By Christiana Sciaudone
Investing.com — helped Square (NYSE:) publish jaw-dropping results for the first quarter, pushing shares up almost 7%.
Bitcoin revenue made up about 70% of the $5.06 billion total, which itself dwarfed the analyst average estimate of $3.32 billion, according to data compiled by Investing.com. Profit of 41 cents a share beat expectations of 17 cents.
Of that $3.51 billion in bitcoin revenue, Square captured $75 million in gross profit during the first quarter of 2021, up approximately 11 times year-over-year. Bitcoin revenue and gross profit benefited from a year-over-year increase in the price of bitcoin, bitcoin actives, and growth in customer demand. “In future quarters, we recognize that bitcoin revenue may fluctuate as a result of changes in customer demand or the market price of bitcoin,” the company said in a statement.
Square invested $220 million between the fourth quarter of 2020 and first quarter of 2021 in bitcoin, and noted a bitcoin impairment loss of $20 million on the investment for the first quarter. As of March 31, the fair value of the bitcoin investment was $472 million based on market prices, $272 million greater than the carrying value of the investment, Square said.
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