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Square

beat estimates for fourth quarter revenue and gross profit, but shares slipped after hours as the company said first quarter financial trends were only marginally better than the December quarter

Square (ticker: SQ) reported fourth quarter gross revenue of $ 3.16 billion, ahead of estimates of $ 3 billion in revenue Gross margin stood at $ 804 million, exceeding forecast of $ 798 million The company reported adjusted EBITDA of $ 185 million (earnings before interest, taxes, depreciation and amortization), well ahead of forecast of $ 140 million

But Square’s initial outlook for the first quarter was not very optimistic The company said gross margin in January was up 15% year-over-year, a “slight improvement” from in the fourth quarter Gross payment volume in its Seller division, which provides payment services to businesses, increased 5% year over year in January, in line with the growth trend in the fourth quarter

The square stock was down 52% in after-hour trading, to $ 243.20, after dropping 43% in regular trading on Tuesday

Square appears to tie its fortune more closely to Bitcoin The company said it bought 3,318 Bitcoins for $ 170 million in the quarter, in addition to a $ 50 million purchase in the third quarter Bitcoin now accounts for around 5% of Square’s total cash and equivalent securities

Bitcoin is fueling revenue for the company’s popular Cash app, where users can buy and store currency.The Cash app generated approximately $ 1.8 billion in Bitcoin revenue and $ 41 million in gross profit over the course of the year. quarter (the difference being the transaction and exchange fees that Square makes as a broker)

Square’s Bitcoin revenue was $ 4.6 billion in 2020, nine times year over year, and generated gross profit of $ 97 million, or 2% of its total revenue in Bitcoin, the company said

While Bitcoin is not a big source of money for Square, it may lead to adoption of its Cash app The company said the Cash App reached over 36 million monthly active customers, up more than 50% year on year

Square stock has jumped 210% in the past 52 weeks and 18% this year, ahead of today’s earnings report The company held a conference call to discuss the results at 5 p.m. Eastern Time

Square topped estimates for revenue and gross profit in the fourth quarter, but shares slipped after hours as the company reported that the first quarter’s financial trends were only slightly better than those of the December quarter

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Square share

World news – CA – Square share is down because growth slows

Source: https://www.barrons.com/articles/square-beat-fourth-quarter-estimates-the-stock-is-tumbling-because-growth-may-be-slowing-51614118799