Jack Dorsey did not inspire the market when he took on the leadership position at Square (NYSE: SQ). Analysts were worried that he wouldn’t be able to juggle both Twitter and Square at the same time. But, if the recent performance is an indicator, he does seem to have turned Square around for the better.

Square’s Financials

For the first quarter, Square’s revenues grew 22% over the year to $462 million, ahead of the Street’s expectations of $451 million. Its platform processed $13.6 billion of gross payment volume, recording a 33% growth over the year. Loss per share of $0.04 was also significantly better than the market’s expected loss of $0.08 per share. During the quarter, Square did not generate any revenues from Starbucks, which transitioned away from their infrastructure during the fourth quarter of 2016.

By segment, transaction-based revenue increased 34% to $403 million. Transaction-based revenue as a percentage of GPV was 2.96% in the first quarter of 2017, compared with 2.92% a year ago. Transaction-based profit as a percentage of GPV also increased from 1.03% to 1.07% in the reported quarter. Subscription and services-based revenue increased 106% to $49 million. Hardware revenue in the first quarter of 2017 fell 4% to $9 million.

For the current quarter, Square forecast revenues of $223-$226 million, and EPS of $0.03-$0.05. The market was looking for revenues of $224 million and earnings of $0.05 per share for the quarter. For the full year, Square raised its outlook for revenue to $890-$910 million with an EPS of $0.16-$0.20. Earlier it had forecast revenues to be in the range of $880-$900 million with an EPS of $0.15-$0.19. That is still marginally shy of the revenue consensus of $902 million and EPS of $0.18 per share for the year.

Square’s Market Expansion

Square has been focused on international expansion. It has now gone live in the United Kingdom, and is now available in five countries including the US, Australia, Japan, and Canada. Besides international expansion, the company is also benefiting from the delay that it takes for customers to pay by credit cards containing microchips.

Square has been intensifying its focus on larger retailers instead of individual sellers. Recently, it launched Square for Retail, a mobile point-of-sale (mPOS) platform that is focused on the smaller and medium retailers. It is already seeing improved results from this focus. Within its seller mix, 43% of Square’s merchants process over $125,000 in annualized GPV compared with 34% a year ago. Besides generating more business, the larger retailers are also prone to demand more value-added services that Square sells such as invoicing, Instant Deposit, and working capital.

Till recently, Square had been looking at selling off its food delivery service Caviar. But considering that it did not get any suitors, it appears to be working on improving the offering instead. It is now working to integrate Caviar with Square and to expand Caviar from a food delivery service to a food ordering platform. It now leverages its technology from Square Cash to complete delivery payouts to all new Caviar couriers. Additionally, Square’s offerings of payments, point-of-sale and order management help it reach more restaurants. I am not crazy about the Caviar strategy, and consider it a distraction in an otherwise well-managed progression.

The market is pleased with Square. Its stock is currently trading around a 52-week-high of $20.34 with a market capitalization of $7.7 billion. Square had listed in November 2015 and prior to listing, its valuation was pegged at $6 billion. It hasn’t had a very pleasant ride in the stock market but has been recovering nicely from the 52-week low of $8.77 it had fallen to in June last year.

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