Block Inc. shares surged nearly 8% in after-hours trading Thursday after the payments company reported first-quarter earnings that topped expectations, driven by strong growth in Cash App. The company posted adjusted diluted earnings of $0.85 per share, beating the consensus estimate of $0.68, while gross profit rose 27% year over year to $2.91 billion. Block shares ended regular trading at $70.14, down 0.97% on the NYSE, before the after-hours pop to $75.70.
Cash App gross profit jumps 38%
Cash App remains Block's growth engine. Gross profit from the peer-to-peer payments platform hit $1.91 billion, up 38% from a year ago. Square, the company's merchant services business, posted gross profit of $982 million, a 9% increase. Combined, the two segments drove Block's overall gross profit to $2.91 billion. Adjusted operating income hit a record $728 million, with margins expanding to 25%.
Bitcoin remeasurement loss drags net income
Despite the operational strength, Block reported a net loss of $309 million attributable to common stockholders. The culprit: a $172.8 million remeasurement loss on its Bitcoin investment. Under accounting rules, Block must mark its Bitcoin holdings to market each quarter, and the decline in BTC price during Q1 triggered the charge. That non-cash loss more than offset the underlying profit from payments and financial services.
Block lifts 2026 outlook
Management raised full-year guidance. Block now expects gross profit growth of 19%, or $12.33 billion, and adjusted diluted EPS of $3.85 — up 62% from the prior year. For the second quarter, the company projected gross profit of $3.04 billion and adjusted diluted EPS of $0.86, representing 20% and 39% year-over-year growth, respectively. The guidance suggests Block sees the Q1 momentum continuing, even as the macro environment stays uncertain.
Dorsey: AI now core to operations
CEO Jack Dorsey pointed to artificial intelligence as an increasingly important part of the company's operations and customer products. The exact role AI played in the quarter wasn't broken out in the numbers, but the comment signals that Block — like many of its fintech peers — is leaning into automation and data analysis to drive efficiency and user engagement. Investors will watch for more detail on how that translates into future margins and revenue.
The big question heading into Q2: whether Bitcoin's price swings will continue to muddy Block's bottom line. The company's core business is clearly firing on all cylinders. But the remeasurement loss shows that as long as Block holds a large BTC treasury, quarterly net income will remain at the mercy of crypto markets.
