Shares of Block moved sharply higher on Wednesday after the fintech company reported third-quarter results that exceeded analyst expectations and lifted its full-year profit guidance. The stock gained more than 14% during the session, building on a 6.2% advance in after-hours trading the previous day.
For the quarter ended September 2026, Block posted adjusted earnings of $1.13 per share, ahead of estimates that ranged from roughly $1.02 to $1.04. Revenue came in at $6.72 billion, topping the consensus estimate of $6.58 billion and rising from $6.12 billion a year earlier.
Guidance raised across key metrics
Management increased its full-year adjusted earnings forecast to $4.15 per share and lifted its gross profit outlook to $12.63 billion, which would represent annual growth of 22%. The prior gross profit forecast stood at $11.98 billion. For the fourth quarter, Block expects adjusted earnings of $1.15 per share, and for 2027 it projected gross profit of $14.52 billion.
The company said the revised outlook reflects momentum across its operations and its continued investments in artificial intelligence, alongside a broader emphasis on business velocity. Block also indicated it expects gross profit to grow at least 15% in 2027 while it keeps funding long-term growth initiatives.
Cash App and Square drive quarterly performance
Third-quarter gross profit rose 22% year over year to $3.24 billion. Net income increased to $566 million from $462 million in the prior-year period. Adjusted operating income climbed 92% to a record $923 million, and the adjusted operating margin expanded by more than 1,000 basis points to 29%.
Both of Block's primary platforms delivered higher gross profit. Cash App gross profit grew 27% year over year to $2.07 billion, while Square, the merchant-facing segment, saw gross profit rise 14%. Square gross payment volume growth accelerated to 14%, its fastest pace since the first quarter of 2023. Cash App reached 60 million monthly transacting active users, and consumer lending originations increased 40% to $19 billion.
Block generates revenue through transaction fees across its platforms, including Square, Cash App, and the buy now, pay later service Afterpay. Cash App also enables customers to buy and sell Bitcoin.
Bitcoin ecosystem and new initiatives
Block's Bitcoin-related business recorded weaker gross profit even as the value of its Bitcoin holdings rose. Bitcoin ecosystem gross profit fell 50% year over year to $52 million, a decline the company attributed to a strategic reduction in fees charged on certain Bitcoin transactions through Cash App. Cash App generated $4.07 billion in revenue during the quarter, including $1.77 billion from its Bitcoin ecosystem segment. The value of Block's Bitcoin holdings increased by $229.7 million during the period.
The company also said it began piloting Buzz, a free, open-source collaboration platform announced in July. Chief Executive Jack Dorsey said Block expects to generate its first machine intelligence revenue from the product in the fourth quarter.
Analyst reactions diverge
Analysts maintained differing views on the stock following the results. Citizens retained its Market Perform rating and $76 price target, while Raymond James raised its price target to $100 from $97 and kept an Outperform rating.
This article is for informational purposes only and does not constitute financial advice.
