Updated Version: Block Raises Full-Year Profit Forecast, Cash App Drives Growth in Q3

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Rishab Shaju/Prakhar Srivastava

Reuters, November 3 - Block, led by Jack Dorsey (XYZ.N), raised its full-year gross profit forecast on Tuesday after reporting an increase in third-quarter earnings, driven by strong performance from its Cash App business and stable consumer spending, factors that offset uncertainty about the economic outlook.

The company's stock price rose 9% in after-hours trading.

In the third quarter, the U.S. economy posted its fastest growth in a year. Despite higher oil prices caused by the Iran conflict, consumer spending remained strong and businesses increased investment in artificial intelligence, offsetting the impact.

As Block's consumer-focused financial platform, Cash App saw its third-quarter gross profit surge 27% year-on-year. Gross profit for its Square merchant business rose by 14%.

"Neighborhoods is a key driver that propelled Cash App's monthly active transacting users to 60 million in September," CEO Jack Dorsey said in a letter to shareholders.

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Cash App's expanding range of banking and lending products has helped Block diversify its revenue beyond transaction fees, but also increased the company's credit losses. In the third quarter, Block's losses on transactions, loans, and consumer receivables rose by 65.6% to $601.7 million.

"We continue to see strong spending on the Cash App Card, and Borrow repayment rates remain robust. Taken together, these signals demonstrate that consumers are managing their finances well and are financially strong," CFO Amrita Ahuja told Reuters in an interview.

Block now expects 2026 gross profit to reach $12.63 billion, a 22% increase, up from its previous forecast of $12.51 billion. The company expects fourth-quarter gross profit of $3.32 billion.

COO Owen Jennings said the company expects to generate direct revenue from AI tools for the first time in the fourth quarter.

The fintech company also forecasts 2027 gross profit could reach $14.52 billion, an increase of 15%, as the company expects artificial intelligence investments to fuel continued growth.

For the three months ended September 30, adjusted operating profit rose to $923 million, or $1.13 per share, compared with $480 million, or 54 cents per share, a year earlier.

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