Key Stats for Block Stock
- Current price: $71 (April 17, 2026 close)
- Full-year gross profit: $10.36 billion, +17% YoY
- Full-year adjusted operating income: $588 million (Q4); full-year AOI grew 30% YoY with 2 points of margin expansion
- Q4 gross profit: $2.87 billion, +24% YoY
- Q4 adjusted diluted EPS: +38% YoY
- 2026 full-year gross profit guidance: $12.2 billion, +18% YoY
- 2026 full-year adjusted operating income guidance: $3.2 billion, +54% YoY; 26% AOI margin
- 2026 adjusted diluted EPS guidance: $3.66, +54% YoY
- TIKR model price target: $153.29
- Implied upside: +115% over 5 years (17.7% annualized)
Block Stock: Q4 2025 Earnings Breakdown
Block stock (XYZ) delivered Q4 gross profit of $2.87 billion, up 24% year-over-year, capping a year in which gross profit growth more than doubled from the first quarter to the fourth.
Full-year gross profit reached $10.36 billion, up 17% year-over-year, with adjusted operating income growing 30% and delivering 2 points of margin expansion even as the company accelerated investment.
Cash App was the growth engine of the quarter, posting gross profit of $1.83 billion, up 33% year-over-year and accelerating relative to Q3.
The sharpest driver within Cash App was Borrow, where origination volume grew more than 3x year-over-year in Q4, the strongest quarter for first-time Borrow actives ever, fueled by the November launch of Cash App Green and the completed migration of loan originations to Square Financial Services.
Square gross profit grew 7.5% year-over-year in Q4, with GPV up 10.3% and new volume added accelerating to 29% year-over-year growth, the strongest NVA quarter on record.
Management announced a 40% workforce reduction on earnings day, cutting headcount from over 10,000 to just under 6,000, citing the compounding capability of AI tools including its internal agent orchestration layer, Goose, which has driven a greater than 40% increase in production code shipped per engineer since September.
CEO Jack Dorsey framed the decision directly: “We believe Block will be significantly more valuable as a smaller, faster intelligence native company.”
Block stock investors also received a capital return update: the company repurchased $790 million of shares in Q4 alone, bringing the full-year total to $2.3 billion returned to shareholders.
For 2026, Block guided full-year gross profit of $12.2 billion, up 18% year-over-year, and raised adjusted operating income guidance to $3.2 billion, reflecting 54% growth and 6 points of margin expansion versus 2025.
Q1 2026 guidance calls for gross profit of $2.8 billion, up 22% year-over-year, with adjusted operating income of $600 million and adjusted diluted EPS of $0.67, up 20% year-over-year.
Management expects AOI margins to expand each quarter throughout 2026 from the Q1 starting point of 21%, with just under 60% of the full-year $3.2 billion AOI target weighted to the second half.
XYZ Stock: Financials
The income statement tells a leverage inflection story: gross profit has compounded at an accelerating rate since 2022, and operating income swung from deeply negative to the fastest-growing line on the statement.
Full-year gross profit grew 16% to $10.42 billion in 2025, with gross margin expanding to 43%, up from 37% in 2023, a 600 basis point improvement over two years as the mix shifted toward higher-margin financial services.
Operating income grew ~69% year-over-year in 2025 to $1.76 billion, with operating margin reaching around 7%, up from ~4 % in 2024 and recovering sharply from the (1.0%) print in 2023.
The operating leverage trajectory is the clearest signal in the data: from a (3.5%) operating margin in 2022 to 7.3% in 2025, with 2026 AOI margin guided to 26% on an adjusted basis.
What Does the Valuation Model Say?
The TIKR model prices Block stock at $153.29, implying 115.1% total upside from the current price of $71.26, or 17.7% annualized over the next 4.7 years.
The mid-case assumptions are an 8.7% revenue CAGR and an 11.1% net income margin, both achievable given the 2026 guidance trajectory and the structural cost reset delivered by the workforce reduction.
The Q4 result and raised 2026 guidance make the investment case materially stronger: Block enters the year with gross profit growing at 18%, AOI margins set to reach 26%, and a leaner cost structure that pulls forward the profitability timeline management previously outlined for 2027 and 2028.
At $71.26, Block stock is pricing in execution risk that the last four quarters of accelerating gross profit growth and the boldest cost action in the company’s history have done significant work to reduce.
The central tension this report creates is whether Block can sustain 18% gross profit growth through 2026 while absorbing higher first-half risk losses from Borrow’s rapid expansion and redeploying savings from the workforce reduction into AI infrastructure and go-to-market without disrupting product velocity.
Bull Case
- 2026 AOI guidance of $3.2 billion represents 54% year-over-year growth and a 6-point margin expansion, pulling forward the profitability trajectory outlined at Investor Day for 2027 and 2028
- Cash App Green drove the strongest quarter ever for first-time Borrow actives and a 22% year-over-year increase in primary banking actives to 9.3 million, a cohort generating nearly 10x the gross profit of peer-to-peer-only users
- Developer productivity metrics show a greater than 40% increase in production code shipped per engineer since September, supporting the thesis that a smaller workforce can sustain or accelerate product velocity
- Square NVA grew 29% year-over-year in Q4 and GPV reaccelerated to over 12% quarter-to-date as of February 24, with sales-led NVA up 62% year-over-year
Bear Case
- Q4 Borrow growth of 223% year-over-year in origination volume drove higher portfolio losses in December and January from new cohort mix, with risk loss growth expected to remain elevated in H1 2026
- Square gross profit grew only 7.5% in Q4 versus 10.3% GPV growth, with hardware costs and processing partner changes each a 2 percentage point drag, a spread management expects to persist into H1 2026
- Nearly 60% of the $3.2 billion AOI target is back-half weighted, making the full-year number highly dependent on H2 execution at a company that just cut 40% of its workforce in Q1
- The TIKR model’s mid-case revenue CAGR of 8.7% is well below the gross profit growth rate Block is currently delivering, suggesting the model may be conservative but also that mean reversion risk is real if Borrow loss rates or macro conditions deteriorate
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