Block Inc (NYSE:SQ) shares rose about 6.5% after it reported stronger-than-expected first-quarter 2026 earnings, highlighted by solid profit growth and improved margins, despite a slight revenue miss.
Block (XYZ) reported adjusted earnings per share of $0.85, above analyst expectations of $0.68. Revenue came in at $6.06 billion, slightly below consensus estimates of $6.12 billion.
Gross profit increased 27% year over year to $2.91 billion, exceeding internal guidance and reflecting accelerating growth across both Cash App and Square.
Adjusted operating income rose to $728 million, while adjusted EBITDA reached a record $1 billion. The company said its adjusted operating income margin reached 25%, an all-time high.
On a GAAP basis, Block reported a net loss attributable to common stockholders of $309 million, or $0.52 per share.
Within Cash App, commerce enablement volume grew 18% year over year, driven by strength in Cash App Card and accelerating buy-now-pay-later activity. Consumer lending origination volume increased 82% year over year, including 175% growth in Cash App Borrow originations.
Square gross payment volume rose 13% year over year, with US GPV up 8.2% and international GPV up 35% (26% in constant currency).
“We continued to deliver strong financial performance in the first quarter as AI became more central to how Block operates and what we build for customers,” Block CEO Jack Dorsey said in a statement.
Also boosting Block shares was improved full-year guidance. Block also raised its full-year 2026 outlook, now expecting gross profit of $12.33 billion, up more than 19% year-over-year.
The company forecasts adjusted operating income of $3.34 billion, or a 27% margin, and adjusted diluted EPS growth of 62% to $3.85.
For the second quarter, Block guided to gross profit of $3.04 billion, up 20% year over year, with adjusted operating income of $740 million and a 24% margin.