Square isn't making money and likely won't be profitable until mid-2015, according to reports.
The failure of Square Wallet seemed to seal its fate in the eye of analysts, but the reality is more complicated, Forbes reported. It hasn't been profitable and its debt is because of investment in new products -- some of which didn't work -- and 900 employees.
"The gross profits we earn on transactions already pay for the non-growth expenses of the company," Roelof Botha, a partner at Sequoia Capital and a board member of Square, told Forbes. "We could be profitable tomorrow morning if we said, 'Lets not spend money to keep growing.' "
U.S. & World
News from around the country and around the globe
Square makes $300 million a year in receipts, but so far its spending has exceeded that. However, Square estimates that it will start showing a profit in mid-2014, and it has a $225 million line of credit, so it disputes reports that the company may be bankrupt before a profit. Forbes reported that despite raising $367 million from investors, it's not clear if Square is still training to raise money -- which would help its bottom line.