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Square's 3Q17 Earnings: What You Can Expect

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Square's 3Q17 Earnings: What You Can Expect PART 1 OF 6

Square’s Top-Line Growth: What to Expect in 3Q17

PayPal provides a yardstick to measure Square’s progress

Payments processor Square (SQ) is scheduled to release its 3Q17 results on November 8. The results are slated to come out after the US market (SPY) closes. PayPal (PYPL), a rival of Square’s in the payments processing industry, released its 3Q17 results on October 19, effectively putting out a yardstick by which to gauge Square’s 3Q17 performance.

PayPal’s 3Q17 revenue rose 22% year-over-year to $3.2 billion, surpassing consensus estimates by $60 million. PayPal’s adjusted EPS (earnings per share) for the quarter were $0.46, up 31% year-over-year and above the consensus estimate of $0.43.

Square’s Top-Line Growth: What to Expect in 3Q17

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Square grew revenue 26% in 2Q17

In 2Q17, Square reported revenue of $552 million, up 26% year-over-year and above consensus estimates by more than $15 million. Square posted adjusted EPS of $0.07 in the quarter, up from 2Q16 and above the consensus estimate of $0.05.

The chart above shows Square’s quarterly revenue growth rate up to 2Q17.

Square expecting improvement

While releasing its 2Q17 results, Square also guided 3Q17. The company guided for 3Q17 revenue in the range of $562 million–$568 million and adjusted EPS was guided in the range of $0.04–$0.05. Looking at the guidance, you can see that Square is expecting a year-over-year improvement in both its top-line and bottom-line metrics.

Square has recently sought to escalate its competition with PayPal, taking its payment technology (QQQ) to Europe (EFA) in the battle for the control of the merchant payments processing market.

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