Square, Inc. (SQ) was founded in 2009 by Jack Dorsey and Jim McKelvey, two entrepreneurs who shared a dream to create a company that could aggregate merchant services and mobile payments into a single, easy-to-use service. Less than a decade later, Square has been downloaded over 33.5 million times and small businesses accept credit cards, track their sales and inventory, and even obtain financing.
Square's product line includes Square Cash, which allows users to send and receive money for free using a mobile application, and Square Point-of-Sale, a free application that allows merchants to process payments via smartphone. Square Inc. released Q3 2018 earnings on November 7, 2018. The peer-to-peer payment processor reported $431 million in revenues this quarter, a 68% increase from $257 million over the same period last year.
How Square Grew Its Financials
Square received seven rounds of private funding before the company went public in November 2015. The last round of funding before its IPO was a Series E financing in October 2014 from Acequia Capital, but other investors in the company include Sequoia Capital and Khosla Partners. On November 19, 2015, Square's shares began trading on the New York Stock Exchange at $9 per share with a company valuation of $2.9 billion. As of November 8, 2018, Square's market capitalization has grown to $31.15 billion, or a 974.14% increase in price from its IPO.
In November 2017, the Square Cash App announced a trial that made bitcoin trading available to some of its users. The stock price rocketed to a record high of $48.86 per share following the news. On March 12, 2018, the stock reached $54.89 per share, its highest level since its IPO, on positive news about extending its bitcoin trading services to Wyoming. On April 27, 2018, Square announced its acquisition of San Francisco-based Weebly, a website construction service and web-hosting service company. Square acquired food delivery service Caviar in August 2014 and became the first company to own both a food delivery company and a point-of-sale service when it launched Square for Restaurants in May 2018.
What Products and Services Does Square Offer?
Square charges merchants 2.75 percent of the sales price of any transaction they process via swipe, insert, or tap, and 3.5 percent plus 15 cents for every transaction that is manually keyed in. Square POS enables customers to pay, tip, and sign on a merchant's mobile phone or tablet, and merchants can use it to process payments made with credit cards, gift cards, and cash. Business owners can also use the app to send and track invoices, customize products, email receipts, apply discounts, administer refunds, access real-time sales data, and track inventory in real-time.
Square POS is typically used in conjunction with Square Reader, a small device that can be installed on a smartphone or tablet that reads credit and debit cards. Users can access this information and engage in these activities by logging onto the app's dashboard. The money from the merchant's transactions is typically deposited into their bank account in one to two business days. Other products offered by the company include Square Analytics, a set of free tools that can be applied on top of its POS products, and Square Appointments, an online service that allows users to book appointments.
Square Stand, one of the company's few physical products, allows users to turn an iPad into a complete point-of-sale tool. The company has also expanded into financing small businesses with products like Square Capital, which provides cash advances to merchants without a limit on when they need to be paid back. The firm also now provides complete payroll services to businesses in 38 states with Square Payroll. Square released a new version of Square Reader in 2015 that is compatible with Apple Pay and other digital payment systems.
Square's Corporate Profile
Some of the companies that Square has acquired include Storehouse, Fastbite, Kili, and Caviar, in addition to a partnership with e-commerce platform BigCommerce. The company's major competitors include Google Wallet (GOOGL), Intuit Inc. (INTU), and PayPal-owned (PYPL) Venmo. The company now has offices in several countries including the United States, Canada, and Japan. At the time of writing, Square has more than 2,000 employees and its board of directors includes former U.S. Treasury Secretary and Harvard University President Lawrence Summers, and former CFO of Goldman Sachs David Viniar.