Block beat second-quarter profit estimates and raised its full-year outlook, less than six months after cutting more than 40% of its workforce to embed AI into its operations. Cash App's gross profit jumped 31% in the quarter, and the company's adjusted operating margin expanded to 27%, up from 22% a year earlier. Executives say the leaner, AI-focused structure is behind the gains.
Block's adjusted profit of $1.02 a share beat the 87-cent estimate compiled by LSEG for the quarter ended June 30. Revenue of $6.62 billion also topped the $6.49 billion consensus forecast. Block, the fintech company behind Square and Cash App, raised its full-year 2026 gross profit forecast to $12.51 billion, representing 21% growth, up from a prior forecast of $12.33 billion, or 19% growth.
Cash App and Square power the print
Cash App's gross profit rose 31% to $1.97 billion in the quarter, with 59 million monthly transacting active users in June. The Square unit's gross profit increased 13% to $1.16 billion as gross payment volume grew 10%, its strongest growth rate in three years. Management attributed the momentum to traction with larger merchants and self-onboarded sellers alike.
AI-driven cuts show payoff
The results come less than six months after Block's February announcement of the cuts. The company said then it would cut more than 4,000 jobs, roughly 40% of its workforce, shrinking headcount from over 10,000 to under 6,000.
Business lead Owen Jennings told MarketWatch: "We can ship higher-quality products much, much more quickly" because of the company's push into AI. CFO Amrita Ahuja said the raised outlook reflects more than the quarterly beat, saying the company feels good about its shift toward becoming an intelligence-oriented organization.
Block shares still fell 2% in after-hours trading despite the beat-and-raise. Seaport Research analyst Jeff Cantwell called the drop typical post-print volatility and said he expects the shares to move higher on the results, in a note to clients.
Sources: MarketWatch, Reuters via Investing.com, Crypto Briefing
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