Block raises profit forecast as Cash App growth boosts margins

Block raised its 2026 gross profit forecast to $12.51 billion from $12.33 billion after a second quarter that showed stronger Cash App engagement and better margins. The new target implies 21% gross profit growth in 2026, up from the 19% pace Block had previously projected, a sign management sees enough momentum in its core businesses to expect a firmer bottom line.

Second-quarter gross profit climbed 25% from a year earlier, while adjusted operating income margin reached a record 27% and adjusted diluted earnings per share rose 65%. Cash App gross profit surged 31%, reinforcing the role of the consumer platform in Block’s profit equation as customers continue to use it for payments, money transfers, banking features and related services.

The results matter because Block has long been treated as a test case for whether a high-growth fintech can turn scale into lasting earnings power. Stronger engagement on Cash App can increase transaction volume and deepen monetization, but the company also needs disciplined spending to protect those gains. The latest quarter suggested both pieces moved in the right direction: resilient consumer spending helped volumes, while margin improvement showed more efficient execution across the business.

Investors still took a cautious view. Block shares fell 5% after the release, even after an initial rally, showing that the market wants proof that the improved outlook is durable rather than just a quarter of belt-tightening. Block had already lifted its annual gross profit outlook on May 7 after resilient consumer spending and strong Cash App performance, extending a pattern of better-than-expected operating momentum.

Block’s broader portfolio gives the earnings story added weight. Alongside Cash App and Square, the company’s brands include Afterpay, TIDAL and Bitkey, reflecting a strategy that ties consumer finance, merchant software and related digital services into one platform. If Cash App continues to grow at a faster clip and margins stay near current levels, Block will be better positioned to argue that its model can deliver growth without sacrificing profitability, a benchmark that still defines the digital payments sector.