Payments firm Square recorded better than expected revenue for the first quarter, but recorded a greater than expected loss.
The company lost 14 cents a share, excluding some one-time costs, on revenue of $379 million in the quarter. Analysts, on average, expected a loss of 6 cents a share, excluding some items, on $345 million in revenue. The company’s
Square also raised its guidance range for 2016 adjusted Ebitda — a profitability metric that doesn’t take into account costs like stock-based compensation — to $8 million to $14 million, from $6 million to $12 million. The company also raised adjusted revenue guidance — which excludes its soon-to-end Starbucks relationship — for the year to $615 million to $635 million, from $600 million to $620 million.
Square’s stock was down about 4 percent in after-hours trading and later plunged as much as 12 percent.
Square went public in November in a high-profile offering. The company priced its IPO at $9 a share, below the range it had originally forecasted, as questions about its path to profitability and Dorsey’s two-CEO situation hung over the company. It opened its first day of trading at $11.20 a share and finished the day at $13.07.
The company generates the vast majority of its revenue from payment processing, but has been trying to add new businesses to help it differentiate its service and get more profitable.
Another thing to note: The so-called lock-up period on shares expires May 16, after which early investors are free to sell their shares on the open market.
Square also announced that it had accrued $50 million in costs associated with the settlement of a lawsuit with a college professor, Robert E. Morley, Jr., who claimed he had invented the Square card-reader but was unjustly cut out of the business.
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