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How Square Quietly Inches Closer to Profitability, Continuously Surpassing Expectations

Square was started in 2009 to enable businesses to accept card payments, an important capability that was previously inaccessible to many businesses. Since then, Square has continued to expand its product offerings to match the needs of its customers and now operates a cohesive commerce ecosystem that combines sophisticated software with affordable hardware to enable sellers to turn mobile and computing devices into powerful payments and point-of-sale solutions.

A little over a month has passed since Square, Inc. released their most recent 10-Q, and investors were pleasantly surprised to see that the company surpassed market earnings estimates yet again. While Square failed to generate Net Income in the first quarter of 2017, its losses were much narrower than expected as the company continues to experience significant revenue growth that is outpacing the growth rate of its expenses. For the first quarter, Square reported a loss per share of $0.04, beating the Zack’s Consensus Estimate of $0.17. This encouraging earnings release fared well for Square’s stock price as it has increased by 18% since the announcement. This better-than-expected financial performance for the quarter can be attributed to several factors.

Growing business segments

Square made a name for itself by offering an ingenuitive tool that allowed small business owners to facilitate debit an ...

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