Aug 5 (Reuters) – Block raised its full-year gross profit forecast on Wednesday after the payments firm posted market-beating results, driven by resilient consumer spending and strong growth at its Cash App business.
Shares of the Jack Dorsey-led company rose more than 4% in extended trading.
Cash App has largely fended off competition by evolving beyond peer-to-peer transfers into a broader consumer financial services platform offering banking, investing and lending products.
The second half of the year also typically brings major shopping events, including Cyber Monday and the holiday season, when retailers offer deep discounts that encourage spending even among budget-conscious consumers, providing a seasonal boost to payment volumes.
Block now expects gross profit of $12.51 billion, representing a 21% growth in 2026, compared with its prior forecast of $12.33 billion, or 19% growth.
The results also cap a strong earnings season for the U.S. payments industry and underscore resilience in the face of inflationary pressures fueled by the Middle East conflict and elevated borrowing costs.
Payments firms have continued to process healthy transaction volumes even as consumers rein in discretionary spending and prioritize everyday essentials, since both transactions flow through the same networks.
Gross profit at Cash App surged 31% in the second quarter while it rose 13% at its Square merchant business.
Block has also stepped up its cost-cutting efforts. In February, it announced plans to cut more than half its workforce as part of a broader overhaul to embed AI across its operations.
“Intelligence tools are the next major technology shift, but machine learning is not new to Block,” Dorsey said in a letter to shareholders.
Adjusted profit of $1.02 per share in the three months ended June 30 comfortably beat Wall Street expectations of 87 cents, according to estimates compiled by LSEG.
Revenue at $6.62 billion also topped expectations of about $6.49 billion.
(Reporting by Manya Saini in Bengaluru; Editing by Sriraj Kalluvila)
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