Payment services provider Square (NYSE: SQ) posted a 52% year-over-year increase in Q4 2020 gross profit of $804 million and up from $794 million in Q3 2020. Total net revenue for the quarter was $3.16 billion, up 141% year-over-year, versus analysts' consensus of $3.11 billion.
Transaction-based revenue was $929 million in the fourth quarter of 2020, up 12% year over year, and transaction-based gross profit was $394 million, up 26% year over year. Subscription- and services-based revenue was $449 million in the fourth quarter of 2020, up 60% year over year.
Operating expenses were $759 million in the fourth quarter of 2020, up 49% year over year, and non-GAAP operating expenses were $622 million, up 51% year over year.
The company's mobile payment service, Cash App, powered the rise with a 162% year-over-year increase to $377 million in gross profit, while the Seller ecosystem generated gross profit of $427 million, up 13% year-over-year. Cash App had more than 36 million monthly customers active, a 50% increase year-over-year.
Square announced its earnings results after the market closed on Tuesday. Almost overshadowing the strong earnings was the announcement that it has purchased approximately 3,318 bitcoins at a cost of $170 million. The company previously had purchased $50 million in bitcoin. The total of approximately $220 million represents roughly 5% of Square's total cash, cash equivalents and marketable securities on hand as of Dec. 31, 2020, the company said.
The reason for the purchase is that Square “believes that cryptocurrency is an instrument of economic empowerment, providing a way for individuals to participate in a global monetary system and secure their own financial ...
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