Block Lifts 2026 Outlook as Its Bitcoin Gross Profit Halves

Block raised its 2026 gross profit forecast to $12.626 billion on Tuesday after a third quarter in which its bitcoin business earned half as much gross profit as a year earlier, its shareholder letter shows.

The old forecast was $12.51 billion, Reuters reported. Block's shares rose 6% to 8% in after-hours trading, according to Investing.com and The Block.

Big revenue, thin margin

Bitcoin ecosystem revenue was $1.80 billion in the quarter, down from $2.02 billion. Gross profit on it fell 50% to $52 million.

Why the gap is so wide: when a Cash App customer buys bitcoin, Block books the full purchase price as revenue, then books the cost of buying that bitcoin as a cost. Only the difference, mostly fees and spread, is gross profit. Block said the drop came mainly from "a strategic decision to reduce the fee we charge on certain bitcoin transactions on Cash App."

The rest of the company carried the quarter. Total gross profit rose 22% to $3.24 billion, Cash App's rose 27% and Square's rose 14%. Adjusted earnings were $1.13 a share, against 54 cents a year earlier.

The bitcoin on Block's own books

Block also holds bitcoin as an investment. It recorded a $229.7 million remeasurement gain on that holding in the quarter and valued it at $771.9 million on Sept. 30, the filing shows.

Costs rose too. Losses on transactions, loans and consumer receivables climbed 66% to $601.7 million as Cash App lending grew, Reuters reported.

In our opinion: the number worth watching is $52 million. Block chose to earn less per bitcoin trade while the rest of the business grew, which tells you bitcoin is being priced to bring customers in. If the fee cut lifts trading volume, revenue should show it first. Fourth-quarter results land Feb. 24, 2027.