Block logo is seen in this illustration taken, August 3, 2026. REUTERS/Dado Ruvic/Illustration
Block logo is seen in this illustration taken, August 3, 2026. REUTERS/Dado Ruvic/Illustration
Nov 3 : Block on Tuesday raised its full-year gross profit outlook after strength in its Cash App unit lifted the firm's quarterly earnings, while also reaching a preliminary settlement with the US Department of Justice over its anti-money laundering program.
The US economy grew at its fastest pace in a year in the third quarter, shrugging off higher oil prices due to the Iran war, signaling that consumers maintained robust spending, benefiting financial firms such as Block.
Gross profit at Cash App, Block's consumer-focused financial platform, surged 27 per cent in the third quarter from a year earlier. Gross profit at its Square merchant business rose 14 per cent.
CNA Games
Guess Word
Crack the word, one row at a time
Buzzword
Create words using the given letters
Mini Sudoku
Tiny puzzle, mighty brain teaser
Mini Crossword
Small grid, big challenge
Word Search
Spot as many words as you can
Show More
Show Less
Cash App's growing banking and lending products have helped Block diversify its revenue streams beyond transaction fees.
"We've seen continued strong spending on Cash App Card as well as strong repayment rates on Borrow, which for us are the signals that collectively tell us consumers are managing their finances and the strength of their pocketbook," Chief Financial Officer Amrita Ahuja told Reuters in an interview.
But the diversification has also increased the company's credit losses. Block's losses on transaction, loan and consumer receivables rose 65.6 per cent to $601.7 million in the third quarter.
Block now expects gross profit of $12.63 billion for 2026, representing 22 per cent growth, compared with its prior forecast of $12.51 billion. It forecast gross profit of $3.32 billion for the fourth quarter.
The fintech firm also forecast 2027 gross profit of $14.52 billion, implying 15 per cent growth, as it expects AI investments to drive sustained growth.
Executive Officer and Head of Business Owen Jennings said the company expects the fourth quarter to mark the first time it generates revenue directly from AI tools.
Adjusted operating income rose to $923 million, or $1.13 per share, for the three months ended September 30, compared with $480 million, or 54 cents per share, a year earlier.
Separately, Block said it reached an agreement in principle with the US Department of Justice in October to defer for three years a charge that the company failed to maintain an effective anti-money laundering program in violation of the Bank Secrecy Act.
The deferred prosecution agreement could result in an expected net payment of roughly $764 million after credits for prior regulatory resolutions, the company added.
The disclosure removes some uncertainty related to the probe but the DOJ resolution remains subject to a final agreement and court approval, and Block warned the ultimate terms could result in losses exceeding the amount already accrued.
Week in Review
Our chief editor shares analysis and picks of the week's biggest news every Saturday.