Block's Q3 2025: Contradictions Emerge on Cash App and Square Strategies, Macroeconomic Guidance, and Growth Rate Priorities

Date of Call: November 6, 2025

Financials Results

• Gross Margin: $2.66B gross profit, up 18% YOY, accelerating from 14% in the prior quarter (driven by Cash App)
• Operating Margin: 18% adjusted operating income margin in Q3; adjusted operating income $480M; management noted margins expanded year-over-year

Guidance:

• Q4 2025 gross profit expected to grow over 19% YOY to $2.755B.
• Q4 adjusted operating income expected $560M, implying ~20% adjusted operating income margin.
• Full-year 2025 gross profit expected $10.243B (>15% YOY) and adjusted operating income $2.056B (~28% YOY).
• Expect 2025 and long-term tax rate in the mid-20% range; Q4 net interest expense expected ~$45M.
• Management expects to be approaching Rule of 40 heading into 2026 and will provide more 2026 detail at Investor Day.

Business Commentary:

• Cash App Growth and Engagement:
• Cash App's gross profit grew by 24% year-over-year in the third quarter, accelerating from 16% in the second quarter.
• Engagement metrics improved with inflows per active growing by 10% year-over-year and gross profit per monthly transacting active increasing by 25%.

• The growth was driven by improvements in user experiences, marketing campaigns, and product innovations like Cash App Borrow and Post-Purchase Buy Now Pay Later.

• Square's International Growth and Market Share:

• Square's gross profit grew 9% year-over-year in the third quarter, with an acceleration in growth in both the U.S. and internationally.
• GPV grew 12%, with a strong performance in the telesales channel and expansion in international markets like Canada, Australia, and the UK.

• This was fueled by successful product and go-to-market strategies, gaining profitable market share in target verticals like food and beverage.

• Borrow and Lending Products Expansion:

• Cash App Borrow originations grew 134% year-over-year, reaching nearly $22 billion in an annualized basis, with stable risk loss rates and strong annualized net margins of 24%.
• This expansion was supported by underwriting improvements and migrating to Square Financial Services, which allowed for increased geographical coverage.

• The strategy aims to expand credit access and drive engagement within the Cash App ecosystem.

• Sales and Marketing Strategies:

• Square's sales-driven NVA was up 28% year-to-date, with expectations to exceed 40% in Q4, reflecting strong field sales execution.
• The company is leveraging a combination of field sales, partnerships, and targeted marketing to acquire new sellers, focusing on tailored tactics and maintaining strong marginal ROI.
• The expansion of sales and marketing efforts is position Block to capture a larger share of the market by offering comprehensive solutions for various seller segments.
  

  Sentiment Analysis:

  Overall Tone: Positive

  • Management: "We had another strong quarter, delivering for our customers and exceeding expectations across gross profit and adjusted operating income." Q3 gross profit +18% YOY to $2.66B; adj. operating income $480M; management raised FY guidance and expects Q4 GP growth over 19% YOY and adj. operating income $560M, signaling confidence and momentum.

Q&A:

• Question from Tien-Tsin Huang (JPMorgan): Progress report on Cash App network density and when we might see an inflection in network growth given current investments?
  Response: Active growth is accelerating—58M monthly actives in Sept with further acceleration into Oct—driven by product fixes, social features (1.5M pools), teen scale and targeted marketing that lifted inflows and gross profit per active.

• Question from Timothy Chiodo (UBS): Color on field sales team productivity, tools, payback and how those reps will change GPV/gross profit mix relative to ISOs and self-onboard?
  Response: Field sales ramp (now 100+ reps) is delivering strong marginal ROI—sales-driven NVA +28% YTD (expected >40%), will compound GPV and gross profit while self-onboard remains ~70% of NVA.

• Question from Andrew Jeffrey (William Blair): Why Cash App Borrow/BNPL are high-quality products vs. traditional lenders and what underwriting/data advantages you have?
  Response: Borrow scaled rapidly (originations +134% YOY; ~ $22B annualized) while keeping loss rates below 3% and achieving ~24% annualized net margins, enabled by proprietary Cash App credit scoring and AI/ML underwriting driving strong unit economics and engagement lifts.

• Question from Darrin Peller (Wolfe Research): Besides Borrow, what levers are driving Cash App gross profit acceleration and is the growth sustainable?
  Response: Acceleration is broad-based—network products, banking (direct deposit/primary banking), commerce (Card GPV +19%, Cash App Pay +70%) and Bitcoin—all supported by product and marketing improvements; Borrow adds outsized ROIC (~30%) and ecosystem second-order effects.

• Question from Adam Frisch (Evercore ISI): How are you thinking about macro risk versus company momentum in setting the Q4 guide and what did Oct data show about consumer spend?
  Response: Q4 guide is informed by strong Q3 and October metrics showing consistent inflows, transaction sizes and loss rates; isolated impacts were minimal and Square saw weather-related GPV softness late Oct but overall trend supports the guide.

• Question from Dan Dolev (Mizuho): Any testing/results on fully integrated Square Bitcoin payments ahead of launch and adoption indicators?
  Response: Full launch to sellers next week; beta merchants report easy integration and are promoting acceptance; no seller fees to accept Bitcoin and management is focused on improving buyer adoption via education and UX.

• Question from Jason Kupferberg (Wells Fargo): Is new Square volume coming from legacy POS conversions or from other cloud competitors, and have you seen pricing pressure?
  Response: New volume comes from both legacy POS migrations and competitor win-backs driven by the field sales ramp and telesales; no material payment pricing moves—momentum is from product, sales coverage and lower churn.

• Question from Bryan Keane (Citi): Thoughts on Afterpay opportunity and how post-purchase BNPL is scaling relative to Borrow?
  Response: Post-purchase Afterpay and Cash App Card are scaling quickly—> $3B origination run-rate in early Oct, healthy loss rates in line with expectations, expanding eligibility and partner integrations globally.

• Question from Mihir Bhatia (BofA Securities): How will AI impact Block—use cases near-term and is it a cost saver or growth driver?
  Response: AI is both—a growth and cost lever: internal Goose work boosted velocity, Square AI/Cash App AI will surface products, automate tasks and act as virtual COO/CFO using real-time platform data to drive monetization and reduce costs.

• Question from Harshita Rawat (Bernstein): What is needed to attract more Cash App inflows and commerce spend per user; what levers change brand/product perception?
  Response: Focus is on converting users to primary banking via product suite and incentives—primary banking actives rose to 8.3M (18% YoY) and to 8.7M in Oct (20% YoY); cross-sell (Borrow, Afterpay, rewards) and engagement programs drive large ARPU uplifts.

• Question from James Faucette (Morgan Stanley): As Square goes upmarket, how should we think about pricing and profitability and which segments are responding to new product enhancements?
  Response: Upmarket traction is driven by combined Block value (Cash App network + Square features) and new capabilities (menu management, delivery integrations); focus is on scaling headcount with strong marginal ROI rather than competing on price, leading to stronger GPV and seller growth.

Contradiction Point 1

Cash App User Growth Strategy

It highlights differing strategies and emphasis on stimulating Cash App's user growth, which is crucial for the company's expansion and revenue generation.

How is Cash App's monthly active growth progressing, and when could we see an inflection in network growth? - Tien-Tsin Huang (JPMorgan Chase & Co)

2025Q3: Progress is strong with 58 million monthly actives in September and an acceleration in year-over-year growth for monthly actives. Key focus areas include network enhancements, social primitives like Cash App Pools, and teens and family features. - Owen Jennings(CPO)

How can Cash App user growth be further stimulated? - Raymond James(Raymond James & Associates)

2025Q2: We believe we're building the money app for the next generation, with a focus on multiplayer money features like Cash App Pools. Marketing efforts are becoming more creative and innovative to resonate with the younger crowd. We're leveraging our technology and focus to launch more products quickly, aiming to reinvigorate network growth and user engagement. - Jack Dorsey(CEO)

Contradiction Point 2

Square's Go-To-Market Strategy and Performance

It involves differing perspectives on Square's go-to-market strategy and performance, which directly impacts sales and revenue growth.

Can you discuss field sales team productivity and their gross profit contributions? - Timothy Chiodo (UBS Investment Bank)

2025Q3: Field sales team has performed well with strong paybacks and growth in sales-driven NVA. Focus on marginal ROI has led to effective sales tactics and increased reps since the start of the year. Marketing and underwriting outcomes are also driving growth. - Nicholas Molnar(COO)

What returns have you seen from your expanded go-to-market playbook for Square? - Andrew Jeffrey (William Blair & Company L.L.C.)

2025Q2: We're seeing strong growth in new volume added, with expectations to double in the fourth quarter. Field sales and telesales are showing strong returns with paybacks in the 5- to 6-quarter range. Our partner motion is also driving growth, especially through our first U.S. ISO partnerships. International sales have seen 25% GPV growth and 19% gross profit growth, benefiting from our sales motions. - Amrita Ahuja(COO & CFO)

Contradiction Point 3

Macroeconomic Impact on Guidance

It involves the company's stance on macroeconomic impact on guidance, which is crucial for investor understanding and decision-making.

How is macroeconomic impact affecting guidance and go-to-market strategy? - Adam Frisch (Evercore ISI Institutional Equities)

2025Q3: Guidance informed by third quarter performance and October trends, with stable metrics and healthy returns on investments. - Amrita Ahuja(CFO)

What has changed in the past 90 days, and what are the macro assumptions in your guidance? - Darrin Peller (Wolfe Research)

2025Q1: We saw a shift in consumer behavior during tax season. Our guidance reflects macro softening beyond what we've seen so far. We're maintaining flexibility to invest in growth initiatives despite macro conservatism. - Amrita Ahuja(CFO)

Contradiction Point 4

Growth Rate and Focus Areas

It highlights different approaches to growth rate expectations and prioritization of focus areas, which could impact strategic direction and investor expectations.

How is Cash App's effort to boost monthly actives progressing, and when could network growth inflect? - Tien-Tsin Huang(JPMorgan Chase & Co)

2025Q3: We intend to double our growth rate across our business. - Jack Dorsey(CEO)

What will it take to restart Cash App MAUs growth—marketing, new products, or something else? - Robbie Bamberger(Baird)

2024Q4: We've made deliberate decisions to maintain stable actives. - Amrita Ahuja(COO, CFO & Treasurer)