Square Shares Fall Despite Earnings and Revenue Beat

Shares of payments company Square were heading higher in Wednesday’s session but sank in after-hours trading despite reporting a beat on the top and bottom line in its third quarter financial report.

Square reported earnings per share of 13 cents while analysts expected 11 cents. Revenue at $431 million was also ahead of the $413.9 million that was expected by analysts.

Adjusted revenue grew 68 percent year over year and it was the first quarterly profit for the company at $20 million. In the year ago period Square had reported a net loss of $16 million.

According to on the way out CFO Sarah Friar, the “big driver” in this profit was because of Square’s investment in EventBrite. “Clearly from the third quarter we’re seeing strong momentum in our businesses,” Friar said on the earnings call. “That is symptomatic of a strong macro environment but also of the value proposition.”

Friar is leaving the company to be the CEO of Nextdoor, a social media startup. Square CEO Jack Dorsey said on the call that a replacement has not been found for Friar yet.

For the quarter, subscription- and services-based revenue jumped 155 percent year over year to $166 million.

It may have been the guidance that sent traders into a panic. For the upcoming quarter, Square expects to earn between 12 and 13 cents. Analysts were waiting for 15 cents.

Disclaimer: We have no position in Square, Inc. (NYSE: SQ) and have not been compensated for this article.