Square Reports Q3 2021 Performance: $42 Million Gross Profits From Bitcoin
According to payments company Square’s letter to shareholders, it made $1.82 billion in bitcoin revenue during the Q3 of 2021 via its Cash App, yielding $42 million in gross profit from it.
The numbers were reported in Q3 earnings release on Thursday. According to Square the total revenue for the period came in at $3.84 billion, and $1.13 billion in gross profits.
The letter commented on the performance:
“Compared to the second quarter of 2021, bitcoin revenue and gross profit decreased on a quarter-over-quarter basis, driven primarily by relative stability in the price of bitcoin, which affected trading activity compared to prior quarters.”
However, the results indicate another quarterly decline, compared to Q2’s $2.72 billion in bitcoin revenue and the peak in Q1, when the firm posted $3.51 billion in bitcoin revenue.
Commenting on the total performance of the Cash App Square said:
“Cash App delivered strong growth in the third quarter of 2021, generating $2.39 billion of revenue and $512 million of gross profit, which increased 16% and 33% year over year, respectively.”
The shareholder letter also mentioned that the fair value of its past investments in bitcoin was $352 million as of September 30. Square bought $50 million in bitcoin in October 2020 and another $170 million worth in February 2021.
“As an indefinite-lived intangible asset, bitcoin is subject to impairment losses if the fair value of bitcoin decreases below the carrying value during the assessed period. In the third quarter, we recognized a bitcoin impairment loss of $6 million on our bitcoin investment
As of September 30, 2021, the fair value of our investment in bitcoin was $352 million based on observable market prices, which is $203 million greater than the carrying value of the investment.”
Square founder Jack Dorsey keeps on expanding the company’s bitcoin exposure, including efforts to develop a bitcoin hard wallet as well as an open platform for bitcoin-related financial services. Last month, Dorsey played with the idea that Square might get involved in building bitcoin mining rigs.
