Payments firm Square Inc (SQ.N) handily beat Wall Street expectations for quarterly profit on Thursday, as surging demand for bitcoin fueled a jump in cryptocurrency transactions on its peer-to-peer payment service Cash App.
Stripping out one-time costs, the payments firm, led by Twitter Inc (TWTR.N) top boss Jack Dorsey, earned 41 cents per share. Analysts on average had expected 16 cents per share, according to Refinitiv IBES data.
Cash App generated $3.51 billion in bitcoin revenue, up eleven times from a year earlier, in a quarter when the most popular cryptocurrency hit $1 trillion in market capitalization for the first time.
Dorsey told analysts on a post-earnings call that the company views bitcoin as “the internet’s potential to have a native currency.”
“This is going to be a long-term focus, enabling bitcoin to be a 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,” he said.
Bitcoin has surged in value this year as the backing of top-tier companies including Tesla Inc (TSLA.O) power its march to the mainstream.
San Francisco-based Square said in February it had invested $170 million in bitcoin, raising its wager from the $50 million it had invested in the fourth quarter of 2020.
The company’s top line was also strengthened by the shift to digital transactions, spurred by the COVID-19 pandemic that forced people to stay at home and shop online.
Gross payment volumes, a measure of the transactions processed on Square’s platform, rose 29% in the first quarter to $33.1 billion.
Total net revenue jumped nearly four-fold to $5.06 billion.