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Block Q2 Earnings Call Highlights Raised Outlook and AI Push
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Key Takeaways
Block raised 2026 gross profit guidance to $12.51 billion and adjusted operating income to $3.47 billion.
Square payment volume rose 13% to $72.8 billion, led by stronger U.S. and international growth.
AI lifted code changes per engineer 150%, while Square shipped 130 features in the first half.
Block, Inc. (XYZ - Free Report) raised its 2026 outlook after second-quarter gross profit grew 25% and the adjusted operating income margin reached a record 27%. Management focused on stronger Square trends, deeper Cash App engagement and faster product development.
Adjusted earnings of $1.02 per share beat the Zacks Consensus Estimate of $0.86. Revenues of $6.62 billion topped the consensus estimate of $6.54 billion.
Foundational Lead, COO and CFO Amrita Ahuja said that Block now expects 2026 gross profit of $12.51 billion, up 21%, and adjusted operating income of $3.47 billion at a 28% margin. Full-year 2026 adjusted earnings are projected to be $4.02 per share, up 70%.
A Wells Fargo analyst asked whether conservatism remained in the outlook. Ahuja said that July Square payment-volume growth matched second-quarter strength, while Cash App inflows, monetization and risk trends remained healthy.
Block Sees Square Momentum Building
Ahuja said that Square gross payment volume grew 13% to $72.8 billion. U.S. growth accelerated to roughly 10%, its strongest rate since the second quarter of 2023.
Food-and-beverage volume rose 20%, while mid-market sellers remained Square’s fastest-growing segment. International payment volume increased 25% on a constant-currency basis.
During questioning from Wolfe Research, Ahuja credited faster product releases and expanding distribution. Block had more than 200 active independent sales organization partners, while self-onboarded new volume grew at its fastest pace since the second quarter of 2021.
XYZ Leans on Cash App Engagement
Ahuja said that Cash App gross profit rose 31% to $1.97 billion. Monthly transacting actives increased 3% to 59 million, while inflows per active grew 9%.
Cash App commerce volume rose 17% to $56.5 billion, and consumer-lending originations increased 59% to $18.9 billion. Management still expects low-single-digit active growth for 2026.
An Evercore analyst questioned growth after Cash App Borrow’s rapid expansion. Co-Founder, head and chairman Jack Dorsey emphasized banking, commerce, Neighborhoods, families and Cash App Tags. Ahuja said that Borrow loss rates remained healthy and loss growth should moderate.
Block Puts AI at the Center
Dorsey said that the intelligence-focused reorganization remains on track. Code changes per engineer have risen 150% since the start of 2026, and Square shipped 130 features in the first half, more than triple the prior-year pace.
A Barclays analyst asked about AI costs and monetization. Ahuja said that budgets are increasing, but Block’s model-agnostic architecture, workload routing and open-source models provide flexibility on quality and cost.
Business lead Owen Jennings said that Managerbot could enter software tiers, sell directly or use usage-based pricing. Management is prioritizing product quality, usefulness and distribution before selecting a monetization model.
XYZ Scales Neighborhoods and Banking
Jennings said that Neighborhoods crossed $1 billion in annualized seller payment volume in June. New sellers joining in July were eight times the March level, while follower spending reached about 10% of seller volume after three quarters.
Ahuja said that Square Financial Services is expanding deposit-taking and acquiring capabilities. The bank processed its first Square acquiring transaction in June, creating a path toward funding efficiency and processing resilience.
Hardware lead Thomas Templeton said that initial Cash App Tags releases sold out, with more than 3 million people requesting notifications for future drops without paid marketing. Production and additional form factors are expanding.
Block Balances Growth and Discipline
Ahuja said that Block will invest more in Square distribution, Neighborhoods and AI when expected returns justify deploying profit upside. Management paired that stance with margin expansion and higher full-year profitability targets.
Dorsey framed owned hardware, banking infrastructure, proprietary data and model-agnostic AI as core advantages. The focus remained on converting those capabilities into faster product releases and broader network engagement.
Style Scores complement the Zacks Rank, with the strongest historical combinations centered on Zacks Rank #1 or 2 (Buy) stocks carrying A or B scores. XYZ’s signals are constructive but mixed, and the Zacks Rank can change as estimates are revised after the reported results.
View the Zacks #1 Rank List
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Block Q2 Earnings Call Highlights Raised Outlook and AI Push
Key Takeaways
Block, Inc. (XYZ - Free Report) raised its 2026 outlook after second-quarter gross profit grew 25% and the adjusted operating income margin reached a record 27%. Management focused on stronger Square trends, deeper Cash App engagement and faster product development.
Adjusted earnings of $1.02 per share beat the Zacks Consensus Estimate of $0.86. Revenues of $6.62 billion topped the consensus estimate of $6.54 billion.
Block, Inc. Price, Consensus and EPS Surprise
Block, Inc. price-consensus-eps-surprise-chart | Block, Inc. Quote
XYZ Raises 2026 Profit Outlook
Foundational Lead, COO and CFO Amrita Ahuja said that Block now expects 2026 gross profit of $12.51 billion, up 21%, and adjusted operating income of $3.47 billion at a 28% margin. Full-year 2026 adjusted earnings are projected to be $4.02 per share, up 70%.
A Wells Fargo analyst asked whether conservatism remained in the outlook. Ahuja said that July Square payment-volume growth matched second-quarter strength, while Cash App inflows, monetization and risk trends remained healthy.
Block Sees Square Momentum Building
Ahuja said that Square gross payment volume grew 13% to $72.8 billion. U.S. growth accelerated to roughly 10%, its strongest rate since the second quarter of 2023.
Food-and-beverage volume rose 20%, while mid-market sellers remained Square’s fastest-growing segment. International payment volume increased 25% on a constant-currency basis.
During questioning from Wolfe Research, Ahuja credited faster product releases and expanding distribution. Block had more than 200 active independent sales organization partners, while self-onboarded new volume grew at its fastest pace since the second quarter of 2021.
XYZ Leans on Cash App Engagement
Ahuja said that Cash App gross profit rose 31% to $1.97 billion. Monthly transacting actives increased 3% to 59 million, while inflows per active grew 9%.
Cash App commerce volume rose 17% to $56.5 billion, and consumer-lending originations increased 59% to $18.9 billion. Management still expects low-single-digit active growth for 2026.
An Evercore analyst questioned growth after Cash App Borrow’s rapid expansion. Co-Founder, head and chairman Jack Dorsey emphasized banking, commerce, Neighborhoods, families and Cash App Tags. Ahuja said that Borrow loss rates remained healthy and loss growth should moderate.
Block Puts AI at the Center
Dorsey said that the intelligence-focused reorganization remains on track. Code changes per engineer have risen 150% since the start of 2026, and Square shipped 130 features in the first half, more than triple the prior-year pace.
A Barclays analyst asked about AI costs and monetization. Ahuja said that budgets are increasing, but Block’s model-agnostic architecture, workload routing and open-source models provide flexibility on quality and cost.
Business lead Owen Jennings said that Managerbot could enter software tiers, sell directly or use usage-based pricing. Management is prioritizing product quality, usefulness and distribution before selecting a monetization model.
XYZ Scales Neighborhoods and Banking
Jennings said that Neighborhoods crossed $1 billion in annualized seller payment volume in June. New sellers joining in July were eight times the March level, while follower spending reached about 10% of seller volume after three quarters.
Ahuja said that Square Financial Services is expanding deposit-taking and acquiring capabilities. The bank processed its first Square acquiring transaction in June, creating a path toward funding efficiency and processing resilience.
Hardware lead Thomas Templeton said that initial Cash App Tags releases sold out, with more than 3 million people requesting notifications for future drops without paid marketing. Production and additional form factors are expanding.
Block Balances Growth and Discipline
Ahuja said that Block will invest more in Square distribution, Neighborhoods and AI when expected returns justify deploying profit upside. Management paired that stance with margin expansion and higher full-year profitability targets.
Dorsey framed owned hardware, banking infrastructure, proprietary data and model-agnostic AI as core advantages. The focus remained on converting those capabilities into faster product releases and broader network engagement.
XYZ’s Zacks Signals Remain Balanced
XYZ carries a Zacks Rank #3 (Hold). Its Growth Score of A, Momentum Score of B and VGM Score of A indicate favorable characteristics in those styles, while the Value Score of C is less compelling. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Style Scores complement the Zacks Rank, with the strongest historical combinations centered on Zacks Rank #1 or 2 (Buy) stocks carrying A or B scores. XYZ’s signals are constructive but mixed, and the Zacks Rank can change as estimates are revised after the reported results.