Block's Q3 gross profit rose 22% to $3.24 billion, beating expectations, with its stock price climbing more than 7% in after-hours trading.

According to Bloomberg, Block, the payments company founded by Jack Dorsey, reported a 22% year-over-year increase in third-quarter gross profit to $3.24 billion, exceeding analysts’ average forecast of $3.1 billion. The firm raised its full-year 2026 gross profit outlook from approximately $12.5 billion to around $12.6 billion, pushing its shares up more than 7% in after-hours trading. On the operational front, Square is expanding its reach to food and beverage merchants, while Cash App has rolled out additional bank account-like features. Block is also connecting Cash App users with Square merchants via its Neighborhoods initiative and has begun selling some internally developed AI tools. Despite prior layoffs, the company’s third-quarter operating expenses hit $2.8 billion, rising both year-over-year and quarter-over-quarter. Additionally, Block disclosed a roughly $230 million loss on its Bitcoin investments in the third quarter. Its Bitcoin business primarily provides trading channels for clients, with performance tied to Bitcoin price fluctuations. The company projects fourth-quarter gross profit of $3.32 billion and 2027 gross profit of $14.52 billion, a 15% year-over-year increase. Business head Owen Jennings stated Block expects to generate direct revenue from AI tools for the first time in the fourth quarter, with AI investments set to drive future growth. Block also revealed it has reached a tentative agreement with the U.S. Department of Justice (DOJ) over a multi-year anti-money laundering investigation. The proposed deferred prosecution agreement totals roughly $964 million, with Block anticipating a net payment of around $764 million—higher than the $526 million reserve disclosed in the prior quarter. The deal remains subject to court approval.