Block, Inc. (XYZ) Earnings

Management highlights

Jack mentioned they had a strong first quarter, exceeded guidance and raised full year outlook, internal intelligence tools improving operations, Moneybot live on Cash App, Managerbot available to over 1 million sellers and on track to reach all Square sellers in June. Amrita stated they delivered strong quarter, outperformed guidance across metrics, Cash App and Square had strong growth, expanded product ecosystem in Cash App, scaled Square's ISO partnerships, transformational investments in AI reshaping what they build and how they operate

Guidance

Raising full-year outlook for gross profit to $12.33 billion (19% growth), adjusted operating income to $3.34 billion, adjusted diluted EPS to $3.85. Q2 expected gross profit $3.04 billion (20% growth), adjusted operating income $740 million, adjusted diluted EPS $0.86. Intend to increase investment in go-to-market in high ROI areas, expect low single-digit actives growth for remainder of 2026, continued year-over-year growth in primary banking actives with slight seasonal sequential decline in Q2, expect to accelerate GPV growth in 2026, expect gap between reported gross profit growth and GPV growth to narrow in Q2, expect Q2 interest expense $55M - $60M, full year interest expense ~$200M - $210M, mid-20% non-GAAP effective tax rate

Segment performance

Gross profit grew 27% year-over-year to $2.91 billion in the first quarter. Cash App gross profit growth was 38% year-over-year, driven by Commerce Enablement and Financial Solutions. Cash App monthly transacting actives grew 4% year-over-year, inflows per transacting active up 10% year-over-year, primary banking actives growth 18% to $9.7 million. Square gross profit and GPV growth accelerated to 9% and 13% respectively in Q1, GPV grew 11.5% on constant currency basis, accelerated from food and beverage sellers to 21% and mid-market sellers to 22%, international GPV grew 35% year-over-year or 26% on constant currency basis, had more than 140 active ISO partners, launched next gen Square Register, expanded Square Bitcoin payments, enabled Managerbot for over 1 million sellers, Neighborhoods expanded to sellers representing $320 million in annualized GPV, up 190% since December

Analyst Q&A

• Q: Tien-Tsin Huang asked Jack about postmortem of reorg, what's worked better than expected, challenges, near term tracking.

  A: Jack said expectations were high, hit expectations, had challenges but team prepared, more code written with AI agents puts burden on reviewing, still work on flatter organization, speed of decision-making and product velocity important.

• Q: Darrin Peller asked Amrita about areas of strength in Q1 informing rest of year, key drivers, underlying segments.

  A: Amrita said broad-based strength across ecosystems, Cash App had growth in key metrics, Square saw acceleration in GPV and growth in areas like food and beverage, mid-market, international, drivers were new volume added and net volume retention, expect added point of growth in full year outlook.

• Q: Tien-Tsin Huang asked Jack about reorg postmortem, what's worked, challenges, near term tracking.

  A: Jack repeated previous points.

• Q: Timothy Chiodo asked Amrita about Cash App growth drivers in '27 and '28.

  A: Amrita said core drivers are network virality and engagement, embedding lending into other Cash App products like peer-to-peer, Commerce Enablement, Cash App Green, growth drivers include Borrow normalization, expansion of Buy Now, Pay Later, Cash App Score.

• Q: Dan Dolev asked about driving uptick in product velocity.

  A: Owen Jennings said product velocity driven by AI tools and org changes, smaller flatter teams, more autonomy, production code changes per engineer up, example of Buy Now, Pay Later for Cash App Pay built by few engineers in weeks.

• Q: Bryan Bergin asked about Managerbot early impact.

  A: Owen Jennings said Managerbot and Moneybot built on same foundation, proactive intelligence, early retention surprised upside, sellers using it for various automations, Moneybot had good engagement and cross-sell.

• Q: Andrew Schmidt asked about Square GP and GPV growth convergence.

  A: Amrita said Square gross profit growth accelerated to 9% in Q1, exclude hardware costs it was 11%, expect gross profit to grow roughly in line with GPV growth in second half, pricing and packaging key drivers.

• Q: Harshita Rawat asked about Square go-to-market components.

  A: Nicholas Molnar said strong NVA growth, diversified channels, field sales expanded, ISO channel exceeding expectations.

• Q: Bryan Keane asked about Neighborhoods.

  A: Owen Jennings said Neighborhoods accelerating, spend at seller from followers reaches 10% of GPV, average 1,000 followers in first year, adding hundreds of sellers a week, expect to drive Cash App actives in back half.

• Q: Kenneth Suchoski asked about Borrow.

  A: Amrita said Borrow provides value to customers, growth through SFS, expanding eligibility, variable profit margins key, more mature cohorts have lower loss rates.

• Q: William Nance asked about balance of driving network density vs deepening relationships.

  A: Owen Jennings said focus on growing network, ongoing work on network health, managed accounts for kids, Cash App Score, investing in go-to-market, Neighborhoods and Moneybot as levers