Block Inc., the payments company behind Square and Cash App, has increased its annual gross profit forecast to $12.3 billion. This new outlook is higher than both its previous forecast and the average analyst estimate of $12.1 billion. The improved projections come after a substantial round of artificial intelligence-related job cuts, which executives deemed necessary for enhancing company performance.
This positive revision follows a similar pattern from earlier in the year. In August 2025, Block raised its full-year gross profit guidance to $10.17 billion from an initial $9.96 billion, driven by strength in its Cash App lending business and resilient payment volumes. At that time, CEO Jack Dorsey attributed this "super-bullish" outlook and faster product launches to the company's adoption of AI.
Block had previously undergone a significant workforce reduction in February 2026, cutting nearly half its staff as part of an overhaul to integrate AI across its operations. This move was expected to materially boost margins, with the company forecasting an adjusted operating margin of 26% for 2026, up from 20% in 2025. Analysts noted that while the job cuts were large, they brought Block's headcount closer to pre-pandemic levels, making it a leader in gross profit per employee compared to peers like Visa.
The company's strategic focus on AI-driven efficiency and innovation has been a key factor in its updated financial expectations. While Block's revenue for Q2 2025 missed analyst estimates at $6.05 billion and earnings per share were 62 cents, below the 68 cents consensus, the subsequent operational changes and revised outlook highlight a strong belief in its new direction.
