Payments firm Square announced a $125 million in revenue from Bitcoin through its mobile payments service, CashApp. Square entered the crypto space, much to the dismay of traditional players, and have established themselves as a strong brand capable of understanding consumer needs. Their last earnings report was dismal, but since the renewal of the bull market, Square seems to be going strong, August 1, 2019.
Earnings Details and Future Outlook
Square’s stock price tanked after their numbers fell below the guidance previously issued by the company. While this is negative for the company, there is a lot of positive developments for Bitcoiners as Square solidifies itself as a major player in the ecosystem.
Net revenue increased 22 percent from Q1 and 44 percent from Q2 2018. The earnings growth for the company has historically jumped from Q2 to Q3, so investors can expect sizeable revenue growth for the next quarter.
Payment volume, which had been sticky around $21-22 billion for a year, launched a massive surge to $26.8 billion in Q2. Net loss was cut from $38 million last quarter to a mere $7 million this quarter. Square may be closing in on becoming profitable company on a net income basis.
Bitcoin revenue of $125 million is a massive increase from the $37 million in revenue in Q2 2018. CashApp has dominated the retail game and established itself as one of the biggest traditional finance brands in crypto alongside Fidelity.
There is a very realistic probability Square becomes a net profit company in Q3, but even if they don’t, they have been growing and eventually will become a net profit firm.
Boost for Crypto Company Earnings
The onset of a bull market is most definitely going to be a catalyst for growth in cryptocurrency companies. Hut8 Mining, Overstock, and others are going to reap the benefits of a strong bull market if they already haven’t.
Earnings for these companies are directly correlated to the performance of the cryptocurrency market. As the market develops and assets appreciate, these companies will be able to leverage this to massively scale and grow in the high double digits.
The downside is that when there are crypto bear markets like last year, companies who have not diversified their business plans outside of crypto will suffer from negative growth in poor performing periods.