Block reported stronger than expected first quarter earnings as rapid growth in Cash App and core fintech services helped offset weakness in its Bitcoin business.
Key Takeaways
- Block beat Wall Street earnings estimates with adjusted earnings per share of $0.85, above analyst expectations of $0.68.
- Cash App delivered strong growth, helping gross profit rise 27% year over year to $2.91 billion.
- Bitcoin revenue declined sharply as weaker market conditions and lower transaction fees impacted crypto trading activity.
- Block raised its full year guidance for 2026, signaling confidence in continued growth despite crypto market volatility.
What Happened?
Jack Dorsey’s fintech company Block posted first quarter 2026 earnings that exceeded analyst expectations, sending shares sharply higher in after hours trading. Investors focused on the company’s strong profitability and upgraded outlook, even as Bitcoin related revenue and holdings faced pressure during the quarter.
Block shares climbed nearly 8% after the earnings release, with momentum driven by strong Cash App performance and expanding operating margins.
Block Q1 2026 Earnings are out now. Read our Shareholder Letter: https://t.co/FAY5CbKZux$XYZ pic.twitter.com/41Rz8aWLxC
— Block Investor Relations (@BlockIR) May 7, 2026
Block Delivers Strong Earnings Beat
Block reported adjusted diluted earnings per share of $0.85, comfortably beating the consensus estimate of $0.68. The company’s adjusted operating income also surged 56% year over year to $728 million.
Quarterly revenue reached $6.1 billion, slightly below Wall Street expectations, but investors appeared more focused on profitability improvements and future guidance.
Gross profit increased 27% to $2.91 billion, supported largely by the continued expansion of Cash App and lending services.
According to the company, Cash App generated $1.91 billion in gross profit, representing a strong 38% increase compared to the same period last year. Growth was fueled by higher activity across lending, banking, commerce, and Cash App Borrow products.
Square, Block’s seller focused business, also contributed positively with gross profit rising 9% to approximately $981 million. The growth was supported by stronger loan activity and increased payment volumes from merchants.
Bitcoin Revenue Drops During Weak Market Conditions
While Block’s core fintech operations remained strong, its Bitcoin business experienced a significant slowdown during the quarter.
Bitcoin ecosystem revenue fell to $1.8 billion, down from $2.33 billion a year earlier. Cash App’s Bitcoin related revenue specifically declined 31% year over year.
The company said changing Bitcoin trading dynamics and reduced fees on certain Cash App Bitcoin transactions contributed to the decline.
Block also recorded a $173 million Bitcoin remeasurement loss under fair value accounting rules. The loss reflected the decline in Bitcoin prices during the first quarter, when Bitcoin fell roughly 23.8%.
The non cash accounting adjustment contributed to Block posting a net loss of approximately $309 million attributable to common stockholders, reversing a profit reported during the same quarter last year.
In addition to the Bitcoin related loss, Block reported nearly $495 million in restructuring charges connected to workforce reductions announced earlier this year. The company also accrued $240 million related to an ongoing US Department of Justice matter involving compliance and risk practices.
Block Expands Bitcoin Holdings
Despite weaker crypto market conditions, Block continued increasing its Bitcoin reserves during the quarter.
The company disclosed that it held more than 9,000 Bitcoin by the end of March 2026, up slightly from prior periods. Block added 149 Bitcoin during the quarter at a cost basis of approximately $12.6 million.
According to the filing, Block’s total Bitcoin investment was acquired at a cumulative cost basis of roughly $305 million, while the fair market value stood at approximately $617 million at the end of the quarter.
The company also noted that its combined corporate Bitcoin treasury and customer Bitcoin holdings totaled 28,355 BTC, valued at roughly $2.2 billion.
Block Raises Full Year Guidance
Management raised its expectations for the remainder of 2026, citing strong execution across its business segments.
Block now expects 19% gross profit growth for the full year and projects adjusted diluted earnings per share growth of 62%.
The company also highlighted increasing use of artificial intelligence tools across operations to improve efficiency and support margin expansion.
Investors reacted positively to the updated outlook, with Block stock continuing its recent momentum. Shares have gained roughly 25% since the company announced workforce reductions earlier this year.
CoinLaw’s Takeaway
I think this quarter shows why investors continue backing Block even during difficult crypto market cycles. In my experience, companies with diversified revenue streams tend to perform better when Bitcoin trading activity slows down. What stood out to me most was how strongly Cash App and lending products performed while crypto revenue weakened sharply.
I also found it notable that Block kept increasing its Bitcoin reserves despite reporting large accounting losses tied to market volatility. That suggests management still sees Bitcoin as a long term strategic asset rather than a short term trading position. The market clearly rewarded Block for focusing on operational growth instead of relying entirely on crypto momentum.
