01—Abstract
Summary
Summary of the 10-Q filed May 7, 2026. Cited figures are marked; the original filing is the authoritative source.
Block, Inc. (XYZ) reported a net loss attributable to common stockholders of $308.7 milliona for the first quarter of 2026, compared with net income of $189.9 million in the first quarter of 2025.
Total net revenue rose to $6.06 billionb from $5.77 billion, while gross profit increased to $2.91 billion from $2.29 billion. The loss was driven by higher operating expenses, including $495.3 million of restructuring charges tied to the Workforce Plan, under which the company reduced its workforce by more than 40%, and a $240 million accrued estimate of loss related to a DOJ inquiry. Transaction, loan, and consumer receivable losses rose to $500.1 million from $169.7 million, and operating income swung to a loss of $172.0 million from income of $329.3 million.
Cash App gross profit was $1.91 billionc, up 38% year over year, driven by growth in Cash App Borrow, while Square gross profit was $981.5 million, up 9%. Bitcoin ecosystem revenue declined $533.4 million, or 23%, reflecting lower trading volume and bitcoin prices. Adjusted EBITDA was $1.01 billion compared with $812.8 million a year earlier.
Management cites available liquidity of $9.1 billiond and expects annualized net cost savings from the Workforce Plan of approximately $800 million to $900 million. During the quarter the company repurchased $636.0 million of Class A common stock, leaving $4.7 billion authorized under its program. Investors should weigh the strong gross profit growth in Cash App and Square against the rising credit losses, restructuring costs, the unresolved DOJ matter, and the pending securities and derivative litigation, for which the filing states a loss could be material but cannot be estimated.
02—Key points
Key Highlights
- Net loss attributable to common stockholders of $308.7 million, versus net income of $189.9 million in Q1 2025; diluted loss per share of $0.52.
- Gross profit of $2.91 billion, up from $2.29 billion; Cash App gross profit up 38% and Square gross profit up 9%.
- Restructuring charges of $495.3 million under the February 2026 Workforce Plan; expected annualized net savings of approximately $800 million to $900 million.
- Transaction, loan, and consumer receivable losses rose to $500.1 million from $169.7 million, with loan losses up to $368.4 million from $67.0 million.
- Accrued $240 million estimate of loss related to the DOJ inquiry; the filing states ultimate losses could exceed this amount and be material.
- Available liquidity of $9.1 billion, including $900.0 million undrawn under the revolving credit facility; $636.0 million of share repurchases in the quarter.
- Bitcoin ecosystem revenue fell $533.4 million (23%), and the remeasurement loss on the bitcoin investment was $172.8 million.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q1 FY2026, Block lost $0.05.
- Revenue$6.06B100.0%
- Cost of revenue−$3.15B52.0%
- Gross profit$2.91B48.0%
- Operating costs−$3.08B50.9%
- Operating income−$172.0M2.8%
- Interest, other & tax−$136.6M2.3%
- Net income−$308.6M5.1%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed May 7, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $6.06B$5.77B | +4.9% |
| Cost of Revenue | $3.15B$3.48B | −9.6% |
| Gross Profit | $2.91B$2.29B | +27.1% |
| R&D Expenses | $1.04B$760.70M | +36.6% |
| Operating Expenses | $3.08B$1.96B | +57.2% |
| Operating Income | -$171.99M$329.30M | −152.2% |
| Net Income | -$308.60M$188.72M | −263.5% |
| EPS (Basic) | $-0.52$0.31 | −267.7% |
| EPS (Diluted) | $-0.52$0.30 | −273.3% |
| Shares Outstanding (Basic) | 597.59M619.37M | −3.5% |
| Shares Outstanding (Diluted) | 597.59M635.34M | −5.9% |
05—Questions
Frequently Asked Questions
Why did Block swing from net income to a net loss in the first quarter of 2026?
Operating income turned to a loss of $172.0 million from income of $329.3 million a year earlier. The main drivers were $495.3 million of Workforce Plan restructuring charges, a $253.8 million increase in accrued litigation and regulatory expenses within G&A, a $330.4 million increase in transaction, loan, and consumer receivable losses, and a $172.8 million bitcoin remeasurement loss below operating income.
What is driving growth in the business?
The filing attributes financial solutions revenue growth of 51% primarily to Cash App Borrow origination volumes, with Cash App Borrow revenue up $369.4 million. Commerce enablement revenue rose 14%, driven by Square processing growth in line with Square GPV growth of 13%. Cash App gross profit grew 38%, mainly from Cash App Borrow.
How much cash and liquidity does Block have, and how is it returning capital?
As of March 31, 2026, the company had approximately $9.1 billion of available liquidity, including $8.2 billion in cash, cash equivalents, restricted cash, and marketable debt securities and $900.0 million undrawn under its revolving credit facility. It repurchased 10.7 million Class A shares for $636.0 million in the quarter, with $4.7 billion remaining under its authorized program.
What legal and regulatory matters could affect investors?
The company accrued $240 million for the DOJ inquiry, which remains ongoing, and said it could face losses above that amount. The SEC staff notified the company in March 2026 that it did not intend to recommend enforcement action. A securities class action and related derivative actions survived motions to dismiss in January 2026, and the filing says losses could be material but cannot be estimated. A $114 million San Francisco gross receipts tax exposure is also disclosed, for which a loss is not considered probable.
06—Continue