Block Q2 2025 slides: Gross profit growth accelerates, guidance raised

Block Inc (NYSE:SQ) delivered stronger-than-expected results in the second quarter of 2025, with accelerating gross profit growth and expanding margins leading management to raise full-year guidance. The company’s investor presentation, released following its August 7 earnings report, showcases a significant rebound from its disappointing first-quarter performance.

Quarterly Performance Highlights

Block reported Q2 2025 gross profit of $2.54 billion, representing 14% year-over-year growth and a meaningful acceleration from the 9% growth recorded in Q1. The company also demonstrated strong profitability improvements, with Adjusted Operating Income growing 38% year-over-year to $550 million, delivering a 22% margin.

As shown in the following chart of quarterly gross profit growth:

The company’s profitability metrics showed substantial improvement, with net income attributable to common stockholders reaching $538 million in Q2 2025, compared to $195 million in the same quarter last year. Adjusted Operating Income grew significantly while margins expanded despite continued investments in go-to-market initiatives.

The following chart illustrates Block’s operating income and adjusted operating income performance:

Square Ecosystem Performance

Square’s gross profit grew 11% year-over-year to $1.027 billion in Q2 2025, rebounding from 9% growth in the previous quarter. This growth was driven by strength in software, integrated payments, and banking products.

Square’s gross profit trend is illustrated in this chart:

Total (EPA:TTEF) Square Gross Payment Volume (GPV) grew 10% year-over-year in Q2, with U.S. GPV growing 7.0% and international GPV showing robust 25% growth. International markets now represent 19% of Square’s total GPV, up from 17% a year ago.

The following chart shows Square’s GPV growth by geography:

Block continues to make progress in attracting larger merchants to its Square ecosystem. GPV from mid-market sellers (those processing more than $125,000 annually) grew 17% year-over-year in Q2, with these sellers now representing 44% of Square’s total GPV, up from 41% a year ago.

As shown in this breakdown of Square GPV by seller size:

Cash App Ecosystem Performance

Cash App delivered gross profit of $1.50 billion in Q2 2025, representing 16% year-over-year growth and a significant reacceleration from the 10% growth seen in Q1. This performance was driven by strong results from Cash App Borrow, Cash App Card, and Buy Now, Pay Later services.

The following chart illustrates Cash App’s gross profit trend:

Block continues to increase monetization of its Cash App user base, with gross profit per monthly transacting active reaching $87 on an annualized basis in Q2, up 15% year-over-year. The company now has 57 million monthly transacting actives on Cash App.

This chart shows the growth in gross profit per monthly transacting active:

Cash App Borrow, the company’s consumer lending product, saw originations grow 95% year-over-year to $18 billion annualized in Q2, while maintaining stable underwriting performance. The service delivered a 24% annualized net margin in Q2 2025.

As illustrated in this chart of Cash App Borrow margins:

Forward Guidance and Outlook

Following its strong Q2 performance, Block raised its full-year 2025 guidance for both gross profit and Adjusted Operating Income. The company now expects to deliver $10.17 billion in gross profit for the full year, representing 14.4% year-over-year growth, with Adjusted Operating Income of $2.03 billion at a 20% margin.

The full-year guidance is summarized in this slide:

For the third quarter of 2025, Block expects gross profit to grow 16% year-over-year to $2.60 billion, with Adjusted Operating Income of $460 million at an 18% margin.

The Q3 2025 guidance is detailed here:

This guidance represents a significant improvement from Block’s Q1 2025 performance, which saw the company miss both EPS and revenue forecasts, leading to an 18.52% drop in its stock price. The stock has since recovered, with premarket trading on August 8 showing a 7.74% increase to $82.80.

Block’s financial objectives focus on balancing growth with profitability, maximizing gross profit, and creating value for shareholders. The company is using the "Rule of 40" as a guiding financial framework, which combines gross profit growth and Adjusted Operating Income margin. Based on its full-year 2025 guidance, Block expects to achieve a "Rule of X" score of 34%, indicating solid performance on this metric.

The company’s reacceleration of growth in Q2, combined with expanding margins and raised guidance, suggests Block is successfully navigating the challenges it faced earlier in the year and is positioned for stronger performance in the second half of 2025.

Full presentation:

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