Square (SQ) Earnings And Revenues Surpass Estimates In Q1
Zacks Investment Research | May 02, 2018 10:28PM ET
Square Inc. (NYSE:SQ) reported first-quarter 2018 adjusted earnings of 6 cents per share, which beat the Zacks Consensus Estimate by a penny and also came ahead of management’s guided range of 3-5 cents per share. The figure also surged 20% on a year-over-year basis but decreased 25% sequentially.
Net revenues of $669 million surpassed the Zacks Consensus Estimate of $624 million and also came ahead of the guided range of $605-$620 million. The figure increased 44.8% from the year-ago quarter and 8.6% on a sequential basis.
Adjusted revenues came in $307 million, which were up 50.5% year over year and 8.5% from the previous quarter. The figure also surpassed management’s guided range of $290-$295 million.
The year-over-year top-line growth was driven by robust product performance, especially CashApp which accelerated the bitcoin revenues of Square. Moreover, strong gross payment volume (GPV) aided the first quarter results.
During the first quarter, Square rolled out Instant Deposit and Cash App in United Kingdom which expanded its reach in the country. Both the products will continue to drive top-line of the company, given the cash flow management status of the country.
Additionally, the company announced the acquisition of Weebly, which will help Square to improve its omni-channel business by combining Weebly’s web presence tools with Square’s in-person and online offerings. This will enhance the company’s service to sellers.
Also, larger sellers will continue to adopt Square platform, courtesy given to its friendly ecosystem.
However, share price of the company dropped more than 4% on Wednesday. Shares of Square have returned 40.3% on a year-to-date basis, outperforming the Square, Inc. Quote
Balance Sheet
As of Mar 31, 2018, cash and cash equivalents balance was $$738.5 million compared with $696.5 million as of Dec 31, 2017. Short-term investments were $200 million in the reported quarter, up from $169.6 million in the last quarter.
Long-term debt was $362.9 million, which increased from $358.6 million in previous quarter.
Guidance
For second-quarter 2018, Square expects net revenues between $740 million and $760 million. The Zacks Consensus Estimate for revenues is currently pegged at $725.7 million.
Further, adjusted revenues are expected in the range of $355-$360 million. Adjusted EBITDA is expected in the range of $60-$64 million.
Adjusted earnings are expected in the range of 9-11 cents per share. The Zacks Consensus Estimate for earnings is currently pegged at 12 cents per share.
For 2018, Square expects total revenues between $3 billion and $3.06 billion, up from the previous guided range of $2.82-2.88 billion. The Zacks Consensus Estimate for net revenues currently stands at $2.89 billion.
Get The News You Want
Also, the company raised its guidance for adjusted revenues from $1.3-$1.33 billion to $1.4-$1.43 billion.
Adjusted EBITDA is anticipated in the range of $240-$250 million. The mid-point reflects year-over-year growth of 19%.
Adjusted earnings are projected in the range of 44-48 cents per share. The Zacks Consensus Estimate for earnings is currently pegged at 46 cents per share.
Zacks Rank and Other Stocks to Consider
Square currently carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the broader technology sector are Micron Technology (NASDAQ:MU) , Nice (NASDAQ:NICE) and Match Group (NASDAQ:MTCH) . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see Zacks Investment Research