Square's Revenue Climbs 41%
August 03 2016 - 5:40PM
Dow Jones News
Square Inc. posted a better-than-expected 41% jump in revenue
during its second quarter, narrowing its loss from a year ago,
helped by sharp growth in transaction revenue.
The company also raised annual guidance for adjusted revenue and
adjusted earnings before interest, taxes, depreciation and
amortization. Square did warn, however, that total net revenue
growth would be "impacted" by its continued decline in Starbucks
transaction revenue as the coffee chain switches to a new payment
processor.
Shares of Square climbed 8.4% to $11.32 after hours.
Square said it now expects adjusted revenue to be in the range
of $655 million to $670 million, up from a previous range of $615
million to $635 million. Adjusted Ebitda is also expected to rise
to a range of $18 million to $24 million, up from its previous
range of $8 million to $14 million.
For the current quarter, Square forecast revenue between $410
million to $420 million and adjusted Ebitda between $5 million and
$6 million. The company also released for the first time its
expectations for total net revenue for the year between $1.63
billion and $1.67 billion. Analysts cited by Thomson Reuters
forecast annual revenue of $1.6 billion, and revenue of $415
million for the third quarter.
For the latest quarter, Square reported a loss of $27.3 million,
narrower than its year-earlier loss of $29.6 million. On a
per-share basis, the company posted a loss of 8 cents, compared
with a loss of 20 cents a year earlier.
Revenue rose 41% to $439 million.
Analysts surveyed by Thomson Reuters expected a loss of 11 cents
a share on revenue of $406 million.
Transaction revenue climbed 40% to $364.9 million, while
transaction revenue as a percentage of gross payment volume was
2.93%, down from 2.96%. Gross payment volume in the quarter grew
42% to $12.5 billion.
Square's hardware sales shot up to $11.1 million. That came with
accelerating hardware costs going to $14 million from $6.7 million
a year earlier, as Square spends to develop and distribute the new
devices that work with contactless mobile-phone apps and so-called
chip cards with enhanced security features.
Software and data revenue jumped to $29.7 million from $12.9
million, thanks in part to Square Capital, the company's lending
arm and an expected source of profitability growth. Square Capital
extended $189 million in cash advances and loans during the second
quarter, a 23% increase from the first quarter.
Run by Twitter Inc. founder and Chief Executive Jack Dorsey and
known for the small white payment devices it sells to small
businesses, Square has been the subject of intense focus since its
initial public offering late last year.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
(END) Dow Jones Newswires
August 03, 2016 17:25 ET (21:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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