“The payments company beat analysts’ estimates for earnings and revenue in its third-quarter report Wednesday.
Square missed Wall Street’s expectations for fourth-quarter earnings guidance.
San Francisco-based Square, run by Twitter CEO Jack Dorsey, is well-known in the payments sector for its credit card processor, payment hardware and popular Cash app. It has also moved into small business lending through Square Capital.”
PUBLISHED WED, NOV 7 2018 • 3:33 PM EST
Payment company Square reported quarterly earnings and revenue that beat analysts’ expectations on Wednesday but came up slightly short on forward guidance.
Here’s how the company did compared with what Wall Street expected:
Earnings: 13 cents per share vs. 11 cents per share forecast by Refinitiv.
Revenue: $431 million vs. $413.9 million forecast by Refinitiv.
Adjusted revenue grew 68 percent year over year. The company reported its first quarterly profit of $20 million, compared with a net loss of $16 million in the third quarter of last year. Square’s chief financial officer, Sarah Friar, said a “big driver” of the profitability was the investment in EventBrite, which went public in October.
Square met expectations for Wall Street’s fourth-quarter revenue guidance, but came up short on earnings guidance for the upcoming quarter. It expects to earn between 12 and 13 cents, below Wall Street’s expectations of 15 cents for the fourth quarter.
Shares of the fintech company fell more than 3.5 percent in after-hours trading Wednesday. The stock has popped more than 120 percent year over year, and is up 136 percent this year alone.
Subscription- and services-based revenue was especially strong, up 155 percent year over year to $166 million in the third quarter. Caviar, Square Capital and Cash Card, a Visa debit card generated by Square’s peer-to-peer Cash App, were key drivers of Square’s third-quarter revenue growth, the company said.
“Clearly from the third quarter we’re seeing strong momentum in our businesses,” Friar said on the earnings call. “That is symptomatic of a strong macro environment but also of the value proposition.”
In October, Square announced Friar was stepping down to become CEO of start-up Nextdoor. Shares of Square dropped as much as 8 percent after the announcement.
Square CEO Jack Dorsey, who also runs Twitter, said on the call with analysts that Square had not yet hired a new CFO but was “working with urgency” to do so. Dorsey called finding Friar’s replacement the “No. 1 focus for the company.”