Block enters its November 3 earnings report with a clear strategic test: can it earn more from existing Cash App users without taking excessive credit risk? The shares closed at $77.24 on October 9, about 11% below their 52-week high, even after management raised its 2026 outlook.
Second-quarter evidence supports the opportunity. Block reported $3.17 billion of gross profit, up 25% from a year earlier. Cash App gross profit rose 31% to $1.97 billion, while Square gross profit increased 13%. The company lifted full-year guidance to about $12.51 billion of gross profit and $3.47 billion of adjusted operating income.
Growth depends on depth, not just users
Cash App had 59 million monthly transacting actives in June, up only 3% from a year earlier. Fewer than 10 million were primary banking actives, which Block defines around paycheck deposits or meaningful card and payment use. Management said those banking customers generate roughly ten times the gross profit of a peer-to-peer-only user.
That figure identifies the opportunity but also needs careful interpretation. Converting someone who already uses Cash App Card may produce less incremental value than converting a basic peer-to-peer user. Primary banking actives grew 17% in the second quarter, so the November report should show whether that pace remains durable.
Lending adds profit and risk
Consumer lending originations grew 59% in the second quarter. Block is extending some Cash App Borrow loans from four weeks to six weeks, allowing higher pricing while also accepting higher expected losses. Management described the change as accretive, but the economics depend on repayment behavior and funding costs.
The company said consumer spending and repayment remained resilient through July and August. That is useful early evidence, not a full credit cycle. Faster loss growth could offset the benefits of longer duration and deeper engagement.
The source article also presented a TIKR valuation scenario reaching about $151 by the end of 2030. That is not company guidance. It depends on assumptions for revenue growth, margins and the earnings multiple, so it should not be treated as a target established by current results.
For the third quarter, Block guided to roughly $3.1 billion of gross profit, about 18% growth. Investors should pair that headline with primary banking actives, risk losses, Square seller growth and adjusted operating margin. Stronger banking adoption with controlled credit losses would support the strategy. Growth purchased through weaker underwriting would make the profit outlook less durable.