Q2 2026 Block Inc Earnings Call Transcript
Key Points
- Block Inc (XYZ) delivered record profitability in Q2 2026, with gross profit up 25% year over year and adjusted diluted EPS up 65%.
- Square's US GPV growth accelerated to its strongest rate since Q2 2023, driven by strong product velocity and expanded go-to-market channels.
- Cash App gross profit grew 31% year over year, with strong performance in commerce and lending, including a 59% increase in consumer lending origination volume.
- The company raised its full-year 2026 guidance for gross profit, adjusted operating income, and adjusted diluted EPS, reflecting strong execution and momentum.
- Innovative products like Cash App Tags and Neighborhoods are showing strong early traction, with Neighborhoods crossing $1 billion in annualized seller GPV and Tags selling out rapidly.
- AI investments are driving significant productivity gains, with code changes per engineer up 150% and Square shipping over 3x more features in H1 2026 compared to H1 2025.
- Cash App actives growth remains modest at 3% year over year, and the company expects only low-single-digit growth in 2026.
- Consumer lending growth is expected to normalize in the second half of 2026, which could slow Cash App's gross profit growth.
- Hardware costs, particularly memory, are rising due to unprecedented industry-wide supply constraints, which could pressure margins.
- The company faces tough comparisons in the second half of 2026, especially for Cash App Borrow, which may lead to slower growth.
- AI-related costs are increasing, and while the company is managing them, there is uncertainty about the long-term ROI of these investments.
- The company's guidance for Q3 2026 implies a deceleration in gross profit growth to 18% year over year, down from 25% in Q2.
Thank you all for joining today's call. We have Jack and Amrita with us today, along with Owen Jennings, our Business Lead and Thomas Templeton, Hardware Lead for Block.
Today's discussion includes forward-looking statements regarding our strategy, guidance, and long-term goals. Actual results may differ materially due to risks and uncertainties described in materials filed and furnished with the SEC and should not be considered an indication of future performance. These statements speak only as of today, and we undertake no obligation to update them, except as required by law.
Reconciliations of any non-GAAP financial measures that we discuss to the most directly comparable GAAP measures are available in our shareholder letter. Further, any discussion of our lending and banking products refer to products offered through Square Financial Services or our bank partners.
Before turning the call over to Jack, I wanted to note that we're trying something new this quarter. In addition to taking questions on the call, we sourced
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