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    XYZ
    Earnings call· Sep 2025(Q3 FY25)

    Block, Inc. XYZ

    Nov 6, 2025 Source

    Executive summary

    Block Q3 FY25 — Strong Gross Profit Growth and Margin Expansion Driven by Cash App and Square

    Block delivered a strong third quarter, exceeding expectations with accelerated gross profit growth and expanded adjusted operating income margins. The company's focus on reaccelerating active growth and increasing network density in Cash App, alongside strategic product and go-to-market initiatives for Square, drove these results. Management is optimistic about continued momentum into Q4 and beyond, with an Investor Day planned to detail future outlooks and AI integration across its platforms.

    Highlights

    5

    • Gross profit grew 18% year-over-year to $2.66 billion, accelerating from 14% growth last quarter.

    • Cash App's gross profit grew 24% year-over-year, accelerating from 16% in Q2 FY25.

    • Cash App monthly actives reached 58 million in September, with primary banking actives growing 18% year-over-year to 8.3 million.

    • Square's GPV from sellers above $0.5 million grew 20% year-over-year, the strongest growth rate since Q1 FY23.

    • Adjusted operating income was $480 million, with margins at 18%, and full-year guidance raised to $2.056 billion.

    Concerns

    2

    • A decision to increase operational flexibility at a processing partner resulted in an approximately 2.6 percentage point headwind to Square gross profit in Q3 FY25.

    • Slightly slower growth in Square towards the end of October, believed to be primarily weather related.

    Guidance & targets

    12
    CategoryTargetConfidence
    Q4 FY25 Gross Profit Growth
    over 19% year-over-year
    high materiality
    High
    Q4 FY25 Gross Profit
    $2.755 billion
    high materiality
    High
    Q4 FY25 Adjusted Operating Income Margins
    20%
    high materiality
    High
    Q4 FY25 Adjusted Operating Income
    $560 million
    high materiality
    High
    Full-year FY25 Gross Profit
    $10.243 billion
    high materiality
    High
    Full-year FY25 Gross Profit Growth
    more than 15% year-over-year
    high materiality
    High
    Full-year FY25 Adjusted Operating Income
    $2.056 billion
    high materiality
    High
    Full-year FY25 Adjusted Operating Income Growth
    nearly 28% year-over-year
    high materiality
    High
    Full-year FY25 and Long-term Tax Rate
    mid-20% range
    medium materiality
    High
    Q4 FY25 Net Interest Expense
    $45 million
    medium materiality
    High
    Long-term Net Interest Expense
    $45 million
    medium materiality
    High
    Rule of 40
    approaching Rule of 40
    high materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Cash App
    Cash App's gross profit growth accelerated significantly, driven by increased monthly actives and enhanced engagement across its product suite, including banking and lending products. Primary banking actives also showed strong growth.
    Gross Profit: 24% YoY growthMonthly Actives (September): 58 millionGross Profit per Monthly Transacting Active: $94Gross Profit per Monthly Transacting Active YoY Growth: 25%Primary Banking Actives: 8.3 millionPrimary Banking Actives YoY Growth: 18%Borrow Annualized Originations (early October): $3 billionBorrow Originations YoY Growth: 134%Borrow Annualized Net Margins: 24%Cash App Card Spend YoY Growth: 19%Cash App Pay GPV YoY Growth: 70%
    		—24%——
    Square
    Square's gross profit and GPV showed accelerating growth, with particular strength in larger sellers and international markets. Sales and marketing efforts are driving significant new volume added, despite a processing cost headwind.
    Gross Profit: 9% YoY growthGPV: 12% YoY growthGPV from sellers > $0.5M: 20% YoY growthSales-driven New Volume Added (NVA) YTD: 28% YoY growthInternational GPV: 26% YoY growth
    		—9%——

    Operational metrics

    27
    Adjusted Operating Income
    $480 million
    Q3 FY25

    Reported adjusted operating income for the quarter.

    Adjusted Operating Income Margins
    18%
    Q3 FY25

    Adjusted operating income margins for the quarter.

    Adjusted EBITDA
    $833 million
    Q3 FY25

    Reported adjusted EBITDA for the quarter.

    Product Development Costs
    flatYoY
    Q3 FY25

    Product development costs remained flat year-over-year.

    Transaction, Loan and Risk Loss Expense
    89%YoY growth
    Q3 FY25

    Growth in expense due to scaling lending products like Borrow and post-purchase BNPL.

    Borrow Loss Rates
    below 3%
    Q3 FY25

    Losses for the Borrow product continue to trend below the target.

    Stock Repurchased
    $1.5 billion
    YTD September

    Amount of stock repurchased year-to-date through September.

    Square Gross Profit Headwind
    2.6 percentage points
    Q3 FY25

    Impact on Square gross profit due to increased processing costs from a decision for operational flexibility.

    Cash App Monthly Actives
    58 million
    September

    Total monthly active users for Cash App.

    Cash App Primary Banking Actives
    8.3 million18% YoY growth
    September

    Number of primary banking actives, showing strong year-over-year growth.

    Cash App Primary Banking Actives
    8.7 million20% YoY growth
    October

    Number of primary banking actives, showing accelerated year-over-year growth in October.

    Post-purchase BNPL Annualized Originations
    $3 billion
    early October

    Annualized originations for the new post-purchase Buy Now Pay Later product.

    Borrow Annualized Originations
    $22 billion
    Q3 FY25

    Annualized originations for the Borrow product.

    Square New Volume Added (NVA) - Sales-driven
    28%YoY growth
    YTD

    Sales-driven NVA growth year-to-date through September.

    Square New Volume Added (NVA) - Sales-driven
    over 40%
    Q4 FY25 exit

    Expected growth rate for sales-driven NVA by the end of Q4.

    Square New Volume Added (NVA) - Self-onboard
    70%
    Q3 FY25

    Percentage of NVA coming from self-onboarding marketing channels.

    Square NVA Payback Periods - Marketing
    4- to 5-quarter
    Q3 FY25

    Healthy payback periods for marketing-driven self-onboard NVA.

    Square GPV from Sellers above $0.5M
    20%YoY growth
    Q3 FY25

    Strongest growth rate for larger sellers since Q1 FY23.

    Afterpay GMV
    18%YoY growth
    Q3 FY25

    Afterpay's Gross Merchandise Volume growth.

    Afterpay Gross Profit
    23%YoY growth
    Q3 FY25

    Afterpay's gross profit growth.

    Cash App Pools Created
    1.5 million
    end of October

    Number of 'pools' created, a multiplayer money feature.

    Cash App Teen Accounts
    5 million
    Q3 FY25

    Number of monthly active teen accounts.

    Cash App Inflows per Active
    10%YoY growth
    Q3 FY25

    Growth in inflows per active, indicating engagement.

    Borrow Return on Invested Capital
    30%
    Q3 FY25

    High return on invested capital for the Borrow product.

    Square Field Sales Reps
    over 100
    Q3 FY25

    Number of field sales representatives, scaled from near zero at the start of the year.

    Square Churn Rates
    lowest
    since Q2 2023

    Churn rates for Square sellers are at their lowest since Q2 2023.

    Cash App Card Actives
    26 million
    monthly

    Number of monthly active Cash App Card users.

    Industry KPIs

    3
    MetricValueDetails
    Capital returns$1.5 billionUSD
    Active consumers58 millionactives
    Payments volume gdv12%%

    Product announcements

    8
    ProductTypeDetails
    Cash App Releaseslaunch
    Neighborhoods on Cash Applaunch
    Square AIlaunch
    Multichannel Menu Managementlaunch
    Unified Third-Party Delivery App Managementlaunch
    Improved Kiosksupdate
    High-yield savings for teen customerslaunch
    Bitcoin Acceptance for Square Sellerslaunch

    Deals & partnerships

    6
    GrubhubStrategic partnership leveraging Block's combined assets (Square and Cash App).

    Partnership leveraging Block's ability to bring more assets to the table, looking at the combined value of Square and Cash App.

    CiscoPartnership driving new sellers to the platform.

    Seeing a strong influx of new sellers joining the platform as a result of this partnership.

    UberNew Afterpay partner.

    Signed as a new Afterpay partner in Australia.

    AmazonNew Afterpay partner.

    Signed as a new Afterpay partner in Australia.

    HibbettNew Afterpay partner.

    Signed as a new Afterpay partner in the U.S.

    JennyNew Afterpay partner.

    Signed as a new Afterpay partner in the U.S.

    Risks & headwinds

    3
    Increased processing costs for SquareQ3 FY25, expected to lap in Q2 FY26

    2.6 percentage point headwind to Square gross profit

    Mitigation: Decision made for operational flexibility; expected to be a temporary headwind.

    Slower Square growth due to macro/weatherend of October

    Slightly slower growth towards the end of October

    Mitigation: Believed to be primarily weather-related; company remains data-driven and flexible to shift marketing/underwriting as needed.

    Macroeconomic conditions

    Dynamic environment, range of potential outcomes

    Mitigation: Company is paying close attention, tracking metrics daily, and has the ability to shift marketing, underwriting, or business operations as needed.

    What to watch in Q4 FY25

    5

    Cash App Monthly Actives Growth

    next quarter
    Current58 million (September), accelerating YoY in October
    TargetContinued acceleration in YoY growth

    Why it matters

    Sustained active user growth is fundamental to Cash App's ecosystem expansion and future monetization opportunities.

    We reported the $58 million number for September. But the underlying trends are strong as well. So what we've seen is an acceleration in the year-over-year growth for monthly active since we declared this a top priority at Block and at Cash App. And we actually saw that acceleration in year-over-year growth for monthly active again in October, which is great.

    Q&A highlights

    6

    What is the progress on Cash App network density and when might we see an inflection in network growth given current investments?

    Cash App reached 58 million monthly actives in September, with year-over-year growth accelerating in October. Growth is driven by net new acquisition and engagement, focusing on core flow enhancements, multiplayer money features like 'pools' (1.5M created by Oct), and expanding 'Teams and Family' accounts (5M teen accounts). All product building contributes to active growth, alongside marketing efforts with strong ROI.

    “We reported the $58 million number for September. But the underlying trends are strong as well. So what we've seen is an acceleration in the year-over-year growth for monthly active since we declared this a top priority at Block and at Cash App. And we actually saw that acceleration in year-over-year growth for monthly active again in October, which is great.”

    asked by Tien-Tsin Wang · answered by Nikhil Dixit

    2 min read6 chapters

    Detailed Narrative

    01

    Cash App Ecosystem Growth and Engagement

    Cash App demonstrated strong performance, with gross profit growing 24% year-over-year, accelerating from the previous quarter. This growth was fueled by reaccelerated active user acquisition, reaching 58 million monthly actives in September, and increased network density. Engagement metrics also improved, with gross profit per monthly transacting active growing 25% year-over-year to $94. New products like post-purchase Buy Now Pay Later on Cash App Card are scaling rapidly, reaching $3 billion in annualized originations.

    02

    Square's Strategic Focus and Market Share Gains

    Square's gross profit grew 9% year-over-year, with GPV up 12%, showing acceleration in both the U.S. and internationally. The company is gaining profitable market share in target verticals like food and beverage, and with larger sellers. Key strategies include connecting sellers and consumers via 'neighborhoods on Cash App,' delivering AI tools for operational efficiency, and providing integrated software and hardware solutions. Sales-driven New Volume Added (NVA) was up 28% year-to-date, with strong payback periods of 4-5 quarters for marketing channels.

    03

    Borrow Product Expansion and Strong Unit Economics

    The Borrow product saw significant expansion, with originations growing 134% year-over-year to nearly $22 billion on an annualized basis. This was driven by underwriting model improvements, expansion into new states via SFS, and nuanced limit adjustments for engaged customers. Despite rapid growth, risk loss rates remained below the 3% target, yielding annualized net margins of 24%. Borrow actives show significantly higher engagement across the Cash App ecosystem, including 3x higher inflows and retention rates.

    04

    AI Integration Across Block's Platforms

    Block views AI as both a growth driver and a cost-saving mechanism, aiming to automate mundane tasks and accelerate product development. Internally, 'Goose' has evolved to assist nearly every role, contributing to increased velocity. Externally, Square AI is being integrated to provide sellers with insights and automate operations, with AI-driven order guides and automated phone orders announced. Cash App will also see significant AI integration, aiming to act as a 'virtual CFO' for users, leveraging real-time data for proactive financial management.

    05

    Go-to-Market Strategy and Sales Productivity

    Block's go-to-market motions, particularly field sales, are performing strongly with healthy paybacks and increasing marginal ROI. Sales-led NVA was up 28% year-to-date through September, expected to exceed 40% by year-end. The field sales team has scaled from near zero to over 100 reps, with plans for further expansion. The company is also seeing strong organic self-onboarding, with 70% of NVA coming from these channels, driven by flow optimization and AI-related search visibility.

    06

    Bitcoin Adoption and Proto Business

    Block is launching Bitcoin acceptance for all Square sellers, allowing them to accept Bitcoin with no fees. Beta merchants have shown strong interest, and the company is focused on making Bitcoin payments more accessible and usable through Cash App and BitKey. The Proto Bitcoin mining business generated its first revenue in Q3 FY25 through hardware sales, with a robust pipeline for 2026 and beyond, positioning it as a potential new ecosystem.

    AI-generated summary of the company’s earnings call. Not investment advice.