Square Management Talks Cash App, Square Card, and More

Square's (NYSE: SQ) wild momentum persisted in the company's fourth quarter, as the financial technology company capped off the year with more strong top-line growth and an impressive jump in its adjusted earnings per share. Revenue climbed 51% year over year while adjusted revenue surged 64% over the same time frame. Meanwhile, Square's adjusted earnings per share increased to $0.14, up from $0.08 in the fourth quarter of 2017.

As Square's impressive business growth continues, investors looking for better insight into the trends behind this growth may want to look beyond these headline figures to the company's fourth-quarter earnings call. During the call, management discussed a range of important topics.

Here are some key quotes from the call.

The Cash App is fueling product innovation

Square's Cash App, a peer-to-peer payment app that is the most downloaded app of its kind (even outpacing PayPal's Venmo), continues to be a key driver for Square. Not only are monthly active users growing rapidly, more than doubling year over year to 15 million in December 2018, but the technology developed for the app is laying a foundation for product launches for sellers as well.

Square CEO Jack Dorsey explained:

Square Card is making a difference

Speaking of the company's Square Card, its new business card, the January-launched financial product for sellers is already off to a good start.

The card gives sellers instant access to funds from sales without having to deposit those funds into a checking account. In addition, sellers get 2.75% cash back when they purchase items or services from other Square merchants. These benefits allow merchants to easily reinvest sales back into their business to support operations and growth.

But there's another benefit Square is witnessing -- a benefit that is particularly helping underserved, smaller sellers. Dorsey explained:

One feature of the Square Card allows users to seamlessly manage personal and business expenses separately.

How Square manages risk with Square Capital

Square's fast-growing loan origination arm, which provides sellers with loans that are paid back through taking a percentage of a seller's daily sales, is growing rapidly. Square facilitated $1.6 billion worth of loans over the trailing 12 months, up 36% year over year.

Is Square taking on additional risk to achieve such impressive growth? Square CFO Amrita Ahuja said the company isn't. In fact, Ahuja believes the company's ability to adeptly manage risk with the product is one way it is differentiating from peers' loan products.

Overall, Square's earnings call reinforced the company's knack for building out its ecosystem in a way that solicits organic business growth while simultaneously increasing switching costs for its sellers by providing them with increasingly more value.

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Daniel Sparks owns shares of Square. The Motley Fool owns shares of and recommends PayPal Holdings and Square. The Motley Fool has a disclosure policy.