Square Jumps 5%: Q4 Beats, Forecasts Year Profit View Above Consensus
- Author: Arturo Norris Feb 23, 2017,
Feb 23, 2017, 6:51
Wall Street was bracing for a loss of nine cents a share on revenue of $449.6 million.
For the full year, Square estimated $2.09 billion to $2.15 billion in revenue, also in line with the average analyst expectation of $2.12 billion.
Square's stock climbed more than four percent in after-hours trading.
Square's gross payment volume (GPV), a key metric for the payments company, ticked up to $13.7 billion, an increase of 34 percent from the same period a year ago.
Here's a graph that looks at Square's Price, Consensus and EPS Surprise. GPV for the year was $50 billion, up 39 percent year over year.
Square saw growth in all vectors of its business, with traditional payment processing growing at a 30+ percent clip year-over-year.
The company also showed significant year over year growth. This statistics also shows a growth of nearly 68 percent over the fourth quarter a year ago.
Company's Q4 guidance: Square said it expected revenue of $438 million to $443 million. In today's announcement, Square said that total net revenue growth "was impacted" by no longer having Starbucks' transactions and once again reiterated it does not "expect to generate Starbucks transaction-based revenue going forward". But Square's platform is popular with small businesses.
"Adjusted" revenue in the three months ended in December rose 42.7%, year over year, to $191.9 million, yielding a net of 5 cents per share. This quarter, Square continued its march to prove doubters wrong and show that it can indeed not only provide its user experience to not only mom and pop shops, but also those retailers with multiple locations and beyond, both in the US and overseas.
Its Square Capital business, which offers loans to customers in exchange for a fixed percentage of their daily card sales, also contributed to revenue growth.
The company posted a net loss per share of $0.56 on $573.8 million in revenue, versus consensus estimates from Thomson Reuters that called for a net loss of $0.50 per share and $576.04 million in revenue.
Much of the success has been attributed to Square's new products that have launched since 2014.