Square stock rises on bigger deals
03 August 2017 | 9425 views | 1
Shares in payments upstart Square have surged after the company pushed revenues above expectations on the basis of more sales to larger retailers.
The company's stock moved up 10% in after-hours trading after it posted a Q1 loss of 4 cents per share on revenue of $551.51 million, ahead of market guidance for a 5 cents a share beating on lower earnings.
A 33% jump in gross payments processing to $16.4 billion was largely attributed to Square's success in courting larger retailers, Payments from merchants processing more than $500,000 in transactions annually grew 61% compared to the comparable quarter and accounted for 19% of all transactions processed, up from 14% a year ago.
The company's loan decisioning platform, which crunches retailer data to offer lending products to business owners is credited with unlocking a lucrative new revenue stream for the company, which saw a 68% rise in loans year-on-year to $318 million.
"We're serving merchants who typically would go to their friends and family to get the sizable loan," Square chief Jack Dorsey told analysts in a conference call. "We think that's a massive opportunity and no one else is really going after it, especially with all the data that we have so we can make really calculated judgments and decisions around it."