Slug: block
Date: 2026-10-05
Industry: Payments / Fintech
Accent: #111111
Status: Public (NYSE: XYZ). Audited annual figures in the 2025 Form 10-K; quarterly figures from SEC-filed shareholder letters (unaudited). Next results: Nov 3, 2026.
| Metric | Value | Label | Source |
|---|---|---|---|
| Gross profit Q2 2026 | $3.17B, +25% YoY; Cash App $1.97B (+31%); Square $1.16B (+13%) | FACT | Q2 2026 letter |
| Gross profit by category Q2 2026 | Commerce Enablement $1,805M; Financial Solutions $1,289M (+43%); Bitcoin $72M (−31%) | FACT | Q2 2026 letter |
| Revenue Q2 2026 | $6.62B, of which bitcoin $1.89B (≈29%) | FACT | Q2 2026 letter |
| Bitcoin share of gross profit | ≈2% ($72M / $3,166M) | INFERENCE (computed) | Q2 2026 letter |
| FY2025 gross profit | $10.36B, +17% | FACT | Q4 2025 remarks |
| 2026 guidance (raised Aug 2026) | $12.51B gross profit (+21%); $3.47B adjusted operating income (28% margin); adj. EPS $4.02 | FACT | Q2 2026 letter |
| Cash App actives | 59M monthly transacting actives (Jun 2026); 9.4M primary banking actives (+17%) | FACT | Q2 2026 letter |
| PBA value | Nearly 10× the gross profit of P2P-only actives | FACT (company claim) | Q4 2025 remarks |
| Consumer lending originations | $18.9B in Q2 2026, +59% | FACT | Q2 2026 letter |
| Commerce Enablement volume (Cash App) | $56.5B, +17%; monetization rate 1.65% | FACT | Q2 2026 letter |
| Square GPV | $72.8B Q2 2026 (+13%); US 78% / intl 22%; $250B in 2025 | FACT | Q2 2026 letter; 10-K |
| Square sellers | 4.5M+ sellers, 5.9B sales in 2025 | FACT | 10-K |
| Square loan losses | Cohort loss rates under 4% “through every cycle” | FACT (company claim) | Q2 2026 letter |
| Headcount | 10,205 FTE at Dec 31, 2025 → “just under 6,000” after Feb 2026 cut of 4,000+ | FACT | 10-K; Q4 2025 letter |
| Charges | Contingencies, restructuring and other: $743M (Q1 2026), $365M (Q2 2026) | FACT | Q2 2026 letter |
| Loss expense | Transaction, loan, consumer receivable losses $585M (+99%) Q2 2026 | FACT | Q2 2026 letter |
| Square plans | Free $0; Plus $49/mo per location; Premium $149/mo per location | FACT | Square pricing |
| Square card rates | In person 2.6% / 2.5% / 2.4% + 15¢; online 3.3% / 2.9% / 2.9% + 30¢; keyed 3.5% + 15¢; Afterpay 6% + 30¢ | FACT | Square pricing |
| Cash App fees | Instant transfer 0.5–2.5% ($0.25–$1 min, max $75); add from credit card 3%; ATM $2.50 (waivable) | FACT | Cash App ToS |
| New products | Cash App Tags (NFC), Cash App Mobile $40/mo, USDC stablecoins, Afterpay Pre-Purchase, Moneybot (1M+ weekly engaged accounts) | FACT | Q2 2026 letter |
| Regulatory | CFPB: $55M penalty + $75M–$120M redress; states: $80M BSA/AML | FACT | CFPB; CSBS order |
| Liquidity / buybacks | $8.8B total liquidity; $701M repurchased YTD; $4.6B authorization left (Jun 30, 2026) | FACT | Q2 2026 letter |
Card reader for small sellers → two-sided money network (Square + Cash App, joined by Afterpay) → profit shifting to consumer lending and banking-style services → halved headcount in 2026 to run as an “intelligence-native” company.
Square started (2009, Jack Dorsey and Jim McKelvey) with a phone card reader that let tiny sellers take cards for a flat percentage. Cash App added a consumer side; Afterpay (acquired 2022) connected the two with buy-now-pay-later. The money has moved: in Q2 2026 Financial Solutions (Cash App Borrow, BNPL, Square Loans, instant deposits) produced 41% of gross profit and grew 43%, while bitcoin, still ~29% of revenue, delivered ~2% of gross profit (INFERENCE from FACT). That is the lesson in why Block reports gross profit, not revenue. The other lesson is cost: in February 2026 Block cut from 10,205 people to just under 6,000, citing AI, then raised 2026 guidance to 28% adjusted operating margin. Risks to teach: loan losses rising with volume (+99% YoY), regulatory history (2025 CFPB and state orders), and whether a much smaller team can keep shipping.
# Block — research brief **Slug:** block **Date:** 2026-10-05 **Industry:** Payments / Fintech **Accent:** `#111111` **Status:** Public (NYSE: XYZ). Audited annual figures in the 2025 Form 10-K; quarterly figures from SEC-filed shareholder letters (unaudited). Next results: Nov 3, 2026. ## Label key - **FACT** — SEC filings (2025 Form 10-K, Q4 2025 and Q2 2026 shareholder letters filed as 8-K Ex. 99.1), squareup.com pricing page, Cash App Terms of Service, CFPB and state-regulator orders - **SECONDARY** — reputable press (The Verge, BBC, Reuters, Guardian, Business Insider) on the Feb 2026 layoffs - **INFERENCE** — teaching connection (labeled; computed from FACT figures, not a reported metric) ## Primary sources (FACT) 1. Q2 2026 Shareholder Letter (Aug 5, 2026): https://www.sec.gov/Archives/edgar/data/1512673/000119312526335117/d91486dex991.htm 2. Q4 2025 Shareholder Letter (Feb 26, 2026; workforce reduction): https://www.sec.gov/Archives/edgar/data/1512673/000119312526076557/d108590dex991.htm 3. Q4 2025 prepared remarks: https://s29.q4cdn.com/628966176/files/doc_financials/2025/q4/Q4-2025-Prepared-Remarks-Block.pdf 4. 2025 Form 10-K / Annual Report: https://www.sec.gov/Archives/edgar/data/1512673/000162828026027210/a10-kfilingblockinc2025ars.pdf 5. Square pricing: https://squareup.com/us/en/pricing 6. Cash App Terms of Service (fee schedule): https://cash.app/legal/us/en-us/tos 7. CFPB enforcement action (Jan 16, 2025): https://www.consumerfinance.gov/enforcement/actions/block-inc/ 8. State regulators’ settlement and consent order (Jan 2025): https://www.csbs.org/sites/default/files/other-files/Block%5FSettlement%5Fand%5FConsent%5FOrderFinal%5F1.13.2025-order%20only.pdf ## Secondary sources - The Verge — Block cuts nearly half of its staff (Feb 26, 2026): https://www.theverge.com/tech/885710/jack-dorsey-block-layoffs-job-cuts-ai - BBC — up to $500M restructuring costs cited (Feb 27, 2026): https://www.bbc.com/news/articles/cq570d12y9do - The Guardian — laid-off workers dispute that AI can do their jobs (Mar 8, 2026): https://www.theguardian.com/technology/2026/mar/08/block-ai-layoffs-jack-dorsey ## Key figures used on canvas | Metric | Value | Label | Source | |---|---|---|---| | Gross profit Q2 2026 | $3.17B, +25% YoY; Cash App $1.97B (+31%); Square $1.16B (+13%) | FACT | Q2 2026 letter | | Gross profit by category Q2 2026 | Commerce Enablement $1,805M; Financial Solutions $1,289M (+43%); Bitcoin $72M (−31%) | FACT | Q2 2026 letter | | Revenue Q2 2026 | $6.62B, of which bitcoin $1.89B (≈29%) | FACT | Q2 2026 letter | | Bitcoin share of gross profit | ≈2% ($72M / $3,166M) | INFERENCE (computed) | Q2 2026 letter | | FY2025 gross profit | $10.36B, +17% | FACT | Q4 2025 remarks | | 2026 guidance (raised Aug 2026) | $12.51B gross profit (+21%); $3.47B adjusted operating income (28% margin); adj. EPS $4.02 | FACT | Q2 2026 letter | | Cash App actives | 59M monthly transacting actives (Jun 2026); 9.4M primary banking actives (+17%) | FACT | Q2 2026 letter | | PBA value | Nearly 10× the gross profit of P2P-only actives | FACT (company claim) | Q4 2025 remarks | | Consumer lending originations | $18.9B in Q2 2026, +59% | FACT | Q2 2026 letter | | Commerce Enablement volume (Cash App) | $56.5B, +17%; monetization rate 1.65% | FACT | Q2 2026 letter | | Square GPV | $72.8B Q2 2026 (+13%); US 78% / intl 22%; $250B in 2025 | FACT | Q2 2026 letter; 10-K | | Square sellers | 4.5M+ sellers, 5.9B sales in 2025 | FACT | 10-K | | Square loan losses | Cohort loss rates under 4% “through every cycle” | FACT (company claim) | Q2 2026 letter | | Headcount | 10,205 FTE at Dec 31, 2025 → “just under 6,000” after Feb 2026 cut of 4,000+ | FACT | 10-K; Q4 2025 letter | | Charges | Contingencies, restructuring and other: $743M (Q1 2026), $365M (Q2 2026) | FACT | Q2 2026 letter | | Loss expense | Transaction, loan, consumer receivable losses $585M (+99%) Q2 2026 | FACT | Q2 2026 letter | | Square plans | Free $0; Plus $49/mo per location; Premium $149/mo per location | FACT | Square pricing | | Square card rates | In person 2.6% / 2.5% / 2.4% + 15¢; online 3.3% / 2.9% / 2.9% + 30¢; keyed 3.5% + 15¢; Afterpay 6% + 30¢ | FACT | Square pricing | | Cash App fees | Instant transfer 0.5–2.5% ($0.25–$1 min, max $75); add from credit card 3%; ATM $2.50 (waivable) | FACT | Cash App ToS | | New products | Cash App Tags (NFC), Cash App Mobile $40/mo, USDC stablecoins, Afterpay Pre-Purchase, Moneybot (1M+ weekly engaged accounts) | FACT | Q2 2026 letter | | Regulatory | CFPB: $55M penalty + $75M–$120M redress; states: $80M BSA/AML | FACT | CFPB; CSBS order | | Liquidity / buybacks | $8.8B total liquidity; $701M repurchased YTD; $4.6B authorization left (Jun 30, 2026) | FACT | Q2 2026 letter | ## Model read (teaching arc) **Card reader for small sellers → two-sided money network (Square + Cash App, joined by Afterpay) → profit shifting to consumer lending and banking-style services → halved headcount in 2026 to run as an “intelligence-native” company.** Square started (2009, Jack Dorsey and Jim McKelvey) with a phone card reader that let tiny sellers take cards for a flat percentage. Cash App added a consumer side; Afterpay (acquired 2022) connected the two with buy-now-pay-later. The money has moved: in Q2 2026 Financial Solutions (Cash App Borrow, BNPL, Square Loans, instant deposits) produced 41% of gross profit and grew 43%, while bitcoin, still ~29% of revenue, delivered ~2% of gross profit (INFERENCE from FACT). That is the lesson in why Block reports gross profit, not revenue. The other lesson is cost: in February 2026 Block cut from 10,205 people to just under 6,000, citing AI, then raised 2026 guidance to 28% adjusted operating margin. Risks to teach: loan losses rising with volume (+99% YoY), regulatory history (2025 CFPB and state orders), and whether a much smaller team can keep shipping. ## Do not invent - Per-loan APRs or Borrow fee schedules (vary by borrower; not one public rate) - Customer counts beyond reported actives / seller figures - Market cap or share price (changes daily; not used) - AI-attributed savings figures (company has not quantified)