European Investor
04 Nov 2026, 09:16
Block Jumps 6.5% Premarket as Profit Growth Accelerates and 2026 Guidance Rises
Block (NYSE: XYZ) shares rose about 6.5% in premarket trading after the company reported stronger-than-expected third-quarter results and raised its 2026 outlook for gross profit, adjusted operating income and adjusted EPS.
Third-quarter gross profit increased 22% year over year to $3.24 billion. Adjusted operating income surged 92% to $923 million, while adjusted diluted EPS more than doubled, rising 109% to $1.13. Block said all three measures exceeded its previous guidance.
Cash App remained the largest growth contributor, with gross profit climbing 27% to $2.07 billion. Cash App reached 60 million monthly transacting active users in September, with the company highlighting its Neighborhoods product as an important contributor to user growth.
Square gross profit increased 14% to $1.16 billion, while Square gross payment volume growth accelerated to 14%, its strongest rate since the first quarter of 2023. Block attributed the improvement to expanded distribution and faster product development.
AI is also becoming a larger part of Block's strategy. The company has expanded internal AI automation and is beginning to commercialize its technology through Builderlab and Buzz. Block began piloting Buzz with external customers in October and expects to generate its first machine-intelligence revenue during the fourth quarter.
Looking further ahead, Block expects 2027 gross profit to grow at least 15% to approximately $14.52 billion. Adjusted operating income is projected to rise 30% to $4.58 billion, with adjusted operating margin expanding to 32% of gross profit from an expected 28% in 2026.
The 6.5% premarket gain appears to reflect accelerating profitability alongside continued growth in both Cash App and Square. The sharp increase in adjusted operating income and EPS, higher 2026 expectations and a 2027 outlook pointing to further margin expansion suggest Block's cost discipline is increasingly translating revenue growth into earnings growth.
Block (NYSE: XYZ) shares rose about 6.5% in premarket trading after the company reported stronger-than-expected third-quarter results and raised its 2026 outlook for gross profit, adjusted operating income and adjusted EPS.
Third-quarter gross profit increased 22% year over year to $3.24 billion. Adjusted operating income surged 92% to $923 million, while adjusted diluted EPS more than doubled, rising 109% to $1.13. Block said all three measures exceeded its previous guidance.
Cash App remained the largest growth contributor, with gross profit climbing 27% to $2.07 billion. Cash App reached 60 million monthly transacting active users in September, with the company highlighting its Neighborhoods product as an important contributor to user growth.
Square gross profit increased 14% to $1.16 billion, while Square gross payment volume growth accelerated to 14%, its strongest rate since the first quarter of 2023. Block attributed the improvement to expanded distribution and faster product development.
AI is also becoming a larger part of Block's strategy. The company has expanded internal AI automation and is beginning to commercialize its technology through Builderlab and Buzz. Block began piloting Buzz with external customers in October and expects to generate its first machine-intelligence revenue during the fourth quarter.
Looking further ahead, Block expects 2027 gross profit to grow at least 15% to approximately $14.52 billion. Adjusted operating income is projected to rise 30% to $4.58 billion, with adjusted operating margin expanding to 32% of gross profit from an expected 28% in 2026.
The 6.5% premarket gain appears to reflect accelerating profitability alongside continued growth in both Cash App and Square. The sharp increase in adjusted operating income and EPS, higher 2026 expectations and a 2027 outlook pointing to further margin expansion suggest Block's cost discipline is increasingly translating revenue growth into earnings growth.
