Payments company Square reported its third quarter financial results revealing a win on both the top and bottom line but a miss on guidance for the fourth quarter. For the upcoming quarter, Square expects to earn between 12 and 13 cents. Analysts were waiting for 15 cents however.
The San Francisco-based Square, which is run by Jack Dorsey who is also the CEO of Twitter, reportred third quarter earnings per share of 13 cents while analysts expected 11 cents. Revenue at $431 million was also ahead of the $413.9 million that was expected by analysts.
Adjusted revenue grew 68 percent year over year and it was the first quarterly profit for the company at $20 million. In the year ago period Square had reported a net loss of $16 million. For the quarter, subscription- and services-based revenue jumped 155 percent year over year to $166 million.
According to CFO Sarah Friar, who is leaving the company, the “big driver” in this profit was because of Square’s investment in EventBrite. “Clearly from the third quarter we’re seeing strong momentum in our businesses,” Friar said on the earnings call. “That is symptomatic of a strong macro environment but also of the value proposition.”
Friar is leaving the company to be the CEO of Nextdoor, a social media startup. Dorsey said on the earnings call that a replacement has not been found for Friar yet but is “working with urgency” to find one. After Friar’s announcement that she would be leaving, Dorsey said she “steered us through an IPO and helped build a growing ecosystem of businesses that will scale into the future.” and that she “leaves us having established a culture of entrepreneurship and discipline across the entire company. She has been an amazing leader, partner, and friend, and we are grateful for all she’s done for Square.”
Friar in a statement, “Very rarely, a company comes along that has the ability to literally change people’s lives for the better – how they communicate, how they interact, how they look out for their fellow neighbors. Nextdoor is one of those rare companies that transcends its utility as a business and is quickly making its mark on communities here and around the world.”
Square, which is known for its credit card processor, payment hardware and popular Cash app, recently moved into small business lending with Square Capital. The company also announced Square Terminal, an intuitive credit card machine that takes payments quickly and securely.
Dorsey said, “We have seen these black rectangular boxes on countertops everywhere around the world, this is the common device that people use to accept a credit card and make a sale in the first place. We answered it originally by enabling people to take their mobile personal device like an iPhone or an Android device or an iPad and plug in one of our readers or pair it wirelessly. We decided that we could do better and serve an entirely new market by building an all-in-one device that doesn’t require a third-party tool, and enables people to sell in the way that they are used to.”