Square (SQ) Misses Q1 EPS by 15c

May 6, 2020 4:11 PM EDT

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Square (NYSE: SQ) reported Q1 EPS of ($0.02), $0.15 worse than the analyst estimate of $0.13. Revenue for the quarter came in at $1.38 billion, versus $959.36 million reported last year.

"The past few months have brought uncertainty, anxiety, and grief to people across the world. We have seen firsthand the challenges of grappling with COVID-19 for our employees, our customers, and our communities. We have also seen stories of resilience and hopeā€”of neighbors coming together to support affected families, of sellers pivoting their businesses to offer essential services, and of our employees organizing fundraisers for hospitals and medical workers. As a company, our focus remains on our mission of economic empowerment, which we believe has never been more important. Across our Seller and Cash App ecosystems, we are moving quickly to address the current needs of our customers as COVID-19 has affected both businesses and individuals. We are focused on supporting our customers with information and resources; adapting our products to changing commerce experiences; and helping our customers access government stimulus programs. While the macroeconomic environment remains uncertain, we believe our long-term strategy of building a diverse ecosystem of products, customers, and use cases adds resilience to our company. In January and February, gross profit increased 47% year over year, or 51% year over year excluding Caviar from the 2019 period. During the last two weeks of the quarter, our Seller ecosystem experienced a significant slowdown due to the impacts of COVID-19, with Seller GPV (Gross Payment Volume) down 35% year over year. In the first quarter, Cash App gross profit grew 115% year over year. We recognize that the macroeconomic environment is having a significant impact on people around the world, including many of our customers. This may cause a variety of outcomes for our financial results in upcoming quarters, depending on the length and severity of the impact from COVID-19, and we expect a material impact to our second-quarter results. Accordingly, we are not providing secondquarter or full-year 2020 revenue or earnings guidance at this time; instead, we have provided a further update on the latest trends in our business during the month of April. While we have strategically pulled back on certain expenses, we will continue to invest in our business for the long term as we believe this moment is a transformative opportunity to help serve existing and new customers. We believe our customer-centric approach and strong balance sheet can allow us to manage the current volatility and emerge in a position of strength."

For earnings history and earnings-related data on Square (SQ) click here.

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