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Square's Cash App Q2 Bitcoin Revenue Rose 200%, Takes $45M Bitcoin Impairment Loss

Cash App's bitcoin gross profit rose to $55 million, Square said in its second-quarter letter to shareholders.

Updated Sep 14, 2021, 1:33 p.m. Published Aug 1, 2021, 11:37 p.m.

Square, the company led by Twitter co-founder and CEO Jack Dorsey, said its Cash App service's bitcoin revenue in the second quarter tripled to $2.72 billion from $875 million a year earlier, while its bitcoin gross profit jumped to $55 million from $17 million.

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Bitcoin revenue and gross profit benefited from year-over-year increases in the price of bitcoin and bitcoin activities and growth in customer demand, the payments services company said in its second-quarter financial letter to shareholders, which was released Sunday evening.
Bitcoin revenue and gross profit declined from the first quarter, mainly because of relative price stability, which affected trading activity compared with prior quarters.
Future quarters may see fluctuation in bitcoin revenue and gross profit as a result of changes in customer demand or market price, the letter says.
During the second quarter, Square recognized an impairment loss of $45 million on the bitcoin the company holds. Because bitcoin is accounted for as an indefinite-lived intangible asset, if the value of bitcoin falls below the carrying value, an impairment is required.
As of June 30, the fair value of the company's bitcoin investment was $281 million, $127 million greater than the carrying value. The company purchased its bitcoin for $50 million in last year's fourth quarter and $170 million in the first quarter.
Overall, the company posted second-quarters adjusted earnings of 66 cents per share, adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) of $360 million and total revenue of $4.68 billion. The earnings per share and Ebitda were more than doubled analysts' estimates of 31 cents as $178 million, according to FactSet.
Separately, Square announced on Sunday that it agreed to buy Australian installment payment company Afterpay in an all-stock deal worth $29 billion based on Square's closing price on Friday.

Square Bitcoin Earnings

Greg Ahlstrand

Originally from California, I've been Asia-based since 1999, headquartered in Hong Kong and Jakarta and traveling throughout the Asean countries, Japan, Korea, the Chinese mainland and Taiwan for stories. Made Australia a couple of times, too.

I started my journalism career as a news assistant at the Fresno Bee in Central California while studying the subject in school after the Navy. I went from launching and recovering helicopters on flight decks at sea to recovering papers fresh off the printer in the Bee's basement and launching them onto the editors' desks, whose editors had long since gone home for the night. Eventually, they let me stop delivering the paper and start writing stuff in it. My first beat was night cops: liquor store robberies, gang shootings, fatal car crashes (almost always alcohol related). It was an education.

I am, as implied above, a U.S. Navy veteran. I served in seagoing helicopter squadrons as an aviation anti-submarine warfare technician throughout the Asia Pacific region and the Indian Ocean. I have a significant number of sailor stories to tell. I have no significant crypto holdings.

Among my hobbies are welding, building stuff, home remodelling, (or knocking a house down and starting from scratch if it's too far gone to fix), riding horses and rebuilding old tractors. So far I've done a Ford 8N and a Ford 9N. It's slow going, because I live in Hong Kong and the tractors are in California, so I only get to work on them once or twice a year, for a week or two at a time - and that was before covid.

I love my Lab, Cooper, whom my neighbors asked me to adopt two years ago when they moved back to Shanghai from Hong Kong. Cooper and I actually planned the whole thing -- we've known each other almost his whole life -- but his first parents are unaware of the conspiracy; and they send him Christmas presents every year.