Mobile payments company Square Inc’s revenue beat analysts’ estimates in its first quarterly results since going public in November, easing pressure on CEO Jack Dorsey who is also leading turnaround efforts at Twitter Inc.
The company’s shares were up 3.7 percent in extended trading on Wednesday after closing up 4.8 percent during the day.
Square, founded in 2009, has built a substantial customer base with a credit card reader that turns a mobile device into a payment terminal. The company also makes point-of-sale registers and chip-enabled card readers.
Total net revenue rose 49.2 percent to $374.4 million in the fourth quarter ended Dec. 31, beating analysts’ average estimate of $343.2 million, according to Thomson Reuters I/B/E/S.
Square’s transaction revenue – earned from businesses processing payments through its devices – grew 44.7 percent to $298.5 million.
Total net revenue and analysts’ estimates include transaction costs and revenue from Starbucks Corp, with which it has a payment processing agreement.
The company said it does not intend to renew the deal when it expires in the third quarter.
On an adjusted basis, the company reported revenue of $135 million.
However, the net loss attributable to common stockholders widened to $80.5 million, or 34 cents per share, from $37.1 million, or 25 cents per share.
The company has been investing heavily in new hardware, such as chip-enabled card readers, and building out its lending business, Square Capital.
Chief Executive Dorsey also runs Twitter, another company with substantial obstacles to growing profits. Shareholders in both companies have been concerned about Dorsey’s dual role.
Adding to the worries, Square also faces intense competition in the payments market, with Apple’s Apple Pay service, Amazon exploring in-store payments, and startups such as Stripe Inc entering the fray.
(Reporting by Abhirup Roy in Bengaluru; Editing by Sriraj Kalluvila and Shounak Dasgupta)