Square Mobile Payment Firm Sees Bitcoin Profits Double In Q2, $37 Million
This Wednesday, Square Inc. reported better-than-expected financial results. However, shares were slightly down in after-hours trading after the company’s third-quarter earnings forecast missed analyst expectations.
Square (SQ) said adjusted earnings were 13 cents a share, up 86% from a year ago, with revenue rising 60% to $385 million, topping expectations. A year earlier, Square earned 7 cents a share on adjusted sales of $240 million. Analysts expected Square to report earnings of 12 cents on sales of $367.6 million for the period ended June 30.
The company released an unaudited quarterly financial report and stated it made an overall net revenue of $814 million, 6 percent of which came from the cryptocurrency purchase service enabled on its Cash App late last year. However, with the cost of facilitating bitcoin purchases amounting to over $36.5 million in the same period, the report indicted Square again booked a small margin of $420,000 for its bitcoin service.
Square has been on an acquisition spree, and its costs have been continuing to rise. International expansion remains a focus for Square, which offers its products in the US, Canada, the U.K., Japan, and Australia. More and more of Square’s revenue is coming from higher-margin services like loans, instant deposits, food delivery, and employee management software.
Square's chief financial officer Sarah Friar said the goal of the bitcoin purchase service on the Cash App is not “trying to push on the monetization of bitcoin today.”
The San Francisco-based firm makes credit-card readers that plug into mobile phones and tablets. In November, it set up a Bitcoin exchange so that users of its Square Cash app could buy and sell the digital cryptocurrency.