Square’s Bitcoin (BTC) Revenue and Costs Revealed in Annual Earnings Report
Square recorded $167 million in Bitcoin revenue for 2018, reflecting increasing popularity but profit margins remain slim.
Square, the San Francisco-based payments company shared financial figures for Q4 2018 and the entire year, in a letter for shareholders. According to the report, the company’s annual revenue for 2018 was nearly $3.3 billion (a 49% increase), while Q4 brought $933 million (a 51% increase).
Of the entire revenue, Bitcoin accounted for $52 million in Q4 2018 and $167 million for the entire year. Square’s Q4 2018 Bitcoin revenue exceeded figures from Q3 and Q2 2018, reflecting the increase in popularity for the cryptocurrency near the end of the year.
However, Square’s Bitcoin revenue does not translate into major profits, since there are costs associated with transactions and procuring Bitcoins. The company’s unaudited statement (pictured below) shows a clearer picture of BTC related revenues and costs.
Of the $52,443,000 in Bitcoin revenue during Q4 2018, $51,951,000 went to cover costs, leaving $492,000, out of which transaction costs and other expenses would need to be deducted to reach the net profit figure.
Similarly, for the entire year, Bitcoin brought in $166,517,000 for Square, while the cost was $164,827,000, leaving $1,690,000 to cover for other expenses and reach the net profit figure.
Despite the slim profit margins, Square CEO Jack Dorsey (also the CEO of Twitter) is very supportive of Bitcoin and aims to make it easier for customers to use the digital currency for everyday purchases. He has also shared the company’s intention to support Lightning Network payments in the future, which have almost no transaction fees and much faster speeds.
According to Dorsey, Bitcoin will outlast other digital currencies and has the potential to become one of the major [or only] means of transacting over the internet.