Square’s stock fell more than 6 percent in after-hours trading after the company disappointed Wall Street with its outlook. One bright spot for the payments company is bitcoin, which users can buy and sell on the Cash App and which they are increasingly doing. Square CEO Jack Dorsey clearly appreciates it, reportedly giving a shout out to bitcoin during today’s earnings call.
Yes we do https://t.co/KwMBormBG1
— jack 🌍🌏🌎 (@jack) August 1, 2019
Square generated $125 million in bitcoin revenue in Q2 2019, which is not too shabby and contributed nearly half of the Cash App ecosystem’s total sales. Last year in the same period, the company generated roughly $37 million in bitcoin revenue when the broader crypto market was in the doldrums. What a difference a year makes, and this time around bitcoin helped to drive profits.
“During the quarter, bitcoin revenue benefited from increased volume as a result of the increase in the price of bitcoin and generated $2 million of gross profit.”
As crypto analyst Kevin Rooke points out, Square’s bitcoin revenue has been rising ever since Q1 2018.
Square customers bought $125 million of Bitcoin last quarter on Cash App!
That’s 5 straight quarters of *accelerating* revenue growth for Square’s Bitcoin business, and 237% growth YoY.
TO THE MOON 🚀 pic.twitter.com/6A3bNtaMTF
— Kevin Rooke (@kerooke) August 1, 2019
Wall Street Didn’t Celebrate Square’s Bitcoin Revenue
Wall Street, however, was fixated on Square’s disappointing guidance for the upcoming quarter. Square forecasts that it will report between $0.18 and $0.20 in EPS vs. analyst estimates of $0.22. The payments company also revealed that it’s offloading its food-delivery business Caviar to DoorDash for $410 million so it can focus on its core operations. According to the announcement:
“This transaction allows us to increase our focus on and investment in our two large, growing ecosystems—one for businesses and one for individuals. “
Bitcoin has been good for Square, and Jack has been returning the favor. Square could decide to pour more resources into its bitcoin business, especially now that we’re seeing greater merchant adoption of crypto with competing apps like Flexa’s Spedn.
The company recently launched Square Crypto, which is a division that is dedicated to streamlining bitcoin payments for merchants and consumers. The Square Crypto team, which is led by Steve Lee, has mass adoption of bitcoin in its sights.