As Square gears up for its IPO dog-and-pony show, it just revealed that its revenue is slowing down while losses are growing larger. At the same time, the mobile payments company also disclosed in an amended S-1 filing that it’s lost an important board member and early investor, venture capitalist Vinod Khosla, who owns a 17% stake in Square.
In the third quarter of 2015, which happened to be when Jack Dorsey returned to Twitter as interim CEO while at the same time as serving as CEO of Square, the company saw total net revenue of $332.2 million, up 46 percent from Q3 of 2014, when it made $227.4 million.
The numbers were also up around 8 percent quarter-to-quarter, from $310 million in Q2. That’s the good news.
The bad news is that growth is slowing. Q2 had seen 50 percent year-over-year growth, up from $206.8 millon in the same quarter of 2014. It also saw quarter-to-quarter growth of 24 percent, up from $250.6 million in the first quarter of this year.
The other troubling sign is growing net loss, which reached $54 million in the latest quarter, an 84 percent increase from a $29.6 million loss in the second quarter.
If there’s a silver living to those numbers it’s that a good amount of its debt seems to have some from its deal with Starbucks, as it reported transaction costs of $41 million for the most recent quarter. Those costs for the nine months ended September 30, 2015, increased by $10.7 million, or 10%, compared to the nine months ended September 30, 2014.
That deal with Starbucks, which started in 2012, turned into a giant money loser and finally ended earlier this month. So that should certainly help Square’s bottom line as it moves forward onto new partnerships.
Khosla’s departure
Khosla, who is General Partner of Khosla Ventures, has served as a member of Square’s board of directors since June 2011. His decisions to step down does not seem to have anything to with the company itself, but his own preference to not stay on when the company went public.
“Mr. Khosla has previously expressed his desire to step down from our board of directors immediately prior to our initial public offering, consistent with his stated preference not to serve on the boards of directors of public companies, and has tendered his resignation from our board of directors to take effect upon the effectiveness of the registration statement relating to this offering. He will remain an advisor to the board,” it says.
Khosla will be one of the speakers at our annual Post Seed conference on Dec. 1 at Ruby Skye in San Francisco. Other speakers will include John Doerr (Kleiner Perkins), Alfred Lin (Sequoia Capital), and more. Join us! REGISTER HERE.
VatorNews reached out to Square, but a company spokesperson declined to comment.
We have also reached out to Vinod Khosla for additional comment and we will update this story if we learn more.
This filing was first noticed by Forbes.
(Image source: investorplace.com)
