Square Inc. surged the most in more than eight months after an earnings report suggested the mobile payments company is on the path to profitability as larger sellers processed more transactions.
The shares jumped as much as 18 percent to $12.28, the most since Nov. 19. The stock was trading at $11.98 at 9:41 a.m. in New York.
In its second-quarter earnings report Wednesday, Square raised its forecast for full-year adjusted revenue and earnings before interest, taxes, depreciation and amortization. Its second-quarter adjusted revenue beat analysts’ estimates. Payment volume also surged 42 percent, in part driven by more transactions from larger sellers. While the company headed by Jack Dorsey reported a net loss of $27 million, narrowing losses from a year earlier by more than $2 million.
The results are an “emphatic answer” to investor doubts about the company’s ability to drive profitable growth and the ability of Square Capital, which provides loans to businesses, to attract investors to fuel growth, said Mark Palmer, an analyst at BTIG LLC, in a note.