Block Cutting Staff to Reduce Costs, Raises Earnings Forecast for 2026

Financial technology company Block, led by Jack Dorsey, raised its full-year profit forecast in its earnings statement released on Thursday, expecting a profit of $2.91 billion by the end of 2026, a year-on-year increase of 19%. The company also expects full-year gross profit to reach $12.33 billion, slightly above the average analyst estimate of $12.1 billion.

This upward revision of guidance is an attempt by Block to demonstrate that the restructuring over the past two years is entering a phase of profit realization. After the earnings announcement, the company's stock price rose by 11% in after-hours trading. Block's stock price has risen nearly 8% this year.

Since 2024, Block has been continuously adjusting its organizational structure and business model, with the core goal of generating higher output with fewer resources. The company restructured its reporting lines and proposed plans for more efficient operations.

Earlier this year, Block announced a layoff of nearly half of its staff, citing changes brought about by artificial intelligence as one of the main reasons. Chief Operating Officer Owen Jennings stated that the management began discussing the impact of AI at the end of last year, ultimately concluding that the company needed to be flatter, smaller, and more agile, especially in terms of developers.

Block is attempting to further integrate its personal money transfer product, Cash App, with its merchant services, Square. For the market, if these two businesses can form a closer connection between users and payment scenarios, profit growth would not just be a short-term result of layoffs.

The first-quarter data provided a phased validation of this logic. Block's adjusted EBITDA reached $1 billion, higher than analyst expectations, and net revenue reached $6.06 billion, also exceeding the market consensus of $5.87 billion.