Square beats in Q1 with revenue of $5.06B, up 266% YoY, with $3.5B in bitcoin revenue, up 11x YoY, gross profit of $964M, up 79% YoY, with $495M from Cash App
Context & Ripple Effects
Square's bitcoin line has grown from a rounding error into the company's biggest revenue engine: back in August 2018, bitcoin trading brought in just $37M against $385M in adjusted revenue, and even by mid-2020 Cash App's quarterly bitcoin revenue was $875M. The February Q4 report already showed the pattern — $1.76B of bitcoin inside a $3.16B quarter — and Q1 pushes it further: $3.5B of bitcoin revenue against $5.06B total.
That matters because bitcoin trading revenue passes through Cash App at thin margins. The cleaner read on the quarter is gross profit — $964M, up 79% YoY, with $495M of it from Cash App — which shows the underlying payments-and-wallet business growing even faster than the pre-crypto baseline.
First-order effects
- Square's reported top line is now dominated by bitcoin resale: more than two-thirds of Q1 revenue came from buying and selling bitcoin in Cash App, so headline revenue tracks crypto volumes as much as payments volume.
- Cash App generates over half of company-wide gross profit ($495M of $964M), confirming the wallet has overtaken the seller business as Square's profit center.
Second-order effects
- Analysts covering Square have to rebase their models off gross profit rather than revenue, since bitcoin passthrough inflates the top line without proportional economics — the same adjustment the market was already forced into by the Q4 print.
- Sustained bitcoin demand in Cash App deepens Square's exposure to crypto price swings: user trading appetite, not merchant payment volume, now sets the size of each quarter's revenue beat.
Third-order effects
- If the pattern holds, consumer fintech reporting splits into two stories per company — a gross-revenue number distorted by crypto brokerage and a gross-profit number reflecting real monetization — pushing valuation debates and eventual accounting scrutiny toward how passthrough crypto sales are presented.
- Square is effectively becoming a bitcoin retail brokerage attached to a payments company, meaning its earnings quality moves with crypto cycles even as the seller ecosystem compounds underneath.
The trend: Square's income statement is being reshaped by Cash App's bitcoin trading, turning gross profit — not revenue — into the metric that reveals the health of its core payments business.