Square Inc., the company that makes white, cube-shaped credit card readers for mobile devices, forecast third-quarter earnings that topped analyst’s estimates, as the company’s core digital payments business grew and its ancillary software and data businesses gained traction.

Square forecast adjusted revenue of $167 million to $171 million in the current quarter, exceeding analysts’ average estimate of $166.3 million. The company raised its full-year adjusted revenue projections of $655 million to $670 million, up 6 percent from the midpoint of the company’s previously stated range and the average analyst estimate of $646 million. The company projects third-quarter adjusted EBITDA of $18 million to $24 million, up from a previous range of as much as $14 million. That compares to analysts’ estimates of $6.9 million. Shares surged 9.2 percent to $11.40 in extended trading.  Gross payment volume in the second quarter rose 42 percent to $12.5 billion.

Chief Executive Officer Jack Dorsey -- who also runs Twitter Inc. -- has been trying to convince investors that Square can grow amid stiffening competition from PayPal Holdings Inc. and First Data Corp. in the crowded transactions industry. The company started by selling smartphone plug-ins to let food truck vendors and small businesses accept credit-card payments. Now it’s trying to gain larger businesses as customers by offering more services, including loans and tools for managing inventory and analyzing sales. Since the company went public last November, investors have been watching for Square to move towards profitability through growth in those higher-margin businesses.

"Investors are clamoring for profitability, or at least a move towards profitability," said Mark Palmer, an analyst at BTIG LLC. "The bigger picture in terms of Square’s long term profitability is really the data and software line item that encompasses not just Square capital but a bunch of ancillary small business offerings that have higher margins than their core processing business." "Given how young Square is, the number of merchants needs to grow," said Scott Devitt, analyst at Stifel Nicolaus & Co. Inc. "It’s early in understanding whether Square can build a sustainable and differentiated platform, but they have good products and it’s a market that’s ripe for some change and disruption."

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