How will Block sustain strong growth trends in Cash App (user growth, inflows) and Square (NVA, GPV) given the reduced headcount?

Owen Jennings expressed confidence in sustaining growth due to a more nimble organizational structure, increased talent density, and benefits from AI tools. He highlighted a strong product roadmap, including core network growth, key product launches (Cash App Green, Card, Bitcoin, Afterpay), and bigger bets like Neighborhoods and ManagerBot. “what we've seen is that smaller, more nimble teams have allowed us to move faster and actually get products into our customers' hands more quickly.”

What is driving the strong growth in PBAs (9.3 million, up 22% YoY) and how will this impact future profitability, given their 10x higher gross profit?

Owen Jennings attributed the growth to the launch of Cash App Green, which expanded access to banking benefits beyond direct deposit users. He noted improved cohort retention and incremental engagement across products like Borrow and Cash App Card, with personalized offers seeing a massive increase in attach rate (2% to 14%). This strategy targets the 'modern earner' underserved by traditional banks. “gross profit per active is almost 10x what we see for a peer-to-peer only active.”

Given the Q1 GPV reacceleration to 12% quarter-to-date, what is the visibility for the full-year low-to-mid teens guidance, and what are the key vertical trends?

Amrita Ahuja confirmed the strategy is paying off, with GPV accelerating from 8.6% in 2024 to 10% in 2025 full year, and 12% QTD in Q1 2026. Food and beverage GPV was up 16% YoY in Q4. Nick Molnar added that NVA growth (29% YoY in Q4, sales-led NVA up 62%) will compound into GPV growth, supported by efficient marketing, scaled sales teams, and expanding ISO partnerships. “We exited '25 with new volume added in Q4 above 29%. We saw very strong growth from a self-onboarded perspective and still 65% of our volume comes from our self-onboarded sellers, which is a real competitive advantage for Square.”

XYZ

Block (XYZ) Q4 FY25 earnings call: guidance and Q&A

Earnings call· Dec 2025 (Q4 FY25)· Information Technology· Feb 26, 2026

Source: earnings call transcript

Executive summary

Block, Inc. Q4 FY25 — Exceeds Guidance, Raises 2026 Outlook Amidst Strategic Workforce Reduction

Block delivered a strong Q4 FY25, outperforming guidance across key financial metrics and raising its 2026 outlook. The company announced a significant workforce reduction, aiming for a smaller, faster, and intelligence-native organization to enhance product velocity and operational efficiency. This strategic shift is expected to drive sustained growth and margin expansion, leveraging AI tools and a focused product roadmap.

Highlights

Gross profit grew 24% year-over-year to $2.87 billion in Q4 FY25.
Adjusted operating income grew 46% year-over-year to $588 million in Q4 FY25, achieving 3 points of margin expansion.
Adjusted diluted EPS grew 38% year-over-year in Q4 FY25.
Cash App monthly actives reached 59 million, with primary banking actives increasing 22% year-over-year to 9.3 million.
Square new volume added (NVA) grew 29% year-over-year in Q4 FY25, contributing to 10.3% GPV growth.

Concerns

The company announced a workforce reduction from over 10,000 to just under 6,000 employees.
Higher portfolio losses were observed in December and January for Borrow due to a mix shift to new cohorts.
Hardware costs and higher processing costs each presented a 2 percentage point headwind to Square gross profit growth in Q4 FY25.

Guidance & targets

Category	Target	Timeline	Confidence
Full-year 2026 gross profit growth	18% high materiality	FY26	High
Q1 2026 gross profit growth	22% medium materiality	Q1 · FY26	High
Full-year 2026 adjusted operating income	$3.2 billion high materiality	FY26	High
Full-year 2026 adjusted diluted EPS	$3.66 high materiality	FY26	High
Q1 2026 adjusted operating income	$600 million medium materiality	Q1 · FY26	High
Q1 2026 adjusted diluted EPS	$0.67 medium materiality	Q1 · FY26	High
Full-year 2026 adjusted operating income margin expansion	6 points high materiality	FY26	High
Long-term gross profit growth	mid-teens high materiality	long-term	High
Full-year 2026 non-GAAP effective tax rate	mid-20% low materiality	FY26	High
Full-year 2026 net interest expense	$200 million low materiality	FY26	High
Q1 2026 net interest expense	$60 million low materiality	Q1 · FY26	High
Full-year 2026 Cash App actives growth	low single-digit medium materiality	FY26 and long term	Medium
2026 Adjusted Operating Income Pacing	just under 60% in H2 2026 medium materiality	FY26	High
2026 Adjusted Operating Income Margin Expansion Pacing	expand each quarter, faster in Q3 and Q4 medium materiality	FY26	High
2026 Square gross profit growth vs GPV growth	roughly in line with GPV growth later in H2 2026 medium materiality	H2 FY26	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Cash App Accelerated gross profit growth relative to Q3. Focus on deepening engagement with primary banking actives, who generate nearly 10x the gross profit of peer-to-peer only actives. Strongest quarter for new Cash App Card actives in over a year. Borrow delivered exceptional growth, driving deeper engagement across Cash App. Monthly actives: 59 millionPrimary banking actives: 9.3 millionPrimary banking actives growth YoY: 22%Commerce enablement volume: $54.7 billionCommerce enablement volume growth YoY: 17%Commerce monetization rate: +4 bps YoYConsumer lending origination volume growth YoY: 69%Borrow origination volume growth YoY: 3x	—	33% (gross profit)	—	$1.83 billion (gross profit)
Square Gross profit growth driven by financial solutions. Hardware costs and higher processing costs were each a 2 percentage point headwind to gross profit growth. Strongest year ever for NVA growth in 2025. Partnered with over 100 independent sales organizations. Q1 2026 GPV reaccelerated. New volume added (NVA) growth YoY: 29%Sales-led NVA growth YoY: 62%GPV growth YoY: 10.3%Q1 2026 quarter-to-date GPV growth YoY: over 12%Food and beverage GPV growth YoY: 16% (Q4)	—	7.5% (gross profit)	—	—

XYZ operating KPIs by quarter

XYZ operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Dec 2024 Q4 FY24	Mar 2025 Q1 FY25	Jun 2025 Q2 FY25	Sep 2025 Q3 FY25	This call Dec 2025 Q4 FY25	Mar 2026 Q1 FY26	Change vs prior quarter
Active accounts Cash App Borrow	5M We ended 2024 with 5 million Cash App Borrow monthly actives. Source: earnings call transcript	—	6M First, on the strength of Borrow, we now have 6 million monthly actives on Borrow. Source: earnings call transcript	—	—	—	—
Active accounts Cash App Card	25M Cash App Card at 25 million monthly actives in December is an amazing distribution surface for us to launch these sorts of product features into. Source: earnings call transcript	—	—	26M And so -- and we have 26 million Cash App card active on a monthly basis right now. Source: earnings call transcript	—	—	—
Active accounts Cash App	57M But there's some deliberate decisions that we've made as part of our banker-based strategy in the near term that have resulted in a consistent sort of 57 million monthly actives, which grew 2% year-over-year in December. Source: earnings call transcript	57M It's a pretty meaningful unlock for us that deepens the connection between the ecosystems and exposes our Buy Now, Pay Later products to the 57 million monthly actives over time. Source: earnings call transcript	—	58M Cash App's 24% year-over-year gross profit growth in the third quarter accelerated from 16% in the second quarter, our focus on reaccelerating active growth and increasing network density is working as we reached 58 million monthly actives in September. Source: earnings call transcript	59M Cash App monthly actives returned to growth in the second half of 2025, ending the year at $59 million, and we executed on our engagement strategies with primary banking actives growing 22% year-over-year to 9.3 million monthly actives in December. Source: earnings call transcript	59M And while this looks like 59 million for 2 quarters in a row, that's just an artifact of rounding and how we report. Source: earnings call transcript	0%
Active accounts Cash App Banking	—	—	—	—	9.3M Cash App monthly actives returned to growth in the second half of 2025, ending the year at $59 million, and we executed on our engagement strategies with primary banking actives growing 22% year-over-year to 9.3 million monthly actives in December. Source: earnings call transcript	9.7M We continue to deepen engagement across our actives base with inflows per transacting active up 10% year-over-year and primary banking actives growth of 18% year-over-year to $9.7 million. Source: earnings call transcript	+4.3%
Active accounts Cash App Sponsored Teen	—	—	5M In June, we had 5 million sponsored teen actives and 1.7 million actives that had graduated from a sponsored account to an individual Cash App account. Source: earnings call transcript	5M We've achieved massive scale on the Teams and Family side, we have 5 million monthly active teen accounts that are using Cash App, and we continue to invest to serve them. Source: earnings call transcript	—	—	0%
Active accounts Cash App Pay	—	—	7M If you compare post-purchase BNPL to Borrow at similar points in time, the newer product, which gets to learn from Borrow, is outpacing in terms of attach rates and in terms of loss rates and Cash App Pay now at 7 million monthly actives as of June. Source: earnings call transcript	—	8M+ It's continued to scale at a very meaningful pace, up 55% year-on-year and active surpassing 8 million in the fourth quarter. Source: earnings call transcript	—	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

Product	Type	Timeline
Afterpay pre-purchase on Cash App Card	launch	February
Pay-in-Four (BNPL for peer-to-peer transactions)	launch	—
MoneyBot	expansion	coming weeks and months
Square AI	launch	—
Square Handheld	launch	—
Second-generation Square Register	launch	—
Proto mining rigs	milestone	—
Cash App Green	launch	November (at Cash App Releases)
Cash App Cards and savings accounts for children (6-12 years old)	roadmap	—

Deals & partnerships

Fanatics partnership

Afterpay added Fanatics as a large partner.

Endeavour Group partnership

Afterpay added Endeavour Group (largest liquor retailer in Australia) as a large partner.

Instacart merchant partnership

Cash App Pay merchant partnership, providing new distribution opportunities.

Target merchant partnership

Cash App Pay merchant partnership, providing new distribution opportunities.

Risks & headwinds

Workforce reduction announced today

Reducing Block from over 10,000 people to just under 6,000.

Mitigation:Strategic decision to become a smaller, faster, intelligence-native company, leveraging AI tools to increase efficiency and product velocity. Expected to lead to faster product innovation and meaningful investment.

Higher portfolio losses in Borrow Q4 FY25 and early 2026

Higher portfolio losses in December and January.

Mitigation:Due to mix shift to new cohorts (higher losses by design). As of mid-February, all 2026 cohorts are trending below risk loss targets, demonstrating ability to quickly calibrate risk and adjust exposure.

Hardware costs and higher processing costs impacting Square gross profit Q4 FY25

Each a 2 percentage point headwind to Square gross profit growth in Q4.

Mitigation:Consistent with Investor Day expectations. Hardware viewed as a customer acquisition investment. Expect increasing software attach rates to drive gross profit acceleration and continued evolution of pricing/packaging.

Macroeconomic conditions future

Actual results could differ materially from those contemplated by our forward-looking statements.

Mitigation:Forward-looking statements are based on information and assumptions as of today's date.

Timing of cost structure changes and investments impacting Q1 AOI Q1 FY26, Q2 FY26, H2 FY26

Q1 operating income guidance includes a modest benefit from today's announcement, but more meaningful impact in Q2 and H2.

Mitigation:Expect adjusted operating income margins to expand each quarter throughout the year, with faster expansion in Q3 and Q4. Just under 60% of 2026 AOI guidance expected in H2.

Higher risk loss growth in H1 2026 H1 FY26

Higher risk loss growth in the first half of the year.

Mitigation:Based on strong Borrow growth rate expectations in Q1 and Q2. Underwriting team, product design, and proprietary data/credit infrastructure allow quick calibration and exposure adjustment.

Q&A highlights

Why was the significant workforce reduction decided now, and why is this the optimal size for the company?

Jack Dorsey explained that the decision is a culmination of efforts to functionalize the company, eliminating duplication, and leveraging recent advancements in AI models. He believes AI tools enable smaller, more nimble teams to operate faster and more effectively, allowing Block to get ahead of an industry-wide shift towards AI-native operations.

“something happened in December of last year, just last year, where the models just got in order of magnitude more capable and more intelligent. And it's really shown a path forward in terms of us being able to apply it to nearly every single thing that we do.”

asked by Tien-Tsin Huang · answered by Jack Dorsey

2 min read 6 chapters

Detailed narrative

Strategic Workforce Reduction and AI Integration

Block announced a significant workforce reduction, decreasing its team from over 10,000 to just under 6,000 employees. This decision is driven by the belief that intelligence tools have fundamentally changed how companies operate, enabling smaller, more agile teams to achieve more.

The company aims to integrate AI at its core, influencing decision-making, product development, risk management, and customer service, with a focus on building customer capabilities and interfaces.

Strong 2025 Performance and 2026 Outlook

The company reported a strong 2025, with gross profit growth more than doubling from Q1 to Q4, leading to $10.36 billion in full-year gross profit (17% YoY growth). Adjusted operating income grew 30% YoY, expanding margins by 2 points. For 2026, Block raised its gross profit growth guidance to 18% ($12.2 billion) and adjusted operating income guidance to $3.2 billion (54% YoY growth), reflecting the new cost structure and continued investment.

Cash App Engagement and Lending Expansion

Cash App saw monthly actives return to growth, reaching 59 million by year-end 2025. Primary banking actives grew 22% YoY to 9.3 million, generating nearly 10x the gross profit of peer-to-peer only actives. Consumer lending origination volume grew 50% YoY in 2025, with Borrow originations more than tripling YoY in Q4, driven by expansion into new states and integration with the Cash App Green program.

Square's Distribution and Product Velocity

Square achieved its strongest year ever for new volume added (NVA) growth of 17% in 2025, with Q4 NVA growing 29% YoY. Sales-led NVA increased 62% YoY in Q4, complemented by partnerships with over 100 independent sales organizations. GPV grew 10.3% in Q4 and reaccelerated to over 12% quarter-to-date in Q1 2026, supported by product enhancements in food and beverage and the launch of Square AI.

AI Tooling and Developer Velocity

Block has observed significant improvements in AI tooling capabilities, with engineering work that previously took weeks now completed in a fraction of the time using agentic coding tools. This has led to a greater than 40% increase in production code shipped per engineer since September, indicating enhanced developer velocity and efficiency across the organization.

Cash App Credit Score Monetization

The company is exploring monetizing its proprietary Cash App credit score, which has enabled profitable lending of $18.5 billion in Q4. This involves showing the score to customers for transparency and behavior incentives, and partnering with third-party lenders to sell credit score data. This initiative is seen as a high-margin product stream, leveraging the data from Borrow and Afterpay.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.