0001628280-26-032200
SEC filingGross profit rose 27% YoY to $2.9B, driven by Cash App Borrow, with operating loss widening due to $495M restructuring charges.
In Q1 2026, total net revenue grew 5% YoY to $6.06B, driven by a 24% increase excluding bitcoin ecosystem revenue. Gross profit rose 27% to $2.91B, expanding margin by 830 bps to 48.0%, primarily due to favorable mix from higher-margin financial solutions and lower bitcoin contribution. Operating loss of $172M contrasted with income of $329.3M in Q1 2025, as the company recorded $495.3M in restructuring charges from a 40% workforce reduction. Adjusted Operating Income (non-GAAP) improved 56% to $727.7M, reflecting underlying operational leverage. Net loss attributable to common stockholders was $308.7M, inclusive of a $172.8M bitcoin remeasurement loss, compared to net income of $189.9M in the prior period.
Cash App segment gross profit surged 38% YoY to $1.908B, driven by a 51% increase in financial solutions revenue, particularly Cash App Borrow origination volumes which grew 175% in the quarter. Square segment gross profit increased 9% to $981.5M, supported by Square Lending and GPV growth of 13% (to $63.1B), with strength in Food and Beverage sellers. Bitcoin ecosystem revenue declined 23% to $1.796B, but its contribution to gross profit remained low at 2% of total, underscoring the shift toward higher-margin services.
Management expects annualized net cost savings of $800M-$900M from the workforce reduction, with benefits to begin after completion of the plan. Remaining restructuring charges are expected to be immaterial and substantially complete by Q2 2026. The company ended the quarter with $9.1B in available liquidity and is focused on disciplined growth and cost efficiencies, including AI automation and centralization. No specific revenue or earnings guidance was provided for future periods.
As of March 31, 2026, Block held $6.86B in cash and equivalents and $0.62B in marketable debt securities (short-term $462.6M, long-term $154.6M). Total debt (including warehouse facilities) stood at $7.84B, with $7.29B in senior and convertible notes and $542.5M drawn on warehouse facilities. Shareholders' equity was $21.68B, up from $22.17B at year-end 2025 primarily due to $636M in share repurchases and $308.7M net loss. Inventory was $174.3M, largely finished goods.
The company disclosed $2.236B in non-cancelable purchase commitments, mainly for cloud computing infrastructure. Timing: $0.282B due in remainder of 2026, $0.782B in 2027–2028, and $1.172B thereafter. Additionally, Block has a $900M revolving credit facility (undrawn) and $960.9M available under warehouse facilities. The company also accrued $327.2M in severance-related liabilities from the workforce reduction plan (more than 40% headcount reduction) and $240M for DOJ resolution discussions.
Block repurchased 10.7M shares for $636M in Q1 2026, leaving $4.7B of a $9B authorization remaining. No dividends were paid. Capex was modest at $30.6M, reflecting a capital-light model. Debt activity: $83.2M in interest expense on notes; warehouse facility borrowings saw net repayments of $841.2M. The company issued no new debt.
Block operates two reportable segments: Cash App and Square. For Q1 2026, Cash App generated $3.87B revenue (gross profit $1.91B, 49.3% margin) and Square $2.11B revenue (gross profit $0.98B, 46.5% margin). Corporate and Other contributed $73.8M revenue and $19.6M gross profit. Geographically, 91.3% of total revenue came from the United States ($5.53B) and 8.7% internationally ($0.53B). No other country exceeded 10% of revenue. Long-lived assets: U.S. $7.19B, Australia $4.59B, other international $1.90B.