XYZ · Q3 2025 Earnings

Bullish

Block, Inc.

Reported November 6, 2025

30-second summary

Block delivered Q3 FY2025 gross profit of $2.662B (+18% YoY), accelerating from +14% in Q2 and beating its own $2.60B / +16% guide by ~$62M and 200bps on the growth rate. Management raised FY2025 gross-profit guidance to $10.243B (from $10.17B) and lifted FY adjusted operating income to $2.056B (from $2.03B). Cash App gross profit accelerated to +24% YoY (from +16% in Q2), Borrow originations grew +134% YoY, and management formalized a Q4 guide of $2.755B gross profit (+19% YoY) with operating margin stepping to 20% in Q4. The acceleration arc Block committed to in August has landed — Q3 growth accelerated to +18%, Q4 guide carries it further to +19%, and the question for next quarter is whether the exit rate holds and whether Square U.S. GPV joins Cash App in the acceleration story.

Headline numbers

EPS

Q3 FY2025

$0.54

Revenue

Q3 FY2025

$6.11B

+2.3% YoY

Operating margin

Q3 FY2025

15.4%

Key financials

Q3 FY2025

Metric	Q3 FY2025	YoY	Q2 FY2025	QoQ
Revenue	$6.11B	+2.3%	$6.05B	+1.0%
EPS	$0.54	—	$0.62	-12.9%
Operating margin	15.4%	—	19.0%	-360bps

Guidance

Square raised full-year gross profit and Adjusted Operating Income guidance and beat Q3 expectations on both metrics; company projects 20% Adjusted Operating Income margins sustained into Q4 with accelerating profitability growth.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Gross Profit	Q3 FY2025	$2.60 billion	$2.789 billion	+$0.189 billion above guide	Beat
Gross Profit YoY Growth	Q3 FY2025	16%	14.8%	-1.2pts below guide	Met
Adjusted Operating Income	Q3 FY2025	$460 million	$501.8 million	+$41.8 million above guide	Beat
Adjusted Operating Income Margin	Q3 FY2025	18%	18%	in-line	Met

New guidance

Metric	Period	Guide	YoY
Gross Profit	Q4 FY2025	$2.755 billion	19%
Adjusted Operating Income	Q4 FY2025	$560 million	—
Adjusted Operating Income Margin	Q4 FY2025	20%	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Gross Profit	FY2025	$10.17 billion	$10.243 billion	+$73 million	Raised
Gross Profit YoY Growth	FY2025	over 14%	over 15%	+1pt minimum	Raised
Adjusted Operating Income	FY2025	$2.03 billion	$2.056 billion	+$26 million	Raised
Adjusted Operating Income YoY Growth	FY2025	—	nearly 28%	—	Raised

Reaffirmed unchanged this quarter: Adjusted Operating Income Margin (20%)

Segment performance

Q3 FY2025

Segment	Q3 FY2025	YoY
Cash App Gross Profit	$1.62B	+24.0%
Square Gross Profit	$1.02B	+9.0%

Other KPIs

Q3 FY2025

Segment	Q3 FY2025	YoY
Square International Gross Profit	$0.147B	+14.0%
Square GPV	$67.2B	—
Square GPV YoY Growth	12%	—
Cash App Monthly Transacting Actives	58M	—
Cash App Primary Banking Actives	8.3M	—
Cash App Gross Profit per Monthly Transacting Active	$94	—
BNPL GMV	$9.70B	—
Cash App Borrow Originations YoY Growth	134%	—
Adjusted Operating Income Margin	18%	—

Management tone

Q2 anchor: "Back to growth mode" → Q3 anchor: "Approaching Rule of 40 into 2026"

Last quarter Block declared the inflection; this quarter it quantified the destination. Management's framing has shifted from "we are accelerating" to "we are approaching Rule of 40 as we head into 2026" — a categorical commitment to a specific growth-plus-margin target that the company has historically not put on the tape. The anchor: "Taken together, we expect to be approaching rule of 40 as we head into 2026." This signals that the 2026 setup conversation, which Block had deferred to the November Investor Day, is now being pulled forward into the Q3 print.

Cash App's identity has moved from "consumer payments app with a banking layer" to "banking and lending ecosystem" across three quarters. Two quarters ago the headline was Pools and Cash App Card; last quarter it was the new 8M "banking assets" cohort at $250 gross profit per active; this quarter it is Borrow at +134% origination growth, primary banking actives accelerating to +20% YoY in October, and gross profit per MTA growing +25% YoY to $94. The anchor: "Borrow actives have 3x higher inflows, 2x higher card spend, and 3x higher retention versus non-borrow actives." The framing has shifted from product-by-product disclosure to ecosystem-engagement economics — Borrow is now the wedge, not the destination.

Square's narrative is being recast from a payments processor to a vertically integrated seller OS, and the language has hardened. Q2 mentioned Square AI and Handheld as new launches; Q3 brought the explicit moat claim: "We believe we're the only company that designs the hardware, operating system, software, commerce capabilities, and financial tools for sellers." That this assertion is being made the same quarter Square gross-profit growth decelerated 200bps suggests management is preemptively reframing the competitive story before the GPV reacceleration the Q4 guide implicitly requires.

Field sales has graduated from validated unit economics to a quantified growth driver. Last quarter management defended the 5–6 quarter payback; this quarter Nick disclosed sales-led NVA grew +28% YoY through September and is expected to exceed +40% in Q4, with the team scaled from "near-zero reps at year start to 90 field reps at Q3-end, scaling toward 100+." This is the first time Block has put a Q4 sales-led NVA growth target on the tape — the prior framing was inputs (rep count, payback), the current framing is outputs (NVA growth rate).

Proto has moved from exploratory venture to revenue-generating business with a 2026 pipeline. The shift across three quarters: speculative chip launch → Q3/Q4 gross-profit contributor → first revenue, first customer, "robust pipeline for 2026 and beyond." The anchor: "In Proto, our Bitcoin mining business, we generated our first revenue...we sold our first rigs to our first customer." Still a modest contributor in 2025, but the language is now commercial rather than aspirational.

Recurring themes management leaned on this quarter:

Cash App ecosystem expansion (banking, lending, BNPL)Square vertical integration and AI-driven seller toolsNeighborhood connectivity bridging sellers and consumersAccelerating gross profit growth (18% reported, 24% Cash App)New venture monetization (Proto Bitcoin mining)Rule of 40 approach to balancing growth and profitability

Risks management surfaced:

Macroeconomic conditionsChanges in processing partner arrangements and operational flexibility costsLending product scaling and risk management (Borrow and post-purchase BNPL)International market execution and telesales channel dependencyBitcoin mining business volatility and pipeline execution risk

Q&A highlights

Tin Chin Huang · JP Morgan

Asked about Cash App monthly active user (MAU) growth progress, network density acceleration, and timing of inflection in network growth given Block's investments.

Owen provided detailed breakdown of 58M MAUs in September with acceleration in year-over-year growth continuing into October. Highlighted two-part approach: net new acquisition and engagement. Key initiatives include network enhancements (pools: 1.5M created by October), teens/family products (5M monthly active teen accounts, new high-yield savings), marketing ROI, and product velocity. Noted inflows per active up 10% YoY and gross profit per active up 25% YoY.

58 million Cash App MAUs in September1.5 million pools created through end of October5 million monthly active teen accountsInflows per active grew 10% YoY

Andrew Jeffrey · William Blair

Asked about Cash App Borrow credit quality concerns, long-term profitability, superior value proposition relative to traditional finance, and Block's AI/data-driven underwriting distinctives.

Amrita emphasized Borrow as important product for expanding credit access to underserved consumers. Highlighted origination volume up 134% YoY reaching ~$22B annualized in Q3, with gross profit growth even stronger. Detailed three expansion strategies: core underwriting model improvements, nationwide expansion via SFS bank migration, and nuanced eligibility/limits for engaged customers. Maintained risk/loss rates below 3% target despite triple-digit growth. Noted borrow actives have 3x higher inflows, 2x higher card spend, and 3x higher retention versus non-borrow actives. Emphasized Cash App credit score as core proprietary asset leveraging decade-plus lending experience and AI/ML modeling.

Borrow origination volume up 134% YoY to ~$22B annualized in Q3Loss rates maintained below 3% targetNet margins at ~24% in Q3, above internal targetBorrow actives have 3x higher inflows per active than non-borrow

Tim Chiodo · UBS

Asked about field sales team productivity, technology/tools enabling effectiveness, payback periods (~5-6 quarters), and GPV/gross profit contributions from larger merchants with longer LTV but lower per-unit monetization rates.

Nick detailed strong field sales performance with 28% YoY sales-led NVA growth through September, expecting Q4 to exceed 40%. Scaled team from near-zero reps at year start to over 100 field reps growing fast. Emphasized marginal ROI on incremental headcount continuing to scale with meaningful room for further investment. Corrected assumption that field sales operates same way as ISO channel (longer L), noting field is still early and that economics shouldn't be viewed purely as gross profit-to-GPV ratio. Focus is on maximizing variable profit dollar growth per headcount. Self-onboarding remains strong at 70% of NVA with 10% YoY growth, driven by flow optimization and AI improvements. Square ranks #1 for SMB AI-related searches.

Sales-led NVA up 28% YoY through September, expected to exceed 40% in Q4Field sales team grew from ~0 to 100+ reps in 20255-6 quarter payback period for field sales70% of Square NVA still coming from self-onboarding

Aaron Peller · Wolf Research

Asked about Cash App gross profit acceleration to double digits excluding borrow contribution, asking what levers (MAUs, flywheel effects, other variables) are driving growth and sustainability outlook.

Owen detailed Cash App as integrated ecosystem across four key areas: network products (P2P), banking products (direct deposit), commerce products, and Bitcoin. Noted meaningful progress across all four driving acceleration. Specific metrics: card GPV growing 19% YoY, Cash App Pay GPV growing 70% YoY, Cash App Afterpay originations accelerating from $2B to $3B annualized by early October. Emphasized not viewing business excluding Borrow but rather seeing it as core ecosystem piece with 30% ROIC. Noted market fit given large share of US population living paycheck-to-paycheck, enabling use of Borrow as carrot to incentivize primary banking behavior. Announced updates next week at Cash App releases and deeper discussion at upcoming Investor Day.

Card GPV growth 19% YoYCash App Pay GPV growth 70% YoYCash App Afterpay originations accelerated to $3B annualized by early OctoberBorrow return on invested capital 30%

Adam Frisch · Evercore ISI

Asked about macro visibility and Q4 guidance calculus given accelerating momentum, plus company-specific go-to-market strategy driving Square growth acceleration.

Amrita provided macro outlook based on Q3 performance and October metrics, noting strong results without evidence of macro deterioration. Isolated tariff impacts on BNPL (~$2-3B GMV business). Observed slightly slower GPV growth towards end of October believed weather-related, but seeing strongest new volume-added NVA in long time across self-onboard and sales. Philosophy is data-driven daily monitoring with flexibility to adjust marketing, underwriting, and business operations as needed. Nick emphasized field sales scaling from zero to 100+ reps as major contributor to increased consideration and deal flow. Telesales growth improving meaningfully. International telesales showing significant NVA acceleration. Observing lowest churn rates since Q2 2023. Win-backs of direct competitors' merchants occurring. No major pricing moves made. Recent software pricing update focused on simplicity (three-tier system) driving ARPU expansion and SaaS attach.

Field sales team scaled to 100+ reps from near-zeroLowest churn rates since Q2 2023International telesales showing significant NVA accelerationStrong new volume-added NVA levels highest in long time

Answers to last quarter's watch list

Q3 gross profit landing at +16% YoY ($2.60B): Gross profit landed at $2.662B (+18% YoY), beating both the dollar guide (~$62M / +2.4%) and the +16% YoY growth guide (by 200bps). Growth accelerated from +14% in Q2, and the Q4 guide of $2.755B (+19% YoY) carries the acceleration arc one step further.

Resolved positively

Cash App MTA trajectory: MTAs moved from 57M (Q2) to 58M (Q3), a modest headline step. The more interesting move is inside the metric: primary banking actives at 8.3M (+18% YoY, accelerating to +20% in October), gross profit per MTA at $94 (+25% YoY; +$7 QoQ from $87), and inflows per active +10% YoY. The user count is not the inflection — the per-user monetization is.

Resolved positively

Borrow loss rates as originations scale to $18B+ annualized: Originations reached ~$22B annualized (+134% YoY); management disclosed loss rates maintained below the 3% internal target with net margins at ~24% (above target) and 30% ROIC. Credit quality has held through the scale-up.

Resolved positively

Square U.S. GPV reaccelerating to low-double-digits: Total Square GPV grew +12% (vs. +10% blended in Q2), with F&B at +17% and Retail at +12%, but Services at +7% and Square International gross profit +14% (decel from +19% in Q2). Square gross profit growth decelerated to +9% from +11%. Direction is positive on volume but the gross-profit translation has not yet shown the H2 step-up the FY guide implies.

Continue monitoring

Post-purchase BNPL run-rate progression: Cash App Afterpay originations accelerated from $2B annualized in July to $3B annualized by early October — a 50% step in three months. BNPL GMV reported at $9.70B in Q3.

Resolved positively

Proto chip delivery milestones: Proto generated first revenue, sold its first rigs to its first customer, and management cited a "robust pipeline for 2026 and beyond." Management characterized Proto as "only a modest contributor to the second half of this year" — the H2 gross-profit contribution from Proto in the original Q2 guide is materializing but small.

Resolved positively

What to watch into next quarter

Q4 gross profit landing at $2.755B (+19% YoY): the falsifiable test of the entire acceleration thesis. Anything below +18% YoY breaks the exit-rate narrative and complicates the 2026 Rule-of-40 framing.

Q4 adj. operating margin stepping from 18% to 20%: a 200bps sequential expansion alongside +19% gross-profit growth is the most aggressive growth-and-margin pairing Block has guided to. Watch whether the Q4 print delivers both or trades one for the other.

Square U.S. GPV and Square gross-profit growth reconvergence: Square gross profit decelerated to +9% in Q3 (from +11% in Q2) even as GPV grew +12%. Watch whether the +40% Q4 sales-led NVA growth target translates to Square gross-profit reacceleration, or whether the gross-profit-to-GPV gap widens further.

Borrow loss rates as originations approach $25B+ annualized: at +134% origination growth, the book is doubling. The <3% loss-rate disclosure has held; watch the Q4 print for the first signs of any deterioration as nationwide expansion via SFS continues.

Cash App primary banking actives sustaining +20% YoY: October ran at 8.7M and +20% growth. This is the cohort generating $250+ annualized gross profit per active. A continued +20% trajectory into Q4 validates the Cash-App-as-banking-ecosystem thesis; a deceleration back to mid-teens would suggest the acceleration was Borrow-led.

Investor Day quantification of "approaching Rule of 40": management telegraphed the framing for the November Investor Day. Watch whether the 2026 setup is given a specific growth + margin target, and how the FY2026 gross-profit growth bar is set against the +19% Q4 exit rate.

Sources

Block, Inc. Q3 2025 Shareholder Letter / Press Release, SEC EDGAR filing: https://www.sec.gov/Archives/edgar/data/1512673/000119312525269715/d48712dex991.htm
Block Q3 2025 earnings call Q&A (select exchanges with JP Morgan, William Blair, UBS, Wolfe Research, Evercore ISI)

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