Square delivers strong Q2 results, doubles subscription revenue

Subscription and services-based revenue, which includes Square Capital and Caviar, was up 99 percent.
Written by Natalie Gagliordi, Contributor

Square delivered solid second quarter earnings financial results after the bell on Wednesday.

The mobile payments and small business service provider reported a Q2 net loss of $16 million, or 4 cents a share, compared to a net loss of $27 million, or 8 cents a share, the year prior.

Square's Non-GAAP earnings clocked in at 7 cents a share on revenue of $552 million, up 26 percent over the same quarter last year.

Wall Street was expecting a loss of 5 cents a share on revenue of $536 million.

The company's gross payment volume was another big win for the quarter, coming in at $16.4 billion, an increase of 32 percent from the same quarter a year ago.

Transaction-based revenue was $482 million, up 32 percent year over year. Subscription and services-based revenue, which includes the company's lending service Square Capital and food delivery business Caviar, was $59 million, up nearly double what it was in the second quarter of 2016. Square says it has advanced nearly $318 million to sellers via Square Capital in Q2.

Hardware revenue dropped by 7 percent to $10 million, though Square attributes the decrease to higher-than-normal sales in the first half of 2016 associated with pre-orders for its card readers.

Square is once again raising its revenue guidance for fiscal 2017. The company now expects revenue in the range of $2.14 billion to $2.16 billion, up from its previous guidance range of $2.12 billion to $2.16 billion.

For the current quarter, Wall Street is expecting an earnings loss of 6 cents a share with revenue of $562.3 million. Square responded with a Q3 earnings guidance between 4 cents and 5 cents a share with revenue between $562 million and $568 million.

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