Key Highlights
- Strategic fee reductions on select Cash App Bitcoin transactions led to a 50% decline in Bitcoin ecosystem gross profit, reaching $52 million.
- Overall gross profit jumped 22% to reach $3.24 billion, while net income increased to $566 million.
- Cash App’s gross profit expanded 27% to $2.07 billion, serving 60 million monthly active transacting users.
- Full-year gross profit guidance increased to $12.63 billion.
- The stock finished Tuesday’s session at $76 before climbing over 6% in extended trading.
Block Inc. saw its Bitcoin-related gross profit cut in half during the third quarter compared to the previous year. This decrease resulted from the company’s deliberate strategy to reduce transaction fees on select Bitcoin trades within Cash App, even as other business segments delivered robust performance.
The Bitcoin ecosystem’s gross profit declined 50% year-over-year to $52 million. According to Block, this reduction stemmed from a “strategic decision to reduce the fee” applied to specific Bitcoin transactions.
Despite lower profit margins, the Bitcoin division continued generating substantial revenue. Cash App recorded $4.07 billion in quarterly revenue, with the Bitcoin ecosystem contributing $1.77 billion of that total.
Block’s Bitcoin operations primarily encompass customer Bitcoin purchases through Cash App, its Proto division, and fees from Bitcoin withdrawals. The lower gross profit doesn’t indicate a corresponding 50% drop in trading activity.
Strong Performance from Cash App and Square Divisions
Beyond the Bitcoin segment, the company demonstrated growth across all other metrics. Block reported net income of $566 million, rising from $462 million in the prior year, while total revenue climbed to $6.72 billion from $6.12 billion.
Overall gross profit expanded 22% to $3.24 billion, surpassing management projections. Cash App contributed $2.07 billion, representing a 27% year-over-year increase.
September saw Cash App reach 60 million monthly transacting users. Block attributed part of this expansion to Neighborhoods, a feature connecting shoppers at Square merchant locations with the Cash App ecosystem.
The lending business experienced rapid expansion. Loan originations surged 40% compared to the previous year, fueled by Cash App Borrow and Afterpay Post-Purchase offerings. Financial Solutions gross profit, the division handling consumer lending, increased 32%.
Square’s gross payment volume accelerated 14%, marking its quickest annual growth rate since Q1 2023. Domestic volume grew 10.4%, while international volume soared 26%.
Square gross profit improved 14%. Commerce Enablement gross profit rose 19%, driven by enhanced payment processing across both Square and Cash App platforms.
Adjusted earnings per share hit $1.13, representing a 109% increase from the prior year. The adjusted operating income margin reached 29%, establishing a new company benchmark.
Updated Full-Year Projections from Block
Block elevated its full-year gross profit projection to $12.63 billion, representing 22% growth versus the previous year. The company also anticipates adjusted operating income will increase 69% and adjusted diluted earnings per share will expand 75%.
“We expect Block to perform meaningfully better in 2026 than the expectations we outlined at Investor Day in November 2025,” Jack Dorsey and CFO Amrita Ahuja stated in their shareholder communication.
Looking toward 2027, Block projects gross profit growth of at least 15%. The company forecasts adjusted operating income will climb 30% to $4.575 billion.
Block also anticipates a third consecutive year of accelerating Square payment volume growth in 2027. Management expects Cash App active customer growth in the low single digits.
Prior to the earnings announcement, Zacks assigned the stock a #3 (Hold) rating based on varied estimate adjustments. Wall Street analysts project earnings of $1.16 per share next quarter on revenue of $6.76 billion, and $4.05 per share for the complete year on revenue of $26.09 billion.
Block shares ended Tuesday’s regular trading down 1.4% at $76. Following the earnings disclosure, the stock climbed between 6.2% and over 8% during after-hours trading, per multiple sources.
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