Square reports $20 million profit for quarter

Square, the San Francisco payments company, made a profit of $20 million on revenue of $431 million in its third quarter, beating Wall Street analysts’ expectations.

Revenue was up 68 percent from a year ago. The company’s revenue was $257 million last year during the same period.

Analysts had forecast adjusted revenue in the third quarter of $414.1 million. Adjusted revenue omits some of the company’s transaction costs.

Square’s profit of $20 million stands in contrast to the past year, when the company reported a string of quarterly losses. In the third quarter of 2017, Square reported $16 million in losses.

The profit includes a gain of $37 million from the company’s stake in Eventbrite. Square invested in the company last year as part of a deal to process payments for the online ticketing startup, which went public this year.

Shares of Square dropped 20 percent in the days following the Oct. 10 announcement that Sarah Friar, the company’s chief financial officer, planned to step down to become CEO of Nextdoor. The company’s stock is up more than 100 percent this year because of growth in its Cash payment system and Caviar delivery service, according to analysts surveyed by Bloomberg.

Square introduced a new,

portable payment device, the $399 Square Terminal, in October. CEO Jack Dorsey called the Terminal a highlight of recent months, likening other payment terminals to a stegosaurus.

“We fully expect (sellers) to surprise us with how they use it and where they use it,” he said. Unlike the company’s original device, a card reader that plugs into smartphones and swipes magnetic-stripe credit and debit cards, the Terminal is a standalone, battery-powered device that can handle chip cards and has a built-in receipt printer.

Dorsey also said the search for Friar’s replacement is ongoing, and that the company would not share a timeline to fill the position.

The Chronicle reported this week that Square, which has been expanding its offices around the country, is considering Oakland’s Uptown Station for a leasing deal. Dorsey has expressed concern about the taxes the company would pay under Prop. C, the new measure passed by San Francisco voters Tuesday that raises taxes on big businesses to fund homeless services. Square is also disputing the amount it owes San Francisco under the city’s gross receipts tax.

Square’s stock closed at $82.69 on Wednesday. Shares fell about 5.1 percent in after-hours trading.