 11% increase year-over-year. Bitcoin gross profit was $42 million, approximately 2% of bitcoin revenue.
Square executives mentioned plans to delve deeper into the digital assets space.
“We also recently created a business called TBD in order to build an open developer platform with the sole goal of making it easy to create noncustodial and permissionless and decentralized financial services with a focus on bitcoin,” Square CEO Jack Dorsey said during the earnings call. “The plan to share detailed plans with a white paper later this month.”
The white paper, which will provide a more detailed business plan, will be released on November 19, Dorsey said. Dorsey also provided updates on Square’s plans to launch a consumer bitcoin hardware wallet and mining system.
The company expects its various expansion efforts in digital assets to be lucrative in the long term.
“TBD, the hardware wallet, and Bitcoin mining… we expect will in aggregate represent roughly 5% of our incremental step up next year for approximately $140 million in overall non-GAAP capex,” said Square CFO Amrita Ahuja on the call. “As we look ahead, we’re excited for what the future holds for our company. We’re going after a large and growing addressable market.”
Square’s peer-to-peer payment platform Cash App reported $2.39 billion of revenue and $512 million of gross profit, which increased 16% and 33% year over year, respectively.
Bitcoin revenue and gross profit decreased on a quarter-over-quarter basis compared to the second quarter of 2021.
This was “driven primarily by relative stability in the price of bitcoin, which affected trading activity compared to prior quarters,” the report noted.
The company warned that bitcoin-related earnings are largely unpredictable for the future.
“In future 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,” the report said.
Square invested $170 million in bitcoin in the first quarter of 2021. In Q3, the company recognized a bitcoin impairment loss of $6 million on the bitcoin investment.
Square was trading down 4.88% in after-hours trading, at time of publication.