Square Inc. (NYSE:SQ) shares drop as much as 19 percent after the company posted another quarterly loss that wider than analysts expectation due to rising expenses.
The payments provider reported first quarter loss of $96.8 million, or 29 cents a share, compared with loss of $48 million, or 33 cents a share, a year earlier. Adjusted quarterly loss was 14 cents a share in the quarter ended March. Analysts surveyed by Thomson Reuters had project a loss of 9 cents.
Revenue rose 51 percent to $379 million, topping analysts’ estimate of $344.
The wider loss is due to increase of operating expense. Overall operating expenses surged 72 percent to $207 million in the first quarter. Product development expense rose also rose 63 percent.
"The core business is really strong. The small-business economy and moving upmarket towards medium-sized businesses has always been our sweet spot and we are seeing a lot more growth in the midmarket and up-market opportunity," CEO Jack Dorsey said Thursday on CNBC's "Closing Bell."
Square is also facing some challenges in May. The 180-day lockup period stock will expires May 16. The company project that there will be roughly 64 million stock options and warrants covered by the lockup will be exercisable at the expiration."
"This is another one-time event that every single company goes through and what we're focused on is making sure that we continue to focus on what we do which is build our tools so that people continue to value it and our sell base grows and they grow as well," Dorsey said.
Square shares drop 19 percent to 10.51 at 10:50 a.m. in New York.