Block Inc.'s Bitcoin ecosystem generated half as much gross profit in the third quarter as it did a year earlier, but the decline stemmed from a deliberate fee reduction rather than falling customer demand, and strong results across the rest of the business were enough to lift the company's shares in after-hours trading.

Bitcoin ecosystem gross profit fell 50% from a year earlier to $52 million. Block said the drop resulted from its "strategic decision to reduce the fee" charged on certain Bitcoin transactions in Cash App. The segment still produced substantial revenue: Cash App generated $4.07 billion in revenue for the quarter, of which $1.77 billion came from the Bitcoin ecosystem. Put differently, Bitcoin brought in roughly 43% of Cash App's quarterly revenue but only about 2.5% of its $2.07 billion in gross profit.

Block's Bitcoin ecosystem mainly covers customer purchases of Bitcoin inside Cash App, its Proto business — Block's Bitcoin mining venture — and Bitcoin withdrawal fees. Because the segment's revenue counts the full value of customer purchases while gross profit captures only the spread and fees Block retains on those transactions, a lower fee shrinks the profit earned per trade rather than the number of trades. The company noted that lower gross profit in the unit does not mean trading volume fell by half.

Cash App and Square Carry the Quarter

Outside of Bitcoin, Block's numbers rose across the board. The company posted net income of $566 million, up from $462 million a year earlier, on total revenue of $6.72 billion, up from $6.12 billion. Total gross profit grew 22% to $3.24 billion, beating management's guidance — a marker investors track closely, since Block steers the business by gross profit rather than revenue.

Cash App delivered $2.07 billion of that gross profit, a 27% increase from the same quarter last year. The app had 60 million monthly transacting users in September, a figure Block partly credited to Neighborhoods, a product that links customers who shop at Square merchants to the Cash App network.

Lending also grew quickly. Loan originations rose 40% from a year earlier, driven by Cash App Borrow and Afterpay Post-Purchase. Gross profit for Financial Solutions, the unit tied to consumer lending, climbed 32%.

Square's gross payment volume rose 14%, its fastest yearly growth since the first quarter of 2023. U.S. volume grew 10.4%, while international volume jumped 26%. Square gross profit increased 14%, and Commerce Enablement gross profit rose 19% on stronger payment activity across Square and Cash App.

Adjusted earnings per share reached $1.13, up 109% from a year earlier, while the adjusted operating income margin hit 29%, a company record.

Block Raises Its Full-Year Outlook

Block lifted its full-year gross profit forecast to $12.63 billion, which would mean 22% growth from last year. The company also expects adjusted operating income to rise 69% and adjusted diluted earnings per share to grow 75%.

"We expect Block to perform meaningfully better in 2026 than the expectations we outlined at Investor Day in November 2025," Jack Dorsey and CFO Amrita Ahuja wrote in their shareholder letter.

For 2027, Block expects gross profit to grow at least 15% and forecasts that adjusted operating income will rise 30% to $4.575 billion. The company also expects a third straight year of faster growth in Square payment volume in 2027, and it sees Cash App active customers growing in the low single digits.

Analyst Estimates and Market Reaction

Before the report, Zacks rated the stock #3 (Hold), citing mixed estimate revisions. Analysts expect earnings of $1.16 per share for the next quarter on revenue of $6.76 billion, and $4.05 per share for the full year on revenue of $26.09 billion.

Block shares closed down 1.4% at $76 on Tuesday. After the earnings release, the stock rose between 6.2% and more than 8% in after-hours trading, according to separate reports.