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 traded 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.
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.