Square Keeps Rolling Along

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Square Keeps Rolling Along

Payments company has put its business serving sellers back on track

Square’s year-over-year gross payment volume once again grew 25%.

PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS

Square apparently managed a neat trick at the end of last year: It changed its pricing without sacrificing volume.

After selling its Caviar food-delivery business and moving to reinvest in its business offering payments and related services to sellers, Square was on the hook to show it could continue to drive the big growth implied by its valuation. In 2020, Square’s enterprise value has traded as high as 65 times its forward earnings before interest, taxes, depreciation and amortization. That is up sharply from a low near 40 times in 2019, after the company’s transaction volume growth slowed.

So the onus was on Square to show that growth wouldn’t again slip. And in the fourth quarter, as the company reported Wednesday after the close, it delivered. Year-over-year gross payment volume growth was 25%, the same as in the third quarter. This was despite the pricing changes implemented last fall that, on the whole, raised the amount the company makes from transactions…

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