Square's (NYSE:SQ) stock price soared on Wednesday, following a strong second-quarter earnings report that saw revenue jump 64% to 1.9 billion.
The mobile payments company was up nearly 10% in early trading Wednesday for a whopping 140% gain since the beginning of the year.
Gross profit was up 28% year over year to $597 million. Square's Cash App was the major cash cow, as it generated revenue of $1.2 billion and gross profit of $281 million, up 361% and 167% from the second quarter of 2019, respectively.
The Cash App, which enables people to send and receive money, had more than 30 million active customers in June. Growth in the Cash App benefited from disbursements of the CARES Act stimulus programs and unemployment benefits, the company said.
The Cash Card, a debit card tied to the Cash App that can be used to make purchases, had more than 7 million users, double the amount from one year ago.
Squareʻs seller ecosystem of merchants who used the service for payment transactions saw revenue fall 17% to $723 million and gross profits decline 9% to $316 million. However, gross payment volumes increased each month as more sellers resumed operations as restrictions lifted.
"Additionally, we believe our strategy of building a diverse ecosystem of products serving multiple use cases and a broad customer base adds resilience to our company," CEO Jack Dorsey said in the shareholderʻs letter.
Operating expenses were up 33% to $620 million at the fintech company. Product development expenses accounted for $207 million of that total, a 19% increase, while sales and marketing expenses were up 52% to $238 million.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was $97.9 million, down 7% year over year due primarily to lower seller revenue, while adjusted earnings per share was $0.18, down from $0.21 a year ago, but beating estimates (adjustments to both include taking out share-based compensation).
The company ended the quarter with $3.7 billion in liquid assets, including $3.2 billion in cash.