Square earnings for the third quarter shot past expectations of market observers courtesy of healthy growth from the company's consumer app. The earnings disclosure lifted Square stocks up in a most comfortable spot during after-hours sessions, Wednesday.
Square Inc (SQ) said its adjusted earnings has increased 93 percent to 25 cents per share, with adjusted earnings going up 41 percent to $602 million. The digital payment processor had earned 13 cents a share of $431 million in sales a year earlier.
Wall Street analysts expected a $596.5 million gross Square earnings of 20 cents for the period ended September 30.
Square said merchant customers' gross third quarter payment volume were up 25 percent to $28.4 billion, topping almost $28 billion in estimates.
Adjusted earnings before interest, taxation, depreciation and amortization, known as EBITDA, grew by 86 percent to $111 million, exceeding market projections.
Square Cash, a digital money transfer service platform for consumers, competes with Venmo's (PYPL) PayPal Holdings Inc. The company pointed out that additional features to the Square Cash app, such as allowing users to purchase and sell Bitcoin, make the app highly capable in competing with the market's big players.
The company said total net income for Cash App was $307 million in the third quarter. Square generated Bitcoin revenue of $148.4 million, up from $43 million in the previous year.
"With the exception of Bitcoin, sales from the Cash App was $159 million, up 116 percent year-over-year," the firm said in a letter to shareholders.
Bitcoin produced a gross profit of $2 million over the period, approximately the same as the previous quarter, Square said.
With the aid of Bitcoin, Square's net income grew 44 million to $1.28 billion, down from $1.155 billion in projections. Square set up a Bitcoin exchange in November 2018. It is charging a small transaction fee.
Square does not report Bitcoin derived sales. That number is the Bitcoin revenues to app users from Square, minus the digital currency purchase cost.
The digital payment processor has completed last week's $410 million sale to Door Dash of Caviar, a food ordering and delivery service.
As some observers have predicted in the past days, Square did not provide initial guidance for fiscal 2020 in its note to stockholders.
Through extended trading on the stock market late Wednesday, Square's volume has risen nearly 4 percent to 63.74.
Square manufactures electronic card readers which can be linked to smartphone gadgets. The company also provides operating systems for back offices to manage inventory and other tasks in addition to its consumer-focused Square Cash.
