NEW YORK, August 5, 2026, 18:09 EDT
- Block increased its full-year adjusted operating income outlook to $3.47 billion, up from the previous estimate of $3.34 billion.
- Adjusted earnings were $1.02 per share, surpassing the LSEG estimate of 87 cents.
- Shares dropped 1.35% in after-hours trading, giving up early gains following the results.
Block lifted its 2026 adjusted operating income forecast by $130 million and raised its gross profit outlook by $180 million. That equates to 72 cents in additional operating income for every incremental dollar of gross profit, according to a straightforward comparison to its May guidance.
This was the key signal for investors. Gross profit guidance was raised by 1.5%, and operating income guidance moved up by 3.9%. The adjusted margin goal was lifted by one point to 28%.
The quarter reflected comparable leverage as gross profit surpassed May guidance by $126 million. Adjusted operating income outpaced guidance by $124 million, almost matching gross profit gains on a narrow comparison.
According to Block’s filing and LSEG LON:LSEG estimates, the company delivered a profit that exceeded expectations by a larger margin than its revenue surprise.
| Q2 measure | Reported | Benchmark | Variance |
|---|---|---|---|
| Revenue | $6.618 billion | $6.49 billion consensus | +2.0% |
| Gross profit | $3.166 billion | $3.04 billion May forecast | +4.1% |
| Adjusted operating income | $864 million | $740 million May forecast | +16.8% |
| Adjusted EPS | $1.02 | $0.87 consensus | +17.2% |
U.S. regular trading ended with Block at $84.20, a decrease of 0.5%. Initial post-earnings indication touched $88. The stock then fell to $83.06 by 18:01 EDT, marking a 1.35% drop in after-hours trading.
The improved yearly forecast continues the margin improvements through the latter half.
| 2026 measure | New outlook | May outlook | Increase |
|---|---|---|---|
| Gross profit | $12.51 billion | $12.33 billion | $180 million, or 1.5% |
| Gross-profit growth | 21% | More than 19% | About 2 percentage points |
| Adjusted operating income | $3.47 billion | $3.34 billion | $130 million, or 3.9% |
| Adjusted operating margin | 28% | 27% | 1 percentage point |
| Adjusted EPS | $4.02 | $3.85 | $0.17, or 4.4% |
The profit increase is due to more than just higher demand. Product development costs dropped 16% following the organizational restructuring in February. Meanwhile, sales and marketing expenses climbed 21%, with Cash App spending up by 28%.
Growth was mainly driven by Cash App. Although its user base increased just 3%, lending, transaction activity, and monetization all expanded at a significantly higher rate.
| Operating measure | Q2 2026 | Q2 2025 | Change |
|---|---|---|---|
| Cash App gross profit | $1.973 billion | $1.501 billion | +31% |
| Square gross profit | $1.160 billion | $1.027 billion | +13% |
| Cash App monthly actives | 59 million | 57 million | +3% |
| Cash App lending originations | $18.9 billion | $11.9 billion | +59% |
| Cash App commerce volume | $56.5 billion | $48.3 billion | +17% |
| Square GPV | $72.85 billion | $64.25 billion | +13% |
Cash App reported a 31% increase in profit compared to a 3% rise in user numbers, indicating greater revenue per user. The commerce monetization rate climbed by 12 basis points to reach 1.65%.
Square’s U.S. payment volume climbed by 9.8%, marking its fastest growth rate since 2023. Gross-profit growth was boosted by roughly two percentage points due to a one-time tariff reimbursement.
Chief Executive Jack Dorsey described intelligence tools as “the next major technology shift.” He noted that machine learning has for some time played a role in underwriting and fraud controls. SEC
Risks: Credit-related losses almost doubled, increasing by 99% with the growth in lending, but Block maintained cohort loss rates are still healthy. Bitcoin gross profit dropped by 31%. For Q3, the company projects gross profit to rise by 18%, slower than Q2’s 25%.
Prior to the report, shares had increased 2.5% since the close on July 29. On Wednesday, they finished up 29.4% for 2026. The shift indicates that expectations climbed alongside the stock.
Wall Street was largely optimistic ahead of the announcement, though consensus was not reached. The recommendations below were published prior to the results.
| Analyst | Firm | Recommendation | Target | Date |
|---|---|---|---|---|
| Richard Sunderland | Truist Financial NYSE:TFC | Buy, reiterated | Not stated | Aug. 4 |
| James Faucette | Morgan Stanley NYSE:MS | Overweight, reiterated | $90 from $98 | Aug. 3 |
| Andrew Harte | BTIG | Buy, reiterated | $90 | July 27 |
| Andrew Schmitt | KeyBanc, unit of KeyCorp NYSE:KEY | Overweight | $105 from $100 | July 23 |
| Andrew Bauch | BMO Capital, part of Bank of Montreal (TSE:BMO) | Hold | $85 from $78 | July 22 |
Prior to the announcement, 38 out of 45 analysts tracked had Buy or Strong Buy ratings. Seven analysts rated the stock as Hold, and none gave a Sell rating. The consensus price target averaged $93.03, but that figure may be updated after the results.
Key macroeconomic updates are scheduled for August 12 and August 14. July consumer price figures are due on Wednesday, with retail sales data expected Friday. The results will challenge the spending projections that support Block’s revised forecast.
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