Square’s (SQ) Q3 results beat expectations

Square Inc. (NYSE: SQ) beat revenue and earnings expectations for the third quarter of 2019. Shares were up 3.4% in aftermarket hours on Wednesday.

Total revenue increased 44% year-over-year to $1.27 billion, crushing estimates of $596.5 million. Adjusted revenue grew 40% to $602 million.

Net income was $29 million, or $0.06 per share, compared to $20 million, or $0.04 per share, last year. Adjusted EPS totaled $0.25, beating forecasts of $0.20.  

Square completed the sale of Caviar to DoorDash on October 31. Excluding Caviar, net revenue grew 45% year-over-year and adjusted revenue grew 43%.

During the quarter, the Seller ecosystem generated $918 million of total net revenue. Total net revenue for Cash App was $307 million and excluding bitcoin, Cash App revenue was $159 million.  

During the quarter, Square processed $28.2 billion in GPV, up 25% year-over-year. GPV from larger sellers grew 34% and accounted for 55% of total GPV. GPV from mid-market sellers grew 44% and accounted for 27% of total GPV.  

Also read: iQiyi Q3 2019 Earnings Report

Transaction-based revenue was $817 million, up 25% year-over-year. Subscription and services-based revenue was $280 million, up 68%, driven mainly by Cash App, Square Capital, and Instant Deposit for sellers. Hardware revenue was $22 million, up 24% from last year.  

For the fourth quarter of 2019, Square expects GAAP revenue of $1.16-1.18 billion and adjusted revenue of $585-595 million. GAAP earnings are expected to range from a loss of $0.01 to earnings of $0.01. Adjusted EPS is expected to be $0.19-0.21.

For fiscal year 2019, revenue is expected to be $4.56-4.58 billion while adjusted revenue is estimated to be $2.24-2.25 billion. GAAP loss per share is expected to be $0.04-0.02 while adjusted EPS is projected to be $0.76-0.78.

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