Block Q3 gross profit increased by 22% to 3.24 billion USD, after-hours trading rose over 7%

According to Bloomberg, Jack Dorsey's payment company Block reported a 22% year-on-year increase in gross profit for the third quarter to $3.24 billion, exceeding analysts' average expectations of $3.1 billion. The company raised its full-year gross profit forecast for 2026 from approximately $12.5 billion to about $12.6 billion, with shares rising over 7% in after-hours trading. In terms of business, Square is expanding its restaurant merchant base, while Cash App is launching more banking account features.

Block is also connecting Cash App users with Square merchants through the Neighborhoods project and has begun selling some internally developed AI tools. Despite previously announced layoffs, operating expenses for the third quarter still reached $2.8 billion, showing an increase both year-on-year and quarter-on-quarter. Additionally, Block disclosed a loss of approximately $230 million from Bitcoin investments in the third quarter, with its Bitcoin business primarily providing trading channels for customers, and related performance fluctuating with Bitcoin prices.

Block expects a gross profit of $3.32 billion for the fourth quarter and a gross profit of $14.52 billion for 2027, representing a year-on-year growth of 15%. The company's business head Owen Jennings stated that Block anticipates earning revenue directly from AI tools for the first time in the fourth quarter and expects AI investments to drive subsequent growth. The company also disclosed that it has reached a principle agreement with the U.S. Department of Justice regarding a multi-year anti-money laundering investigation, with the proposed deferred prosecution agreement involving a total amount of approximately $964 million. Block expects to net pay about $764 million, higher than the $526 million reserve disclosed in the previous quarter, and the agreement still requires court approval.