The analyst anticipates Seller gross profit to increase by roughly 50% year-over-year with “strong upside potential” to ~56%.
Secondly, in contrast to the Cash App, Square’s Seller segment suffered during the pandemic, and Keane is expecting “strong transaction-based revenue growth driven by easier comps and strength online as well as in-store.” That said, Keane thinks Square has enough firepower to mitigate against the growth deceleration of its star feature.įor one, the comps won’t be quite as tough when Q4 comes around, leaving “potential” for year-over-year growth to improve slightly into Q4. While prior to the pandemic Cash App profit growth exhibited a ~100% year-over-year uptick, this increased to 276% YoY in July 2020, and then moderated to ~180% YoY in Aug/Sep.Īccordingly, when Square reports 3Q21 earnings today after the close, Deutsche Bank’s Brian Keane expects the growth to slow down to 39% year-over-year, which is also a drop from ~94% in 2Q21 as “fading stimulus benefits and difficult comps,” come into play. This was especially true during the pandemic when the peer-to-peer offering grew at a rapid pace at the peak of the stimulus programs.
Over the past few years, the increasing success of the Cash App has been Square’s ( SQ) biggest growth driver.
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