Highlights

  • Q3 2026 Gross Profit grew 22% year over year to $3.235 billion
  • Adjusted diluted EPS hit a record $1.13, up 109% year over year
  • Adjusted Operating Income nearly doubled to $922.7 million, representing a 29% margin
  • Full-year 2026 gross profit guidance raised to $12.626 billion, up 22%

Block (NYSE:XYZ) reported higher net Revenue and a record level of adjusted operating income. Total net revenue came in at $6.72 billion, up 10%, with the lower revenue growth rate relative to gross profit reflecting the exclusion of lower-margin Bitcoin ecosystem revenue from management's preferred metrics. Adjusted operating income almost doubled to a record $922.7 million, representing 29% of gross profit.

Cash App Lending and Engagement Drive Outperformance

Cash App generated $2.07 billion in gross profit in Q3 2026, up 27% year over year, driven by continued strength in consumer lending and the Cash App Card. Consumer lending origination Volume climbed 40% to $19.0 billion, reflecting deepening financial services engagement among Cash App's monthly active user base of 60 million. The Cash App Card continues to gain adoption as a primary spending tool, with higher spend per active card driving incremental gross profit. Block has positioned Cash App as a full-service financial platform targeting underserved consumers, and the lending and card franchises are demonstrating the revenue potential of that strategy.

Square Merchant Platform Grows Despite Processing Headwinds

Square contributed $1.16 billion in gross profit, up 14% year over year, though results were slightly dampened by a 2.6 percentage point headwind from increased processing costs at a key operational partner. Excluding this headwind, Square's underlying performance was stronger than reported. Square Loans and Square Software were cited as the primary growth drivers, with food and beverage market gross payment volume growing 17% year over year. Block's strategy of expanding from core payment processing into lending, banking, and software services within the Square ecosystem mirrors the broader Financial Solutions approach that has driven Cash App's expansion.

Machine Intelligence Revenue Marks New Frontier

Block disclosed that it expects to generate its first machine intelligence revenue in Q4 2026 from Buzz, an open-source workspace product for humans and AI agents that entered Alpha testing in July 2026. While the initial revenue contribution is likely to be modest, management highlighted it as the beginning of a new revenue stream less correlated with payment volumes and crypto markets.

Preliminary 2027 Outlook Sets Ambitious Targets

Looking ahead, Block provided preliminary 2027 guidance targeting at least 15% gross profit growth and a 32% adjusted operating income margin. The targets imply continued Operating Leverage while maintaining a meaningful Investment pace in new product initiatives. For Q4 2026, Block guided gross profit of $3.315 billion, up 15%, and adjusted operating income of $1.005 billion at a 30% margin. The raise-and-guide pattern — this was Block's third consecutive guidance raise — has boosted investor confidence in management's ability to execute on its growth and profitability objectives.