Shares of Block (NYSE: XYZ) rose more than 4% in after-hours trading after the payments company posted second-quarter results that beat Wall Street forecasts. Adjusted earnings for the three months ended June 30 reached $1.02 per share.
Analysts polled by London Stock Exchange Group (LSE: LSEG) had expected earnings of 87 cents per share. Quarterly revenue was $6.62 billion, exceeding analyst forecasts of about $6.49 billion.
The company, led by Jack Dorsey, also raised its full-year target. Block now forecasts gross profit for 2026 of $12.51 billion, which would represent 21% growth compared to the previous year. The previous target was $12.33 billion, or 19% growth. The report was released at the end of a successful earnings season for U.S. payment companies.
Block Separates Bitcoin Activity from Business Metrics Used to Assess Operational Performance
Block stated that when evaluating its performance, the company considers both results calculated under GAAP standards and results not in accordance with GAAP standards. The company places the greatest emphasis on gross profit, adjusted operating income, and adjusted earnings per share.
"Bitcoin trading and changes in the price of bitcoin have historically had an insignificant impact on gross profit, adjusted operating income, and adjusted earnings per share, but can create significant fluctuations in reported GAAP revenue and net income. To provide greater transparency regarding these factors, we publish Cash App revenue from the Bitcoin ecosystem and the reassessment of our bitcoin investments prior to releasing earnings reports," said Block.
According to Block's preliminary estimates, Cash App revenue from the Bitcoin ecosystem for the second quarter was $1.8 billion. This amount primarily includes the dollar value of bitcoin purchased by customers through Cash App.
The company also expected an accounting loss of $88.5 million resulting from the revaluation of its bitcoin investments using the asset's closing price on June 30. Block reflects this item below operating income. This only alters GAAP earnings and does not affect the adjusted operational metrics used to track the business.
Block stated that both bitcoin figures are preliminary and unaudited and do not reflect the situation for the entire quarter. The company plans to publish the full report on August 5, 2026.
Cash App revenue from bitcoin can change rapidly, as the price of bitcoin and customer transaction volumes are never stable. Accounting profits or losses on Block's own bitcoin position also rise or fall depending on the market price of bitcoin.
Cash App Boosted Block's Quarterly Performance Due to Growth in Banking, Lending, and Online Commerce Activity
Cash App was the primary contributor to this growth. Its gross profit grew 31% year-over-year. The seller-focused Square business showed 13% growth. Overall, Block's gross profit grew 25% year-over-year.
The company also reported an adjusted operating margin of 27%, the highest in its history. Adjusted diluted earnings per share increased 65% compared to the previous year, reaching a record $1.02.
User activity within Cash App also grew. The number of active users in primary banking services increased by 17%, and the volume of Cash App Commerce Enablement usage also grew by 17%. Consumer lending origination volumes increased by 59%, with much of this growth coming from Cash App Borrow.
Square payment volume grew across the merchant network. Total Square Gross Payment Volume (GPV) increased 13% year-over-year. U.S. GPV grew 10%, marking the fastest pace of domestic market growth since the second quarter of 2023. International GPV grew 28%.
Block is also reducing costs. In February, the company announced plans to cut more than 50% of jobs as part of a broader restructuring that involves integrating artificial intelligence into more aspects of daily operations.
"Intelligence tools are the next major technology shift, but machine learning is not new for Block," Jack wrote in a letter to shareholders.
Block forecasts that in 2026, gross profit will grow by 21%, adjusted operating income by 67%, and adjusted diluted earnings per share by 70%.
The financial results materials advise readers to refer to an appendix containing the company's definitions for the following metrics: number of active transactions, Square gross revenue, number of active primary banking operations, Cash App Commerce Enablement volume, and Cash App Consumer Lending Origination volume. Block also included tables that reconcile each non-GAAP metric to the nearest GAAP measure.
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