Square Inc (SQ.N), the mobile payments company run by Twitter Inc (TWTR.N) Chief Executive Jack Dorsey, reported a bigger-than-expected quarterly loss as operating costs surged.
The company’s shares were down 11.6 percent at $11.54 in after-hours trading on Thursday.
Square, which went public in November, facilitates payments between businesses and customers with a credit card reader that turns any mobile phone into a payment terminal. The company also makes point-of-sale registers and chip-enabled card readers.
Dorsey co-founded both Square and Twitter, but investors have been showing greater confidence in his ability to build Square into a strong business than in his chances of turning around Twitter.
Square’s shares have risen nearly 50 percent since the company went public on Nov. 19, while Twitter has lost nearly half of its value in the same period as the Microblogging company struggles to attract users and advertisers.
Dorsey splits his time between the two companies, which are both based in the same area of San Francisco.
Square’s net revenue jumped 51.4 percent in the first quarter ended March 31. The company also said its gross payment volume – the total dollar amount of all card payments processed by sellers – jumped 45 percent to $10.3 billion.
But its net loss attributable to common stockholders widened to $96.8 million from $48 million in the same period a year ago as operating expenses jumped 72 percent to $207 million.
Square spent more on marketing, developing its products and on staff during the quarter, Dorsey said in a letter to shareholders. (bit.ly/1Wb29rm)
Excluding one-time items, Square reported a loss of 14 cents per share, compared with the average analysts’ estimate of 9 cents, according to Thomson Reuters I/B/E/S.
Net revenue rose to $379.3 million from $250.6 million a year earlier and $374.4 million in the fourth quarter of 2015.
Analysts on average had expected $343.6 million.
(Reporting by Sudarshan Varadhan and Sai Sachin R in Bengaluru; Editing by Ted Kerr)