3 Key Factors Driving Cash App's Gross Profit Up 200%
Cash App, Square's (NYSE: SQ) consumer neobank app, was the highlight of its second-quarter earnings report. Active accounts climbed to 30 million by the end of June, and management said July was its best month of net additions ever. CEO Jack Dorsey told investors gross profit for Cash App grew more than 200% last month during the company's Q2 earnings call.
Renewed interest in bitcoin pushed Cash App's top-line growth significantly higher, up 367%. But even when removing bitcoin, where Square doesn't make very much profit, revenue increased 140% per year, reaching a $1.3 billion run rate.
There are three key drivers behind Cash App's growth, CFO Amrita Ahuja pointed out during the earnings call: accelerating customer acquisition, improved product adoption, and increased frequency and volume of spend. All three benefited from government stimulus efforts and tax refunds last quarter, but Square expects to maintain its momentum through the back half of the year.
Source Fool.com
