Block's Q2 Earnings Beat: Is This the Start of a Major Turnaround?

Block (formerly Square) reported second-quarter earnings that surpassed Wall Street expectations, with adjusted earnings of $1.02 per share, up 64% year-over-year, and revenue of $6.618 billion, including bitcoin transactions, up 9% from the previous year. Analysts had predicted earnings of 87 cents per share on revenue of $6.474 billion.

Despite the beat, Block stock dipped on Thursday, reflecting mixed investor sentiment.

Key Financial Metrics

Block's gross profit rose 25% to $3.17 billion, slightly above estimates of $3.062 billion. EBITDA increased 31% to $1.169 billion, beating estimates of $1.078 billion. Gross payment volume from merchants grew 10% to $74.73 billion, versus the expected $73.61 billion.

Turnaround or Growth Story?

Block's massive restructuring earlier this year, which included cutting its workforce by over 40%, appears to be paying off. JPMorgan analyst Tien-tsin Huang noted, "It's clear to us that the improved momentum at Block is sustaining and that the company's reorganization earlier this year is achieving its intended effect: improved product velocity, which will drive improved growth at better profitability as the firm orients to being an intelligence company."

Evercore ISI analyst Adam Frisch added, "Q2 was another proof point that Block has graduated from a turnaround to a growth story with encouraging visibility that the current trends can continue for the foreseeable future via Square and Cash App growth, new products, market expansion and AI initiatives."

For the current quarter, Block forecasts gross profit of $3.13 billion, in line with estimates. The company also raised its FY26 gross profit guidance, signaling confidence in sustained growth.

Stock Performance and Technicals

Square stock dipped 1.5% to near $83 in early trading, despite being up about 30% in 2026. The stock holds an IBD Composite Rating of 92 out of 99 and an Accumulation/Distribution Rating of A+, indicating strong institutional buying.

Core Businesses and Innovations

Block operates a two-sided digital payments ecosystem, with products for merchants and consumers. The Cash App allows individuals to manage money, buy stocks, and cryptocurrency, and recently added a pooled payments feature for group splitting.