(Reuters) - Payments company Square Inc (SQ.N), reported a smaller-than-expected quarterly loss on Wednesday and raised its earnings forecast, as customers processed more transactions through its technology and it extended the reach of its services.
The San Francisco-based company, led by Twitter Inc (TWTR.N) Chief Executive Jack Dorsey, posted a quarterly loss of 4 cents per share, on revenue of $461.55 million.
Analysts on average had expected a loss of 8 cents per share on revenue of $450.7 million, according to Thomson Reuters I/B/E/S.
Square’s shares were up more than 5 percent at $19.30 in after-hours trading.
Square’s technology allows small and medium sized businesses to accept credit card payments on mobile devices. The product has become popular because it helps small merchants and self-employed professionals complete credit card transactions without a cash register or expensive software.
The company, which went public in 2015, has been seeking to diversify its revenue stream by attracting larger merchants and expanding into new businesses, from lending to food delivery.
The company’s gross payment volume - the total dollar amount of all card payments processed by sellers - jumped 33 percent to $13.65 billion.
Square raised its 2017 total revenue forecast to $2.12 billion-$2.16 billion from $2.09 billion-$2.15 billion.
The company has also been expanding overseas.
In March, Square made its foray in the United Kingdom, where it estimates around half of local small businesses still do not take card payments.
Square faces competition from startups offering similar services in Europe including the UK’s SumUp, which is backed by Groupon Inc, and Sweden’s iZettle.
“We’ve seen a lot of imitation,” Dorsey said, on a call with analysts on Wednesday. “We’re very proud that we continue to invent and others follow and we can’t just rest on those laurels.”
Outside the United States, Square operates in Canada, Japan and Australia.
Chief Financial Officer Sarah Friar said the company had an edge on competitors in the UK because it had launched with a range of services alongside payments, such as software to issue invoices and analytics tools.
“We bring a lot of the learning [...] from markets like the U.S. and Australia as we go to the UK,” Friar said.
The company also highlighted growth in its food delivery business Caviar, with order volume in the first quarter more than doubling year over year.
Square Capital, the company’s business which offers loans to customers in exchange for a fixed percentage of their daily card sales, originated $251 million in loans the first quarter of 2017, up 64 percent from a year earlier.
Its invoice business saw users grow to 225,000, the largest ever quarterly growth for the product.
Operating expenses fell about 10 percent to $187.51 million.
Reporting by Anna Irrera in New York and Sruthi Shankar in Bengaluru; Editing by Martina D'Couto and Diane Craft