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Square Warns on First-Quarter Results; Withdraws Full-Year Guidance

Square says effects of coronavirus have intensified in past 10 days and that first-quarter results will be sharply affected.
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Square  (SQ)  warned Tuesday that first-quarter results will be sharply affected by the effects of the coronavirus as gross processing volume has fallen 25% over the past 10 days.

The company said it now expects to report first-quarter net revenue of $1.3 to 1.34 billion and a gross profit of $515 million to $525 million. The company said the range “assumes a further deceleration in overall GPV through the last week of March, beyond the levels we have seen in recent days.”

Square said it expects to report first-quarter adjusted EBITDA and adjusted earnings per share below the guidance offered on March 5 following its issuance of convertible debt. At the time it forecast a loss of 4 cents a share to 2 cents a share. For the full year it had forecast adjusted EPS of 88 cents a share to 92 cents a share.

Square said the weakness in gross processing volume “has offset relative strength in the Cash App ecosystem, where the impact on gross profit growth has been less pronounced.”

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Shares of Square rose 80 cents, or 1.7%, to $47.11 in after-hours trading after gaining 15.75% in the regular session on a strong bounce in markets in anticipation of Congressional coronavirus legislation to offset the economic effects of the coronavirus and related shelter-in-home orders. Tuesday's gain was the best single-day percentage increase ever for Square. 

Elsewhere, fintech stocks were higher Tuesday. 

Among fintech ETFs, The Amplify CrowdBureau ETF  (LEND)  rose $1.26, or 12.6%, to $11.26.

The ARK Fintech Innovation ETF  (ARKF)  rose $1.66, or 9.18%, to $19.74.