Square (NYSE:SQ) stock popped to all time highs in early August after the payments processor reported second quarter earnings which absolutely smashed expectations.

And by smashed expectations, I mean smashed expectations.

Revenues were supposed to come in around $1.1 billion, or down 4% year-over-year. Instead, Square reported revenues of $1.9 billion, $800 million above estimates and up 64% year-over-year.

Meanwhile, Square was supposed to report a loss of 5 cents per share in the quarter. Thanks to better-than-expected revenue growth, the company reported a net profit of 18 cents per share.

How did Square do it? How did a payments processor, which makes most of its money off of commissions from in-store transactions, report 64% revenue growth in a quarter wherein physical stores were closed and consumer spending fell off a cliff?

One word: innovation. And innovation is exactly why you want to stick with SQ stock both here and now, and over the long run.

Here’s a deeper look.

Square’s Strong Earnings

Square was supposed to have a bad quarter. After all, the company is built on the back of in-store spending at small-to-medium sized merchants, retailers, restaurants and bakeries. Those places were closed for most of the quarter. When they did reopen, many of them saw low traffic volumes. Further, many have been under significant financial pressure, and have been forced to cut spending on things on Square Seller Services.

All of that did show up in Square’s Q2 report. Gross payment volume in the quarter dropped 15% year-over-year. Card-present GPV declined 38%. Subscription revenue from Sellers dropped 16%.

Despite those huge drops in Square’s core physical payments and enterprise software businesses, the company still reported 64% revenue growth year-over-year.

How? Two new innovative businesses at Square, which are seeing robust early adoption: Square Online and Cash App.

New Businesses Gaining Momentum

Over the past few years, Square has been gradually building out an online seller ecosystem to complement its physical seller ecosystem. Management stepped up their efforts in making that online ecosystem robust during the second quarter.

Sellers responded favorably.

Square online GPV rose 16% year-over-year in the quarter to account for 25% of total GPV. With this huge growth, Square is now truly an omni-channel payments processor, with broad reach across both the physical and digital spheres.

Meanwhile, Square’s nascent but burgeoning peer-to-peer digital payments platform, Cash App, saw huge engagement growth in the quarter.

Monthly active transacting users rose to 30 million in June. Total revenues from Cash App rose nearly 250% year-over-year. Bitcoin revenue on the app roise six-fold year-over-year. Cash Card spend rose 50% year-over-year.

The whole ecosystem simply caught fire, underscoring that Cash App is increasingly turning into an all-in-one digital money ecosystem for payments, spending, and trading.

Innovation Powers Growth

Zooming out, the big idea here is that innovation is powering sustained strong growth at Square through addressable market expansion, even amid what is arguably the toughest economic backdrop for a payments company.

This is nothing new. Square has been one of the most innovative companies on the planet for several years now. What started out as a physical payments processing hardware company, has turned into so much more than that.

Square first added various iterations of its core physical hardware payments processors. Then, the company built out a robust software seller ecosystem to complement its payments business, with things like Square Payroll. The company then established Square Capital, a lending business to help financially support its customers.

Now, the company is jumping into e-commerce with Square Online and building out what could be an equally huge consumer-side payments platform in Cash App. The result of this relentless innovation and addressable market expansion is that Square has sustained huge growth and SQ stock has been a big-time winner.

Since 2016, Square has sustained 30%-plus net revenue growth every single year. SQ stock is up more 1,000% over that stretch.

Square Stock Is Reasonably Valued

The big growth from Square — and the big gains in SQ stock — won’t stop anytime soon.

Square will continue to leverage a consumer pivot towards non-cash payments to grow its physical GPV. Meanwhile, Square Online now means Square’s total GPV will be boosted by secular tailwinds underpinning more widespread e-commerce adoption.

Similarly, Cash App will sustain huge growth over the next several years as consumers increasingly turn towards digital payments platforms to do everything from pay friends, to buy products, to invest in Bitcoin and stocks.

There’s also the whole wild card banking catalyst, wherein Square could turn into a more robust financial service for small-to-medium sized merchants.

When you connect all those dots, it becomes clear that Square will continue to sustain 20%-plus revenue growth for a lot longer, while the company’s highly scalable software-centric business model will turn that robust revenue growth into consistent profit margin expansion and even bigger profit growth.

I see innovation and secular tailwinds power Square’s earnings per share toward $14 by 2030. Based on a typical multiple in this sector of 25-times forward earnings and an 8.5% discount rate, that implies a 2020 price target for SQ stock of roughly $170.

Bottom Line on SQ Stock

Square is a long-term winner. Recent earnings strongly confirm as much. This payments processor leveraged innovation and new businesses to power 64% revenue growth in a quarter wherein GDP contracted by more than 30%.

That’s impressive and it won’t stop anytime soon. Relentless innovation will continue to power big growth at Square along with big gains in SQ stock.

So stick with the rally. This one’s a winner that’s only going higher.