Mobile payments processor Square made nearly half of its Q4 revenue from its bitcoin-enabled Cash App, the company revealed in its financial results on Tuesday.
Square said gross profit from the Cash App was $377 million in Q4. Its Q4 gross profit overall was $804 million. The Cash App generated $1.76 billion of bitcoin revenue and $41 million of bitcoin gross profit during the fourth quarter.
The company also said it has purchased $170 million worth of bitcoin since October 2020. The investment represents about 5% of the company’s total assets as of the end of 2020.
“The investment is part of Square’s ongoing commitment to bitcoin, and the company plans to assess its aggregate investment in bitcoin relative to its other investments on an ongoing basis,” the company said in its earnings release.
In 2020, Square said more than three million customers purchased or sold bitcoin on Cash App, and, in January 2021, more than one million customers purchased bitcoin through the app for the first time.
“Bitcoin volumes per customer were up more than 2.5x year over year, primarily driven by buying activity, as existing customers continued to buy bitcoin and new adopters bought even greater volumes of bitcoin,” the company said in its shareholder letter. “Bitcoin has helped increase gross profit per active customer and engagement in our broader ecosystem as bitcoin actives use other products, such as Cash Card and direct deposit, more frequently compared to the average Cash App customer.”
Square said Cash App had more than 36 million monthly active customers in December 2020, more than double year over year.
Elsewhere on the balance sheet, Square reported a Q4 net income of $293 million, or 65 cents a share. Gross profit was $804 million, up 52% over the same quarter last year. Total net revenue came to $3.16 billion with adjusted EPS of 32 cents.
Wall Street was looking for earnings of 24 cents a share on revenue of $3.09 billion.
The company’s fourth quarter transactional revenue came in at $929 million. Revenue from its software and data products, including Square Capital and Cash App, came to $449 million. The company’s hardware revenue was $24 million. Another key metric for Square is its gross payment volume (GPV), which it said came to $29.4 billion.
For the full year of 2020, Square’s gross profit climbed 45% year over year to $2.73 billion. Cash App generated $1.23 billion in fiscal 2020 gross profit, up 168% year over year. Cash App generated $4.57 billion of bitcoin revenue and $97 million of bitcoin gross profit for Square.
For the current quarter, analysts expect Square to report earnings of 20 cents a share with revenue of $3.07 billion.