Amrita Ahuja to Join Square as Chief Financial Officer

January 03, 2019 04:05 PM Eastern Standard Time

SAN FRANCISCO--(BUSINESS WIRE) -- Square, Inc. (NYSE: SQ) announced today that Amrita Ahuja will join the company as Chief Financial Officer. Amrita will start in January and will report to CEO Jack Dorsey.

Amrita is currently the CFO of Blizzard Entertainment, a leading global developer and publisher of interactive software products and entertainment content with over $2 billion in annualized revenue and a division of Activision Blizzard (NASDAQ: ATVI). Amrita has been with Activision Blizzard for over eight years in a number of finance and strategy roles across the company, including SVP of Investor Relations, VP of Finance and Operations, and VP of Strategy and Business Development. Prior to Activision Blizzard, she held various roles at Fox Networks Group, the Walt Disney Company, and Morgan Stanley. She received her M.B.A. from Harvard Business School and her A.B. from Duke University.

“In Amrita, we have found an amazing, multidimensional business leader,” said Jack Dorsey, Square CEO. “Amrita brings the ability to consider and balance opportunities across our entire business, and she will help strengthen our discipline as we invest, build, and scale. She is willing to challenge herself and others, has the courage to take principled risks, and is passionate about our customers and our purpose.”

“Amrita has a rare combination of financial acumen, strategic operational experience, and the ability to dive deep into a multifaceted business,” said David Viniar, Square’s Lead Independent Director and former CFO of Goldman Sachs. “She will be a fabulous addition to Square, and I look forward to working with her as she joins our high-caliber executive team.”

“I’m incredibly inspired by Square’s purpose as it has personal resonance for me,” said Amrita. “My parents were the type of entrepreneurial business owners for whom Square was created. I believe Square is building the most innovative commerce ecosystem for sellers and consumers, and I am excited to help the company execute against this massive opportunity.”

(Reuters) - U.S. financial technology provider Fiserv Inc said on Wednesday it had agreed to buy payment processor First Data Corp in a $22 billion (£17 billion) all-stock deal, the biggest ever acquisition in the booming market for digital payments.

The deal illustrates how providers of commoditised banking services are seeking to diversify by developing or acquiring technology that powers transactions such as credit card purchases and payments through a mobile phone.

Fiserv, one of the biggest technology providers to banks by revenue, said in a statement the acquisition enables it to offer services to financial clients, from enrolling new customers to providing multiple ways to handle physical or digital payments.

In an interview, Fiserv President and Chief Executive Jeffery Yabuki said the deal combines "the largest, broadest and best processor of card-based payments" with his firm's expertise in other areas of payments, such as bank transfers.

Square unveils new debit card for small-business customers

Jan 17, 2019

Square Inc. on Thursday announced a new debit card for small-business owners, a move that enables the fintech company to further participate in the economics of payment transactions.

With the Square Card, which is free to obtain and use, business owners will be able to spend their Square balances immediately in stores and online. Previously, those who used Square for payment processing had to wait several days for their funds to transfer to their banks accounts, or else they could pay a small fee for instant access to their money.

Square earns transaction fees at the time sellers make their purchases with the card.

Square will give cardholders a 2.75% discount when they use the Mastercard Inc.-branded card to buy items from another Square seller, a nod to the standard payment-processing fee that sellers have come to know from Square.

The company is no stranger to offering stored-value debit products, having launched the consumer-focused Cash card in 2017. Consumers don’t pay to use the Cash card, but Square generates revenue from it via transaction fees.

Instinet analyst Dan Dolev wrote in a November note to clients that the Cash Card is the fourth largest revenue component within Square’s software and services segment, based on his recent chat with the company’s investor-relations team. The various software and services components together are expected to have brought in $253 million during 2018, according to FactSet estimates. Square said in its second-quarter investor letter that Cash App customers spent $250 million with the card last June, almost triple the amount spent in December 2017.

Square Stock Could Rally With Its New Card Offering, Says Analyst

Jan. 24, 2019

Nomura Instinet believes Square ’s (ticker: SQ) new card offering will disrupt traditional banks.

Last week Square announced the launch of a free debit Mastercard to small businesses that offers a 2.75% discount on purchases made at other Square sellers.

The firm’s analyst Dan Dolev reiterated his Buy rating for Square stock, citing the large opportunity in the business-to-business spending market. The analyst increased his price target for the shares to $110 from $108, representing about 57% upside to the current level.

“Although we believe the near-term revenue opportunity from Square Card is modest, the rise in B2B card penetration, and the fortification of the ecosystem from driving seller engagement, are significant long-term positives,” Dolev wrote on Thursday.

The analyst estimated the total addressable market in North America for Square in the small- to medium-sized business spending space could be $50 billion. He predicts the new cards will nurture the ecosystem of Square business users because of the discount incentives.

“SQ’s B2B debit card increases SQ’s disruption of services that are traditionally offered by banks, as sales are stored in the Square balance instead of being deposited to the bank,” he wrote.

Square shares fall after Raymond James downgrades stock and predicts nearly 30% retreat

29 Jan 2019

Raymond James is telling investors to scale back their positions in payments company Square.

The firm downgraded the stock to "underperform" from "market perform," citing a lack of growth opportunities on the horizon and its move into banking as a negative catalyst for the stock.

Shares fell more than 6.5 percent following the call Tuesday.

"We believe organic growth peaked in 3Q18 and growth on the all-important subs and services line will likely materially decelerate in 2Q19," Raymond James analyst John Davis said in a note to clients Tuesday. "We believe the risk/reward is negatively skewed and recommend investors reduce positions."

The firm has a $56 fair value price for Square's stock — roughly 27 percent below where it closed on Monday. The stock has been on a tear over the past year, up 61 percent from last January. In 2019 alone, it's up 30 percent.

Raymond James is also bearish on Square's move into banking. The fintech company re-filed its application for an industrial loan company charter in December after pulling it earlier in the year to answer questions from regulators. The move would allow Square to operate without going through outside banks and intermediaries. If approved, Square would also get access to a coveted feature of the banking world — deposit insurance.

"Adding more credit- and bank- related products increases the cyclicality of an already macro sensitive business and would likely be multiple dilutive," Davis said.

Square is best known for its credit-card processing hardware. But it also has a popular peer-to-peer payment app, the Cash App, has moved into small business lending through Square Capital, and debuteda debit card for small businesses earlier in January.

Revenue upside from some of its newer products is "likely to prove more difficult" this year though, and the fintech company will have to rely on its core businesses, according to Raymond James.

"We believe revenue upside will likely be more muted this year as subs and services will likely once again need to be the driver of significant upside," Davis said.

9 fintech stocks to invest in this year

Feb 14, 2019

We’ve all read about the disruptive potential of fintech, and how millennials are trading traditional forms of payment for mobile solutions like Venmo and shunning old-school wealth management for platforms like Robinhood.

If you’re interested in the future of finance, it’s worth taking some time to play with these apps and experience their potential. However, the reality of fintech in 2019 — and the truth of its investment potential — goes far beyond what you see in smartphone apps.

Here are nine dynamic companies with solutions that are revolutionizing payment processing, accounting, investing and other financial services. All are long-term buys.

Intuit

PayPal

Alibaba

SquareGreen Dot

BlackLine

Visa

Global Payments

Envestnet

Global X FinTech ETF

Square falls after reporting slower growth and weak Q1 earnings guidance

Square reported fourth-quarter earnings that beat analysts' expectations on Wednesday. But guidance for the first quarter and revenue growth were weaker than expected.

Here's how the company did compared with Refinitiv consensus estimates:
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• Earnings: 14 cents per share vs. 13 cents per share, forecast by Refinitiv
• Adjusted revenue: $464 million vs. $454 million, forecast by Refinitiv

Shares fell more than 7 percent following Square's quarterly report.

The company brought in $464 million of adjusted revenue for the fourth quarter, a 64 percent rise year over year. Square reported adjusted earnings per share of 14 cents, a 6 cent bump from a year earlier.

The San Francisco-based company, run by Twitter CEO Jack Dorsey, issued earnings-per-share guidance for the first quarter between 6 and 8 cents. Wall Street was looking for 11 cents. Its revenue guidance for the first quarter was in line with analysts' expectations.

Slower growth also weighed on Square's stock price. The company's adjusted revenue grew 53 percent year over year, down from 56 percent in the third quarter. Wall Street had been expecting roughly 60 percent revenue growth year over year.

Subscription and services-based revenue, a closely watched metric by Wall Street, was a bright spot. The company reported $194 million in that portion of revenue, 144 percent jump year over year. For the full year, Square notched $592 million in subscription and services-based revenue, up 134 percent year over year.

Square's peer-to-peer Cash App had another break-out quarter with more than 15 million monthly active customers in December 2018, more than double what it was a year earlier.

"Cash App more than doubled its monthly active customers, and products launched in the past five years are now more than half of our adjusted revenue," Square CEO Jack Dorsey told CNBC in a statement.

The payment company announced it hired Amrita Ahuja as its new CFO in January. Wednesday marks her first earnings call in the position, filling former CFO Sarah Friar's void after she stepped down last year. Ahuja held the same position at Blizzard Entertainment, a division of Blizzard.

Last quarter , the company beat analysts' expectations on earnings and revenue but came up slightly short on forward guidance. Subscription and services-based revenue was especially strong, up 155 percent year over year.

• Adjusted earnings: 11 cents per share vs. 8 cents per share, forecast by Refinitiv
• Adjusted revenue: $489 million vs. $478 million, forecast by Refinitiv

Gross payments volume came in at $22.6 billion, versus $22.8 billion analysts were expecting. Second quarter earnings also came in light, with the company forecasting between 14 and 16 cents per share, with revenue between $545 million and $555 million, both lower than anticipated.

I think they're intentionally providing low guidance #s so analysts can lower their estimates and then they beat them. I'm seeing a trend...

Q3 guidance vs what they reported

Total net revenue: $1.13 billion to $1.15 billion . . . reported
Adjusted Revenue: $590 million to $600 million . . . reported
Adjusted EBITDA: $106 million to $110 million . . . reported
Adjusted EPS: $0.18 to $0.20 (vs analyst estimate for EPS of $0.22) . . . reported


Q2 2019 guidance vs what they reported

Total net revenue: $1.09 billion to $1.11 billion . . . reported $1.17 billion -- beat
Adjusted Revenue: $545 million to $555 million (vs analyst estimate for adjusted revenue of $556 million) . . . reported $563 million -- beat (and vs analyst estimate for $557.1 million)
Adjusted EBITDA: $90 million to $94 million . . . reported $105 million -- beat
Adjusted EPS: $0.14 to $0.16 (vs analyst estimate for EPS of $0.19) . . . reported $0.21 -- beat (and vs analyst estimate for $0.17)


Compare their Q1 2019 guidance vs what they reported today

Total net revenue: $918 Million to $938 Million . . . reported $959 million -- beat
Adjusted Revenue: $472 Million to $482 Million . . . reported $489 million -- beat
Adjusted EBITDA: $47 Million to $51 Millin . . . reported $62 million -- beat
Adjusted EPS: $0.06 to $0.08 . . . reported $0.11 -- beat


Their Q4 2018 guidance vs what they reported

Total net revenue: $895 Million to $905 Million . . . reported $933 million -- beat
Adjusted Revenue: $446 Million to $451 Million . . . reported $464 million -- beat
Adjusted EBITDA: $75M to $80M . . . reported $81 million -- beat
Adjusted EPS : $0.12 to $0.13 . . . reported $0.14 -- beat


Their Q3 2018 guidance vs what they reported

Total net revenue: $840 Million to $860 Million . . . reported $882 million -- beat
Adjusted Revenue: $407 Million to $412 Million . . . reported $431 million -- beat
Adjusted EBITDA: $62 Million to $65 Million . . . reported $71 million -- beat
Adjusted EPS: $0.08 to $0.10 . . . reported $0.13 -- beat


Their Q2 2018 guidance vs what they reported

Total net revenue: $740 Million to $760 Million . . . reported $815 million -- beat
Adjusted Revenue: $355 Million to $360 Million . . . reported $385 million -- beat
Adjusted EBITDA: $60 Million to $64 Million . . . reported $68 million -- beat
Adjusted EPS: $0.09 to $0.11 . . . reported $0.13 -- beat


Their Q1 2018 guidance vs what they reported

Total net revenue: $605 Million to $620 Million . . . reported $669 million -- beat
Adjusted Revenue: $290 Million to $295 Million . . . reported $307 million -- beat
Adjusted EBITDA: $30 Million to $33 Million . . . reported $36 million -- beat
Adjusted EPS: $0.03 to $0.05 . . . reported $0.06 -- beat


Their Q4 2017 guidance vs what they reported

Total net revenue: $585 million to $595 million . . . reported $616 million -- beat
Adjusted Revenue: $262 million to $265 million . . . reported $283 million -- beat
Adjusted EBITDA: $34 million to $37 million . . . reported $41 million -- beat
Adjusted EPS: $0.05 to $0.06 . . . reported $0.08 -- beat


In every instance, they end up exceeding their guidance range *and* beating the lowered analyst estimates.