Block (XYZ) reports after the close today, and the headline numbers look strong on paper. Wall Street expects a more than 90% year-over-year jump in adjusted diluted EPS when Block reports third-quarter results on November 3. The consensus sits at $1.02 per share, with revenue forecast at about $6.62 billion, up roughly 8% from a year ago. For anyone watching the numbers roll in tonight, that EPS growth sounds like a payments business firing on all cylinders.
It mostly is. The complication is what you are actually owning when you own Block.
While bitcoin ecosystem revenue contributed 45% of Cash App revenue in the first half of 2026, gross profit generated from bitcoin ecosystem was only 3% of Cash App gross profit. That gap is the core insight. Bitcoin drives a large share of Block’s top-line revenue, but almost none of its profit. The real earnings engine is lending, card spending, and merchant payments.
The lending growth powering Block’s gross profit does not exist in a vacuum. Credit card delinquencies have reached their highest rate since 2011, a macro backdrop that sets the ceiling for any consumer-lending acceleration.
In Q2, overall Block gross profit grew 25% year over year, with 31% growth in Cash App and 13% growth in Square. Financial Solutions gross profit grew 43%, driven by Cash App Consumer Lending. Bitcoin Ecosystem gross profit, by contrast, declined 31% year over year. That pattern has held across both quarters reported this year: the core payments and lending businesses are accelerating while the bitcoin line shrinks.
The problem tonight is timing. U.S. spot bitcoin ETFs shed $643.3 million on Friday, the largest daily outflow since June 25. Bitcoin has slipped to roughly $76,700, extending a retreat that follows the largest daily outflow from spot bitcoin funds in more than four months and a roughly $6.3 billion theft from Binance, described by multiple outlets as the largest crypto theft on record. Block earned its Q3 revenue when bitcoin was trading significantly higher. The marks that hit tonight’s balance sheet reflect a different market.
Analysts project bitcoin revenue of $1.73 billion for the quarter, a year-over-year decline of 12.2%. That number was locked in during Q3. Any bitcoin remeasurement losses, however, will be calculated at current prices, and current prices are under pressure. In Q1 2026, Block recorded a $172.8 million bitcoin remeasurement loss. A similar dynamic could surface tonight.
This is the ownership question Block investors need to answer before the call: are you comfortable with a company where a dramatic crypto event can alter reported earnings even when the underlying payments business is performing well? Analysts expect momentum to continue, supported by improving Cash App monetization, stronger Square growth, and ongoing cost reductions. Block has guided to a 28% adjusted operating income margin and 89% year-over-year adjusted diluted EPS growth for 2026. Those targets were set when bitcoin was healthier.
Block is not the only payments-adjacent company navigating the gap between crypto volatility and a maturing core business. Coinbase faces the same cycle-dependency critique, yet new stablecoin legislation is reshaping its regulatory outlook in ways the stock price has not yet reflected.
The wealth-building case for Block rests on Cash App’s lending growth and Square’s payment volume acceleration. Cash App Consumer Lending origination volume grew 59% year over year in Q2. U.S. Square payment volume growth accelerated to approximately 10%, its fastest rate since mid-2023. Those numbers do not care what bitcoin did last week.
Long-term investors should watch tonight for one signal above all: gross profit growth in Cash App and Square excluding bitcoin. If those lines hold their trajectory, Block is delivering exactly what a payments-company thesis requires. Bitcoin is the distraction, not the business. Tonight’s call will make that separation clearer than any analyst preview can.
