Please ensure Javascript is enabled for purposes of website accessibility

Why Square Stock Popped 7.9% on Friday

By Travis Hoium - May 7, 2021 at 1:58PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It was another great quarter from Square.

What happened 

Shares of digital financial stock Square (SQ -0.76%) jumped as much as 7.9% in trading on Friday after reporting first-quarter 2021 financial results. The stock held steady most of the day and is up 5.6% at 1:10 p.m. EDT. 

So what

Total revenue jumped from $1.38 billion a year ago to $5.06 billion, primarily on the back of a more than ten-fold increase in Bitcoin (BTC -2.86%) revenue to $3.51 billion. Transaction-based revenue was up 26.6% to $959.7 million, and subscription and service-based revenue jumped 88.3% to $557.7 million.

Person paying for bike equipment with Square.

Image source: Square.

Gross profit jumped 79% versus a year ago to $964 million, and net income was $39 million versus a $106 million loss a year ago. 

The Bitcoin numbers complicate the financial report and analyst estimates. But analysts were expecting $3.3 billion in revenue, so the company easily surpassed that. And Square's adjusted earnings per share, which pulls out one-time items, of $0.41 topped the $0.17 analysts expected. 

Now what

For Square, the great news is that both businesses and consumers are using its products at a growing rate. Gross payment volume through the seller network increased to $29.8 billion from $22.0 billion a year ago, and the Cash App ecosystem is growing with inflows into customer accounts growing 55% between February and March alone. And with 7 million people using their Cash Card each week, Square is becoming a key to consumers' financial lives. 

As Square intertwines itself with businesses and consumers, it will be a disruptive force in financial markets. And that's why the stock continued its strong run today. 

Travis Hoium owns shares of Square. The Motley Fool owns shares of and recommends Bitcoin and Square. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Block, Inc. Stock Quote
Block, Inc.
SQ
$79.72 (-0.76%) $0.61
Bitcoin Stock Quote
Bitcoin
BTC
$22,793.60 (-2.86%) $-671.16

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
394%
 
S&P 500 Returns
127%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/18/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.