When Square reports its first earnings results as a public company on Wednesday, investors will be looking for the answers to several pressing questions:
Did Square push back into positive adjusted Ebitda territory, after the payments company lost money according to this metric in the third quarter following a profitable second quarter?
Are there any signs that Jack Dorsey’s second job at Twitter, which is very much a full-time job on its own, is affecting Square’s performance?
And how fast is the company’s small — but high-margin — data and software business growing?
All are important, but long-term, the answer to the last question may be most critical. That’s because the business unit — which includes the Square Capital lending-like business and payroll software business, among other products — serves at least two crucial functions at Square.
First, it’s a profit driver. This unit’s gross profit margin was 80 percent higher than that of Square’s core payments business in the first half of 2015.
Secondly, its a differentiator. If a merchant who processes payments with Square likes these other offerings, it seems logical that they would be less likely to flee to a competitor payments processor, even if a slightly better deal comes along.
In the third quarter, this business unit accounted for 12.5 percent of Square’s adjusted revenue. Investors expect that number to keep growing. On Wednesday afternoon, we’ll find out how much progress has been made.
This article originally appeared on Recode.net.