Square (NYSE:SQ) reported its second-quarter results after the market closed on Thursday. The digital payments and point-of-sale solutions company posted strong revenue growth, a sharp increase in adjusted EBITDA, and a huge jump in its Cash App volume -- the total dollar amount of the app's peer-to-peer, Cash Card, and Cash for Business transactions.

Beyond the quarterly update, Square also announced on Thursday that it is selling its food-ordering platform, Caviar, to DoorDash in a deal valued at $410 million.

Here's a closer look at the results, as well as details of the pending sale of Caviar.

An employee and customer interact with the two displays included with Square Register

Square Register. Image source: Square.

Square's second-quarter results: The raw numbers


Q2 2019

Q2 2018



$1.17 billion

$815 million


Adjusted EBITDA

$105 million

$68 million


Net income (loss)

($7 million)

($6 million)


EBITDA = earnings before interest, taxes, depreciation, and amortization. Data source: Square second-quarter shareholder letter

What happened with Square this quarter?

Square's second-quarter revenue jumped 44% year over year to $1.17 billion. Adjusted revenue (net revenue less transaction-based costs, bitcoin costs, and the impact of deferred revenue adjustment related to purchase accounting) increased 46% year over year to $563 million. The figure exceeded management's guidance range for adjusted revenue to be between $545 million and $555 million.

Helping drive growth during the quarter was an 87% year over year increase in subscription and services-based revenue.

Adjusted EBITDA soared 54% year over year to $105 million as Square continues to balance growth with investments in its business.

What management had to say

Management once again drew attention to its fast-growing peer-to-peer payments mobile application called Cash App.

"Our Cash App ecosystem has reached significant scale, generating $260 million in total net revenue in the second quarter of 2019. Excluding bitcoin, Cash App revenue was $135 million," the company said in its second-quarter shareholder letter.

The company also provided some useful context on its subscription and services-based revenue, noting that its "growth was driven primarily by Cash App, Square Capital, Caviar, and Instant Deposit for sellers."

In a separate press release on Thursday, management explained why the company is selling Caviar to DoorDash. 

"We are increasing our focus on and investment in our two large, growing ecosystems -- one for businesses and one for individuals," explained Square CEO Jack Dorsey. "This transaction furthers that effort, and we believe partnering with DoorDash provides valuable and strategic opportunities for Square."

The two companies also said they will expand their partnership, which currently includes a Door Dash integration with the Square for Restaurants platform.

Subject to customary closing conditions and regulatory approval, the $410 million deal is expected to close sometime this year. The $410 million is comprised of a combination of cash and preferred DoorDash stock.

Looking forward

Square maintained its guidance for full-year adjusted revenue between $2.25 billion and $2.28 billion. The midpoint of this guidance range would represent 43% year-over-year growth.

For its third quarter, Square said it expected adjusted revenue between $590 million to $600 million. The midpoint of this range represents 38% growth. Management expects third-quarter adjusted earnings per share for the period to be between $0.18 and 0.20, up from $0.13 in the second quarter of 2018. 

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