Jack Dorsey's Square reports Q1 bitcoin revenue grew 1,000% to $3.5 billion - and is the 3rd-largest corporate holder of the cryptocurrency

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Jack Dorsey's Square reports Q1 bitcoin revenue grew 1,000% to $3.5 billion - and is the 3rd-largest corporate holder of the cryptocurrency
Jack Dorsey.David Becker / Getty Images
  • Square's bitcoin sales volume surged 1,000% year-on-year in the first-quarter, the company said.
  • Overall revenue was $5.06 billion, handily beating analyst expectations of $3.37 billion.
  • Jack Dorsey said Square views bitcoin as "the internet's potential to have a native currency."

Square reported first-quarter earnings that beat analyst estimates on Thursday, powered by surging demand for bitcoin.

Quarterly revenue from bitcoin grew eleven times to $3.5 billion, from $306 million a year ago, the company said in a shareholder letter. But gross profit from these transactions were only $75 million, or about 2% of bitcoin revenue, making up Square's fee generation from sales.

Square profits from transaction fees that customers are charged with when they buy or sell cryptocurrencies on its platform, which is smaller in comparison to revenue generated.

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Jack Dorsey's Square reports Q1 bitcoin revenue grew 1,000% to $3.5 billion - and is the 3rd-largest corporate holder of the cryptocurrency
Square's Cash App.Shutterstock

Overall quarterly sales for the digital-payments firm came in at $5.06 billion, beating analyst forecasts for $3.37 billion. Net income for the quarter was $39 million, or 8 cents per share. Gross profit more than doubled by rising 79% year-on-year to $964 million.

Jack Dorsey's Square reports Q1 bitcoin revenue grew 1,000% to $3.5 billion - and is the 3rd-largest corporate holder of the cryptocurrency
Square

The company announced a boosted bitcoin stake in February, having invested an additional $170 million. That accounted for about 5% of its total cash, cash equivalents, and marketable securities.

With that investment, Square bought an additional 3,318 bitcoin at an average price of $51,235.68. It had bought 4,709 bitcoin for $50 million in October 2020, currently worth about $263 million.

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Square now holds 8,027 bitcoin, according to bitcointreasuries.org, worth about $448 million. That makes it the third-largest publicly-traded holder of the digital asset after MicroStrategy and Tesla.

"We see bitcoin as the internet's potential to have a native currency, and we want to further that as much as we can." CEO Jack Dorsey said during an earnings call. "Our focus is enabling bitcoin to be the native currency. It removes a bunch of friction for our business, and we believe fully that it creates more opportunities for economic empowerment around the world."

Square counted more than 10 million monthly active users of its Cash Card in the quarter. About seven million active users, on average, used its Cash Cards every week in March.

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Square's shares rose 2.5% to $229.55 per share in pre-market trading on Friday.

Bitcoin was last trading 1% lower on Friday, at around $55,800 per coin, but is up 89% so far this year.

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