Square Expands Caviar's Capabilities

Investment Analysis Clubs Saul’s Investing Discussions
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Caviar is Square’s restaurant delivery service. Scratch that. Caviar was Square’s food delivery service. Now customers can use the application as a mobile order-ahead platform too. Just the latest example of Square making its ecosystem a little stickier.

Investors in Square Inc (NYSE:SQ) have had good reason to celebrate this year. Shares in the payment processing company are up more than 70% year-to-date. The company’s meteoric rise has been powered by its strong revenue and earnings growth reported in recent quarters. In Square’s 2017 first quarter, the company reported adjusted revenue of $204 million, a 39% increase year-over-year, and total payment volume of $13.6 billion, a 33% annual increase.

Fueling this strong growth is Square’s subscription- and services-based revenue, which grew a remarkable 106% year-over-year. While Square does not always break down the individual components of this business segment, the first quarter’s shareholder letter did state that Caviar, Square Capital, and Instant Deposit all “contributed significantly” to the division’s growth. The letter also stated Caviar’s order volume had more than doubled from the previous year’s first quarter.

While many were skeptical of Square’s purchase of a restaurant delivery service when it first acquired Caviar in 2014, Square has since proven the doubters wrong by carefully incorporating the platform into its larger ecosystem. The company’s leadership has also broadened the service’s scope, adding more function so that it is now much more than a simple delivery service. In March, Square introduced Caviar Pickup, a new feature that allows diners to order ahead for their food via Caviar’s app or online.

Read the entire article at https://www.fool.com/investing/2017/07/08/squares-caviar-now…

Matt
Long SQ
MasterCard (MA), Nestle (NSRGY), PayPal (PYPL), and Verizon (VZ) Ticker Guide
See all my holdings at http://my.fool.com/profile/CMFCochrane/info.aspx

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Matt,

I saw your article and my mouth just dropped when I read it because just days earlier I had been discussing this very concept! I love restaurant food but I don’t love eating out. I bought more shares yesterday.

Peace,
Dana

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I use a slew of delivery services, but have never tried Caviar. Will have to do that sometime soon. Currently of GrubHub, DoorDash and UberEats, UberEats has been my go to as of late. There is a flat delivery fee and the tip is included (or at least there is nowhere to tip in the app). If one wants to tip, it has to be done in cash with the driver and there is not an expectation.

UberEats also seems to be the quickest and has restaurants that guarantee delivery in under 30 minutes. Pretty good for the City of Chicago.

UberEats doesn’t seem to have the volume of restaurants as the other two, but am sure they are building. I’ll have to try out Caviar and report back to the group.

A.J.
Delivery connoisseur

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I love restaurant food but I don’t love eating out.

I agree, Dana! Well, I like eating out sometimes, but usually I would much rather have food magically appear at my door step while I’m binging on Netflix shows after the kids are in bed.

When I first started following SQ I really didn’t get the Caviar acquisition. I thought it was just a random bolt-on that might drive company revenue. But there was a method to the madness and I now believe it complements the whole very nicely. With its new capabilities, even more so. It also helps level the playing field between small restaurants and the much larger chains which can afford to develop their own such food ordering apps.

Matt
Long SQ
MasterCard (MA), PayPal (PYPL), Skechers (SKX), and Verizon (VZ) Ticker Guide
See all my holdings at http://my.fool.com/profile/CMFCochrane/info.aspx

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