(Reuters) - Mobile payments company Square Inc (SQ.N) posted better-than-expected third-quarter results and raised its full-year profit and revenue forecasts, as a growing number of merchants increasingly used its technology to process transactions.
The company, co-founded and led by Twitter Inc (TWTR.N) Chief Executive Jack Dorsey, now expects full-year adjusted profit of 24-25 cents per share and revenues of $2.18 billion to $2.19 billion.
It had earlier expected an adjusted profit of 21-23 cents per share and revenue of $2.14 billion to $2.16 billion.
The company’s shares initially rose in extended trading, before reversing course to trade down 3.5 percent. The stock has soared 169 percent this year up to Wednesday’s close.
Square’s flagship technology includes a credit card reader that turns any cellphone into a payment terminal. It has grown in popularity as it allows smaller merchants to process credit card transactions without a cash register or expensive systems.
The company, which went public in 2015, has been seeking to diversify its revenue stream by attracting larger merchants and offering more diverse services to its clients, ranging from loans to payment cards.
Square’s gross payment volume – the total dollar amount of all card payments processed by sellers – climbed 31 percent to $17.39 billion in the quarter ended Sept. 30.
Payments from larger merchants, or those processing more than $500,000 in transactions annually, grew 64 percent.
The San Francisco-based company's loss narrowed to $16.1 million, or 4 cents per share, from $32.3 million, or 9 cents per share, a year earlier. (squ.re/2AlRpyb)
Square posted an adjusted profit of 7 cents per share, while its adjusted revenue rose 45 percent to $257 million in the quarter.
Analysts on average had expected a profit of 5 cents per share on revenue of $245 million, according to Thomson Reuters I/B/E/S.
Reporting by Nikhil Subba in Bengaluru; Editing by Savio D'Souza