Block Inc. (NYSE: XYZ) shares climbed more than 8.1% in after-market trading on Tuesday after the payments company co-founded by Jack Dorsey delivered an earnings report that beat management's guidance, with Cash App gross profit up 27% and Square accelerating after a prolonged stretch of slower growth. Block operates through two main ecosystems — Square, its payments platform for merchants, and Cash App, its consumer financial services app — so the report offered a read on both sides of the business.

The company's total gross profit rose 22% from a year earlier, exceeding its own outlook. Cash App and Square both expanded, while the Bitcoin business moved in the opposite direction.

Cash App lending expands as Square processes more payments

Block's adjusted earnings per share reached $1.13, a 109% increase that more than doubled the prior-year figure. The company's adjusted operating income margin hit 29%, a record for Block. The margin mattered because the company retained a larger share of its gross profit as operating earnings rather than letting expenses absorb the additional revenue.

Cash App counted 60 million monthly transacting users in September, a measure of customers actively using the app during the month, aided in part by Neighborhoods, a product that connects customers who shop with Square merchants to the Cash App network. The initiative is designed to merge two separate user bases into a single connected network.

Origination of Block's customer loans increased 40% year over year, driven by Cash App Borrow, its consumer lending product, and Afterpay Post-Purchase, the company's buy-now-pay-later offering.

Gross payment volume (GPV) rose 14%, the strongest year-on-year growth since the first quarter of 2023. The metric climbed 10.4% in the United States and surged 26% internationally. GPV measures the volume of payments processed rather than the income generated.

The segment breakdown shows where the income came from: Square's gross profit grew 14%, Commerce Enablement's gross profit advanced 19% on improved payment activity across Square and Cash App, and Financial Solutions expanded 32%, powered by consumer lending.

Bitcoin bucked the trend. Bitcoin Ecosystem gross profit fell 50% from a year earlier, which Block attributed to its deliberate decision to cut fees on certain Bitcoin trades made through Cash App. Because gross profit in the segment tracks the fees collected on trades rather than trading volume itself, the company noted that the decline does not mean Bitcoin trading volume was halved.

Block expects faster earnings growth than it previously forecast

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

For 2026, Block is forecasting 22% gross profit growth, 69% growth in adjusted operating income, and a 75% rise in adjusted diluted earnings per share. Those figures are forecasts, not reported earnings.

The longer-term outlook is more measured. Management expects gross profit to grow by at least 15% in 2027, while adjusted operating income is projected to climb 30% to reach $4.575 billion.

“Neighborhoods has started to connect Square and Cash App, while our investments in AI are laying the foundation for what we believe will become Block's next ecosystem,” Dorsey and Ahuja told shareholders.

Block also anticipates a third consecutive year of rapid GPV growth for Square in 2027, with gross profit projected to rise at a similar pace. Cash App is expected to add active customers in the low single digits, while both Commerce Enablement and Financial Solutions are anticipated to generate strong gross profit growth.

Analysts were less conclusive ahead of the report. Conflicting earnings estimate revisions kept Block at a Zacks Rank #3 (Hold), indicating the stock was expected to perform roughly in line with the broader market.

Estimates for the upcoming quarter call for the company to earn $1.16 in EPS on revenues of $6.76 billion. For the full fiscal year, EPS estimates stand at $4.05 on revenues of $26.09 billion. Those estimates set the near-term benchmark for Block's next report, the first checkpoint against management's expectation that 2026 will come in ahead of the outlook it outlined at Investor Day in November 2025.