So what: Square incorporated Square Europe in July, and appears ready to expand in the region. This could help Square leverage its research and other operating expenses to an even broader audience of customers. If Square is going to become a profitable entity, it will have to increase revenue growth without growing operating expenses at the same rate. So far, that's been tough to do for Square.
Now what: Since Square is losing money, it's hard to say when the company's shares will be a great value for investors. And the growth of operating expenses in recent quarters has been a concern for investors. But if management can leverage those expense and investments in back office tools to gain share in Europe along with the key market of the U.S., it'll be a positive for the company.
Before getting too bullish, I'd like to see investments and expansion plans starting to take hold on revenue and lower losses. And the earnings report Wednesday afternoon will tell us how the company is progressing. In a competitive payments business, Square could face an uphill battle to become a preferred payment processor, despite its apparent popularity with retailers.