Square Earnings Surge as Cash App Usage Grows

The company reported a 64% year-over-year jump in revenue this week, along with four million new Cash App users since the start of 2020.

Need to Know

  • Square reported impressive quarterly results this week, highlighting a usage surge in its peer-to-peer payments service and Venmo competitor, Cash App.
  • The report showed 30 million monthly transacting active Cash App customers in June—a jump from 26 million at the start of 2020. 
  • Square’s payment volume from e-commerce channels grew 50%, with online sales comprising more than 25% of seller payment volume, up from 14% a year ago.
  • Gross profit for the payments platform rose 167% year-over-year to $281 million.
  • Square’s ecosystem helped sellers adapt to changing consumer behavior during the COVID-19 outbreak as payment volume from online channels was up more than 50% year over year and made up more than 25% of its seller gross payment volume. 


Square released its quarterly results earlier this week surprising analysts with better-than-expected growth in many areas. Despite the economic uncertainty caused by the coronavirus pandemic, the report indicated consumers’ spending comfort levels are increasing especially when it comes to peer-to-peer payment service apps and online payments. 

The big highlight of the company’s report is the growth of Cash App. A direct competitor to PayPal’s Venmo, Cash App allows users to spend, send, save, and invest—all without ties to a bank.

“Our Cash App ecosystem delivered strong gross profit growth of 167% year over year as we scaled our network to more than 30 million monthly transacting active customers in June,” the company wrote in the report, adding “We remain focused on helping Cash App customers access our broader ecosystem of financial tools, including Cash Card.” 

Despite the growth of Cash App, the bulk of Square’s business lies with its payment processing terminals in small and medium-sized businesses—many of which were shuttered due to the pandemic. As a result, gross profit for Square’s core seller business dropped 9% year over year. However, its seller ecosystem was positioned to help sellers adapt.

“In the second quarter of 2020, gross payment volume from online channels was up more than 50% year over year and made up more than 25% of our Seller volume,” the company stated in the report. 

Similar to Cash App, PayPal‘s digital wallet giant Venmo has noted sizable growth. In its recent Q2 results PayPal noted that it saw $37 billion in payments come through Venmo over the quarter, marking an increase of 52% year-over-year.  The payment app, especially popular with American millennials now has more than 60 million active accounts. Cash App and Venmo are the two top non-bank competitors for sending and receiving money in the U.S.

Square has big plans for its future. Earlier this year, the fintech was granted permission to open its own bank, at least in the form of being approved for “deposit insurance,” meaning Square can offer business loans and other deposit products to its customers.

For the recent quarter, Square reported $1.92 billion in net revenue, representing a 64% year-over-year jump and suggesting that while the nation continues to recover from the pandemic, consumers are ready and willing to spend—at least digitally.