What happened
Shares of Square (SQ +3.28%) fell 7.5% on Wednesday, following the release of the digital payments and financial services company's fourth-quarter results.
So what
Square's revenue soared 141% year over year to $3.2 billion, fueled by a surge in demand for its Bitcoin (BTC +7.60%) trading services. Excluding its Bitcoin business, the fintech leader's revenue rose 23% to $1.4 billion.
Square's stock price pulled back on Wednesday. Image source: Getty Images.
Notably, Square is growing more profitable as it scales its operations. Its gross profit jumped 52% to $804 million, driven by a 162% surge in Cash App's profits. Square's massively popular peer-to-peer payment platform saw its monthly transacting active customers rise by more than 50% from the prior-year period.
Now what
The strong performance apparently wasn't quite enough for some investors. Expectations may have simply been too high for the fintech star. Square's stock price had tripled over the past year ahead of its fourth-quarter report, and many investors likely decided to take some profits off the table on Wednesday.
Square also disclosed that it purchased an additional $170 million worth of Bitcoin. Together with its $50 million investment back in October, Bitcoin now represents roughly 5% of Square's total cash reserves. It's possible that some investors are growing concerned with Square's increasing exposure to the volatile cryptocurrency.
