[ad_1]
Although the company’s losses have jumped higher, the revenue for the Square Cash App has also gone significantly higher. The good thing is as businesses shift towards online presence, Square has seen some big merchants joining its platform during the pandemic period. SQ stock is down now.
The coronavirus crisis has got businesses struggling and payment processor Square Inc (NYSE: SQ) is no exception. Square Inc, a company owned by Twitter CEO Jack Dorsey, has unveiled its Q1 results for 2020.
Losses for the payment processor have doubled as it prepares to deal with the more expected problems ahead. The company’s losses have mounted to $106 million in Q1 2020 against $38 million a year ago in Q1 2019. Since several brick-and-mortar stores are running out of business, they are moving to generate revenue through online platforms.
Square has been trying to provide merchants with tools that can help them navigate through online sales. In the shareholders’ meeting, Square said that earnings were “significantly affected by an increase in reserves for transaction and loan losses as a result of the anticipated impact from COVID-19 on losses in future periods.”
Additionally, Square’s transaction and loan loss expenses have shot to $109 million in Q1 2020. This is 50% up from $77 million losses in Q4 2019. Square CFO Amrita Ahuja said that the company’s approach was to establish reserves four times larger in Q4 2019.
Further briefing the media, the CFO added that the growth rate for Square’s existing merchants remains fairly consistent. Besides, the good thing is that Square has seen larger merchants joining the platform since the pandemic started. These new merchants joining the Square platform are larger in terms of both – gross profit and volume.
Ahuja further noted that the volume growth has surged since mid-April. She added:
“We recognize it’s still early and we continue to see daily volatility, but we’ve been encouraged by these recent trends”.
At press time, the Square Inc stock in the pre-market is at a price of $65.25 (-4.19%). Yesterday, the stock closed at $68.10, teh market cap was $29.92 billion.
Bitcoin Takes the Lead on Square Cash App in Q1
In another major turn around, the Bitcoin revenues for Square Cash App has toppled the fiat revenues. In Q1 2020, Square Cash App amassed $222 million through all of its fiat-powered services. However, the revenue due to Bitcoin stood at $306 million during the same period.
As per reports, the Square Cash App’s profit jumped 115% year-over-year. However, a majority of the profit share was contributed through non-bitcoin revenue. In a filing with the U.S. SEC, the company wrote:
“Bitcoin revenue for the three months ended March 31, 2020 increased by $240.6 million or 367%, compared to the three months ended March 31, 2019. The increase was due to growth in the number of active bitcoin customers, as well as growth in customer demand.”
Jack Dorsey also expressed confidence in Square Cash App’s growth ahead.
“We have reached a very mainstream influencer audience. And because of the simplicity, because of how we handled the stimulus check and because of everything you can do within the app including buying stocks and bitcoin and Cash Card, we think we’ll benefit and draft off a lot of trust, a lot of love, for what it offers and what it can do. And word of mouth is definitely our friend here,” said he.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
[ad_2]
Source link
