Square Inc (NYSE: SQ) stock rose over 2.4% on 28th Feb, 2019 (Source: Google finance) after the company posted better than expected results for the fourth quarter of 2018, but gave weaker than expected guidance for the first quarter 2019. Net loss was $28 million in the fourth quarter, which includes the mark-to-market valuation of our strategic investment in Eventbrite. Excluding this impact, net loss was $12 million. However, the adjusted EBITDA was $81 million in the fourth quarter, up 97% year-over-year. The company ended the fourth quarter of 2018 with $1.6 billion in cash & cash equivalents.
SQ in the fourth quarter of FY 18 has reported the adjusted earnings per share of 14 cents, beating the analysts’ estimates for the adjusted earnings per share of 13 cents, as per forecast by Refinitiv. The company had reported the adjusted revenue growth of 64 percent to $464 million in the fourth quarter of FY 18, beating the analysts’ estimates for revenue of $454 million. The company’s adjusted revenue grew 53 percent year over year, excluding acquisitions, which declined from 56 percent in the third quarter. Wall Street had been expecting roughly 60 percent revenue growth year over year.
Moreover, in the fourth quarter, larger sellers made up 51% of overall GPV, up from 47% in the fourth quarter of 2017. GPV from this group grew 39% year-over-year. Transaction-based revenue was $668 million in the fourth quarter of 2018, up 27% year over year, and transaction-based profit was $247 million, up 29% year over year. Subscription and services-based revenue was $194 million in the fourth quarter of 2018, up 144% year over year. Growth in the fourth quarter was driven primarily by Instant Deposit, Cash Card, Caviar, and Square Capital. In the fourth quarter of 2018, Square Capital facilitated approximately 72,000 business loans totaling $472 million, up 55% year over year. Hardware revenue in the fourth quarter of 2018 was $18 million, up 51% year over year, driven by Square Terminal, which commenced shipment in November 2018, as well as Square Register and third-party peripherals.
SQ issued earnings-per-share guidance for the first quarter to be between 6 cents and 8 cents. Wall Street was looking for 11 cents.
For FY 19, SQ expect the adjusted revenue to be in the range of $2.22 billion to $2.25 billion. For full-year 2019, the company expect adjusted EBITDA of $405 million to $415 million, which represents growth of 60% at the midpoint.