Cash App, cryptocurrency and merchants seeing a resilient consumer — both in card-not-present (CNP) and card-present transactions.
Headline numbers showed that revenues of $5.1 billion far outpaced the $3.4 billion expected by analysts. Adjusted earnings per share came in at 41 cents, blowing past the 16 cents that had been expected.
Drilling down into some of the details, transactions services revenues surged 27 percent year over year to $960 million, where, as Yahoo Finance reported, the consensus expectations had been for $873 million. Gross payment volumes gained 29 percent.
One data point that hints toward an anticipation that in-person commerce will be on the upswing: Hardware revenues gained 39 percent to $29 million.
Crypto has gained attention and anticipation. Here, the company said that bitcoin revenue soared to $3.5 billion, up from $306 million year on year, driven by more than 1 million customers buying bitcoin in January alone. In February, the company said, it invested $171 million in bitcoin, buying more than 3,300 bitcoin.
“In future quarters, we recognize that bitcoin revenue may fluctuate as a result of changes in customer demand or the market price of bitcoin,” management noted in a letter to shareholders.
And on an earnings call, CEO Jack Dorsey pointed to bitcoin as the internet’s potential of having a “native currency.”
Cash App Surge
Total Cash App revenues were $4 billion, although excluding the bitcoin revenue, that segment came in at $529 million. Cash App Business gross payments volume (GPV) was $3.4 billion, up 227 percent year on year. Management noted that Cash App inflows were up 55 percent in March, tied in part to stimulus payments, although April inflows moderated a bit, down on a month-over-month basis by about 16 percent.
Supplemental materials from the company showed that larger seller GPV in the quarter was $18.1 billion, up from $13.5 billion last year and $11.5 billion in the first quarter of 2019. A larger seller generates more than $125,000 in annualized GPV. Seller GPV was 90 percent of the total GPV, which came in at $33.1 billion. Smaller sellers, at less than the $125,000 threshold, were $11.6 billion.
CNP GPV, the company said, was up 34 percent, driven by Square Online, Invoices, Virtual Terminal and eCommerce API. Card-present transactions gained 13 percent, spurred in part by reopening measures.
Square Capital facilitated roughly 136,000 loans in the first quarter, equating to $923 million, up 68 percent year on year. Of that, Paycheck Protection Program (PPP) loans were 57,000 loans, equivalent to more than $392 million.
Beyond the Quarter
Looking into April, the company stated that seller GPV gained 144 percent year over year. Cash App volume was also strong, the company said.
Management noted on the call with analysts that GPV from existing seller “cohorts” from pre-pandemic quarters has been nearly back to pre-2019 levels. Elsewhere, commentary on the call noted that “mid-market” sellers were 30 percent of GPV and that those sellers are growing at twice the rate of the general Square installed base.
It wasn’t all about bitcoin, after all.
Selected by EFXA