Square reported its fourth quarter results after market closed today and shares look like they are down about 1.5% in AH trading:
Square (SQ) late Tuesday reported adjusted fourth-quarter earnings that topped views and forecast full-year 2018 profit that was in line with expectations.
Square said adjusted earnings were 8 cents a share, up 60% from a year earlier, beating views. Revenue rose 36% to $616 million, topping consensus estimates. A year earlier, Square earned 5 cents a share on sales of $452 million. Analysts expected Square to report earnings of 7 cents on sales of $602 million for the period ended Dec. 31.
For the current quarter, its first, Square forecast revenue of $612 million at its midpoint of guidance vs. estimates of $601 million. For the full-year, Square said it expects revenue of $2.85 billion, just above expectations of $2.84 billion.
Read more at https://www.investors.com/news/technology/square-adjusted-ea…
I have only briefly skimmed the shareholder letter, much less look at the conference call, but I like the growth, with the caveat that its coming with lots of spending.
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
Adjusted Revenue (millions) Q1 Q2 Q3 Q4
2014 82
2015 89 111 118 135
2016 146 171 178 192
2017 204 240 257 283
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)
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
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
2017 Q4 Earnings:
Adjusted Revenue Growth (millions)
2016 Q4 TTM Revenue = 687
2017 Q4 TTM Revenue = 984
YOY TTM Adj Revenue Growth =43.2%, previous quarter 41.7%
*Remember adjusted revenue is what you want to look at, not total net revenue, for Square
EPS Growth (GAAP - diluted)
2016 Q4 TTM Earnings = ($0.50)
2017 Q4 TTM Earnings = ($0.16)
YOY TTM EPS Growth = NA
EPS Growth (Adjusted)
2016 Q4 TTM Earnings = $0.03
2017 Q4 TTM Earnings = $0.27
YOY TTM EPS Growth = 800%
- Yes, that’s kinda ridiculous and don’t put any stock in an 800% growth rate
Adjusted P/E (Check Current Price) = 45.91/.27 = 170
Other quick and dirty highlights:
Subscription and services-based revenue: $79M, +96% YOY and +21.5% sequentially
Square Capital: Loan volume +23% YOY, 47K business loans for $305M - Note these numbers are essentially flat sequentially. Losses were below 0.1% reflecting investments in risk management.
Instant Deposit: No breakdown of Instant Deposit numbers this quarter
Take rate revenue: 2.93%
Take rate profit: 1.07%
Cash app: 7M active users in December, #1 finance app in 4Q, top 35 app overall
Operating expenses: Non-GAAP operating expenses were up 44% year over year, accounting for 71% of Adjusted Revenue in the fourth quarter of 2017, compared to 72% in the fourth quarter of 2016. For the full year of 2017, operating expenses were $894 million, up 20% from the full year of 2016.
Cash/cash equivalents: $1.1B, previous quarter $1.1B
2018 Full Year Guidance
Adj. Revenue: $1.3B to $1.33B, +34% YOY
Adj. EBITDA: $240M to $250M, +19% YOY
GAAP EPS: ($0.08) to ($0.04)
Adj. EPS: $0.43 to $0.47
When the market corrected earlier this month, I picked up more shares in the high $30s. This is a stock I like to add to on dips, not strength. I’ll be back with conference call notes in a few days (probably this weekend). Please feel free to add comments or thoughts.
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