2017 has been a big year for the innovative payments company. Not only did they branch out into Australia with their proprietary product Square Stand, they also launched their contactless and chip reader into the Canadian marketplace. And, in an effort to target the larger markets, they also introduced Square Register – the company’s first all-in-one hardware product. So, what does all this mean for their third quarter earnings?
According to a letter addressed to all Square shareholders, the company touts “ongoing strength in transaction-based, subscription and services-based revenue.” And nearly 20 percent of the company’s gross payment volume (GPV) came from sellers using business systems integrated with Square products.
Build with Square, another offering that boosted third quarter earnings, enables sellers to seamlessly integrate their data from Square to other business systems. As reported with their recent earnings, 20 percent of midmarket sellers used business systems integrated with square products. And the company reports their Virtual Terminal as their fastest product to reach $1 billion in cumulative GPV.
Overall, Square reports the following earnings data for third quarter of this year via their shareholder letter:
- The company’s GPV is up 31 percent year over year (YoY) compared to the second quarter of 2017 at 32 percent.
- And when it comes to larger versus midmarket sellers, large-scale GPV increased 44 percent YoY and accounted for 48 percent of total GPV.
- Midmarket GPV grew 64 percent YoY, up from 61 percent in the second quarter.
- Total net revenue is up 33 percent YoY, at $585 million, compared to 26 percent YoY in the previous quarter.
- Transaction-based revenue is up 31 percent YoY at $510 million.
- Subscription and services-based revenue is up 84 percent at $65 million.
- Hardware revenue is up 23 percent at $10 million.
- And as for net loss, the company reported $16 million in the third quarter of 2017, compared to $32 million in third quarter last year.
And finally, the company closed out the third quarter of this year with $1.1 billion in cash, cash equivalents, restricted cash and investments in marketable securities, according to the same shareholder letter. And, as reported by CNBC, the company’s third quarter earnings surpass analyst expectations on both adjusted revenue and adjusted earnings per share, as well as exceed Wall Street’s estimation with their 31 percent YoY growth.