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Despite a strong third quarter earnings report, Square the forecasts for the last quarter of this year gave investors a break, dropping the stock price after 6 hours of trading before rising gradually.
Square's adjusted revenues were up 68% year-over-year to US $ 431 million, exceeding analysts 'expectations of Refinitiv (formerly Thomson Reuters' finance and risk arm), which was looking at 413.9 million USD. He also announced an adjusted earnings per share of 13 cents, higher than the 11 cents expected by analysts.
The third quarter total business figure amounted to 882.1 million USD, up 51% over the same period last year. Square also posted its first quarterly profit of $ 20 million, compared to a loss of $ 16 million last year. Sarah Friar, CFO, said during a conference on financial results that she was largely due to Square's investment in Eventbrite, which held its IPO in October.
Despite analysts' disappointing expectations for its third quarter and adjusted earnings guidance for 2018, they are expected to reach between $ 250 million and $ 255 million, from $ 240 million to $ 250 million. However, Square's forecast for the fourth quarter was not up to par. The company expects an adjusted profit of 12 cents to 13 cents per share, lower than the 15 cents forecast by analysts surveyed by Refinitiv.
Investors were also concerned about Square's transaction-related revenues, which rose 29% to $ 655 million in the third quarter, up from 31% last year, as even slightly slower growth could indicate competitors like Clover are gaining power. However, Square said that the large segment of Gross Payments (GPV) processed by "big sellers", or merchants who spend more than $ 125,000 per year on GPV, has increased by 52%, compared to 48% a year earlier. before.
According to Friars, according to Square, this is due to the fact that Square facilitates the integration of Square's platform in the retail operations, as well as the recent launches of Square Terminal, its card machine. Credit and Square Installments, which allows merchants of customers to make monthly payments.
Friar, who oversaw Square's IPO in November 2015 and has been its chief financial officer since 2012, announced last month that she would leave the company to become Nextdoor's CEO. The CEO and founder, Jack Dorsey, said the search for a new CFO was his number one goal within the company. It will be headed by independent director David Viniar and board member Roelof Botha.
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