Square (SQ -1.68%) reported a blowout third quarter on Thursday, posting huge profits, and the stock price jumped over 12% in early trading on Friday.
The mobile payment fintech saw gross profits skyrocket 59% to $794 million and revenue jump 140% to $3 billion.
In the seller ecosystem -- which helps merchants with processing payments, managing payroll, and other tasks -- revenue was up 5% to $965 million year over year, while gross profits were up 12% year over year to $409 million. The gains were led by 46% growth in markets outside the U.S., which accounted for 11% of overall seller ecosystem growth.
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But the real growth engine came from Square's buyer ecosystem, specifically the Cash App. It generated $2.1 billion in revenue, up 574% year over year. That represents about 70% of overall revenue in the quarter. The Cash App generated $385 million in gross profit, up a whopping 212% year over year. Most of the revenue came through bitcoin transactions, which generated $1.63 billion in revenue, up 11% year over year, and $32 million in gross profit, up 15% year over year.
"We drove strong acquisition of net-new transacting active Cash App customers as well as increased adoption of products such as Cash Card, Boost, direct deposit, stock brokerage, and bitcoin investing," CEO Jack Dorsey and CFO Amrita Ahuja said in the shareholder letter. https://s21.q4cdn.com/114365585/files/doc_financials/2020/Q2/Q3/3Q20-Shareholder-Letter-SQ.pdf
The company doubled the amount of active daily Cash App users versus the third quarter of 2019. Cash App customers had more than $1.8 billion in cash balances stored in their accounts, up 180% year over year.
"While the macroeconomic environment remains uncertain, we continue to believe that our seller and Cash App ecosystems are well-positioned to benefit from the acceleration of secular shifts, such as omnichannel commerce, contactless payments, and digital wallets for consumers," Dorsey and Ahuja said.
Overall, operating expenses were up 59% to $745 million, driven by a 217% increase in Cash App marketing expenses. Net income was $37 million, or $0.07 per share, up from $29 million a year ago. https://news.alphastreet.com/sq-earnings-all-you-need-to-know-about-square-q3-2020-earnings-results/
