Most companies report revenue as their headline number. Block does something different — it tells you to focus on gross profit instead. There's a good reason for that: Block's revenue includes the full value of every Bitcoin trade on Cash App, even though Block only keeps a tiny margin on each trade. That inflates revenue without reflecting the actual economics of the business. This quarter, Block posted $6.1 billion in revenue, up 5% year-over-year, beating estimates of $5.9 billion. More importantly, gross profit — the number management actually runs the business on — grew and the company raised its 2026 gross profit guidance above estimates.
Here's what happened.
The Numbers: Look at Gross Profit, Not Revenue
- Revenue: $6.1 billion, up 5% year-over-year — beat estimates of $5.9B
- Gross profit: growing (Block's key metric)
- 2026 gross profit guidance: raised above estimates
Why does Block tell you to ignore revenue? Here's an example. Say someone buys $1,000 of Bitcoin on Cash App. Block records the full $1,000 as revenue. But Block only keeps about $20 of that (the 2% spread). The other $980 goes to buying the Bitcoin. So revenue looks massive, but the actual money Block earns — gross profit — is much smaller. Gross profit strips out the cost of Bitcoin, payment processing costs, and hardware costs to show what Block actually keeps. It's the more honest number, and it's the one Block's management uses to make decisions.
Square: The Small Business Engine
Square is Block's original product — the little white card reader that lets small businesses accept credit card payments. It's evolved far beyond that into a full business management platform.
Today, Square offers point-of-sale systems (the screens you see at coffee shop counters), online store builders, payroll processing, business loans (Square Loans), inventory management, and appointment scheduling. The idea is to be the operating system for small businesses — handling everything from the moment a customer walks in to the moment the money hits the business owner's bank account.
Square's growth comes from two sources: signing up new businesses (particularly restaurants, retail stores, and service providers) and selling more products to existing customers. A business that starts with just a card reader might eventually add payroll, get a loan, build an online store, and use Square's marketing tools. Each additional product generates more revenue from the same customer.
"Point-of-sale" (POS) is the system a business uses to process transactions — the screen, the card reader, the receipt printer, the software that tracks sales. Traditional POS systems from companies like Oracle or NCR cost thousands of dollars and required technical setup. Square disrupted this by offering a simple, cheap alternative that any small business could set up in minutes. The POS is the entry point; everything else Square sells (loans, payroll, marketing) is the expansion.
Like these translations?
Reading the full earnings report yourself? The Ask AYO extension highlights and translates the jargon in real time — so you can read any company's press release, 10-K filing, or investor call transcript and actually understand it. Free.
Get the free extensionCash App: The Consumer Play
Cash App is Block's consumer product — a mobile app for sending money, receiving direct deposits, buying stocks, buying Bitcoin, and using a debit card (the Cash Card). It's one of the most downloaded finance apps in the US, with tens of millions of monthly active users.
Cash App started as a simple peer-to-peer payment app (a competitor to Venmo) but has evolved into something closer to a digital bank. Users can receive their paycheques via direct deposit, get a debit card, save money, invest in stocks, and buy Bitcoin — all without a traditional bank account.
The monetisation strategy is multi-layered. Cash App earns money from Bitcoin trading margins, Cash Card interchange fees (when users spend with their debit card), instant deposit fees (charging users to get their money instantly rather than waiting 1–3 days), and Cash App Borrow (small personal loans).
"Direct deposit" is when your employer sends your paycheque directly to your bank account (or in this case, your Cash App account). Why does Block care about direct deposit? Because once your salary lands in Cash App, everything else follows — you spend with the Cash Card (Block earns interchange fees), you might buy Bitcoin (Block earns trading margin), and you're less likely to switch to a competitor. Getting someone's direct deposit is the financial equivalent of getting them to move in — once they're settled, they rarely leave.
What's Coming Next
Block raised its 2026 gross profit guidance above what analysts expected, which is the strongest signal management can send. It means the company sees momentum building, not fading.
The strategic focus is on profitability improvement. Block's CEO Jack Dorsey has been pushing for operational efficiency — reducing headcount, cutting non-essential projects, and focusing resources on the products that generate the most gross profit per dollar of investment.
The company has also been integrating Square and Cash App more tightly. The vision is a single financial ecosystem where a Cash App user can pay at a Square merchant seamlessly, and the Square merchant can access Cash App's user base for marketing and loyalty programmes. This integration is still early but could create powerful network effects if executed well.
TIDAL, Block's music streaming service (acquired in 2021), and TBD, its Bitcoin/Web3 development platform, remain part of the portfolio but are smaller priorities compared to Square and Cash App.
"Raising guidance" means the company is telling investors: "We're going to be more profitable than we originally thought." When a company raises the metric it cares most about (in Block's case, gross profit), it usually means internal trends are strong and management has enough visibility into the next few quarters to make a confident prediction. It's one of the most positive signals a company can send.
The Bottom Line
Block beat revenue estimates, raised gross profit guidance, and continued to grow both its small business (Square) and consumer (Cash App) platforms.
↑ Why This Matters (Bull Case)
Block operates two large, growing platforms in a massive market — payments and consumer finance. Square is the default platform for millions of small businesses, and Cash App is one of the most popular finance apps in America. Raising gross profit guidance signals that the efficiency push is working and the business is getting more profitable. The integration of Square and Cash App could create a unique two-sided financial ecosystem that nobody else has. Bitcoin trading on Cash App provides optionality — every crypto bull market sends Cash App transaction revenue surging. And Block's stock has been beaten down from its 2021 highs, meaning expectations are lower and the potential for positive surprises is higher.
↓ Why This Might Worry You (Bear Case)
Revenue growth of 5% is modest, even accounting for the Bitcoin distortion. Square faces intense competition from Shopify (which has its own POS and payments system), Toast (which dominates restaurant POS), and traditional payment processors like Stripe. Cash App competes with Venmo, Chime, Apple Pay, and every major bank's mobile app. Block's Bitcoin exposure cuts both ways — when crypto markets crash, Cash App's transaction revenue drops with them. The company has a history of making expensive, non-core acquisitions (TIDAL, Afterpay) that haven't clearly added value. And despite the efficiency push, Block's path to consistent, substantial GAAP profitability remains a work in progress.
The question is whether Block's two-platform strategy — Square for businesses, Cash App for consumers — creates a financial ecosystem powerful enough to compete with both the tech giants and the traditional banks, or whether trying to do everything means doing nothing exceptionally well.
References
- Block Investor Relations — Q1 2026 Earnings Press Release (May 6, 2026)
- CNBC — Block Beats Revenue Estimates, Raises Gross Profit Guidance (May 6, 2026)
- Bloomberg — Block's Cash App and Square Show Steady Growth in Q1 (May 6, 2026)
Ticker: XYZ (NYSE) · Reported: May 6, 2026
The biggest earnings, translated. Weekly.
One email a week covering what the brands you care about actually said — in plain English. No jargon, no fluff, no spam.
Unsubscribe anytime.