The Block CDI (ASX: XYZ) share price is down 3% after reporting its 2026 second quarter result.
Block is the global fintech business behind Square (for merchants) and Afterpay (buy now, pay later).
2026 second quarter update
The business revealed a number of impressive growth figures for the quarter ending 30 June 2026.
Block reported that overall revenue increased by 9.3% to $6.6 billion.
Overall quarterly gross profit increased 25% to $3.17 billion, with cash app gross profit growth of 31% to $1.97 billion and Square gross profit increased 13% to $1.16 billion.
Operating profit decreased by 8% to $447 million, though adjusted operating profit increased by 57% to $864 million.
The reported earnings per share (EPS) decreased 82.75% to $0.15, while adjusted EPS rose 64% to $1.02.
In terms of profitability, Block said that it exceeded its adjusted operating income guidance.
Other highlights
Block said that Square US gross payment volume (GPV) growth accelerated to 10% in the second quarter, which is the strongest growth rate since the second quarter of 2023.
The company said that new customer acquisition, retention and same store growth all contributed to GPV growth acceleration.
Another highlight was the launch of its cash app mobile offering, a $40 per month unlimited 5G wireless plan. It also launched stablecoins on its cash app.
The company noted that sales and marketing expenses grew 21% year on year, while general and administrative expenses rose 84% year on year, primarily driven by increased accrued legal contingencies.
It also noted that transaction, loan and consumer receivable losses increased by 99%, driven by primarily by growth in loan volumes.
Outlook for the Block share price
For the third quarter of 2026, the company is expecting gross profit of $3.13 billion, up 18% year on year. Adjusted operating profit is projected to be $875 million. Adjusted EPS is forecast to rise 89% to $1.02.
For 2026 as a whole, gross profit is forecast to rise 21% to $12.5 billion, with adjusted operating profit of $3.47 billion. FY26 adjusted EPS is estimated to increase by 70% to $4.02.
Ongoing financial growth is a good sign to see, but the rise in expenses is something to keep an eye on. For now, I think there are better ASX growth shares to target considering the business has risen more than 50% in the last six months.
