Image source: Square.

What: Shares of mobile payment processor Square (SQ 16.13%) are getting crushed today, down by 20% as of 11:20 a.m. ET, after the company reported disappointing first-quarter earnings amid rising costs.

So what: Adjusted revenue in the first quarter came in at $146 million, up 64% year over year. That was driven by higher gross payment volume of $10.3 billion, which was in turn driven by growth within the existing seller base. That all translated into a net loss of $96.8 million, or $0.29 per share, far below analysts' expectations of $0.09 per share in red ink.

Now what: Operating expenses soared a gut-wrenching 72% to $207 million in the first quarter. However, $50 million of that total was attributable to a non-recurring litigation accrual. But even without that charge, the bottom line would have still fallen short of investor expectations. As far as guidance goes, second-quarter adjusted revenue is expected to be $151 million to $156 million. For the full year, adjusted revenue should be $615 million to $635 million, with adjusted EBITDA of $8 million to $14 million.