Block raises full-year profit outlook as Cash App drives Q3 growth

JACK Dorsey-led Block raised its full-year gross profit outlook on Tuesday (Nov 3) after posting a rise in third-quarter earnings, helped by strength in its Cash App unit and steady consumer spending that offset an uncertain economic backdrop.

Shares of the company were up 9 per cent in extended trading.

The US economy grew at its fastest pace in a year in the third quarter, shrugging off higher oil prices due to the Iran war, as consumers maintained robust spending and businesses increased investment in AI.

Gross profit at Cash App, Block‘s consumer-focused financial platform, surged 27 per cent in the third quarter from a year earlier. Gross profit at its Square merchant business rose 14 per cent.

“Neighborhoods was a key driver of Cash App scaling to 60 million monthly transacting actives in September,” CEO Jack Dorsey said in a letter to shareholders.

Cash App’s growing banking and lending products have helped Block diversify its revenue streams beyond transaction fees, but they have also increased the company’s credit losses. Block‘s losses on transaction, loan and consumer receivables rose 65.6 per cent to US$601.7 million in the third quarter.

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“We’ve seen continued strong spending on Cash App Card as well as strong repayment rates on Borrow, which for us are the signals that collectively tell us consumers are managing their finances and the strength of their pocketbook,” chief financial officer Amrita Ahuja told Reuters in an interview.

Block now expects gross profit of US$12.63 billion for 2026, representing 22 per cent growth, compared with its prior forecast of US$12.51 billion. It forecast gross profit of US$3.32 billion for the fourth quarter.

Executive officer and head of business Owen Jennings said the company expects the fourth quarter to mark the first time it generates revenue directly from AI tools.

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The fintech firm also forecast 2027 gross profit of US$14.52 billion, implying 15 per cent growth, as it expects AI investments to drive sustained growth.

Adjusted operating income rose to US$923 million, or US$1.13 per share, for the three months ended Sep 30, compared with US$480 million, or 54 cents per share, a year earlier. REUTERS