Since the company went public last November, investors have been watching for Square to move towards profitability through growth in those higher-margin businesses.
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This time around, Square Inc (NYSE:SQ) has done much better with its earnings report, beating the top and bottom lines. Visit MarketWatch.com for more information on this news. Square ended the day up 4.08 percent at $10.46, and in after-hours trading, it’s jumped up more than 9 percent.
The mobile payments services provider posted revenue of $438.5 million in the period, also topping Street forecasts.
About 42 percent of total payments is coming from larger retailers, said Sarah Friar, Square chief financial officer. Square says it advanced $189 million to sellers via Square Capital in Q2. “So our customer acquisition cost is effectively zero”.
“Square Capital’s competitive advantages continue to attract additional institutional investors, with five new investors added to the program during the second quarter”, Square said, citing the data they can provide on businesses day-to-day operations as a boon that eliminates the lengthy loan application process. Square raised its 2016 adjusted revenue guidance to $662.5 million at the midpoint of its guidance range, up from $625 million.
Still, the company is not profitable.
Wall Street analysts had expected the commerce company to bring in $406 million in revenue with an EPS loss of $0.11 per share.
The net loss narrowed to $27.3 million from $29.6 million.
The company is looking to grow overseas, and is eyeing the United Kingdom as a potential next stop, executives said Wednesday.
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Reuters reported last month that Square incorporated a business called Squareup Europe Ltd in Britain, lining itself up for what could be its first foray into Europe.
