Block Q2 2026 Earnings Call: Complete Transcript

Block (NYSE: XYZ ) released second-quarter financial results and hosted an earnings call on Wednesday. Read the complete transcript below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

Access the full call at Summary Block reported a strong second quarter, exceeding its guidance with a 25% year-over-year gross profit growth and a 65% increase in adjusted diluted EPS, achieving a record 27% adjusted operating income margin. Strategic initiatives include expanding AI capabilities, launching innovative products like Cash App Tags, and enhancing their ecosystem with tools like Buzz and Goose. The company is also focusing on integrating its Square and Cash App ecosystems and leveraging AI for operational efficiency. 47 billion with a 28% margin, and a 70% increase in adjusted diluted EPS.

The third quarter is expected to see 18% gross profit growth and an 89% increase in adjusted diluted EPS. Operational highlights include significant growth in Cash App gross profit (31% year-over-year) and Square's GPV growth (13% year-over-year), with strategic initiatives in expanding field sales and ISO partnerships. Management highlighted the impact of AI on product development and operational efficiency, emphasizing a model-agnostic approach to manage costs and improve scalability, and expressed confidence in the long-term growth potential of their AI-driven initiatives. Full Transcript Katie, Investor Relations Thank you all for joining today's call.

We have Jack and Amrita with us today along with Owen Jennings, our business lead, and Thomas Templeton, hardware lead for Block. Today's discussion includes forward-looking statements regarding our strategy, guidance, and long-term goals. Actual results may differ materially due to risks and uncertainties described in materials filed and furnished with the SEC and should not be considered an indication of future performance. These statements speak only as of today and we undertake no obligation to update them except as required by law.

Reconciliations of any non-GAAP financial measures that we discuss to the most directly comparable GAAP measures are available in our shareholder letter. Further, any discussion of our lending and banking products refer to products offered through Square Financial Services or our bank partners. Before turning the call over to Jack, I wanted to note that we're trying something new this quarter. In addition to taking questions on the call, we sourced questions directly from shareholders on X.

Throughout the call, I will ask questions directly of Jack, Amrita, Owen, and Thomas based on topics our shareholders asked us to explore on our earnings call. With that, over to you, Jack. Jack Dorsey, Block Head Thank you all for joining us. We had a strong second quarter and we're raising our guidance for the year based on the strength of our execution.

My letter this quarter focuses on our capabilities and how we build intelligence. Tools are making it easier to build all the software we need. What's harder is knowing what to build, owning the capabilities behind it, and connecting those capabilities in ways that create value for customers. That's been our focus from the beginning and it's why our network gets stronger with every seller and every customer who joins Cash App.

There's more detail in my letter and I hope you get a chance to read through it. With that, I'll turn it over to Amrita. Amrita Ahuja, Chief Operating Officer Thanks, Jack. We outperformed our guidance and achieved record profitability in the second quarter.

A few of the highlights: we grew gross profit 25% year over year while delivering an all-time-high 27% adjusted operating income margin and growing adjusted diluted EPS 65% year over year. S. GPV growth accelerating to our strongest growth rate since the second quarter of 2023. We continue to grow our field sales motion, and we now have more than 200 active ISO partners, helping drive over 150% quarter-over-quarter growth in the number of new sellers joining Square from the ISO channel.

We drove strong gross profit growth across commerce enablement and financial solutions, and we continue to expect gross profit to grow roughly in line with GPV in the second half of the year. Cash App gross profit grew 31% year over year in the second quarter. Monthly transacting actives grew 3% year over year in June, and we continue to expect low single-digit actives growth in 2026 as we execute on our network growth strategies. Cash App Commerce enablement volume grew 17%, and Cash App consumer lending origination volume grew 59%, reflecting our focus on driving deeper engagement.

We continue to ship innovative new products in the second quarter, including Cash App Tags and Cash App Mobile, and we brought Afterpay Prepurchase on Cash App Card to general availability. We achieved record profitability this quarter while continuing to invest in the long-term growth of our business. We expanded go-to-market investment in the second quarter across Square and Cash App, and we continued to drive product velocity through our investments in AI, most notably in the public launch of Buzz, our agentic collaboration platform, in July.

We're raising our 2026 guidance across gross profit, adjusted operating income, and adjusted diluted EPS, flowing through the Q2 outperformance and raising our expectations for the second half of the year. 47 billion, or a 28% margin, and adjusted diluted EPS growth of 70% year over year. For the third quarter we expect year-over-year gross profit growth of 18%, adjusted operating income margin of 28%, and year-over-year adjusted diluted EPS growth of 89%. We expect third-quarter interest expense of $50 to $55 million, full-year interest expense of $200 to $210 million, and a mid-20% non-GAAP effective tax rate in the third quarter and for the full year.

As we look to the second half of 2026, we have several initiatives that we can invest in to sustain attractive long-term growth in Square. We've proven strong ROIs for new go-to-market motions and have further opportunities to invest across self-onboard, field sales, and ISOs. In Cash App, we have numerous products that we expect to continue to grow, including Cash App Tags and Afterpay Prepurchase Neighborhoods. Our program to connect our two ecosystems has demonstrated strong product-market fit, and we expect to lean into investments to scale this differentiated network faster in the second half of the year.

AI is helping us deliver more value to more customers. We plan to continue to invest in our AI infrastructure, including Buzz, to drive further velocity gains. The breadth of high-ROI growth opportunities we have is significant, and we plan to increase the magnitude of our investment if we see the right opportunities to deploy profit upside. Our increased guidance reflects the strength of our first-half execution and the momentum carrying into the second half of 2026.

Nearly six months after we reorganized Block to make intelligence the center of the company, we're moving faster to deliver value to customers and are executing on our long-term growth initiatives, all while delivering meaningful margin expansion and profitable growth. With that, I'd like to open up the call to Q&A. Katie, Investor Relations Now we will begin the Q&A portion of the call. Please click the raise hand feature to ask a question.

Please limit yourself to one question. P. Morgan. P.

Morgan Thanks, Katie. Great results here. For Jack, I was hoping, like last quarter, to maybe just get a progress report. Six months into the reorg, and I asked you last quarter—just want to get an update here.

What have you learned about the incremental AI investment and talent you need to scale this model across Square and Cash App? And I know you've talked about streaming intelligence a bunch in a lot of different places. I'm curious if you're on track with that and what proof points you'd call out to say if you're on track or not on track with your job there. Jack Dorsey, Block Head Yeah, thanks, Tianjin.

I would say we're definitely on track, and the biggest proof point is our shipping velocity. The team—we have a very small team—on a product like Buzz, which is not just something that we launch externally, but we're using internally as well. We're using it internally to develop, we're using it internally to collaborate, and we think there's a very, very long runway for a product like this. But it's really something that's foundational, and the only reason we could get it out so quickly with such richness is because of all the work that has compounded over the past two years.

We were the first to release a coding harness to the world months before Cloud Code, and we've been building this disciplined intelligence within the company ever since then. And it's allowed us to do things that other companies just haven't been able to do with the organizational structure, including having a more and more cohesive context and memory for the entire company—which I think Buzz is probably the greatest manifestation of for us, but also for other companies as we look to build around this product as well.

I think we're well along the path of implementing these tools to help our organization move faster, and now it's a function of making sure that that same sort of magic we can deliver to all of our Cash App customers and sellers as well. And I think sellers are some of the most important and probably the most relevant in this next one because they're also looking for help with AI. And I think we're one of the few that can really make it simple enough that people can use it and not have to think about it, and it actually gives them time back instead of as a burden of learning.

Katie, Investor Relations We'll take our next question from a shareholder on X, and Jack, this one's to you. It's a two-parter on both Buzz and open source. So how does Block plan to monetize its open source efforts such as Buzz and Goose, and talk more broadly about open source strategy? Does open-sourcing some of our AI initiatives limit how much they benefit Block because they're public by definition?

Jack Dorsey, Block Head It doesn't limit it. I think it gives us a lot more information. It gives us a lot more people who can actually contribute to the code. We're already seeing ideas in the ecosystem, in the community, that we can integrate within Buzz proper.

The reason we built Buzz, as I answered in the last question, is to make ourselves more efficient and to remove our single points of failure on vendors that just haven't met the agentic age in the way that we'd like and in the way that we need—and also how we know our customers, specifically our sellers, will want to operate their businesses, operate their teams, and build for themselves and alongside us. So there's a huge menu of options that we can go down to monetize Buzz. We do intend to do so, but we don't want to custom fit one too early without having a lot more information.

We're in a fortunate position where we can experiment with a number of models and then choose the right one that's going to align all of our incentives with our customers. We've talked with very small businesses in that regard, and we've talked with some of the largest enterprises we can imagine as well, and we think there's something meaningful there. We do intend on the roadmap to offer full git hosting and code repositories. We're going to have a hosted option for teams that don't want to run infrastructure—that's live today.

We think there's a lot we can do on token efficiency. We're already model agnostic, but much more to do there. And then, as I said in one of my posts about Buzz, agents that can transact feels like a natural place that we can explore. But there's something that will fit sellers, there's something that will fit larger enterprise.

And of course we're building this for ourselves to make us a lot more efficient and better. Katie, Investor Relations Our next question comes from the line of Jason Kupferberg from Wells Fargo. Thank you. Jason Kupferberg, Analyst at Wells Fargo So just looking at the numbers here, I mean for the past four or five quarters you've beaten your quarterly guidance not just for AOI, but really for gross profit as well.

And this quarter you're raising the full-year outlook for both metrics by more than the Q2 beat, which is obviously great to see. So just as investors contemplate the second-half outlook, would it be fair to assume that some of the conservatism we've seen in recent quarters has been factored in? And just any color on how to think about gross profit growth at the segment level over the next two quarters would be great to help tune our models. I know that the Square comps get a bit easier and Cash App's obviously get harder, but any color there would be great.

Thanks. Amrita Ahuja, Chief Operating Officer Hey Jason, thanks for the question. Let me first start by talking about the numbers and some of what we're seeing in real time across the business and then talk about what we're seeing in each of our ecosystems and the longer-term opportunities to compound growth in the back half of the year and heading into '27. First, on the numbers, obviously a very strong quarter for us in the second quarter: 25% gross profit growth, 65% diluted EPS growth on a year-over-year basis.

What was encouraging for me to see was how broad-based the strength was, and we feel really good about the momentum that we've got as we head into the back half as a result. If you look at Cash App, we were able to grow actives year over year and inflows per active year over year at a 9% growth rate, with that performance really flowing through numerous products from commerce to banking to lending. S. S.

S. S. GPV — and continued strength in other target verticals for us, with larger sellers and mid-market growth over 20% and international up 25% on a constant-currency basis. So that's a look at the strength and what drove the strength in Q2 — again, very broad-based.

And similarly, when we look at the third quarter, what we're seeing so far is consistent strong performance at the data points that we track, with Square GPV growth in July consistent with the strength that we saw in the second quarter, and continued healthy inflows per active and monetization rates and risk-loss rates across our Cash App business.

Carrying through the run rates that we're seeing, that gets you to the 18% gross profit growth in Q3 with continued margin expansion and exiting the year in Q4 in that gross profit growth range of the mid-teens growth rate, which is consistent with what we've been sharing for some time now and since our Investor Day guidance last November, even as, obviously, as you noted, we reach some of the tougher comps for a product like Cash App Borrow, which was scaling dramatically in the back half of last year, and as that growth normalizes as we look to the back half of this year.

Coming to some of the key drivers across the ecosystems: for Square, we'd expect to accelerate gross profit growth in the back half of this year. That's on the back of both strong GPV growth as we compound the benefits of not only stronger product velocity but also our ramping distribution channels, and on the back of expanding our pricing and packaging initiatives that we rolled out towards the end of last year.

From a Cash App perspective, as we look to the back half of this year, as I noted earlier, we'd expect actives growth in the low single-digit percentage range, and we believe we have far more room to continue to drive deeper engagement across commerce and lending as well. From a consumer lending origination volume perspective, we do expect to see normalization in the back half, but we believe we've built a much broader platform here from a lending infrastructure perspective that should be a driver of growth in multiple ways beyond Borrow too, as we look to the back half and to the longer term.

And then finally, as we're talking about guidance, of course we think continuously about efficiency and profitable growth. As we look at how we've operated post the changes earlier this year, nearly six months in, we have built increasing conviction on our ability to shift our operating rhythms as an intelligence company with AI central to all of our workflows. That way of working ultimately drives improved efficiency over time and greater leverage to our business over time, which then of course gives us the opportunity to invest where we see strong returns.

As I noted in my intro remarks: go-to-market, neighborhoods, AI — these are opportunities for us to lean in where we see strong returns, as we build that room for ourselves in the back half of this year and into next year. OPERATOR Our next question comes from the line of Will Nance from Goldman Sachs. Will Nance, Analyst at Goldman Sachs Hi, thank you for taking the question. I thought I'd take advantage of Thomas being on the call here, because memory costs and hardware have been very top of mind for a lot of investors and probably more relevant as the volume growth and new customer acquisition in Seller keeps accelerating.