(Adds details from earnings and call)
By Anna Irrera and Diptendu Lahiri
Aug 1 (Reuters) - Square Inc on Wednesday topped Wall Street estimates for quarterly profit, but issued weaker-than-expected guidance for the third quarter.
Square’s net loss narrowed to $5.91 million, or 1 cent per share, for the second quarter ended June 30 from $15.96 million, or 4 cents per share, a year ago.
On an adjusted basis, Square earned 13 cents per share, beating the average analyst estimate of 11 cents, according to Thomson Reuters I/B/E/S.
For the third quarter, Square said it expects adjusted earnings per share between 8 cents and 10 cents, falling short of analysts’ expectations of 13 cents.
Shares of the company were down marginally to $66.55 percent in after-hours trading.
Square, whose flagship technology is a credit card reader that turns smartphones into payment terminals, has been seeking to diversify its revenue stream by providing more services ranging from loans to accounting software.
Subscription and services-based revenue, which includes Square’s earnings from lending, more than doubled to $134.33 million in the quarter.
The company also said it had seen an uptick in use of its consumer service Cash App, a peer-to-peer payments application connected to a card. In June customers spent $250 million with the Cash card, almost tripling since December, Square said.
The company has been looking to broaden the reach of Cash, which competes with PayPal Holdings Inc’s popular payments app Venmo.
“Our growth acceleration in recent periods is a result of investments we’ve made over the past few years,” Square’s Chief Financial Officer Sarah Friar said on a call with analysts. “Our success with Cash App is a great example, where we’re building an ecosystem of financial services for individuals in the same way that we did for businesses.”
The company did not disclose the number of customers using Cash.
In January Square started allowing customers to use the app to buy cryptocurrency bitcoin. The bitcoin service generated $37 million in revenue in the second quarter, while bitcoin related costs were $36.6 million.
Friar said on a call with reporters that the company was “not trying to push on the monetization of bitcoin today.”
Total revenue for the second quarter rose to $815 million from $552 million, boosted in part by a surge in transaction volumes.
Transaction-based revenue rose nearly 30 percent to $625.2 million, with gross payment volume, the total dollar amount of all payments processed by sellers, rising 30 percent to $21.4 billion. (Reporting by Anna Irrera in New York and Diptendu Lahiri in Bengaluru; Editing by Arun Koyyur and James Dalgleish)