Key facts
- Block guided 2027 gross profit to $14.52 billion, implying 15% growth, and said it expects AI investments to drive sustained growth.
- Losses on transaction, loan and consumer receivables rose 65.6% to $601.7 million in the third quarter, Block said.
- The deferred prosecution agreement could result in an expected net payment of roughly $764 million after credits for prior regulatory resolutions, Block said.
- Block said the DOJ resolution remains subject to a final agreement and court approval and warned terms could exceed the amount accrued.
- COO Owen Jennings said Block expects the fourth quarter to be the first time it generates revenue directly from AI tools.
- CFO Amrita Ahuja told Reuters that Cash App Card spending and Borrow repayment rates showed consumers managing their finances.
Block raised its full-year gross profit outlook on November 3 after third-quarter earnings rose, helped by 27% gross profit growth at Cash App and steady consumer spending. The Jack Dorsey-led fintech now expects gross profit of $12.63 billion for 2026, representing 22% growth, compared with its prior forecast of $12.51 billion. It forecast gross profit of $3.32 billion for the fourth quarter and $14.52 billion for 2027, implying 15% growth.
Gross profit at Cash App, Block's consumer-focused financial platform, rose 27% in the third quarter from a year earlier, while gross profit at its Square merchant business rose 14%. Adjusted operating income rose to $923 million, or $1.13 per share, for the three months ended September 30, compared with $480 million, or 54 cents per share, a year earlier. Shares of Block rose 7% in extended trading.
Cash App's growing banking and lending products have helped Block diversify revenue beyond transaction fees, but they have also increased credit losses. Losses on transaction, loan and consumer receivables rose 65.6% to $601.7 million in the third quarter.
Chief Financial Officer Amrita Ahuja told Reuters in an interview that continued strong spending on Cash App Card and strong repayment rates on Borrow were signals that consumers are managing their finances. Chief Operating Officer Owen Jennings said the company expects the fourth quarter to mark the first time it generates revenue directly from AI tools.
Separately, Block said it reached an agreement in principle with the US Department of Justice in October to defer for three years a charge that the company failed to maintain an effective anti-money laundering program in violation of the Bank Secrecy Act. The deferred prosecution agreement could result in an expected net payment of roughly $764 million after credits for prior regulatory resolutions, the company said. Block said the resolution remains subject to a final agreement and court approval and warned the ultimate terms could result in losses exceeding the amount already accrued.