Square's Newest Cash App Users Are Extremely Profitable

Square (NYSE: SQ) added 12 million new Cash App users in 2020, and those users are turning to the financial Swiss army app a lot. The company is increasingly benefiting from the network effect of its core peer-to-peer payments service as well as the expanding ecosystem of services it offers through Cash App. So not only is it bringing on new users more quickly than ever before, but they are using more features than others and generating more revenue and profits for Square.

One of the topics Square CFO Amrita Ahuja kept coming back to during Square's fourth-quarter earnings call and its letter to shareholders was "cohort economics." A cohort is a group of users who all signed up for a service around the same time. Square broke out both Cash App and Seller cohorts by year in its letter to shareholders.

Square's Cash Card. Image source: Square.

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Source Fool.com