Block Inc. Posts Stellar Q3 Earnings, Sets Ambitious Targets for 2026

Block Inc., helmed by Jack Dorsey, just released its Q3 earnings report, showcasing an impressive improvement in its financial performance. The company’s net sales surged to $5.62 billion, a significant 24% increase over the previous year. Block’s income, however, increased by 16% from the previous year to $3.19 billion when just non-bitcoin businesses were considered. Since bitcoin sales surged to $2.42 billion, the company’s shareholder letter highlighted the growing impact of cryptocurrencies on its earnings.

Block’s Ambitious 2026 Vision

Boldly, Block Inc. has decided to go for the ‘Rule of 40’ by 2026. The business expects to sustain mid-teens gross profit growth and a mid-20% margin for adjusted operating income in the future. Block’s dedication to long-term financial development and sustainability is emphasized by this vision.

The growing number of Block users was also disclosed in the shareholder letter. The Cash App Pay service had an incredible growth; by September, there were over two million active monthly users—a number that had quadrupled since June. In the meantime, bitcoin sales increased significantly in Q3, hitting $2.42 billion, a whopping 37% gain over the same period last year. Additionally, Bitcoin’s gross profit showed a strong year-over-year growth of 22%, totaling $45 million.

As part of its proactive strategy, the firm authorized the buyback of $1 billion of its shares for the first time. This was a calculated move to counteract the dilutive consequences of share-based pay.

Block’s impressive Q3 profitability results are consistent with those of other industry participants, such as Coinbase, which also posted impressive net profit numbers for the same quarter, and Microstrategy, which disclosed more bitcoin acquisitions completed in October.

The shareholder letter also emphasized Block’s pledge to keep staffing at a minimum. Until the firm determines that the business has “meaningfully outpaced the growth of the company,” it has no intentions to hire more than 12,000 people.

By including bitcoin as an asset on its balance sheet, Block Inc. has strengthened its position in the cryptocurrency industry. Notably, the business bought bitcoin with $50 million in the last quarter of 2020 and an extra $170 million in the first quarter of 2021.

It’s crucial to remember that because bitcoin is an intangible asset with an unlimited life, it might lose value due to impairment losses if its market value decreases below its book value while the asset is being evaluated. Block Inc. announced no impairment losses on its bitcoin assets in the third quarter of 2023, demonstrating its stability and flexibility in the rapidly changing cryptocurrency market.