Wednesday, April 25, 2012 at 3:31 pm.
Square’s ‘Sexy Growth Curve’ Accelerates Again
In a Bloomberg article today, Square drops a new money stat: It is now processing payments at a $5 billion annualized rate. Square has been revealing these stats, with increasing payment volume, for more than a year — see last month’s post, “Square’s Sexy Growth Curve”.
I’ve updated my chart with the latest stats, and it looks as if Square’s payment processing rate continues to accelerate. (It’s hard to know exactly, as the data is based on PR opportunities and not a direct feed of Square’s stats. But that’s what I have to work with.)
This is, of course, what the company and its investors are betting on, so it shouldn’t be seen as anything but the plan. But still, good to see — it should be accelerating.
Assuming Square’s published 2.75% commission, Square’s gross revenue run rate on $5 billion of annual payments is about $140 million. Square does make a margin from its commission, COO Keith Rabois told me last month.
But the company is far from profitable — on purpose, of course. Much of the commission goes to pay the credit card companies, which Square won’t be able to design out of the picture for a while. And with a staff of ~250, aiming to double to 500 this year, Square is spending tens of millions per year on employees.
There’s a lot of talk that Square could become bigger than Twitter, the other famous company founded by Square CEO Jack Dorsey. I need to learn more about the payments business before I can comfortably agree. But it’s cool to watch this company grow. I’m a fan.
Previously: Square’s Sexy Growth Curve