Square (SQ 5.54%) reported fourth-quarter revenue that soared 141% year over year to $3.16 billion, along with adjusted earnings per share (EPS) of $0.32. The results were mixed, as analysts' consensus estimates called for revenue of $3.22 billion and EPS of $0.24. Gross payment volume (GPV) rose 92% year over year to $32 million.
The top-line results were skewed by the company's ongoing foray into Bitcoin (BTC 2.41%). Excluding revenue related to its cryptocurrency transactions, revenue grew to a more modest $1.4 billion, up 23%.
The numbers were further clouded by its strategic investments and one-time events. Square reported net income of $294 million, a decline of 25% year over year. Excluding gains from equity investments and a one-time gain in the prior-year quarter, net income of $20 million increased by 11%.
Square continued to focus on the impressive growth delivered by its Cash App ecosystem, which generated gross profits of $377 million, up 162% year over year.
The company also doubled-down on Bitcoin, saying it spent $170 million to acquire 3,318 Bitcoins. This resulted in a purchase price of just over $51,000 per Bitcoin. Square had previously disclosed a purchase totaling $50 million. Taken together, the two equate to approximately 5% of the total cash and equivalents on Square's balance sheet.
More than 3 million customers purchased or sold Bitcoin via Square's Cash App last year. As the popularity of cryptocurrency has spread, the number of users purchasing Bitcoin has exploded, with more than 1 million customers making a transaction in January, 2021 alone.
While the cryptocurrency accounts for more than half of Square's revenue, it makes a much smaller contribution to its bottom line. While Cash App generated roughly $1.76 billion in Bitcoin revenue, it resulted in just $41 million in gross profit. This suggests that Square earns just over 2% from each user investment in the cryptocurrency.