Is Block, Inc. Entering a Powerful New Phase After a 27% Jump?
Source: Kapitales Research
Highlights:
Block, Inc. (ASX: XYZ) surged nearly 27%, with the stock trading at a CMP of AU$93.510 after releasing its latest quarterly results and announcing a major strategic overhaul.
Fourth-quarter gross profit increased 24% year over year to US$2.87 billion, while Adjusted EBITDA rose to US$929.7 million.
The company plans to reduce its workforce by more than 40%, with expected restructuring costs between US$450 million and US$500 million.
Block, Inc. (ASX: XYZ) witnessed a sharp rally after delivering stronger profitability in its fourth-quarter update and outlining a significant organisational reset. The stock climbed close to 27% to AU$93.510 as investors responded to improved margins, accelerating segment growth, and management’s decision to streamline operations in favour of a more AI-driven structure.
What supported the strong move?
The fintech group posted gross profit of US$2.87 billion for the fourth quarter of fiscal 2025, representing 24% growth compared to the previous year. Cash App remained the key earnings engine, generating US$1.83 billion in gross profit, up 33% year over year. Square contributed US$993 million, reflecting steady 7% growth. Profitability metrics also strengthened. Operating income reached US$485 million, while adjusted operating income expanded to US$588 million, delivering a 20% margin. Adjusted EBITDA came in at US$929.7 million, underlining solid operational performance. Adjusted diluted earnings per share stood at US$0.65, further signalling earnings momentum.
Why is Block cutting over 40% of its workforce?
Management announced plans to reduce headcount by more than 40% as part of a broad restructuring initiative aimed at improving speed, efficiency, and cost discipline. The move is expected to result in one-time charges of approximately US$450 million to US$500 million, primarily linked to severance and related obligations. The company stated that the restructuring is designed to better align resources with its long-term strategy, particularly around artificial intelligence integration and product innovation.
What could this mean going forward?
For fiscal 2026, Block anticipates gross profit of US$12.20 billion, reflecting projected growth of 18%. Adjusted operating income is expected to reach US$3.20 billion, implying a margin of 26%. Although restructuring introduces execution risks, the market’s strong reaction suggests investors are focusing on margin expansion, operating leverage, and the company’s ability to scale efficiently within the evolving digital payments landscape.
Note- All data presented is based on information available at the time of writing.
Disclaimer for Kapitales Research
The materials provided by Kapitales Research, including articles, news, data, reports, opinions, images, charts, and videos ("Content"), are intended for personal, non-commercial use only. The primary goal of this Content is to educate and inform readers. This Content is not meant to offer financial advice, nor does it include any recommendation or opinion that should be relied upon for making financial decisions. Certain Content on this platform may be sponsored or unsponsored, but it does not serve as a solicitation or endorsement to buy, sell, or hold any securities, nor does it encourage any specific investment activities. Kapitales Research is not authorized to provide investment advice, and we strongly advise users to seek guidance from a qualified financial professional, such as a financial advisor or stockbroker, before making any investment choices. Kapitales Research disclaims all liability for any direct, indirect, incidental, or consequential damages arising from the use of the Content, which is provided without any warranties. The opinions expressed by contributors or guests are their own and do not necessarily reflect the views of Kapitales Research. Media such as images or music used on this platform are either owned by Kapitales Research, sourced through paid subscriptions, or believed to be in the public domain. We have made reasonable efforts to credit sources where appropriate. Kapitales Research does not claim ownership of any third-party media unless explicitly stated otherwise.
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Nextgen Global Services Pty Ltd trading as Kapitales Research (ABN 89 652 632 561) is a Corporate Authorised Representative (CAR No. 1293674) of Enva Australia Pty Ltd (AFSL 424494). The information contained in this website is general information only. Any advice is general advice only. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of this product for your circumstances. Please be aware that all trading activity is subject to both profit & loss and may not be suitable for you. The past performance of this product is not and should not be taken as an indication of future performance.
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Is Block, Inc. Entering a Powerful New Phase After a 27% Jump?
Highlights:
Block, Inc. (ASX: XYZ) witnessed a sharp rally after delivering stronger profitability in its fourth-quarter update and outlining a significant organisational reset. The stock climbed close to 27% to AU$93.510 as investors responded to improved margins, accelerating segment growth, and management’s decision to streamline operations in favour of a more AI-driven structure.
What supported the strong move?
The fintech group posted gross profit of US$2.87 billion for the fourth quarter of fiscal 2025, representing 24% growth compared to the previous year. Cash App remained the key earnings engine, generating US$1.83 billion in gross profit, up 33% year over year. Square contributed US$993 million, reflecting steady 7% growth. Profitability metrics also strengthened. Operating income reached US$485 million, while adjusted operating income expanded to US$588 million, delivering a 20% margin. Adjusted EBITDA came in at US$929.7 million, underlining solid operational performance. Adjusted diluted earnings per share stood at US$0.65, further signalling earnings momentum.
Why is Block cutting over 40% of its workforce?
Management announced plans to reduce headcount by more than 40% as part of a broad restructuring initiative aimed at improving speed, efficiency, and cost discipline. The move is expected to result in one-time charges of approximately US$450 million to US$500 million, primarily linked to severance and related obligations. The company stated that the restructuring is designed to better align resources with its long-term strategy, particularly around artificial intelligence integration and product innovation.
What could this mean going forward?
For fiscal 2026, Block anticipates gross profit of US$12.20 billion, reflecting projected growth of 18%. Adjusted operating income is expected to reach US$3.20 billion, implying a margin of 26%. Although restructuring introduces execution risks, the market’s strong reaction suggests investors are focusing on margin expansion, operating leverage, and the company’s ability to scale efficiently within the evolving digital payments landscape.
Note- All data presented is based on information available at the time of writing.
Disclaimer for Kapitales Research
The materials provided by Kapitales Research, including articles, news, data, reports, opinions, images, charts, and videos ("Content"), are intended for personal, non-commercial use only. The primary goal of this Content is to educate and inform readers. This Content is not meant to offer financial advice, nor does it include any recommendation or opinion that should be relied upon for making financial decisions. Certain Content on this platform may be sponsored or unsponsored, but it does not serve as a solicitation or endorsement to buy, sell, or hold any securities, nor does it encourage any specific investment activities. Kapitales Research is not authorized to provide investment advice, and we strongly advise users to seek guidance from a qualified financial professional, such as a financial advisor or stockbroker, before making any investment choices. Kapitales Research disclaims all liability for any direct, indirect, incidental, or consequential damages arising from the use of the Content, which is provided without any warranties. The opinions expressed by contributors or guests are their own and do not necessarily reflect the views of Kapitales Research. Media such as images or music used on this platform are either owned by Kapitales Research, sourced through paid subscriptions, or believed to be in the public domain. We have made reasonable efforts to credit sources where appropriate. Kapitales Research does not claim ownership of any third-party media unless explicitly stated otherwise.
Customer Notice:
Nextgen Global Services Pty Ltd trading as Kapitales Research (ABN 89 652 632 561) is a Corporate Authorised Representative (CAR No. 1293674) of Enva Australia Pty Ltd (AFSL 424494). The information contained in this website is general information only. Any advice is general advice only. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of this product for your circumstances. Please be aware that all trading activity is subject to both profit & loss and may not be suitable for you. The past performance of this product is not and should not be taken as an indication of future performance.
Kapitales Research, Level 13, Suite 1A, 465 Victoria Ave, Chatswood, NSW 2067, Australia | 1800 005 780 | info@kapitales.com.au