Square‘s Q4 earnings 2018 results came after market close on Wednesday (Feb. 27), showing the continuation of several trends seen in recent quarterly reports. These trends included double-digit gross payment volume (GPV) growth, as measured year on year, double-digit transaction gains and traction in newer technology offerings — such as point-of-sale (POS) financing to help sellers log their own top-line growth.
In terms of headline numbers, the payments processing firm reported adjusted revenues of $464 million, up 64 percent year on year, while the Street had looked for $454 million. Earnings on an adjusted basis were $0.14 per share, which matched the Street.
Gross Payment Volume And Large Seller Mix Growth
Digging into the numbers a bit, GPV was up 28 percent in Q4 to $23 billion. Transaction-based revenue was up 27 percent to $668 million. The Cash App, Square said, had more than 15 million monthly active users in December 2018, more than double the number seen in the final month of 2017.
In terms of seller mix, those with annualized volumes north of $500,000 were 24 percent of the GPV, while those between $125,000 and $500,000 were 28 percent. That means larger sellers made up 51 percent of the mix, compared to a similar tally of 47 percent in the same period last year. (Management also spotlighted the fact that verticals such as restaurants are seeing increased momentum with Square’s offerings.)
With more granular detail on mix and technology adoption, newly joined Square CFO Amrita Ahuja said during the conference call with analysts that 30 percent of those sellers serve customers across more than one channel on Square. She added that Virtual Terminal, Invoices and eCommerce API offered up more than 10 percent of the company’s GPI in Q4.
Square also said its recently launched Payroll offering has been useful in helping sellers manage operations, as smaller firms may be relatively underserved by traditional payroll providers. As much as one-third of firms that signed on to Square Payroll throughout 2018 were new to the company, according to supplemental materials filed by Square with its earnings announcement.
In Q4, Square Capital facilitated 72,000 business loans at $472 million, up 55 percent year on year.
In reference to questions about installment payment options (where payment plans can be set up for purchases ranging from $250 to $10,000), introduced during the final months of 2018, CEO Jack Dorsey noted the introduction is still “early,” but that the offering gives Square’s sellers a “tool” that can help compel customers to make a purchase.
Hardware revenue in Q4 was $18 million, up 51 percent year on year, and driven by Square Terminal, Square Register and third-party peripherals. All this leads to — as Dorsey said on the call — an “ecosystem” for the company’s sellers and customers.
In his comments on the Square Card, a free business debit card that allows sellers to access funds upon logging sales, Dorsey said the firm has identified a “pain point” that can be addressed by linking accounts and helping owners invest in their businesses. Square estimated that as much as 40 percent of Square Card beta sellers (per research conducted last month) did not previously have a business debit card. He noted that the card enables new businesses to launch without the need for traditional banking in place, which he termed “pretty profound.” Elsewhere on the call, he said the card can help underserved, underbanked sellers.
Ahuja and Dorsey also explained on the call how there had been a “network effect” that helped the company see growth in products and services that were announced and launched within the last five years. Moving forward, management said that focus would remain on mobile payments and online initiatives.
In after-hours trading, Square shares fell as much as 6 percent, as guidance on an adjusted basis of between $0.06 to $0.08 per share missed the Street estimate of $0.11. Square said it will continue to invest in growth.
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Latest Insights:
Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out our February 2019 Payments And The Platform Economy Report
Cash App, debit cards, earnings, Editors’ Picks, Featured News, GPV, growth, Mobile Payments, News, payroll, Q4, revenue, sellers, Square
Article source: https://www.pymnts.com/earnings/2019/square-q4-gpv-growth-seller-mix-cash-app-card-payroll/
Consumers who rent a vacation home through Airbnb must trust that the keys will be there for them upon arrival, as much as the host must trust that they’ll be paid in a timely manner, and that their property won’t be damaged.
As the sharing economy grows globally, fostering that confidence and trust between buyers and sellers has become more crucial for platforms to stay relevant and competitive. They must also excel at securely handling payments and personal data, while recommending services at the right moment to enhance transactions along the way.
In the new Payments And The Platform Economy Playbook series, powered by Yapstone, PYMNTS examines the latest developments in the platform economy, and seeks to offer a roadmap for managing risks, optimizing rewards and creating a trusted business environment.
Around the Payments and Platform Economy World
A job marketplace platform in India is looking to connect trained trade workers with employers. Co-founder and CEO Pravin Agarwala of BetterPlace asserted that more than 60,000 workers have been onboarded since its 2015 launch, and more than 1,000 large employers are using the service. The digital platform provides hiring, training, compliance management and payroll solutions to its clients, and is geared toward the facilities management, private security and logistics industries, to name a few.
Further east, Airbnb is taking off in South Korea, with a reported 2.9 million tourists using the platform in 2018, a 56 percent increase over the prior year. While hosts in rural communities are legally allowed to accept both Korean citizens and foreigners as guests, hosts in urban areas can only accept those from outside the country. The South Korean government indicated it intends to ease restrictions on urban hosts, as a homesharing bill was submitted to its parliamentary committee on culture, sports and tourism in 2017 — a move that would help normalize and boost the homesharing industry in the country.
This is not to say, though, that sharing economy platforms are completely ironclad. Cybercriminals have recently targeted apps like Uber and Airbnb to launder money, which is then further used for committing illegitimate activities. Platforms need to pay careful attention to fraud across dozens of markets, meaning the ability to detect and manage fraud will only become more crucial as the sharing economy grows.
Read these and the rest of the latest headlines in the Tracker.
Airbnb on Payments, User Friction and Security Challenges in a Global Market
As sharing economy platforms expand globally and become more popular, the pressure is on to cater to consumers, and offer seamless experiences to both buyers and sellers to remain competitive. This means localizing their services and not taking a one-size-fits-all approach when it comes to payment methods and user experiences.
With more than 5 million worldwide listings, Airbnb has to stay up to date with local, state and national digital security regulations as it operates in over 191 countries, according to Logan Vander Linden, payments partnerships lead for Airbnb, in a recent PYMNTS interview. In this month’s feature story, Vander Linden explained how Airbnb works to stay compliant in each market as worldwide competition grows fierce.
Find the full feature story in the Playbook.
HomeAway’s Wins and Losses in the Ever-Competitive Sharing Economy
Renting a room or home online — or through a mobile app — is familiar to consumers, who are used to browsing and booking listings with a few taps on their touchscreens. However, that familiarity creates challenges for homesharing companies, which need to capture customer loyalty in an increasingly competitive market. Their user experiences need to be easy and friction-free, no matter the churning waters in the back end.
In the latest Playbook, PYMNTS analyzes how HomeAway is treading the rapidly changing market conditions. HomeAway is navigating the changing regulations, shifting consumer behaviors and all the other challenges that come with global expansion, as it works to stay competitive. To read the Case Study, download the Playbook.
About the Playbook
The monthly Payments And The Platform Economy Playbook series, a collaboration between PYMNTS and Yapstone, aims to help platform payment decision-makers identify and manage the risks and rewards inherent in shaping their approaches, enabling them to optimize their operations and navigate the real-time challenges they face.
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Latest Insights:
Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out the February 2019 PYMNTS B2B API Tracker Report
Airbnb, Competition, Global Expansion, HomeAway, homesharing, Main Feature, mobile apps, News, Payments and The Platform Economy Playbook, payments innovation, platform payments, Security, sharing economy, Tracker Series, YapStone
Article source: https://www.pymnts.com/news/payments-innovation/2019/airbnb-global-sharing-economy-market/
