Here’s a look at the numbers:
Total Net Revenue (millions) Q1 Q2 Q3 Q4
2014 250
2015 374 310 332 374
2016 379 438 439 452
2017 462 552 585 616
2018 669
Adjusted Revenue (millions) Q1 Q2 Q3 Q4
2014 82
2015 89 111 118 135
2016 146 171 178 192
2017 204 240 257 283
2018 307
Adjusted EBITDA (millions) Q1 Q2 Q3 Q4
2016 13 12 30
2017 27 36 34 41
2018 36
EPS (diluted) Q1 Q2 Q3 Q4
2014 (0.25)
2015 (0.34) (0.20) (0.35) (0.34)
2016 (0.29) (0.08) (0.09) (0.04)
2017 (0.04) (0.04) (0.04) (0.04)
2018 (0.06)
EPS (Adjusted) Q1 Q2 Q3 Q4
2015 (0.05)
2016 (0.05) 0.02 0.01 0.05
2017 0.05 0.07 0.07 0.08
2018 0.06
GPV (billions) Q1 Q2 Q3 Q4
2015 7.1 8.8 9.5 10.2
2016 10.3 12.5 13.2 13.7
2017 13.6 16.4 17.4 17.9
2018 17.8
2018 Q1 Earnings:
Adjusted Revenue Growth (millions)
2017 Q1 TTM Revenue = 745
2018 Q1 TTM Revenue = 1,087
YOY TTM Adj Revenue Growth = 45.9%, previous quarter 43.2%
*Remember adjusted revenue is what you want to look at, not total net revenue, for Square
EPS Growth (Adjusted)
2017 Q1 TTM Earnings = $0.13
2018 Q1 TTM Earnings = $0.28
YOY TTM EPS Growth = 115%
Adjusted P/E (Check Current Price) = 48.66/0.28 = 173
Other quick and dirty highlights:
Subscription and services-based revenue: $97M, +98% YOY and +22.8% sequentially
Square Capital: Loan volume +35% YOY, 50K business loans for $339M - Note these numbers are essentially flat sequentially. Losses were again below 0.1% (~$18M) reflecting investments in risk management.
Instant Deposit: Benefited in volume growth in seller base and Cash App user base. Introduced in UK this quarter.
Take rate revenue: 2.93% - flat sequentially
Take rate profit: 1.09% - up 2 basis points sequentially
Cash App: Introduced in UK, #1 finance app in 1Q, I did not see an update on active users, last quarter it was 7M
Operating expenses: Non-GAAP operating expenses were up 49% year over year, accounting for 72% of Adjusted Revenue in the fourth quarter of 2017.
Cash/cash equivalents: $1.2B, previous quarter $1.1B
Updated 2018 Full Year Guidance
Adj. Revenue: $1.4B to $1.43B
Adj. EBITDA: $240M to $250M
GAAP EPS: ($0.04) to ($0.00)
Adj. EPS: $0.44 to $0.48
Quick takeaway: I need to go through the numbers more, I’ve only given them a quick glance. But expenses seem to be rising essentially as fast as adj. revenue. Notably raised guidance for revenue, not adjusted EBITDA. company did raise EPS guidance (both GAAP and adjusted) however.
That being said, I don’t think any of that matters as long as subscription and services-based revenue keeps growing like they are - as Bear aptly noted above. Large sellers are moving to Square for its ecosystem, not its payment processing services. From the shareholder letter:
Larger sellers often have business needs that extend beyond payments, such as managing multiple employees and locations and tracking inventory. Square provides integrated solutions to meet these diverse needs—saving sellers the time and burden of stitching together individual products from different vendors.
Larger businesses, like other Square sellers, choose Square because they value our cohesive ecosystem: More than half of larger sellers used two or more Square products during 2017. As these sellers use more products, we deepen our relationship with them, and they drive meaningful growth for Square: In the first quarter, total net revenue from larger sellers grew 47% year over year, and Adjusted Revenue from larger sellers grew 60% year over year.
Again, that’s just a quick takeaway. I’ll have more after I get a chance to go through the company’s conference call this weekend.
Matt
Long SQ
MasterCard (MA), PayPal (PYPL), Skechers (SKX) and Square (SQ) Ticker Guide
See all my holdings at http://my.fool.com/profile/TMFCochrane/info.aspx