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Square scheduled to report revenue in the second quarter after the clock



Jack Dorsey, Founder and CEO of Twitter Inc., speaking during an interview in New York, USA, Monday, May 1, 2017.

Michael Nagle | Bloomberg | Getty Images

Shares of Square fell as much as 8% Thursday after the payer provided weaker-than-expected guidance. The company continued to beat analysts' earnings and revenue expectations for the second quarter.

Here's how the company compared to what Wall Street was looking for:

  • Earnings: 21
    cents per share, against 17 cents forecast by Refinitive.
  • Adjusted Revenue: $ 563 million versus $ 557.1 million, calculated by Refinitive.

Adjusted earnings before share in the third quarter were below expectations. The company projected a range of between 18 cents and 20 cents per share, compared to 22 cents analysts had expected. Square did not update the full-year guide.

"The third quarter is an important time for us to invest," Square CFO Amrita Ahuja said in a conversation with reporters.

Adjusted revenues rose to $ 563 million in the second quarter, a jump year of 46% year over year. Gross payment volume came in at $ 26.8 billion versus $ 26.9 billion Wall Street had expected. More than half of Square's payment volume came from larger sellers.

The company updated investors on its popular peer-to-peer Cash app – largely viewed as a competitor to PayPal Venmo. Excluding bitcoin trading, which launched on the app in January last year, the app revenue came in at $ 135 million for the second quarter. That's up from "insignificant" revenue when the app first launched three years ago, Ahuja said in a conversation with analysts.

Square also announced an agreement to sell the food delivery company Caviar to DoorDash for $ 410 million. The acquisition will be a mix of cash and DoorDash preferred shares and is expected to close by the end of this year. According to a securities filing, Square Caviar bought $ 44.3 million in 2014.

CEO Jack Dorsey, who also runs Twitter, said that on the move it was intended to increase Squares focus on business and consumer ecosystems.

"We have seen a lot of opportunity to strengthen both of these ecosystems, but these opportunities require more focus and more investment," Dorsey said in a conversation with analysts. "To increase focus, we decided to sell our Caviar business to DoorDash."

Squares shares had rallied this year with a 47% rally since January, compared to a 20% increase in the S&P 500.

The San Francisco-based company is best known for its credit card processor, payment hardware and growing cash app is hitting. Square also facilitates small business loans through Square Capital, and applied for a special industrial mortgage company license that allows smaller traditional finance companies to receive state-insured deposits.

During the second quarter, Square made 78,000 loans totaling $ 528 million – a 36% jump year over year.

Traders have offered the stock thanks to new product launches, moving into e-commerce opportunities and growth in the Cash app. It also launched a corporate debit card in January. On Thursday, analysts will look for revenue from some of these newer products in addition to their core business with subscriptions and services.


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