Square Inc. announced its 2nd Quarter Financial Results on August 4th, 2020

Square Inc. (NYSE: SQ), a US mobile payment giant, announced its 2nd quarter financial results on the August 4th. 

Net revenue was increased by 64% although the company had operating loss and negative operating cash flow due to increased marketing expenses. We believe that high growth rate of its net revenue represents the drastic growth of the company. 

Due to the recent expansion of COVID-19, GPV (Gross Payment Volume) at restaurants or retailers was decreased by 17%. However, thanks to the US government funds, revenue brought by the mobile app Cash App was increased significantly by 361%.  According to Square Inc., the drastic growth of the Cash App’s revenue was partly driven by the government stimulus program, so they speculate that such drastic growth may not sustain at the same level during the remainder of the third quarter. 

Although subscription based revenue accounted for 18% compared to the total revenue, its growth rate was over 66% (3 months, YoY). As for the other financial index, its current ratio was 170% and ratio of shareholders’ equity to total assets was 25%.

Square, Inc. (NYSE: SQ) stock chart

Important Notice 

  1. Watanabe & Brothers’ Investment is holding shares of Square Inc.
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  3. Any opinions or statements expressed in this report are based on the author’s personal and subjective views, and are not the official views of the organization to which the author belongs.  In addition, although we have done our best efforts in making accurate assessments on the original financial statements, we cannot guarantee any complete accuracy of this report. We do not guarantee either that any future forecasts referred to in this report will certainly be realized. Investment in listed stocks, ETFs, etc. should be carried out under the responsibility of each investor, and even if the investor who read this report suffers a loss due to investment activities, Watanabe & Brothers’  Investment is not responsible for any liability.
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  5. This report was prepared on August 6th, 2020. 
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