$XYZ · Block, Inc.
Block reported Q3 FY2026 results with total net revenue of $6.719B (+9.9% YoY), GAAP diluted EPS of $0.92, and adjusted EPS of $1.13. Gross profit rose 21.6% to $3.235B with gross margin expanding to 48.1%. Operating income was $428.5M, though nine-month operating income fell 42.5% to $703.4M due to surging operating expenses and credit losses.
- Total net revenue rose 9.9% YoY to $6.719B, with Commerce enablement up 15.9% and Financial solutions up 31.5%.
- Gross margin expanded to 48.1% from 43.5% a year ago, driven by higher-margin Financial solutions and Commerce enablement growth.
- GAAP net income attributable to common stockholders was $565.6M ($0.92 diluted EPS), up 22.5% from $461.5M a year ago.
- Transaction, loan, and consumer receivable losses surged 65.6% YoY to $601.7M, reflecting rapid credit portfolio expansion.
- Cash App segment revenue reached $4.07B (+7.2% YoY) while Square segment revenue hit $2.59B (+15.7% YoY).
Extended-hours trading shows shares up 6.62% to $81.00 vs the $75.97 regular close, indicating strong positive reaction to the earnings beat and margin expansion.
Block's margin expansion story is working (48.1% gross margin vs 43.5% last year), but the 65.6% spike in credit losses raises the stakes on whether growth is coming at the cost of deteriorating loan quality.
Block's 48.1% gross margin and 9.9% revenue growth outpace many fintech peers, with Cash App and Square both showing accelerating monetization. The $229.7M bitcoin remeasurement gain highlights how crypto exposure can swing earnings materially quarter to quarter.
Transaction, loan, and consumer receivable losses jumped to $601.7M from $363.5M YoY — a 65.6% increase that outpaces revenue growth and signals rising credit risk as Block scales its lending products. G&A expenses surged 55.8% YoY to $847.5M, compressing operating margin to 6.4%.