Block stocks are rising after a third-quarter beat and a third straight forecast upgrade

Shares of Block Inc. rose more than 7% in late trading today after the payments and financial services company beat expectations for the third quarter and raised its full-year forecast for the third consecutive day.

For the quarter ended Sept. 30, Block reported adjusted earnings of $1.13 per share, up from 54 cents in the year-ago quarter, on revenue of $6.72 billion, up nearly 10% from a year ago. Analysts expected $1.03 per share on revenue of $6.58 billion.

Gross profit rose 22% to $3.24 billion, beating the company’s own forecast. Adjusted operating income nearly doubled to a record $923 million, and adjusted operating margin increased to 29% of gross profit. Product development spending fell 11% year-over-year due to staff cuts Block made in February.

Operating income rose a more modest 5% to $428 million on an unadjusted basis, held back by $435 million in contingent liabilities, restructuring and other costs. Net income attributable to common shareholders was $566 million, compared to $462 million a year ago.

Cash App’s gross profit rose 27% to $2.07 billion. Monthly active transactions reached 60 million in September, and Block cited Neighborhoods as a key driver after the loyalty network automatically enrolled more than 30,000 Square seller locations in August. Consumer lending rose 40% to $19 billion, led by Cash App Borrow and Afterpay Post-Purchase. Losses on transactions, loans and consumer receivables increased by 66% as lending expanded.

Square’s gross payment volume grew 14% to $76.4 billion, the fastest rate since the first quarter of 2023, with U.S. growth accelerating to 10.4%. Square’s gross profit remained at $1.16 billion. Block’s Bitcoin business shrank again as gross profit there halved to $52 million after the company cut fees for certain Bitcoin transactions on Cash App.

Business highlights of the quarter included the July alpha release of Buzz, an open source workspace for humans and AI agents that has since seen more than two dozen updates. General availability of tap-to-pay hardware for Cash App Tags followed in August. In September, Block announced it would open Cash App Score, its internal credit score, to third-party lenders through Nova Credit Inc.

Much of CEO Jack Dorsey’s letter to shareholders focused on AI. Block, he wrote, has “sensibly bridged the divide” by becoming a company that “shares information the way people need it.” Buzz began piloting with potential customers in October, and Block expects to record its first machine intelligence sales in the fourth quarter. Builderlab, the Block ecosystem created to sell Buzz and related tools to other companies, will be officially launched at an event in San Francisco on November 10th.

Fourth-quarter guidance calls for gross profit to grow 15% to $3.32 billion. Adjusted earnings are expected to be $1.15 per share, a penny shy of the $1.16 expected by analysts. For the full year, Block now forecasts gross profit of $12.63 billion (up from $12.51 billion forecast in August) and adjusted earnings of $4.15 per share (down from $4.02). The consensus estimate was $4.06.

A preliminary forecast for 2027 calls for gross profit to grow by at least 15% to $14.52 billion. Adjusted operating income is expected to rise 30% to $4.58 billion next year, well above the $3.51 billion target set by Block at its investor day in November 2025.

Image: Block