Quick Take
- Block raised its 2026 gross profit forecast to $12.51 billion after posting record adjusted operating income.
- Shares reversed an initial 4.5% gain and were last trading nearly 2% lower after hours.
The Jack Dorsey-led fintech firm Block reported a 31% year-over-year decline in bitcoin ecosystem gross profit during the second quarter on Wednesday, after lowering certain Cash App transaction fees.
Block's bitcoin ecosystem generated $1.89 billion in revenue, down 13% from $2.17 billion a year earlier, but up 5% from the first quarter. Gross profit from the segment fell to $72 million from $105 million over the same period.
The company attributed the decline to its “strategic decision” to reduce fees charged on certain bitcoin transactions through its payment app Cash App, alongside a slowdown in bitcoin trading throughout 2026.
Cash App accounted for $1.81 billion of Block's bitcoin ecosystem revenue during the quarter.
Block recorded an $88.5 million paper loss as the value of its bitcoin holdings declined during the quarter, compared with a $212.2 million paper gain a year earlier.
Block held 9,032 BTC in its corporate treasury as of May 8, according to Bitcoin Treasuries, up about 35 BTC from the 8,997 BTC it disclosed at the end of the first quarter. The holdings are worth more than $586 million at current prices.
Block raises full-year outlook
Block reported $89 million in net income for the quarter, down from $538 million a year earlier, mostly driven by unrealized bitcoin losses.
Total gross profit rose 25% year over year to $3.17 billion while Cash App gross profit jumped 31% to $1.97 billion and Square gross profit rose 13% to $1.16 billion.
Block raised its full-year profit forecasts to $12.51 billion, a would-be 21% annual jump in growth.
The company also touched on its launch of USDC support in Cash App during the quarter, allowing customers to transact using stablecoins across multiple blockchains.
Block shares (XYZ) reversed an initial 4.5% after-hours gain and were last trading more than 2% lower at $84.20 following the results.
Block (XYZ) stock price chart. Source: Google Finance
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