Square sails past profit estimates as bitcoin volumes surge

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FILE PHOTO: Jack Dorsey, Square CEO and CEO of Twitter, speaks during an interview on Nov. 19, 2015. REUTERS / Lucas Jackson

(Reuters) – Payment company Square Inc significantly exceeded Wall Street’s expectations for quarterly earnings on Thursday as rising demand for Bitcoin sparked a surge in cryptocurrency transactions on its peer-to-peer payment service Cash App.

With no one-off costs, the payment company, under the leadership of Jack Dorsey, the top boss of Twitter Inc., earned 41 cents per share. According to IBES data from Refinitiv, analysts had expected an average of 16 cents per share.

The Cash app achieved bitcoin sales of $ 3.51 billion in a quarter in which the most popular cryptocurrency hit a market cap of $ 1 trillion for the first time, 11 times more than last year.

Bitcoin has appreciated in value this year as support from top companies like Tesla Inc drives it mainstream.

San Francisco-based Square announced in February that it had invested $ 170 million in Bitcoin and increased its stake from $ 50 million it invested in the fourth quarter of 2020.

The company’s return on sales was also boosted by the move to digital transactions triggered by the COVID-19 pandemic, which forced people to stay at home and shop online.

Gross payment volume, a measure of the transactions processed on the Square platform, increased 29% year over year to $ 33.1 billion.

Total net sales nearly quadrupled in the first quarter to $ 5.06 billion.

Reporting by Noor Zainab Hussain and Niket Nishant in Bengaluru; Adaptation by Sriraj Kalluvila