According to new reports by Square Cash App, the $528 million of revenue in the first quarter of this year (Q1 2020) came mostly from Bitcoin. The report shows that the major cryptocurrency composed the bulk of Cash App’s revenue in the first quarter, though it added much less to profit.
On May 6, Square released its filings for the first quarter of 2020. These filings showed the revenue for Square Cash App’s use, a majority of which came from BTC. As the crypto news now show, even $306 million of Cash App’s $528 million in revenue for the first quarter of the year came from Bitcoin.
Despite these numbers, BTC composed a small fraction of Cash App’s profit which is only $7 million of $183 million in total as a profit. The company explained why it separated its Bitcoin revenue as being more of a core mission. They said:
“We deduct bitcoin revenue because our role is to facilitate customers’ access to bitcoin. When customers buy bitcoin through Cash App, we only apply a small margin to the market cost of bitcoin, which tends to be volatile and outside our control.”
Cash App reported a 115% increase in the profits year-over-year. In an investor call on May 6, a member of the team at Square credited “efficient new customer acquisition,” which usually translates to good marketing as well as ease of use.
As you can see, these numbers are good. However, the numbers for investors were less bright, as the earnings before interest, taxes, depreciation and amortization slipped from $119 million in Q4 to $9 million this quarter alone.
On the call with its shareholders, the Square Cash App’s profits were a main topic – where the CEO of the company Jack Dorsey emphasized Square’s performance in January and February rather than March, when the COVID-19 pandemic hit the world and started ravaging the markets.
Still, Dorsey praised the company for its agility amid the economic crisis, while a colleague of his noted that the entire team is “encouraged by Cash App’s performance in April.” They concluded saying that the recent Bitcoin news are bringing them a lot of users.
Meanwhile, the current price of Bitcoin (BTC) is still flirting with $9,300 with a new increase on the day as it prepares to breach this mark and go upwards.
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