Block Raises Its Outlook for a Third Straight Quarter as Adjusted Profit Jumps and Legal Charges Mount

Block raised its full-year outlook for a third straight quarter on Tuesday after third-quarter results beat expectations.

Block, Inc. (NYSE: XYZ) is an Oakland, California financial technology company. It runs Square, its seller platform, and Cash App, its consumer app. Gross payment volume, or GPV, is the total value of payments it processes.

Gross profit beat the guide and the estimates

Gross profit was $3.24 billion for the quarter ended September 30, 2026. That was up 22% from a year earlier. Revenue was $6.72 billion. By TickerGrove's calculation, revenue rose 9.9% from a year earlier.

The result cleared Block's own third-quarter guidance of $3.13 billion in gross profit. By TickerGrove's calculation, gross profit ran 3.4% above that guide. Block set the guide with its second-quarter results in August.

Gross profit also beat the consensus estimate of $3.16 billion reported by Seeking Alpha. By TickerGrove's calculation, the beat on that frame was 2.4%. It is the only consensus frame this article uses.

Total GPV was $78.15 billion, against a $77.2 billion estimate in the same frame. By TickerGrove's calculation, volume beat the estimate by 1.2%. Square GPV alone was $76.36 billion.

Cash App carried the growth, and Square kept pace

Cash App gross profit was $2.07 billion, up 27% from a year earlier. Cash App is the company's consumer finance app. Monthly transacting actives reached sixty million in September.

Square gross profit was $1.16 billion, up 14% from a year earlier. Square GPV grew 14% to $76.36 billion, its strongest pace since early 2023. The letter ties that growth to new sellers and faster product releases.

Bitcoin went the other way in the quarter. Bitcoin ecosystem gross profit fell 50% to $52 million. Block said the drop came mainly from cutting fees on certain bitcoin transactions in Cash App.

Adjusted profit nearly doubled; official profit did not

Adjusted operating income was $923 million, up 92% from a year earlier. Adjusted figures exclude certain charges the company lists separately. Its margin reached 29% of gross profit, which the letter calls a record.

Adjusted diluted earnings were $1.13 a share, up 109% from a year earlier. That beat the $1.03 estimate in the Seeking Alpha frame. By TickerGrove's calculation, the earnings beat was 9.7%.

On a GAAP basis, operating income was $428 million, up 5%. GAAP means the standard accounting rules. Net income attributable to common stockholders was $566 million. Diluted earnings were $0.92 a share, up 24%.

Legal charges and loan losses explain the gap

The gap between the two profit lines is mostly two costs. Contingencies, restructuring and other charges were $435 million. The expense table shows $743 million in the first quarter and $365 million in the second.

General and administrative costs rose 56% on a GAAP basis. Block said the rise was driven mainly by increased accrued legal contingencies. The letter does not name the legal matter behind those accruals.

Transaction, loan and consumer receivable losses were $602 million, up 66%. Block tied the rise to loan-volume growth and product mix shifts. It said it expects that loss growth to moderate in the fourth quarter.

Full-year guidance is announced, not reported

For the fourth quarter, Block announced gross profit guidance of $3.32 billion, up 15%. Announced adjusted operating income guidance is $1.005 billion. Announced adjusted diluted earnings guidance is $1.15 a share.

Block also raised its full-year 2026 outlook, and that outlook is announced. It now expects gross profit of $12.63 billion, up from $12.51 billion in August. Announced adjusted earnings guidance rose to $4.15 a share, from $4.02.

The company also gave a preliminary outlook for 2027, likewise announced. It expects gross profit growth of at least 15% next year, to $14.52 billion. It expects adjusted operating income to grow 30%, to $4.58 billion.

Shares rose after hours on the report

Shares rose 7.12% in after-hours trading to $81.37 as of 7:08 p.m. ET on Tuesday, according to Nasdaq quote data. The official regular close was $75.97, down 1.45% on the day. That reaction figure is an after-hours snapshot, not a close.

Block had closed Monday at $77.08, the prior close. It fell in Tuesday's regular session before the report. The after-hours move more than reverses that drop, on this one snapshot.

Cash flow and liquidity stayed strong

Net cash provided by operations was $1.02 billion in the quarter. Free cash flow was $972 million. Free cash flow is operating cash flow minus equipment purchases. Block ended the quarter with $10.1 billion in total liquidity.

What remains unknown

What remains unknown includes whether the after-hours gain holds into Wednesday's regular session. After-hours snapshots can fade or reverse. The official test is the next regular close.

The legal matter behind the accrued contingencies also remains unnamed in the letter. Whether loan-loss growth moderates as Block expects is unproven. Fourth-quarter results remain unknown against the announced outlook.

What to watch next

What to watch next is fourth-quarter gross profit against the announced $3.32 billion guide. Watch adjusted operating income against the announced $1.005 billion. Watch adjusted earnings against the announced $1.15 a share.

Watch transaction and loan losses for the moderation Block expects. Watch the next regular close against the after-hours snapshot. Watch whether a fourth straight guidance raise follows the full-year results.