Block Inc. (XYZ) 2Q26 Takeaways A solid beat and raise amid high expectations

Equity Research 6 August 2026 | 2:04AM EDT

Block Inc. (XYZ): 2Q26 Takeaways: A solid beat and raise amid high expectations

Bottom Line: XYZ delivered a solid beat and raise in the quarter and delivered Will Nance | strong results in what we consider to be the most important KPIs: 1) U.S. GPV growth Goldman Sachs & Co. LLC

in seller, which accelerated to 10% in 2Q (despite not being a beneficiary of the Jack Evans | strong 2Q gas and eCommerce spending) and 2) Primary banking actives in Cash Goldman Sachs & Co. LLC

App, which remained in the high-teens against tougher comps. The company also Chandru Ravikumar | guided for 89% EPS growth in Q3, highlighting the significant leverage in the business Goldman Sachs India SPL from the recent headcount reductions, which we expect to carry through to the first half of next year. Finally, on the Square business, the company delivered much strong Seller gross profit in the quarter, and we believe the guidance for Seller gross profit to grow in line with volumes in 2H screens as conservative given several headwinds the company is lapping (JPM processing headwinds, Square Capital). Looking ahead, we are encouraged by the accelerating momentum in the company, with the multi-year turnaround story finally bearing fruit, and with valuation screening as highly attractive at just 15x our 2027 EPS numbers. We reiterate our Buy rating and believe the accelerating momentum in Square and consistent mid/high-teens growth in Cash App should help shares outperform.

2Q26 Results: XYZ reported 2Q26 gross profit of ~$3.166bn, 4% ahead of Visible Alpha Consensus Data. Cash App Revenue came in at $4.02bn (in-line with VA consensus), with segment gross profit of $1.97bn (+3% vs consensus). Square Revenue came in at $2.50bn (+2% vs. consensus), with segment gross profit of $1.16bn (+3% to consensus). Adjusted Operating income came in at $875mn (28% margin), ahead of Street estimates of $744mn (24% margin). GAAP Net income came in at $89mn (vs cons of $410mn) and GAAP EPS of $0.15 (vs VA consensus of $0.68). Adjusted EPS came in at $1.02 (vs VA consensus of $0.87).

3Q26 and FY2026 Guidance: For 3Q26, XYZ expects gross profit of $3.13bn (in-line with consensus) and adjusted operating income of $875mn with 28% margin (+0.2% vs consensus). For FY26, XYZ expects gross profit of $12.51bn (~1% vs consensus). Adjusted Operating Income is expected to be $3.47bn or 28% margin (+3.5% vs consensus). Adjusted EPS is expected to be $4.02 (~+3% vs. consensus).

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Goldman Sachs Block Inc. (XYZ)

Exhibit 1: XYZ Actuals vs Estimates Block estimates vs. actuals Actual Actual Actual GS est. Cons. Est Act vs GS Act vs cons QoQ YoY Comments 2Q25 1Q26 2Q26 2Q26 2Q26 %∆ %∆ 2Q/1Q 26/25 Square GPV % 1% 19% 13% Commerce enablement Rev 1,915 1,803 2,161 2,120 2,121 2% 2% 20% 13% Financial solutions Rev % 0% 8% 22% Bitcoin Ecosystem Rev % 58% 32% NA Other Rev 0 0 1 0 -3 NA -139% Square Revenue 2,166 2,113 2,504 2,443 2,447 3% 2% 19% 16% Square Seller Commerce enablement GP % 4% 22% 10% Financial solutions GP % 0% 8% 22% Bitcoin Ecosystem GP 0 0 0 0 6 NA -100% NA NA Other GP - % -100% -100% -100% Square Gross Profit 1,026 982 1,160 1,128 1,128 3% 3% 18% 13% % margin 47% 46% 46% 46% 46% 16bps 24bps -15bps -104bps % take rate 1.60% 1.60% 1.59% 1.57% 1.57% 2bps 2bps -1bps 0bps Cash App GPV 2,367 1,900 1,886 2,083 1,963 -9% -4% -1% -20% Commerce enablement Rev 940 1,086 1,131 1,086 1,109 4% 2% 4% 20% Financial solutions Rev 733 1,040 1,077 1,071 1,050 1% 3% 4% 47% Bitcoin Ecosystem Rev 2,171 1,744 1,813 1,802 1,840 1% -1% 4% -16% Other Rev 0 0 0 0 9 NA -100% NA NA Cash App Revenue 3,844 3,870 4,021 3,959 4,008 2% 0% 4% 5% Cash…