Despite reporting better-than-expected adjusted revenue and non-GAAP earnings per share for its first quarter, shares of financial technology company Square (NYSE:SQ) took a hit following the earnings release, sliding 8% on Thursday. The main reason for concern on the Street was likely the company's worse-than-expected outlook for its second-quarter revenue and its decision to leave its full-year outlook for adjusted EBITDA unchanged even as it lifted its 2019 revenue target.

Though the Street may have been disappointed in the quarterly results, there's no denying the company's strong execution recently. The stock's pullback is more of a by-product of high expectations than a misstep by the company. For a better look at some of the things Square is doing right, consider a few of the items highlighted in management's first-quarter shareholder letter.

A person working on the Square for Restaurants platform.

Square for Restaurants. Image source: Square.

Momentum with large sellers continues

One driver for Square's business recently has been its momentum with larger sellers -- those generating over $125,000 in annualized gross payment volume. This trend continued in Q2.

"We continued to see strength from larger sellers," Square said in its first-quarter shareholder letter. "In the first quarter of 2019, GPV from larger sellers grew 37% year over year and accounted for 51% of total GPV, up from 47% in the first quarter of 2018."

Management also pointed out exceptional strength with mid-market sellers, or sellers with annualized gross payment volume in excess of $500,000. "Of note, GPV from mid-market sellers grew 50% year over year and accounted for 24% of total GPV, up from 20% in the first quarter of 2018," Square said.

A robust Cash App ecosystem

Square's Cash App continues to thrive. The peer-to-peer payment app has morphed into an ecosystem, including the Cash Card, direct deposit, Instant Deposit, and Cash for Business. "Cash App volume [total dollar amount of peer-to-peer, Cash Card, and Cash for Business transactions] grew nearly 2.5x year over year, reflecting the growing network effects, reach, and engagement of this ecosystem," Square stated. In addition, Square noted, "Within Cash App, we continued to grow the number of monthly active Cash Card customers and saw an increase in transaction frequency per customer."

Management said the Cash App was the primary catalyst behind a near doubling of its subscription and services-based revenue on a year-over-year basis when excluding revenue from acquisitions of Weebly and Zesty.

An opportunity in invoices

Square launched a new app in March dedicated to helping sellers send invoices, building on an invoice product that was already successful. The app is quickly gaining traction and is helping the company capitalize on a key opportunity, management explained in its first-quarter shareholder letter.

Speaking to its momentum in invoices, Square said, "Square Invoices has more than 350,000 active sellers, with over $5 billion in GPV processed in the last 12 months." In addition, Square said, "The average U.S. small business waits approximately 21 days for payment -- while most Square Invoices are paid in one day."

About $1 trillion worth of consumer invoices are sent annually in the U.S., Square said. No wonder the company launched a dedicated mobile app for invoices.