Markets
Here’s Why Block's Bitcoin Business Is Shrinking Despite Excellent Q2
Block beat Q2 estimates, but its Bitcoin business continued shrinking as Cash App and Square became the company's primary growth engines.
BLOCKINSIDERLoadingBlock beat Q2 estimates, but its Bitcoin business continued shrinking as Cash App and Square became the company's primary growth engines.
One of the oldest and most successful crypto businesses has to be Block, which managed to post strong profits despite a difficult Bitcoin market and recent layoffs.
Interestingly, what made Block so well known seems to be a dissipating factor according to the recent Q2 earnings report.
Block released its Q2 Earnings report on Thursday, which showed that the company performed better than expectations. Gross profit shot up by 25% Year-on-Year to $3.17 billion, marking the fifth straight quarter of accelerating/sustained growth.
The company’s revenue also rose to $6.62 billion, higher than the consensus of $6.49 billion. One of the largest contributing factors continues to be Cash App.
Cash App gross profit jumped 31% to $1.97 billion, and Square gross profit grew 13% to $1.16 billion. This extended the momentum both segments carried into the second quarter of the year.
Block also posted a record 27% adjusted operating margin and raised its full-year gross profit guidance to $12.51 billion, up 21% year-over-year.
However, Bitcoin Ecosystem gross profit fell 31% YoY to just $72 million, down from $105 million a year ago. Furthermore, this segment revenue dropped 13% to $1.89 billion, also booking an $88.5 million unrealized loss on its corporate BTC holdings.
In the published Q2 reports, the company explicitly attributed the profit decline to fee cuts on Cash App Bitcoin transactions. Softer global trading volume was another contributing factor, which has been a common factor across the market. The lack of recovery from Bitcoin is a major contributing issue.
Thus, by the looks of it, Block is becoming less of a crypto stock, instead of more of it as the rest of the market does. The headline earnings volatility (GAAP EPS of $0.15 vs. adjusted $1.02) partly reflects Bitcoin remeasurement.
Interestingly, retail narrative still ties Dorsey/Block to crypto messaging. In the Q2 earnings report, Amrita Ahuja, Block’s Chief Financial Officer, also addressed the earlier layoffs. Block had fired 4000 employees, about 40% of its staff, to make way for AI.
“Nearly six months after we reorganized Block to make intelligence the center of the company, we’re moving faster to deliver value to customers and are executing on our long-term growth initiatives, all while delivering meaningful margin expansion and profitable growth”
Block’s share XYZ’s price showed a positive reaction to the earnings call. The stock marked an 18-month high price of $84.20. However, this growth is the result of consistent growth observed over the last six months.
Since early February, XYZ’s price has shot up by 69.47%, rising from around $50.00 to its current price. The stock is also forming a double bottom or “W” pattern, which presents a bullish outlook for XYZ. Crossing the $100 mark would be a sure sign of further bullishness ahead of the asset.
Recently, Block was added by Goldman Sachs to its Conviction List 2026, with a target of $95. The chances of the stock reaching this price are high considering XYZ’s breakout would need a push past $98, which effectively would validate Goldman Sachs prediction.
Thus, despite the difficult market conditions, Block’s bet seems to be paying off, lifting the stock price.
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