November 4, 2026 | TickerRoast Markets Analysis
Block delivered the kind of quarter that its 2025 investor day promised: gross profit up 22%, adjusted operating income nearly doubling and a higher outlook for the year. Shares rallied more than 6% after hours, according to CNBC. The question I keep coming back to is how much of the growth depends on lending, and how much on Square’s accelerating payments business.
A Beat on Every Line That Block Guides To
According to Block’s third-quarter shareholder letter, filed with the SEC on November 3, gross profit grew 22% year over year to $3.24 billion. Adjusted operating income rose 92% to $923 million, an all-time high margin of 29% of gross profit, and adjusted diluted EPS grew 109% to a record $1.13. On a GAAP basis, operating income was $428 million and diluted EPS was $0.92. Block said it exceeded its own third-quarter guidance on gross profit, adjusted operating income and adjusted EPS.
The beat was also clear against Wall Street. According to CNBC, analysts polled by LSEG expected adjusted earnings of $1.03 a share and revenue of $6.59 billion. Block reported total net revenue of $6.72 billion, up about 10% from $6.11 billion a year earlier, according to the financial statements in the letter. Revenue is a less useful measure for Block than gross profit, because bitcoin sales inflate it: bitcoin revenue actually fell to $1.80 billion from $2.02 billion.
| Metric | Q3 2026 | Year over year |
|---|---|---|
| Gross profit | $3.24B | +22% |
| Cash App gross profit | $2.07B | +27% |
| Square gross profit | $1.16B | +14% |
| Adjusted operating income | $923M | +92% |
| Adjusted diluted EPS | $1.13 | +109% |
| GAAP diluted EPS | $0.92 | +24% |
Cash App Grows Through Lending and Neighborhoods
Cash App remains the engine. Its gross profit grew 27% to $2.07 billion, and the company said monthly transacting actives reached 60 million in September, with its Neighborhoods feature, which brings Square sellers’ customers into Cash App, playing a key role. Consumer lending origination volume grew 40% to $19.0 billion, driven by Cash App Borrow and Afterpay’s post-purchase product.
That lending growth is the part of the story I would watch most closely. It explains a good share of the profit acceleration, and Block argues that Borrow brings deeper engagement and higher primary banking attach rates. But consumer credit is cyclical, and a 40% jump in originations means the quality of those loans will matter more to future results than it did a year ago.
Square’s Payments Growth Is Accelerating
The more encouraging sign may be at Square. Gross payment volume grew 14% year over year, which Block called the strongest growth rate since the first quarter of 2023, with U.S. volume growth accelerating to 10.4%. Square gross profit rose 14% to $1.16 billion. Block credited distribution through self-onboarding, field sales and Independent Sales Organization partners, with new sellers from those partners up 90% quarter over quarter.
The shareholder letter leans heavily into AI. Block said it began piloting its Buzz collaboration platform with prospective customers in October, expects to generate its first “machine intelligence revenue” in the fourth quarter and will introduce a new ecosystem called Builderlab at an event in San Francisco on November 10. Those are early-stage projects, and Block itself says it has “more to prove,” so I treat them as optionality rather than part of the investment case today.
A Higher Outlook for 2026 and an Early Look at 2027
The guidance is what likely drove the after-hours move. Block now expects 2026 gross profit of $12.626 billion, up 22%, adjusted operating income of $3.519 billion, a 28% margin, and adjusted diluted EPS of $4.15, up 75%. Compared with the targets it set at its November 2025 investor day, that is 5% more gross profit and 30% more adjusted operating income. For the fourth quarter, Block guides to $3.315 billion in gross profit, up 15%, and adjusted EPS of $1.15.
Block also published a preliminary 2027 outlook of $14.519 billion in gross profit, about 15% growth, and $4.575 billion in adjusted operating income, again about 30% above its investor day target. The letter says the company plans to ramp investment in 2027 in initiatives such as scaling Neighborhoods and AI solutions externally, but that its growth guidance does not rely on them.
The Stock Is Stuck in the Middle of Its Range
Before the report, Block shares closed Tuesday at $76.00, according to Yahoo Finance data, roughly in the middle of a six-month range that runs from $66.63 on June 10 to $84.85 on August 27. The stock sat just below its 20-day moving average near $76.80 and its 50-day average near $77.78, with a neutral 14-day RSI around 47. A 6% after-hours gain would put it back above both lines, and the August high is the level that would show whether the market is willing to pay more for the raised outlook.
The debate around Block has shifted from whether it can grow profitably to how durable that growth is. This quarter answered the first question convincingly. The second depends on credit quality in Cash App lending and on whether Square can sustain double-digit volume growth, and the fourth-quarter report will be the next test of both.
Sources
- Block Q3 2026 Shareholder Letter (Form 8-K, Exhibit 99.1) — Block, Inc. via SEC EDGAR
- Stocks making the biggest moves after hours — CNBC
- Block (XYZ) quote and history — Yahoo Finance
Market data: Yahoo Finance, close of 2026-11-03. Charts generated by TickerRoast from this data.
Disclaimer: This article is for informational and educational purposes only. It provides general financial and business analysis and does not constitute investment advice, a personal recommendation, a recommendation to buy, sell or hold any security, or an offer to transact in any financial instrument. Information is based on publicly available sources as of November 4, 2026 and market data as of the 2026-11-03 close (Yahoo Finance). Past performance is not a reliable indicator of future results; forecasts are uncertain and actual results may differ materially. Investing in shares involves risk, including the loss of capital. The publisher does not guarantee the accuracy or completeness of the information and accepts no responsibility for investment decisions made on the basis of this article. Readers should consult official company disclosures, conduct their own research and, where appropriate, seek advice from a licensed financial adviser. Any relevant financial interests held by the author or publisher in the securities mentioned are disclosed where applicable. This article was prepared with the assistance of AI tools and is based on the sources listed above.
Anonymous reader poll, just for fun. Not investment advice.
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