Adjusted operating income reached $1.13 per share as Cash App generated a 27 percent gross profit increase with 60 million monthly active users in September. The Square merchant division also expanded, delivering a 14 percent gross profit gain during the same period. However, the aggressive push into lending and banking products drove credit and transaction losses up by 65.6 percent to $601.7 million. Management remains confident in consumer resilience due to steady card spending and healthy loan repayment rates.
Key points
Block raised its full-year 2026 gross profit guidance to $12.63 billion, up from the prev…: Block raised its full-year 2026 gross profit guidance to $12.63 billion, up from the previous forecast of $12.51 billion.
Chief Operating Officer Owen Jennings revealed that Block expects to generate its first d…: Chief Operating Officer Owen Jennings revealed that Block expects to generate its first direct revenue from artificial intelligence tools in the fourth quarter.
Nov 3 : Jack Dorsey-led Block raised its full-year gross profit outlook on Tuesday after posting a rise in third-quarter earnings, helped by strength in its Cash App unit and steady consumer spending that offset an uncertain economic backdrop.
The US economy grew at its fastest pace in a year in the third quarter, shrugging off higher oil prices due to the Iran war, as consumers maintained robust spending and businesses increased investment in AI.
Gross profit at Cash App, Block's consumer-focused financial platform, surged 27 per cent in the third quarter from a year earlier. Gross profit at its Square merchant business rose 14 per cent.
"Neighborhoods was a key driver of Cash App scaling to 60 million monthly transacting actives in September," CEO Jack Dorsey said in a letter to shareholders.
Cash App's growing banking and lending products have helped Block diversify its revenue streams beyond transaction fees, but they have also increased the company's credit losses. Block's losses on transaction, loan and consumer receivables rose 65.6 per cent to $601.7 million in the third quarter.
The visual communication platform is enacting significant staff reductions following an extended period of expansion. Leadership is adjusting the company's operational scale to respond directly to its first period of slowing momentum. This major internal shift signals a turning point for the firm after years of uninterrupted business gains.
Co-founder and CEO Melanie Perkins decided that minor organizational adjustments were insufficient to properly position the enterprise for future growth. The restructuring impacts 1,271 employees through job eliminations, role adjustments, or required office relocations to core operational hubs. Exiting staff members are set to receive minimum severance packages comprising half a year of base pay and a full year of healthcare coverage.
Leadership is weighing an operational separation that would untangle its pharmacy locations from its managed care portfolio. A formal division would directly isolate traditional drugstore retail services from broader health coverage operations. This strategic review follows industry-wide shifts as major healthcare conglomerates reevaluate the benefits of integrated corporate structures.