Square Updates First Quarter 2020 Revenue and Gross Profit Outlook for COVID-19
March 24 2020 - 4:05PM
Business Wire
Square (NYSE:SQ) has been closely monitoring the impact of
COVID-19 as the environment evolves. The company has focused first
on the health and safety of its employees, customers, and local
communities, and prioritized investments and products that help
address the needs of its customers during this time.
Prior to the impact of COVID-19 in the U.S., Square achieved
strong growth during the first two months of the quarter. In
January and February, gross profit increased 47% year over year, or
51% year over year excluding Caviar from the 2019 period, driven by
momentum across both its Seller and Cash App ecosystems. In January
and February, Seller ecosystem gross profit grew 32% year over
year, and Cash App ecosystem gross profit grew 118% year over
year.
Starting in March, the effects of COVID-19 began to impact the
company’s growth, in particular due to a slowdown in gross
processing volume (GPV) for its Seller ecosystem. While the
beginning of March was relatively in-line with the company’s
expectations, over the trailing ten-day period Seller GPV has
declined by approximately 25% year over year, with greater declines
in recent days. This has offset relative strength in the Cash App
ecosystem, where the impact on gross profit growth has been less
pronounced.
As a result, Square is revising its growth expectations for the
first quarter of 2020 and now expects to report total net revenue
in the range of $1.30 to $1.34 billion and gross profit in the
range of $515 to $525 million. This range assumes a further
deceleration in overall GPV through the last week of March, beyond
the levels we have seen in recent days. The company expects to
report first quarter 2020 net income (loss) per share, Adjusted
EBITDA, and Adjusted EPS that are below the most recent respective
guidance ranges provided as of March 5, 2020, following our
convertible debt issuance and earnings on February 26, 2020. Given
the uncertainty around COVID-19, Square is withdrawing its
full-year 2020 guidance and expects to provide a further update on
its first quarter 2020 earnings call in May.
In addition, Square is posting a presentation on its Investor
Relations website, which includes materials from its
originally-planned Investor Day that highlight the long-term
potential for its Seller and Cash App ecosystems, and provides an
overview of its market opportunity and unit economics through the
fourth quarter 2019.
Square will host a conference call and webcast at 2:00 p.m.
Pacific Time/5:00 p.m. Eastern Time today, March 24, 2020 to
discuss this update. The domestic dial-in for the call is (877)
683-2081. The Conference ID is 9374557. To listen to a live audio
webcast, please visit Square’s Investor Relations website at
http://square.com/investors. An audio replay will be available
following the call.
About Square, Inc.
Square, Inc. (NYSE: SQ) revolutionized payments in 2009 with
Square Reader, making it possible for anyone to accept card
payments using a smartphone or tablet. Today, we build tools to
empower businesses and individuals to participate in the economy.
Sellers use Square to reach buyers online and in-person, manage
their business, and access financing. And individuals use Cash App
to spend, send, store, and invest money. Square has offices in the
United States, Canada, Japan, Australia, Ireland, and the UK.
Safe Harbor Statement
This press release contains forward-looking statements within
the meaning of the Safe Harbor provisions of the Private Securities
Litigation Reform Act of 1995. All statements other than statements
of historical fact could be deemed forward-looking, including, but
not limited to, statements regarding assumed or potential future
performance and expected financial results of Square, Inc. and its
consolidated subsidiaries (the Company), the business plans and
strategies of the Company, future growth and growth rates of the
Company’s businesses, products and services, and trends in the
Company’s markets, businesses and financial and operating metrics.
Such statements are subject to a number of known and unknown risks,
uncertainties, assumptions, and other factors that may cause the
Company’s actual results, performance, or achievements to differ
materially from results expressed or implied in this press release.
Investors are cautioned not to place undue reliance on these
statements.
Risks that contribute to the uncertain nature of the
forward-looking statements include, among others, uncertainty
around Covid-19 and the effects of government and other measures
seeking to contain its spread; risks related to an economic
downturn or recession in the United States and in other countries
around the world; and changes in political, business, and economic
conditions; as well as other risks listed or described from time to
time in the Company’s filings with the Securities and Exchange
Commission, including the Company’s Annual Report on Form 10-K for
the fiscal year ended December 31, 2019 and risks to be discussed
on today’s investor conference call. All forward-looking statements
are based on information and estimates available to the Company at
the time of this press release and are not guarantees of future
performance. Except as required by law, the Company assumes no
obligation to update any of the statements in this press
release.
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version on businesswire.com: https://www.businesswire.com/news/home/20200324005714/en/
Media Contact: press@squareup.com
Investor Relations Contact: ir@squareup.com
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