Square on Tuesday announced that it is withdrawing its full-year 2020 guidance and adjusting its revenue and gross profit outlook for the first quarter due to the impact of COVID-19 on gross processing volume (GPV).
GPV is a key metric and revenue source for Square, as it measures the total dollar amount of card payments processed by merchants using Square's system. The company takes a 2.6% cut of every payment processed by its merchant and point-of-sale customers.
Square said it began to see a slowdown in GPV from its seller ecosystem starting in March. As the pandemic worsened, Square said it saw merchant GPV drop by 25% year-over-year, with declines accelerating in recent days.
The company now expects first quarter gross profit in the range of $515 to $525 million and a loss for its Q1 net income per share.
"This range assumes a further deceleration in overall GPV through the last week of March, beyond the levels we have seen in recent days," the company said.
Square said it will provide a further update on 2020 guidance during its first quarter 2020 earnings call in May.
Square's announcement comes a day after Twitter -- which shares its CEO, Jack Dorsey, with Square -- withdrew its revenue and operating income outlook for the first quarter due to weak advertiser demand. The social media company said the global COVID-19 pandemic "has impacted Twitter's advertising revenue globally more significantly in the last few weeks."