Bitcoin brought in more revenue for Square’s Cash App than fiat, the company has revealed via its first-quarter earnings results released Wednesday.
In a shareholder letter detailing the company’s financials in the first quarter of 2020, Cash App’s revenues totaled $528 million. Of this revenue, $222 million came from the platform’s fiat-related services while Bitcoin (BTC) brought in $306 million.
This means that Bitcoin has brought in more revenue for the payment firm’s app service than all other offerings. However, the crypto only accounted for a small percentage of Cash App’s Q1 profits.
Cash App saw its gross profits increase by about 115% in year-over-year earnings. But of this, Bitcoin only contributed $7 million. The platform’s other revenue channels brought in $178 million.
Although Q1 profits from Bitcoin were a far cry from those the app realized from fiat services, the results point to a potential rise in YoY profits. In 2019, Square announced that its profit from Bitcoin (BTC) was $8 million.
If the trend in Q1 persists, Cash App’s revenue from BTC in 2020 could be much higher.
Square says that its intention of showing separate earnings figures for Bitcoin stems from their goal of ensuring they “facilitate customers’ access to Bitcoin.”
The company makes money off Bitcoin through Cash App by applying “a small margin” to the cryptocurrency’s market cost.
Q1 2020 revenue from BTC $240 million higher than Q1 2019
Revenue in the first three months of 2020 was higher compared to Bitcoin-related revenue in the period ended March 31, 2019. In Q1 of the current financial year, Cash App revenue from Bitcoin jumped $240.6 million above that of the 3 months ending March 31, 2019.
Cash App’s Q1 2019 revenue from BTC was $65 million, while as stated, Q1 2020 topped at $306 million. The spike in revenue represents a 367% rise in revenue QoQ.
According to the SEC filing that the company submitted:
“The increase was due to growth in the number of active bitcoin customers, as well as growth in customer demand.”
Cash App has continued to see growth in the quarter despite the impact of COVID-19 that has put a strain on many startups. Square CEO Jack Dorsey told investors in an earnings call Wednesday that the company was doing much better due to its direct Cash App deposits. The platform had also benefited from striking it with “a very mainstream influencer audience.“