“During the quarter, bitcoin revenue benefited from increased volume as a result of the increase in the price of bitcoin, and generated $2 million of gross profit,” the earnings report explains.
Founded by Twitter co-founder Jack Dorsey, Square reported that bitcoin represented very nearly half of the total revenue on its Cash App, at $260 million, for the second quarter of 2019. Bitcoin costs, however, are listed at $122.9 million in the unaudited quarterly report, yielding the aforementioned $2 million in profit.
On an investor call Thursday afternoon announcing the numbers, Dorsey said: “We love you, bitcoin.”
SQ does not include the bitcoin cost in adjusted Revenue.
From their investor letter today:
"Adjusted Revenue is total net revenue less transaction-based costs and bitcoin costs, and excludes the effect of deferred revenue adjustment
related to purchase accounting. "
They back out Bitcoin costs, which were about 2 M less than bitcoin sales.
So $2 M in revenue was included in the adjusted revenue from Bitcoin, which was all profit.
I had reduced my SQ holdings when Sarah left and recently took another look to see what’s up.
This table is straight from SQ’s Form 10Q for the quarterly period ended June 30, 2019, p. 36. Yes, revenue from Bitcoin was 125K, an increase of 238% the last 3 mos., 168% for last 6 mos.
**Three Months ended June 30, Six Months ended June 30,**
**2019 2018 2019 2018**
**Revenue from Contracts with Customers:** % Chg % Chg
Transaction-based revenue $775,510 $625,228 24% $1,432,272 $1,148,265 25%
Subscript.&servcs-based rev. $216,491 $111,670 87% $405,693 $188,885 103%
Hardware revenue $22,260 $18,362 21% $40,472 $32,779 23%
**Bitcoin revenue $125,085 $37,016 238% $190,613 $71,111 168%**
**Revenue from other sources:**
Subscr.&services-based rev. $34,892 $22,662 44% $64,547 $42,501 44%
I had just started to listen to the earnings call and was surprised when Jack and Sarah were announced. It’s Sarah Friar’s voice. Wonder what’s going on. If Sarah is back, it would be significant boost to share price, I believe.
Japan is the country to watch for the next few months. The Japanese, are very conservative. Only 20% of the population goes cashless. The Japanese government is trying its best to get the citizens to embrace cashless mobile payments. I suspect Square may do well for two additional reasons:
Rugby world cup 2019 Trophy Tour, Sapporo, Japan, 2019-09-20 to 2019-11-02
Summer Olympics, Tokio, Japan, 2020-07-24 to 2020-08-09
I had just started to listen to the earnings call and was surprised when Jack and Sarah were announced. It’s Sarah Friar’s voice. Wonder what’s going on. If Sarah is back, it would be significant boost to share price, I believe.
Hi IM, I think you were hallucinating… Sorry.
Saul
Square, Q2 2019 Earnings Conference Call August 1, 2019
Company Participants
Jason Lee – Head-Investor Relations Jack Dorsey – Chief Executive Officer Amrita Ahuja – Chief Financial Officer
Dreamer, They don’t count Bitcoin revenue in adjusted revenue (which is the company’s actual revenue for all practical purposes), and seem to think of it as just Jack Dorsey’s toy for now. They also count Square Cash App revenue excluding bitcoin.
Best,
Saul