Block’s massive staff cuts dominated the news surrounding its fourth quarter earnings release and conference call Thursday (Feb. 26).
As the company culls its workforce from more than 10,000 employees to just under 6,000, Block also used the call to point to accelerating growth in its banking ecosystem, in terms of active users, transactions and Cash App at the center of that ecosystem.
Investors cheered the news, sending the stock up 24% in after-hours trading on Thursday.
Chief Executive Officer Jack Dorsey framed the move as structural and strategic. “The core thesis is simple. Intelligence tools have changed what it means to build and run a company,” he said on the earnings call, adding, “I don’t think we’re early to this realization. I think that most companies are late.” He added that “a significantly smaller team using the tools we’re building can do more and do it better. And intelligence tool capabilities are compounding faster every single week.”
He stated on the call that the company is moving toward an operating model in which intelligence is embedded across product development, risk management and customer interfaces. “Intelligence will be at the core of how the entire company works,” Dorsey said.
AI at the Center
Dorsey said Block has already seen internal gains in productivity. “We’ve seen engineering work that would have taken weeks to complete be done by a small team in a fraction of the time,” he told analysts, pointing to agentic coding tools and improvements in model capabilities.
Chief Financial Officer Amrita Ahuja reinforced that message, noting that developer velocity has increased more than 40% since September as AI tools have been adopted across engineering teams.
Externally, the intelligence strategy is showing up in Square AI, MoneyBot within Cash App, and what management calls “manager bot” for sellers. In Cash App, more than 70% of actives who used MoneyBot in testing selected a proactive prompt about their finances to get started, according to the shareholder letter that accompanied results.
The stated goal is to move from reactive interfaces to proactive intelligence that anticipates user needs across payments, lending and commerce.
Ecosystem Depth
The restructuring announcement arrived alongside a quarter that exceeded guidance. Block generated $2.87 billion in gross profit in the fourth quarter, up 24% year over year. Adjusted operating income rose 46% to $588 million. Cash App remained the primary growth engine. Monthly transacting actives reached 59 million.
Primary Banking Actives, which represent customers who receive direct deposit or meet minimum spending thresholds, grew 22% year over year to 9.3 million in December, up from 8.3 million in September. Management has emphasized that these customers generate nearly 10 times the gross profit of peer-to-peer-only users.
Consumer lending expanded sharply. Cash App consumer lending origination volume rose 69% year over year to $18.5 billion in the quarter.
Commerce Enablement volume within Cash App reached $54.7 billion, up 17%, while inflows per transacting active increased 12% year over year to $1,410.
Square, while growing at a slower pace, showed steady momentum. Gross payment volume increased 10% year over year to $65 billion. Food and beverage sellers were a bright spot, with GPV in that vertical up 16% year over year.
Banking at Core of Cash App
Management continues to position Cash App as a banking alternative for what it calls “modern earners.” The company estimates an addressable market of approximately 125 million people across independent earners, hourly workers and teens, per the company’s letter.
Primary banking growth is central to that strategy. Ahuja said the company expects to compound gains in its banking ecosystem while scaling Cash App Green, its status program tailored to customers with multiple income streams.
The lending engine, built on what Block calls Cash App Score, integrates repayment history with near real-time inflow and spending data to support underwriting decisions.
Continued Expansion
Management raised its 2026 outlook. Block now expects gross profit of $12.2 billion, reflecting 18% year over year growth. Ahuja said adjusted operating income margins are expected to expand each quarter through the year, with just under 60% of the full-year adjusted operating income forecast to be delivered in the second half.
“We’re in a place where a lot of what we’ve been working on is coming together,” Dorsey said, adding that he wants Block to be “ahead of the market” in applying intelligence across financial services.
