Square reports strong Q3 on rising subscription revenue
Square topped third quarter earnings and revenue targets Wednesday after the bell. The mobile payments service run by Twitter CEO Jack Dorsey reported a Q3 net income of $29 million, or 6 cents a share. Square's Non-GAAP earnings clocked in at 25 cents a share on revenue of $602 million, up 40% over the same quarter last year.
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Wall Street was looking for earnings of 20 cents a share on revenue of $596.38 million.
Square's gross payment volume (GPV), a key metric for the payments company, ticked up to $28.1 billion, an increase of 25% from the same period a year ago. GPV from larger sellers, defined by Square as merchants generating more than $125,000 in annualized revenue, grew 34% year over year, attributing 55% of GPV for the quarter.
The company's third quarter transactional revenue came in at $817 million. Its subscription and services-based revenue climbed to $280 million, up 68% compared to the year-ago period. Square says it has advanced nearly $563 million to sellers via Square Capital in Q3. The company's hardware revenue was $22 million.
Also of note, Square said Cash App accounted for $159 million of its third quarter subscription revenue and that bitcoin generated $2 million of Q3 gross profit.
For the current quarter, Wall Street is expecting earnings of 25 cents a share with revenue of $621.24 million. Square responded with a Q4 earnings guidance between 19 cents and 21 cents a share with revenue between $585 million and $595 million. Shares of Square were up around 2% after hours.