May 7 (Reuters) – Jack Dorsey-led Block raised its full-year outlook on Thursday as the payments firm benefited from resilient consumer spending and strong growth in its core businesses.
The Oakland, California-based company now expects annual gross profit to be $12.33 billion in 2026, compared with its previous forecast of $12.20 billion.
Shares of the company jumped 7.7% in extended trading. The stock has risen roughly 9% so far this year as of the last close.
U.S. consumer spending remained broadly resilient in the first three months of 2026, underpinned by a stable labor market and wage growth. Higher tax refunds also acted as a tailwind, while the U.S.-Israeli war on Iran boosted gasoline prices and drove up receipts at service stations.
The results cap off a broadly strong reporting season for the payments sector, with card giants Visa and Mastercard also posting robust earnings.
“Cash App was the standout this quarter. We also like the ongoing improvement in Block’s profitability. Importantly, last quarter’s significant reduction in the workforce does not appear to be weighing on Block in terms of its ability to execute,” Seaport Research analyst Jeff Cantwell said.
CASH APP IN SPOTLIGHT
Cash App, which enables peer-to-peer mobile payments, led the way in the reported quarter, with gross profit surging 38% in the quarter from a year earlier.
Consumer lending origination volume at the business surged 82% to $17.6 billion from a year earlier, underpinned by strength in its Cash App Borrow offering.
The launch of Cash App Green, which provides premium banking benefits, has also helped it expand deeper into new geographies. The status program ended March with 9.7 million primary banking actives, up 18% from a year earlier.
Finance chief Amrita Ahuja told analysts Block was in early stages on extending buy now, pay later functionality across Cash App, another area of growth for the firm.
Square, Block’s merchant segment, saw 9% growth in gross profit, while gross payment volume grew 13%.
Overall gross profit surged 27% in the quarter, driven by strong growth in Block’s Cash App and Square businesses.
Block posted record adjusted profit per share of 85 cents in the three months ended March 31, topping expectations of 68 cents, according to estimates compiled by LSEG.
For second quarter, Block expects gross profit to grow 20% from a year earlier to $3.04 billion.
The firm recorded $852 million in restructuring and other charges in the first quarter.
Earlier this year, Block announced over 4,000 job cuts as part of a broader overhaul to embed artificial intelligence across its operations.
“Internally, AI is helping us move faster and improve quality. Externally, it is helping us build products that act earlier for customers and sellers,” Block head Dorsey said in a shareholder letter released along with the quarterly results.
Dorsey told analysts Block was focused on having a flatter organization going forward.
(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Tasim Zahid)
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