What: Following the company's second-quarter earnings release after the market close Wednesday, shares of mobile payments company Square (NYSE: SQ) leaped as much as 17.6% on Thursday, before paring back its gains to around 10.5% as of 1:50 p.m.
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The jump in the stock price was likely driven by Square's better-than-expected second-quarter results.
Image source: Square.
So what: Square reported revenue and adjusted earnings per share of $439 million and a loss of $0.08, respectively. This compares to revenue of $310 million and an adjusted loss per share of $0.20 in the year-ago period. On average, analysts were expecting the company to report revenue of $406 million and an adjusted loss per share of $0.11.
With Square's 41% year-over-year increase in revenue driving the company's adjusted EBITDA margin to 7% -- up about 7 points year over year and 14 points sequentially -- investors were likely happy to see proof of operating leverage as sales increase.
In a press release, management said it was "pleased with our second quarter results, which highlight strong growth at scale and a significant profitability milestone."
Now what: Going forward, the company expects better performance than it had originally expected for the year. It wrote:
Over the next year, investors should watch to see if Square continues to demonstrate steps toward regular profitability as sales increase.
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