Square (SQ) Tops Q4 EPS by 8c, Buys More Bitcoin

Square (NYSE: SQ) reported Q4 EPS of $0.32, $0.08 better than the analyst estimate of $0.24. Revenue for the quarter came in at $3.16 billion versus the consensus estimate of $3.09 billion.

"Throughout 2020 we were guided by our purpose of economic empowerment. Across both ecosystems, we pivoted our product roadmaps and prioritized new investments to best help customers adapt during the pandemic. We also furthered our ongoing commitment to building a more inclusive and sustainable foundation for our global business, such as sharing plans to invest $100 million in minority and underserved communities, announcing our plans to be net-zero carbon for operations by 2030, and launching the Bitcoin Clean Energy Investment Initiative.

In the fourth quarter of 2020, gross profit grew 52% year over year to $804 million. Our Cash App ecosystem delivered strong gross profit growth of 162% year over year. In our Seller ecosystem, gross profit was up 13% year over year in the fourth quarter. For the full year of 2020, gross profit grew 45% year over year to $2.73 billion. Cash App generated $1.23 billion in gross profit, up 168% year over year, and our Seller ecosystem generated $1.51 billion in gross profit, up 8% year over year.

We see compelling opportunities to increase our investments across our Cash App and Seller ecosystems. In 2021, we are focusing our investments on customer acquisition and product innovation. We have achieved attractive returns on our sales and marketing investments as customers have turned to our ecosystems to help them in dynamic environments, and we intend on continuing to expand and strengthen our product offerings. We believe our ecosystems can reach customers in new markets and see significant opportunities to invest behind long-term growth. Our purpose continues to guide our business and our investments—we remain committed to the work ahead."

Square (NYSE: SQ) purchased approximately 3,318 bitcoins at an aggregate purchase price of $170 million. Combined with Square’s previous purchase of $50 million in bitcoin, this represents approximately five percent of Square’s total cash, cash equivalents and marketable securities as of December 31, 2020.

Aligned with the company’s purpose, Square believes that cryptocurrency is an instrument of economic empowerment, providing a way for individuals to participate in a global monetary system and secure their own financial future. 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.

For earnings history and earnings-related data on Square (SQ) click here.

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