Square Gets Squeezed After Q1 Results

By Chris Lange Published May 6, 4:33PM EDT

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Square Inc. (NYSE: SQ | SQ Price Prediction) released third-quarter financial results after markets closed Wednesday. The company said that it had a net loss of $0.02 per share and $1.38 billion in revenue, compared with consensus estimates calling for $0.13 in earnings per share (EPS) and $620.3 million in revenue. The same period of last year had $0.11 in EPS and $959.4 million in revenue.

During the most recent quarter, gross payment volume (GPV) increased 14% year over year to $25.7 billion. The GPV from larger sellers accounted for 52% of total GPV.

Transaction-based revenue was $758 million in the first quarter of 2020, up 15% year over year, and transaction-based gross profit was $292 million, up 18% year over year.

Subscription and services-based revenue was $296 million in the first quarter, up 35% year over year, and subscription and services based gross profit was $256 million, up 61% year over year. Excluding Caviar from the first quarter of 2019, subscription and services-based revenue was up 72% year over year, and subscription and services-based gross profit was up 74% year over year.

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CEO Jack Dorsey commented in the report:

In January and February, gross profit increased 47% year over year, or 51% year over year excluding Caviar from the 2019 period. During the last two weeks of the quarter, our Seller ecosystem experienced a significant slowdown due to the impacts of COVID-19, with Seller GPV (Gross Payment Volume) down 35% year over year. In the first quarter, Cash App gross profit grew 115% year over year.

Shares of Square closed Wednesday at $68.10, in a 52-week range of $32.33 to $87.25. The consensus price target is $62.74. Following the announcement, the stock was down over 7% at $62.85 in the after-hours session.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.