Square (SQ 5.41%) has released its Q1 of fiscal 2020 results, which indicate strong growth in certain metrics and services for the digital-payments company. The quarter saw Square take in $1.38 billion in revenue, up 44% on a year-over-year basis. That was on gross payment volume (GPV) of $25.7 billion, a 14% improvement.

On the bottom line, however, the company flipped to a non-GAAP (adjusted) net loss of almost $8.7 million, or $0.02 per share, from the Q1 2019 net profit of $53.8 million.

Small store with Square terminal at the desk.

Image source: Square.

The big reversal of fortune in the latter metric was due to a dramatic increase in reserves for transaction and loan losses. This has been a widespread trend among banks and financial-services providers lately, as defaults are expected to climb higher due to the economic damage wrought by the SARS-CoV-2 coronavirus.

On average, analysts tracking Square stock had been estimating $1.29 billion on the top line for the quarter and an adjusted per-share net profit of $0.13.

In the conference call discussing the results, Square said that it has had success winning large merchants as customers for its system. Another hot area of growth is the company's Cash App peer-to-peer payment solution, which saw its largest number of "net-new transacting," active customers. Much of this was due to transactions related to the coronavirus outbreak -- charitable donations, fundraising, service tipping and the like.

Investors didn't seem concerned about the heavy provisioning or the sudden descent into the red on the bottom line. On Thursday, Square's stock rose by almost 10%, trouncing the main equity indexes.