Square Surpasses Q4 Earnings And Revenue Estimates

Square Inc. (SQ - Free Report) delivered fourth-quarter 2018 adjusted earnings of 14 cents per share, which beat the Zacks Consensus Estimate by 1 cent and also higher than management’s guided range of 12-13 cents per share. The figure also soared 85.7% on a year-over-year basis and came in line on a sequential basis.

Net revenues of $932.53 million surpassed the Zacks Consensus Estimate of $908.21 million and also came ahead of the guided range of $895-$905 million. The figure increased 51.4% from the year-ago quarter and 5.7% on a sequential basis.

Per the company, adjusted revenues came in $464.25 million, up 64.2% year over year and 7.7% from the previous quarter. The figure also comfortably outpaced management’s revised guided range of $446-$451 million.

Positive contributions from the acquisitions of Weebly and Zesty continued to drive year-over-year top-line growth. Further, the company’s robust product lines contributed well during the reported quarter. Moreover, impressive gross payment volume (“GPV”) growth aided revenue generation in the reported quarter.

Additionally, strengthening presence of Square in the bitcoin space and robust performance of subscription and services drove the results. Further, robust Cash App which experienced more than 15 million monthly active customers in December 2018 aided the results.

Notably, shares of the company dropped 6.7% in the after-hours trade on Feb 27 following the issuance of weaker-than-expected first-quarter 2019 earnings guidance.

Gross Payment Volume

Gross Payment Volume in the reported quarter increased 28% year over year and 1.8% on a sequential basis to $22.9 billion, driven by growth in larger sellers.

Square defines larger sellers as those that make more than $125,000 of annualized GPV and midmarket sellers as those that make more than $500,000 of annualized revenues.

GPV from larger sellers contributed 51% to total GPV, up 39% year over year. This can be attributed to Square’s robust product portfolio and comprehensive ecosystem that helps the company in attracting new sellers to its platform and retaining the existing sellers as well.

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