Block Inc., the financial technology company led by CEO Jack Dorsey, reported a sharp decline in its Bitcoin ecosystem gross profit for the third quarter, primarily due to lowered fees on select Cash App Bitcoin transactions. Despite this setback, Block posted robust overall results, significantly raising its profit forecast for the full year and seeing strong growth in its Cash App and Square divisions.
Bitcoin Revenue Drops After Fee Reductions
Block stated that gross profit from its Bitcoin ecosystem fell by 50% year-over-year to $52 million. The company attributed this decline to its recent strategic decision to cut fees on certain Bitcoin trades within Cash App, a mobile payments platform widely used for peer-to-peer transfers as well as crypto trading.
While Bitcoin-related revenue remains high, at $1.77 billion out of Cash App’s $4.07 billion in total revenue for the quarter, the lower fee structure has trimmed the earnings from this segment. The Bitcoin ecosystem unit covers customer Bitcoin purchases in Cash App, Block’s Proto business, and Bitcoin withdrawal fees.
The reduction in Bitcoin-related gross profit does not necessarily reflect a fall in activity or trading volume, but rather a change in pricing strategy focused on long-term growth.
Customer engagement with Cash App continued at a high level, helping offset the profit dip from Bitcoin operations.
Strong Growth for Cash App and Square
Cash App and Square, which is Block’s payment processing and merchant services division, posted notable gains during the quarter. Block recorded net income of $566 million, up from $462 million in the same period last year. Total gross profit increased 22% to reach $3.24 billion, outpacing company guidance.
Gross profit from Cash App grew to $2.07 billion, marking a 27% jump. The monthly active user base rose to 60 million, with increased connectivity via the Neighborhoods product, which links customers shopping at Square-accepting merchants to the Cash App network.
The company also expanded its lending segment. Loan originations rose 40% from the prior year, supported by Cash App Borrow and Afterpay Post-Purchase products. Gross profit in the Financial Solutions unit, which includes lending services, climbed 32%.
Square reported a 14% increase in gross payment volume, reflecting the fastest pace of growth since early 2023. While US payment volume grew 10.4%, international transaction volume soared 26%.
Profit for Square was up 14%, aided by a 19% increase in gross profit from commerce enablement services across both Cash App and Square. The company’s adjusted earnings per share more than doubled on the year, hitting $1.13. Adjusted operating income margin climbed to a record 29%.
Mini dictionary: Cash App, launched by Block Inc. (formerly Square), is a mobile payment and financial services platform that allows users to send and receive money, invest in stocks and Bitcoin, and access lending features directly from their smartphones.
Profit Forecast Raised, Shares React Positively
Block raised its full-year gross profit outlook to $12.63 billion, projecting 22% annual growth. The company expects adjusted operating income to rise 69% and diluted earnings per share to advance 75% for the year. For 2027, management targets at least 15% gross profit growth and sees adjusted operating income reaching $4.575 billion, an increase of 30%. Block anticipates a third consecutive year of accelerating growth in Square’s payment volume and continued expansion in Cash App’s user base, though at a more moderate pace.
Jack Dorsey and CFO Amrita Ahuja noted in their shareholder letter that Block expects to perform substantially better in 2026 than previously outlined in its November 2025 Investor Day forecasts.
Ahead of the earnings release, Zacks had assigned Block shares a “Hold” rating due to mixed estimate revisions. For the next quarter, analysts project earnings of $1.16 per share on revenue of $6.76 billion, with full-year forecasts at $4.05 per share on revenue of $26.09 billion.
Block’s stock price closed at $76 on Tuesday, down 1.4%. Following the quarterly results, shares rose between 6.2% and more than 8% in after-hours trading, as reported by multiple financial outlets.
