Block outlines 19% Q4 gross profit growth target as Cash App and Square accelerate

Earnings Call Insights: Block, Inc. (XYZ) Q3 2025

MANAGEMENT VIEW

* Jack Dorsey, Co-Founder, Block Head & Chairman, opened the call by emphasizing the inclusion of broader company voices and highlighted upcoming insights from business and sales leaders, stating, "My intention for these calls going forward is to bring in more voices from across the company to share more perspectives on what we're building and why."
* Amrita Ahuja, Foundational Lead, COO, CFO & Treasurer, reported, "We had another strong quarter, delivering for our customers and exceeding expectations across gross profit and adjusted operating income. Gross profit grew 18% year-over-year to $2.66 billion, accelerating from 14% growth last quarter, driven by Cash App. Each of our profitability metrics grew on a year-over-year basis. Adjusted operating income was $480 million, showing strong profitability even in a quarter where we leaned into investments to drive long-term growth."
* Ahuja further noted, "Cash App's 24% year-over-year gross profit growth in the third quarter accelerated from 16% in the second quarter. Our focus on reaccelerating active growth and increasing network density is working as we reached 58 million monthly actives in September."
* Ahuja described the expansion of Cash App Borrow, highlighting, "Growing originations 134% year-over-year while delivering stable risk loss and strong annualized net margins of 24%."
* Proto, Block's Bitcoin mining business, generated its first revenue in the quarter, with Ahuja adding, "We are actively pursuing a robust pipeline for 2026 and beyond."
* Ahuja shared, "We expect to deliver our strongest NVA performance ever in 2025 through expanding field sales, partner programs and targeted marketing."
* Guidance was raised for the fourth quarter, with Ahuja specifying, "For the fourth quarter of 2025, we expect to accelerate gross profit growth again with gross profit growing over 19% year-over-year to $2.755 billion."
* She concluded by saying, "We expect to deliver $10.243 billion in gross profit for the full year, reflecting more than 15% year-over-year growth, consistent with the initial outlook for 2025 that we provided a year ago."

OUTLOOK

* Block increased full-year guidance, projecting Q4 2025 gross profit of $2.755 billion, with year-over-year growth exceeding 19%.
* Adjusted operating income for Q4 is expected to be $560 million, with adjusted operating income margins expanding to 20%.
* Full-year gross profit guidance was raised to $10.243 billion, and adjusted operating income to $2.056 billion, reflecting nearly 28% year-over-year growth.
* The company expects its 2025 and long-term tax rate to be in the mid-20% range, and Q4 net interest expense is projected at $45 million.

FINANCIAL RESULTS

* Gross profit for Q3 grew 18% year-over-year to $2.66 billion.
* Adjusted operating income was $480 million, with margins at 18%.
* Cash App gross profit grew 24% year-over-year, reaching 58 million monthly actives.
* Primary banking actives in Cash App rose to 8.3 million, up from 8 million in the previous quarter.
* New products, including post-purchase Buy Now Pay Later on Cash App Card, reached $3 billion in annualized originations in early October.
* Transaction, loan, and risk loss expense increased 89% year-over-year as Block scaled its lending products.
* Block repurchased approximately $1.5 billion of stock through September.

Q&A

* Tien-Tsin Huang, JPMorgan: Asked Owen Jennings about Cash App actives growth and timing for network growth inflection. Jennings reported 58 million actives in September with continued acceleration in October, stating, "We reported the 58 million number for September. But the underlying trends are strong as well."
* Timothy Chiodo, UBS: Questioned field sales productivity and GPV/gross profit contributions. Nicholas Molnar responded that go-to-market motions, especially field sales, have performed well, noting, "Sales-led NVA was up 28% year-to-date through September and we expect to grow last quarter to over 40%."
* Andrew Jeffrey, William Blair: Sought clarity on Borrow and BNPL product credit quality and profitability. Ahuja addressed robust origination growth and healthy margins, emphasizing, "Borrow performance was incredibly strong in the third quarter with origination volume up 134% year-over-year, reaching nearly $22 billion on an annualized basis."
* Darrin Peller, Wolfe Research: Asked about drivers of Cash App gross profit acceleration beyond Borrow. Jennings explained the diversified product ecosystem and engagement, highlighting, "Card GPV is growing at 19% year-over-year. Cash App Pay GPV growing at 70% year-over-year."
* Adam Frisch, Evercore ISI: Queried about macro vs. company-specific momentum. Ahuja said, "What we've seen so far has been strong."
* Other analysts raised topics including Square Bitcoin payments, competitive momentum, Afterpay opportunities, and AI impacts, with management emphasizing product scalability, AI-driven growth, and cost efficiency.

SENTIMENT ANALYSIS

* Analysts raised probing questions about growth sustainability, credit quality, product engagement, and competitive advantages, reflecting a slightly positive to neutral tone with a focus on execution.
* Management maintained a confident and constructive tone, repeatedly referencing strong momentum, robust product economics, and the scalability of recent investments. Ahuja stated, "We're excited to share more about our capital allocation priorities at our upcoming Investor Day."
* Compared to the previous quarter, both analysts and management displayed slightly increased confidence, with management emphasizing acceleration in key metrics and analysts exploring the durability of growth drivers.

QUARTER-OVER-QUARTER COMPARISON

* Guidance for Q4 and full-year 2025 was raised compared to Q2, with higher targets for gross profit and adjusted operating income.
* Gross profit growth accelerated from 14% in Q2 to 18% in Q3, and Cash App gross profit growth increased from 16% to 24%.
* Management shifted tone to greater confidence in product velocity, sales, and marketing initiatives, while analysts maintained a focus on sustainability and risk.
* New voices from field sales and business leads joined the call, providing more granular insights into product and go-to-market performance.
* Block’s Bitcoin mining business, Proto, delivered its first revenue in Q3, a development not present in the previous quarter.

RISKS AND CONCERNS

* Ahuja cited a 2.6 percentage point headwind to Square gross profit in Q3 due to increased operational flexibility at a processing partner, expected to normalize by Q2 2026.
* Transaction, loan, and risk loss expense increased 89% year-over-year as Block scaled lending products, though loss rates remained below the 3% target.
* Management is closely monitoring macroeconomic trends and has flexibility to adjust marketing, underwriting, or operations if necessary.

FINAL TAKEAWAY

Management emphasized Block’s accelerating gross profit growth, robust performance in Cash App and Square, and the scaling of new products like Buy Now Pay Later and Bitcoin mining. The company raised guidance for Q4 and the full year, highlighting strong execution, expanding market share, and a commitment to capital returns. Management remains confident in sustaining momentum into 2026, underpinned by ongoing investments in technology, go-to-market strategies, and product innovation.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/xyz/earnings/transcripts]

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