Snapshot
Block, Inc. reported $6.05B of revenue in Q2 2025, up -1.6% year over year, with diluted EPS of $0.87 and an operating margin of 8.0%.
- Revenue
- $6.05B
- YoY growth
- +-1.6%
- Diluted EPS
- $0.87
- Operating margin
- 8.0%
What management said
- •These forward-looking statements include discussions about public strategy and guidance, as well as our long-term targeting goals.
- •Also note that the forward-looking statements, including earnings added into 2025, that discussed on the call are based on information available to us and is subsequently reviewed at SEC.
- •With the Rule of 40, we are evaluating some of the growth product growth and suggested value in the margin.
- •We delivered strong results in the second quarter, exceeding our gross profit and adjusted operating income guidance.
- •Gross profit was $2.5 billion, up 14% year-over-year, accelerating from 9% growth last quarter.
- •Adjusted operating income was $550 million, up 38% year-over-year, as we extended margin to our highest quarterly adjusted wide margin yet, 22%.
- •In Cash App, gross profit growth reaccelerated to 16% year-over-year in the second quarter.
- •We believe the combination of assets we have in Cash App is unique and positions us for attractive, sustainable long-term growth as an enduring ecosystem.
- •First, we have a scaled peer-to-peer network that drives community connection and Cash App customer acquisition, with $218 billion in peer-to-peer volume in the last 12 months.
- •We observed strong GPV growth in food and beverage and retail, up 15% and 10% respectively.
- •International GPV growth accelerated to 25% year-over-year as we continued to expand distribution across sales and partnerships.
- •In the second quarter, we delivered our highest ever new volume added and our strongest growth in new volume added since the third quarter of 2021.
What went well
- •Gross profit reached $2.5 billion, up 14% year-over-year, accelerating from 9% growth in the prior quarter, and adjusted operating income was $550 million, up 38% year-over-year at a record 22% adjusted operating income margin.
- •Cash App gross profit growth reaccelerated to 16% year-over-year, with Cash App Card delivering healthy growth at scale and BNPL gross profit reaccelerating, helped by post-purchase BNPL crossing 1 million monthly actives in July.
- •Square GPV growth accelerated to 10% year-over-year with 11% gross profit growth, including strong food and beverage and retail GPV growth of 15% and 10% respectively, and international GPV growth accelerating to 25%.
- •Square delivered its highest-ever new volume added and strongest growth in new volume added since the third quarter of 2021, with field sales showing an estimated five to six-quarter payback on recent cohorts.
- •Borrow originations nearly doubled year-over-year to $18 billion annualized with 6 million monthly actives, maintaining loss rates around 3% or less and 24% annualized net margin, above the 20% threshold.
- •Block was added to the S&P 500 during the quarter, and management raised full-year guidance by more than the second-quarter beat.
What went wrong
- •Third-quarter adjusted operating income margin is expected to be 18%, below the 20%-plus margins in the other quarters of the year, primarily due to risk loss growth as Borrow expands and the timing of expanded go-to-market initiatives.
- •Square's third-quarter gross profit growth is expected in the high single-digit range, below GPV growth, pressured by increased processing costs from adding operational flexibility at a processing partner and further hardware investments.
- •A processing-partner shift created an approximately 2% gross profit growth headwind to Square in the second quarter, offsetting a previously discussed network remediation payment.
- •Cash App network and user growth had stalled in recent quarters, an issue management said it is working to reinvigorate through new products and marketing.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| Gross profit | Q3 2025 | — | $2.6 billion, up 16% year-over-year | Acceleration of two points sequentially |
| Adjusted operating income | Q3 2025 | — | $460 million, 18% margin | Margin step-down vs other quarters' 20%+ |
| Square GPV growth | Q3 and Q4 2025 | — | Low double-digit growth | Modest acceleration from 10% in Q2 |
| Gross profit | Full year 2025 | — | $10.17 billion, over 14% year-over-year growth | Raised |
| Adjusted operating income | Full year 2025 | — | $2.03 billion, 20% margin | Raised; margin expanding two points year-over-year |
| Gross profit growth exit rate | Q4 2025 | — | 19% gross profit growth with over 20% adjusted operating income margin | Three points of further sequential acceleration into Q4 |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| Total gross profit | +14% | Accelerating product innovation and go-to-market investments across Block, up from 9% growth the prior quarter. |
| Adjusted operating income | +38% | Margin expansion to a record 22% on more efficient value delivery. |
| Cash App gross profit | +16% | Reacceleration driven by Cash App Card growth at scale and reaccelerating BNPL gross profit. |
| Square GPV | +10% | Strong food and beverage (+15%) and retail (+10%) volume plus expanded go-to-market and product launches. |
| Square gross profit | +11% | Included a previously discussed network remediation payment, offset by an approximately 2% processing-cost headwind. |
| Square international GPV | +25% | Continued expansion of distribution across sales and partnerships. |
| Borrow originations | Nearly doubled, to $18 billion annualized | Expanded rollout under Square Financial Services originations and growth to 6 million monthly actives. |
| BNPL GMV | +17% reported (18% constant currency) | Acceleration from 13% reported in Q1, driven largely by post-purchase BNPL on Cash App Card. |
| BNPL gross profit | +22% | Part of an accelerating story for the BNPL platform overall. |
| Banking actives ARPU | ARPU over $250 annualized vs $87 blended | 8 million banking actives (paycheck deposit or $500+ monthly spend) are deeply engaged, transacting over 40 times in June; cohort up 16% year-over-year. |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Product velocity and shipping speed | Discussed for several quarters as a focus | Cited as the central takeaway, with launches like Cash App Pools going from ideation to customers in three months, aided by AI coding tools (Goose) | rising |
| Borrow expansion and migration to SFS | Began meaningfully ramping this quarter | SFS now originates the majority of Borrow loans; testing higher limits for paycheck deposit actives with 24% annualized net margin | rising |
| Post-purchase BNPL on Cash App Card | Released in March | Crossed 1 million monthly actives and $2 billion originations run rate in July, tracking ahead of Borrow's early trajectory | rising |
| Square go-to-market and field sales | Leaned into Square sales effort last year | Highest-ever new volume added; 20%+ growth in new volume added with strong LTV/CAC and five to six-quarter payback | rising |
| Cash App banking primacy | — | New disclosure of 8 million banking actives; testing expanded benefits based on spend thresholds | rising |
| Bitcoin, Proto mining and stablecoins | Bitcoin a long-standing focus | Proto miner news expected the following week; Bitcoin acceptance enabled on Square; will support major stablecoins but sees no differentiator to issue its own | rising |
Q&A summary
On conviction and visibility into the second-half acceleration, and where management is more bullish versus more cautious than 90 days ago.
Jack Dorsey credited rising shipping velocity, citing Cash App Pools shipped in three months and AI tooling (Goose). Amrita Ahuja said second-quarter data gave conviction to raise guidance by more than the beat, with two points of sequential acceleration into Q3 and three more into Q4, driven by Borrow (6 million monthly actives), newer Cash App products like post-purchase BNPL and Cash App Pay, Proto, and Square acceleration.
Can you elaborate on Cash App Card post-purchase BNPL attach rates, loss rates, and quantify the opportunity into 2026?
Ahuja said the product, released in March, drove BNPL GMV acceleration to 17% reported (18% constant currency) and 22% gross profit growth; it crossed 1 million monthly actives and a $2 billion originations run rate in July. Leveraging the Cash App credit score, it tracks ahead of Borrow's early trajectory on volume and margin, and is expected to contribute more in 2026 alongside pay-in-four, Cash App Pay, and Tap to Pay.
Can you expand on the new 8 million banking actives metric and how it could drive Cash App gross profit?
Ahuja said paycheck deposit actives grew to over 2.8 million (adding ~100,000 in July). The 8 million banking actives (paycheck deposit or $500+ monthly spend, near top-of-wallet given ~$900 average U.S. debit spend) grew 16% year-over-year, generated over $250 annualized gross profit per active versus an $87 blended ARPU, and transacted over 40 times in June. Block is testing higher Borrow limits and expanded banking benefits.
What returns are you seeing on the expanded Square sales investments, and is it scaling as expected?
Ahuja said first-half new volume added grew 20%-plus and is expected to more than double in Q4. Field sales shows strong LTV/CAC with five to six-quarter payback, supporting continued ramp of field and telesales in the U.S. and internationally; partner-driven leads exceeded expectations and first U.S.-ISO partnerships are emerging, without detriment to self-onboarding.
On the narrower spread between Square gross profit and GPV growth and the moving pieces ahead.
Ahuja attributed it to near-term dynamics, not underlying weakness: an approximately 2% gross profit headwind from increased operational flexibility at a processing partner (offsetting the network remediation payment) expected to persist into Q3 and lap in 2026, plus higher hardware costs from strong Square Handheld adoption. Block expects to exit the year with gross profit and GPV growth roughly in line.
On the gross margin profile of Borrow and the puts and takes on the step-up in losses.
Ahuja said Borrow originations nearly doubled year-over-year to $18 billion annualized with 6 million monthly actives, with annualized net margins of 24% in Q2 (above the 20% threshold) and loss rates around 3% or less. Borrow and post-purchase BNPL are powered by Cash App's internal credit score, which can approve 38% more customers than Vantage Score at the same loss threshold.