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Cash App's monetization rate improved to 1.65% as inflows per active rose 9%.
Block (XYZ - Free Report) delivered a strong performance in the second quarter of 2026, with Cash App generating $1.97 billion in gross profit, up 31% year over year. The growth was driven mainly by Financial Solutions, up 43%, while Commerce Enablement increased 18%. Monthly transacting actives grew only 3%, indicating that Cash App's performance is driven by deeper customer engagement rather than rapid user growth. Primary Banking Actives rose 17%, while inflows per active increased 9%, highlighting engagement.
A major contributor was Cash App Borrow, with Consumer Lending origination volume increasing 59% year over year to $18.9 billion. Commerce Enablement volume also rose 17% to $56.5 billion, supported by Cash App Card and Afterpay BNPL. The monetization rate improved from 1.53% to 1.65%, demonstrating that Cash App is generating more value from its existing customer base.
However, sustaining growth will not be without challenges. Management expects Borrow growth to normalize as Block faces tougher comparisons, while loan-related losses have increased with higher lending volumes. Bitcoin Ecosystem gross profit declined, and Cash App sales and marketing expenses increased 28%. These factors highlight the need for Block to diversify its growth drivers while maintaining profitability.
The long-term outlook remains positive as Block continues to build a diversified Cash App ecosystem across Card, BNPL, primary banking, Cash App Pay, Neighborhoods, families and teens products, Tags and Cash App Mobile. With avenues to deepen engagement, increase product adoption and expand monetization, Block has the potential to sustain healthy growth. The key will be converting customer relationships into financial activity.
How Are Block’s Competitors Faring?
PayPal’s (PYPL - Free Report) revenues increased 5% to $8.7 billion in the second quarter of 2026, while total payment volume (TPV) grew 10% to $486.4 billion. Venmo TPV was particularly strong, increasing 14% year over year, while transactions per active account rose 3%. PayPal also raised its full-year 2026 outlook, reflecting improving momentum across Venmo, Braintree and financial services.
SoFi (SOFI - Free Report) also delivered strong growth in second-quarter 2026, reporting record net revenues of approximately $1.2 billion and net income of $157 million. The company continued to benefit from strong member and product growth, supported by its integrated digital-financial-services platform.
XYZ’s Price Performance, Valuation & Estimates
Shares of Block have risen 17.6% over the past three months, which outperformed the broader industry and the S&P 500 Index.
Image Source: Zacks Investment Research
In terms of forward 12-month P/E, XYZ stock is trading at 17.02X, which is at a discount to the Zacks Internet Software industry’s 27.33X.
Image Source: Zacks Investment Research
Block’s estimate revisions reflect a positive trend. The Zacks Consensus Estimate for full-year 2026 EPS has been revised upward over the past week. It indicates a significant increase year over year.
View the Zacks #1 Rank List
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Block's Q2'26 Cash App Profit Jumps 31%: Can It Sustain Growth?
Key Takeaways
Block (XYZ - Free Report) delivered a strong performance in the second quarter of 2026, with Cash App generating $1.97 billion in gross profit, up 31% year over year. The growth was driven mainly by Financial Solutions, up 43%, while Commerce Enablement increased 18%. Monthly transacting actives grew only 3%, indicating that Cash App's performance is driven by deeper customer engagement rather than rapid user growth. Primary Banking Actives rose 17%, while inflows per active increased 9%, highlighting engagement.
A major contributor was Cash App Borrow, with Consumer Lending origination volume increasing 59% year over year to $18.9 billion. Commerce Enablement volume also rose 17% to $56.5 billion, supported by Cash App Card and Afterpay BNPL. The monetization rate improved from 1.53% to 1.65%, demonstrating that Cash App is generating more value from its existing customer base.
However, sustaining growth will not be without challenges. Management expects Borrow growth to normalize as Block faces tougher comparisons, while loan-related losses have increased with higher lending volumes. Bitcoin Ecosystem gross profit declined, and Cash App sales and marketing expenses increased 28%. These factors highlight the need for Block to diversify its growth drivers while maintaining profitability.
The long-term outlook remains positive as Block continues to build a diversified Cash App ecosystem across Card, BNPL, primary banking, Cash App Pay, Neighborhoods, families and teens products, Tags and Cash App Mobile. With avenues to deepen engagement, increase product adoption and expand monetization, Block has the potential to sustain healthy growth. The key will be converting customer relationships into financial activity.
How Are Block’s Competitors Faring?
PayPal’s (PYPL - Free Report) revenues increased 5% to $8.7 billion in the second quarter of 2026, while total payment volume (TPV) grew 10% to $486.4 billion. Venmo TPV was particularly strong, increasing 14% year over year, while transactions per active account rose 3%. PayPal also raised its full-year 2026 outlook, reflecting improving momentum across Venmo, Braintree and financial services.
SoFi (SOFI - Free Report) also delivered strong growth in second-quarter 2026, reporting record net revenues of approximately $1.2 billion and net income of $157 million. The company continued to benefit from strong member and product growth, supported by its integrated digital-financial-services platform.
XYZ’s Price Performance, Valuation & Estimates
Shares of Block have risen 17.6% over the past three months, which outperformed the broader industry and the S&P 500 Index.
Image Source: Zacks Investment Research
In terms of forward 12-month P/E, XYZ stock is trading at 17.02X, which is at a discount to the Zacks Internet Software industry’s 27.33X.
Image Source: Zacks Investment Research
Block’s estimate revisions reflect a positive trend. The Zacks Consensus Estimate for full-year 2026 EPS has been revised upward over the past week. It indicates a significant increase year over year.
Image Source: Zacks Investment Research
Block currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.