Key points
- Block shares rose 7.9% to $75.70 in after-hours trading after a first-quarter earnings report that showed $0.85 per share versus the consensus of $0.68 — a 25.68% win.
- Year-on-year gross revenue rose 27% to $2.91 billion, fueled by Cash App’s impressive 38% expansion.
- The company reported a $173.8 million loss from a Bitcoin remeasurement, resulting in a quarterly net deficit of $309 million — the first such loss in three years.
- Revenue from Bitcoin operations decreased by 26% due to market dynamics and lower transaction fees on the Cash App
- Management has increased its full-year outlook, now expecting gross earnings to increase by 19% and adjusted EPS growth of 62% for 2026.
Jack Dorsey’s Block Inc. reported first-quarter 2026 results showing adjusted earnings of $0.85 per share, comfortably beating the Zacks Consensus Estimate of $0.68 by more than 25%. Shares of the payment technology company responded by rising 7.9% in extended trading, reaching $75.70.
The company’s total profits increased by 27% compared to the same period last year, reaching a total of $2.91 billion. The Cash App ecosystem showed particularly strong performance with gross revenue expanding 38% to $1.91 billion, supported by strength in lending services, banking products and merchant solutions.
Adjusted operating income posted an impressive 56% increase to $728 million. This achievement pushed adjusted operating margins to an all-time high of 25% compared to gross profit.
On an adjusted EPS basis, the fintech company achieved 52% year-over-year growth. Company executives highlighted “strong execution” as justification for improving their full-year financial outlook.
Management now expects total earnings growth of 19% for fiscal 2026, accompanied by a diluted expansion in adjusted EPS of 62%. These revised targets represent a significant improvement over previous guidance.
However, superficial metrics hide some fundamental challenges. Block posted a net deficit of $309 million during the three-month period — its first quarterly loss since 2023.
A large amount of $172.8 million Bitcoin Remeasurement charges to the company’s treasury played a major role in generating that net loss. As of March 31, Block maintained ownership of 8,883 BTC, with total BTC holdings – including customer balances – amounting to 28,355 BTC, representing approximately $2.2 billion in value.
Bitcoin-related revenue across Block’s product portfolio declined to $1.8 billion from $2.33 billion in the same quarter a year earlier, representing a decline of approximately 26%. Management attributed this reduction to evolving “Bitcoin trading dynamics” and the strategic choice to reduce fees on select Cash App Bitcoin transactions.
Cash App’s Bitcoin segment specifically shrank by 31% year over year. Square reported minimal Bitcoin activity, with the cryptocurrency operations generating revenue of about $28 million — which was offset by matching costs.
Bitcoin’s strategy remains unchanged despite revenue headwinds
Despite weak revenues, Jack Dorsey shows no signs of backing down from Bitcoin. During late April, Block introduced a system for proving reserves for both its company’s Bitcoin holdings and for Cash App and Square user accounts.
roadblock It also introduced an updated Bitkey hardware wallet featuring touchscreen functionality, and rolled out a Cash App capability allowing eligible users to automatically convert incoming payments into Bitcoin.
Square merchants have access to 5% Bitcoin cashback rewards. Customer withdrawal limits have been increased five-fold to $10,000 per day and $25,000 per week.
More than 800,000 U.S.-based merchants have activated bitcoin payment processing through Block’s infrastructure, according to a company announcement in late April.
Staff reductions and operational cost dynamics
Block’s operating expenses rose 57.2% year over year to $3.08 billion during the first quarter. This followed a major organizational restructuring in late February, when Dorsey unveiled plans to cut nearly 4,000 jobs — representing about 40% of the total headcount.
Since announcing the workforce reduction, Block’s stock price has risen approximately 25%.
Sean Emory, founder of Avory & Co., called Block’s performance a “strong quarter,” stressing that the company “overcame and raised” guidance metrics comprehensively.
