Block Inc (NYSE:XYZ) posted first-quarter results that topped Wall Street profit expectations, sending the company’s shares up around 7% in premarket trading Friday after management raised its outlook for the full year.
The financial technology company reported adjusted earnings per share of $0.85, exceeding analyst estimates of $0.68 by $0.17. Revenue came in at $6.06 billion, slightly below the consensus forecast of $6.12 billion.
Gross profit totaled $2.91 billion, representing a 27% increase from the same period last year and surpassing the company’s own guidance.
Block also reported a GAAP diluted net loss per share of $0.52. The result was affected by $852 million in restructuring expenses and legal contingency costs tied to organizational changes implemented in February.
Company raises 2026 guidance
Following the quarterly results, Block increased its full-year 2026 adjusted EPS forecast to $3.85, above the analyst consensus estimate of $3.64. The updated guidance implies annual growth of 62%.
The company now expects 2026 gross profit to reach $12.33 billion, reflecting projected year-over-year growth of 19%.
Block also forecast adjusted operating income of $3.34 billion for the year, implying an operating margin of 27%.
For the second quarter, management expects gross profit of $3.04 billion, representing 20% growth from a year earlier, alongside adjusted operating income of $740 million.
Analysts point to improving profitability story
“Block is becoming the business it should be with pieces in place for a powerful TAM expansion & profitability story,” Morgan Stanley analyst James Faucette said while reiterating an Overweight rating on the stock.
Cash App gross profit climbed 38% year over year to $1.91 billion, supported by strong performance from Cash App Borrow and commerce enablement products.
Consumer lending origination volume surged 82% compared with the prior year to $17.6 billion.
Primary Banking Actives reached 9.7 million users in March, marking growth of 18% from a year earlier.
Square gross profit increased 9% year over year to $982 million, while Square gross payment volume (GPV) advanced 13% to $61.2 billion.
Dorsey highlights AI-driven productivity gains
“AI tools have changed what it means to build and run a company,” said CEO Jack Dorsey in the shareholder letter.
“Production code changes per engineer are up over 2.5x compared to January.”
Last quarter, Dorsey announced a 40% workforce reduction, lowering the company’s employee count from 10,000 to 6,000.
During the quarter, Block repurchased 10.7 million shares for $636 million. The company still has approximately $4.7 billion remaining under its current buyback authorization.