Mobile payments and merchant services provider Square, Inc. has revealed its Q3 revenue report, and with it has shared some positive growth in Bitcoin-related revenue.
Square Shows Steady Continued Growth in Bitcoin Revenue
According to Square’s third quarter 2018 revenue report, the mobile payment firm generated $431 million in adjusted net revenue – beating FactSet analyst projections of $414 million. The growth represents a 68% year-over-year increase of adjusted revenue. Total net revenue reached $882 million in Q3 2018, representing 51% year-over-year growth.
Of the $882 million in net revenue, Bitcoin-related transactions generated $43 million in revenue for Square in the third quarter of the year, up $6 million from the $37 million generated in Q2. Bitcoin-related profits were also up, reaching over $500,000 for Q3.
In Square’s Q3 earnings report, the company highlights why it doesn’t include Bitcoin in its adjusted revenue figures, suggesting the company’s goal is simply to expose customers to Bitcoin for the time being.
“We deduct Bitcoin costs because we consider our role in the Bitcoin transactions to be facilitating customer access to Bitcoin. Since we only apply a small margin to the market cost of Bitcoin when we sell Bitcoin to customers, and we have no control over the cost of Bitcoin in the market, which tends to be volatile, we believe deducting Bitcoin costs is a better reflection of the economic benefits as well as the Company’s performance from the Bitcoin transactions,” the report read.
Bitcoin was added to the Square Cash app last November for testing, then rolled out to its wider customer base in January of this year, allowing users to send, buy, and sell the leading cryptocurrency by market cap.
Related Reading: Jack Dorsey Wants To Help Bitcoin Become Global Currency
Square’s CEO, Jack Dorsey, who also serves as CEO of Twitter, is among the world’s most outspoken Bitcoin promoters. Dorsey believes that Bitcoin has the potential to some day become the single global currency used across the internet.
Square Shares Slip Despite Beating Revenue Projections
Square’s reported Q3 revenue beat out investor expectations, however, shares of the mobile payment company have since dipped due to concerns stemming from the company’s fourth quarter outlook.
Square forecasted 12 cents to 13 cents a share in adjusted earnings, while the FactSet consensus called for 15 cents. Square shares were down as much as 10.6% yesterday, but is starting to rebound.
Square, Inc’s market cap fell from a one-month high of $34.19 billion on Wednesday, to $30.27 billion today, wiping out nearly $4 million in just two days as investors look for more profitable ventures. Despite the downturn, Square boasts a larger market cap than Dorsey’s other business, the popular social media platform Twitter. Twitter’s market cap is currently $25.75 billion. For comparison, Bitcoin’s market capitalization is currently $111 billion.
Square shares have been a profitable investment throughout 2018, – far more profitable than investing in Bitcoin itself – achieving over 125% growth over the past year.