How Bitcoin impacted Tesla, MicroStrategy, and Square’s Q2 earnings

—, , ,
—by Protos Staff
Here's what we learned from the Q2 earnings of public stocks Tesla, MicroStrategy, and Square — which hold billions of dollars in Bitcoin.

Elon Musk’s electric carmaker Tesla posted record earnings last quarter and unlike in Q1 made no changes to its billion-dollar Bitcoin portfolio.

Tesla’s unaudited cashflow statement shows the company generated $11.4 billion revenue last quarter, up 98% year-on-year with $1.1 billion profit.

The Palo Alto giant also stepped up production. Tesla made over 206,000 cars in Q2, doubling its output compared to last year, WSJ reported.

  • Tesla’s $1.5 billion Bitcoin disclosed in February remains its only crypto stake.
  • In Q1, the company trimmed its BTC stash by 10% “to prove its liquidity,” said Musk.
  • Tesla held $1.311 billion worth of Bitcoin as of June 30.

Public stocks that hold Bitcoin (like Tesla) must report impairment losses when their crypto is worth less than when they bought it.

Tesla recorded $23 million in Bitcoin-related impairment losses in Q2 — meaning the company was just in the red on their investment at the end of the quarter.

Tesla is back in the green at press time, according to Bitcoin Treasuries.

Here's what we learned from the Q2 earnings of public stocks Tesla, MicroStrategy, and Square — which hold billions of dollars in Bitcoin.
Tesla’s ‘key metrics’ like net income and vehicle deliveries trended upwards (source: Tesla).

For now, buying Bitcoin is only way Tesla can acquire more. The company briefly accepted BTC in March only to rescind the offer two months later citing “rapidly increasing use of fossil fuels for Bitcoin mining.”

Tesla would take Bitcoin once more when miners confirm they consume 50% clean energy to generate new cryptocurrency, Musk claimed.

As for Musk’s other ventures, the maverick billionaire recently claimed SpaceX holds Bitcoin, and that he personally owns Bitcoin, Ether, and Dogecoin.

MicroStrategy is still mostly Bitcoin

Meanwhile, Michael Saylor’s business intelligence unit MicroStrategy pledged to keep buying Bitcoin.

The Virginia-headquartered stock now holds more than 105,000 BTC ($4 billion), said Saylor during its Q2 earnings call last Thursday.

MicroStrategy boasts a market cap of around $6.2 billion, which means Bitcoin makes up nearly two-thirds of the company’s overall value.

According to its Q2 earnings, the company:

  • spent $529 million on 13,759 BTC in Q2 (approx. $38,467 each),
  • raised $500 million by selling secured notes to fund its Bitcoin purchases,
  • recorded $425 million in impairment losses on its Bitcoin last quarter.
MicroStrategy stock has so far outperformed Square, Tesla, Bitcoin, and the S&P 500 in 2021.

Bloomberg noted that if MicroStrategy sold its entire Bitcoin portfolio today, the company would generate $1.4 billion in profit — more than double its cumulative earnings over the past 25 years.

“Going forward, we intend to continue to deploy additional capital into our digital asset strategy,” confirmed Saylor (that strategy is simply: buy and hold Bitcoin).

Bitcoin aside, MicroStrategy’s actual business hit $125.4 million in revenues for Q2, up $13% year-on-year.

Earnings show Square doubled profits

Jack Dorsey’s fintech play Square revealed its peer-to-peer payments platform Cash App raked in over $2.7 million revenue from Bitcoin transactions in Q2 — triple 2020’s equivalent period.

Square posted $4.68 billion in revenue last quarter, up more than 140% year-on-year. Gross profits almost doubled to clear $1.14 billion.

“Bitcoin revenue and gross profit benefited from year-over-year increases in the price of Bitcoin, [active Bitcoin users], and growth in customer demand,” said Square in a letter to shareholders on Sunday.

Here's what we learned from the Q2 earnings of public stocks Tesla, MicroStrategy, and Square — which hold billions of dollars in Bitcoin.
Square’s gross quarterly profit nearly doubled year-on-year (source: Square).

San Fran-headquartered Square:

  • holds 8,027 BTC ($306.7 million),
  • spent $220 million on its Bitcoin in total,
  • wrote down $45 million in Bitcoin impairment losses last quarter.

MarketWatch highlighted that Cash App generated about half of Square’s Q2 profits ($546 million).

Square however barely takes a cut from Bitcoin-related earnings on Cash App. The company posted $55 million in Bitcoin-related profit, which means Square banked about 2% of its Bitcoin revenue.

Separately, Square announced it agreed to buy Australian payments firm AfterPay for $29 billion, its largest ever acquisition.

Dorsey is really into Bitcoin.

[Read more: Bitcoin is still running on Moscow Time — thanks to Dorsey’s Bitcoin clock]

Square’s all-stock AfterPay deal comes amid rising adoption of “buy now, pay later” offers from payment giants PayPal and Visa.

In a press release, Square hinted the buyout would bring AfterPay users the option to spend Bitcoin with merchants.