Square on Monday said it posted its largest quarterly loss since at least the fourth quarter of 2013, which could hurt the payments startup in its pending initial public offering.
The San Francisco company lost $53.9 million in the third quarter on slowing sales, according to its amended regulatory filing. Square’s sales rose 46% to $332.2 million in the quarter, a lower growth rate than the 50% in the second quarter and 52% in the first quarter. For the first nine months of 2015, the company has lost $131.5 million on $892.2 million in sales.
“The higher quarterly loss may dampen investor enthusiasm for the company’s shares,” the San Francisco Business Times wrote.
“We intend to continue to make investments that will serve sellers and buyers over the long term even if a return on these investments is not realized in the short term,” said Square in its revised S-1.
Square also said that it raised an additional $30 million from two investors as part of its Series E round last year. That round garnered $150 million at a $6 billion valuation. The $30 million fundraising did not include a “ratchet” provision that ensures investors receive additional shares if the company’s IPO price isn’t 20% higher than the price they paid.
The company also said that one of its earliest investors, Vinod Khosla of Khosla Ventures, was leaving the board because he prefers not to serve on the boards of public companies. Khosla Ventures owns 17% of Square.