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Jack Dorsey, co-founder and CEO of Twitter Inc., listens to a Senate Intelligence Committee hearing in Washington, DC, United States on Wednesday, September 5, 2018.
Square posted a fourth-quarter profit higher than analysts' expectations on Wednesday. But the forecast for the first quarter and revenue growth were weaker than expected.
- Profit: 14 cents per share against 13 cents per share, according to Refinitiv forecasts
- Adjusted revenues: $ 464 million versus $ 454 million, forecast by Refinitiv
Shares fell more than 7% after Square's quarterly report.
The company generated adjusted revenues of $ 464 million for the fourth quarter, an increase of 64% over the previous year. Square reported adjusted earnings per share of 14 cents, up 6 cents from a year earlier.
The San Francisco-based company, led by Twitter CEO Jack Dorsey, has released a forecast earnings per share for the first quarter of between 6 and 8 cents. Wall Street was looking for 11 cents. The revenue forecast for the first quarter was in line with analysts' expectations.
Slower growth also weighed on Square's share price. The adjusted business figure of the company increased by 53% over the previous year, down from 56% in the third quarter. Wall Street was expecting revenue growth of about 60% from one year to the next.
Revenues from subscriptions and services, a measure closely monitored by Wall Street, have been a positive point. The company said $ 194 million of this portion of its revenue, an increase of 144% over the previous year. For the full year, Square recorded subscription and service revenues of $ 592 million, up 134% year-over-year.
Square's peer-to-peer Cash App had another outstanding quarter with more than 15 million monthly active customers in December 2018, more than double what it was a year ago.
"Cash App has more than doubled its monthly active customers, and products launched in the past five years now account for more than half of our adjusted revenues," Square general manager Jack Dorsey told CNBC.
The payment company has announced that it has hired Amrita Ahuja as the new chief financial officer in January. On Wednesday, she made her first call for results, filling the void of former financial director, Sarah Friar, after her resignation last year. Ahuja held the same position at Blizzard Entertainment, a division of Blizzard.
, the company outperformed analysts' expectations for earnings and earnings, but slightly exceeded expectations. Revenues from subscriptions and services were particularly high, up 155% over the previous year.
The stock rose 40% this year and more than 70% from one year to the next. Square shares rose slightly before the earnings announcement, trading close to $ 78.95.
– Deidre Bosa from CNBC contributed to the story.