Square’s gross profit rose to $1.13 billion in the third quarter from $794 million a year earlier, thanks to the strong performance of payments service Cash App, up 33 percent, which saw gross profit rise to $512 million dollar.

Cash App generated US$1.82 billion in bitcoin revenue and US$42 million in gross bitcoin profit in the third quarter of 2021, up 11% and 29% year-over-year, respectively.

However, compared to the second quarter of 2021, Bitcoin revenue and gross profit decreased on a quarter-over-quarter basis, driven primarily by the relative stability of the Bitcoin price, which impacted trading activity compared to prior quarters.

In future quarters, Square advises that Bitcoin revenue and gross profit will fluctuate primarily as a result of changes in customer demand or the market price of Bitcoin.

Square is currently in the process of acquiring Australian buy-now-pay-later platform Afterpay for $39 million. The deal is expected to close in the first quarter of 2022.

Noting the acquisition in its third-quarter report, Square said that "through this transaction, we plan to bring together two complementary businesses with a common focus on economic empowerment and financial inclusion."

"We believe the combination will more deeply connect our merchant and money application ecosystems, accelerate our strategic priorities and enable us to deliver even more compelling products and services for consumers and merchants."

eToro analyst Josh Gilbert pointed out that Square's acquisition of Afterpay will allow it to reach a huge addressable market.

"There is increasing demand for merchants to offer 'buy now pay later' services as consumer preferences shift away from traditional credit cards.

"This, in turn, will allow Square to grow its payment streams with greater engagement while providing more opportunities between consumers and merchants, ultimately leading to higher monetization per user," said Mr. Gilbert .

Also, commenting on Square's revenue structure, Mr. Hilbert opined that investors targeting the US company should actually focus more on the seller ecosystem.

This segment of the business generated $606 million in gross profit in Q3, up 48 percent year over year. The company's gross payment volume also rose 43 percent to US$45.4 billion.

"More people than ever are starting small businesses as a result of the e-commerce revolution, which therefore means that this segment of Square over the next one to two years will continue to thrive," Mr Gilbert said.

Maja Garatsa Djurdjevic

Maya's career in journalism spans more than a decade in finance, business and politics. Now an experienced editor and reporter in all elements of the financial services sector, before joining Momentum Media, Maya reported for several established news outlets in South East Europe, looking at key processes in post-conflict societies.