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Square (SQ) Earnings and Revenues Surpass Estimates in Q2

Zacks Equity Research

Square Inc. SQ delivered second-quarter 2019 adjusted earnings of 21 cents per share, which beat the Zacks Consensus Estimate by 5 cents and was also higher than management’s guided range of 14-16 cents per share. The figure also soared 61.5% on a year-over-year basis and 90.9% sequentially.

Net revenues of $1.17 billion surpassed the Zacks Consensus Estimate of $1.11 billion and also came ahead of the guided range of $1.09 billion to $1.11 billion. The figure improved 44.1% from the year-ago quarter and 22.4% sequentially.

Per the company, adjusted revenues came in $562.8 million, up 46% year over year and 15.1% from the previous quarter. The figure also comfortably outpaced management’s guided range of $545-$555 million.

The top line was driven by robust performance of Cash App, which contributed 260 million to the net revenues during the second quarter.

Further, Cash Card’s strengthening adoption rate contributed to the results. During the second quarter, 3.5 million customers utilized the product. Further, benefits from Weebly and Zesty acquisitions, which contributed 2% to the net revenues, remains a positive.

Additionally, continued acceleration in gross payment volume (GPV) of the company drove the results.

Notably, shares of the company dropped 6.6% in the after-hours trade on Aug 1 following the weaker-than-expected third-quarter 2019 earnings guidance. Its guidance for net revenues in the current quarter is also lower than the estimates.

Coming to the price performance, shares of Square have returned 23.1% on a year-to-date basis, underperforming the industry’s rally of 23.1%.

Nevertheless, the company’s solid momentum across sellers and strong product portfolio are tailwinds and are likely to continue aiding its performance in the near term.

Square, Inc. Price, Consensus and EPS Surprise

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