By Dave Sebastian
Square Inc. shares fell 4.4% in premarket trading Monday after the financial technology company agreed to buy payment firm Afterpay Ltd. in an all-stock deal worth about $29 billion and posted lower-than-expected revenue for the second quarter.
The financial-technology company on Sunday said a key attraction of the deal was a growing wariness toward traditional credit among younger consumers, a group particularly hard hit by the Covid-19 pandemic, as lockdowns crushed many hospitality and casual jobs. Afterpay's technology allows users to pay for goods in four, interest-free installments while receiving the goods immediately.
The company posted net revenue of $4.68 billion, up from $1.92 billion in the comparable period last year. Analysts polled by FactSet were looking for $5.03 billion.
Transaction-based revenue rose to $1.23 billion from $682.6 million, and bitcoin revenue rose to $2.72 billion from $875.5 million.
The company posted net income attributable to shareholders of $204 million, compared with a loss of $11.48 million in the year-ago period. Earnings were 40 cents a share, compared with a loss of 3 cents a share.
Adjusted earnings were 66 cents a share. Analysts were expecting 31 cents a share.
Shares were down after closing at $247.26 on Friday.
Write to Dave Sebastian at dave.sebastian@wsj.com
(END) Dow Jones Newswires
08-02-21 0717ET