Square Inc. (SQ) - Get Report shares surged higher Wednesday after the online payments group posted stronger-than-expected second quarter earnings thanks to a surge in app use linked to stimulus and unemployment benefits.
Square, which released its earnings one day ahead of schedule after what it called "early external access of the company’s quarterly financials' to the group's financials", said gross profit rose 28% from last year to $597 million while revenues surged 64% to a Street-beating $1.92 billion
Square Capital said it processed around $873 million in paycheck protection payment (PPP) loans over the quarter, while overall quarterly gross payment volumes grew 17.5% to $26.8 billion
Square shares were marked 13.6% higher in early trading Wednesday to change hands at $155.23 each, an all-time high that would extend the stock's year-to-date gain to around 145% and value the San Francisco, California-based group at $68 billion.
"Notwithstanding management’s acknowledgement that Cash App’s performance may have benefited from stimulus and unemployment benefits, results for the consumer oriented platform demonstrated impressive strength during the quarter," said JMP Securities analyst David Scharf, who carries a market-perform rating on the stock.
"Total monthly active accounts topped 30 million and the number of Cash Card holders reached 7 million, a doubling versus last year. Cash card spend was up 50% sequentially, with the cash balances stored in accounts 86% higher than just three months ago," he added. "Demonstrating management’s vision of an ecosystem for the stored value vehicle, the company is seeing an increase in the number of products being used in the first month of activation."