Cash App and Block pursue banking shift as profit grows

Block raises its 2026 gross profit forecast to $12.6 billion from $12.5 billion as Square and Cash App pursue a broader financial role.

The payments company announced the higher outlook Tuesday in a shareholder letter from founder Jack Dorsey. Third-quarter gross profit reached $3.2 billion, above the $3.1 billion average analyst forecast cited in the results account.

The increase in guidance follows a corporate overhaul announced earlier this year. It puts a financial benchmark alongside management's effort to broaden Cash App's services, extend Square's merchant business and make the two operations work more closely together.

Gross profit provides the benchmark

Block reported gross profit growth of 22% for the quarter. The result exceeded the analyst benchmark, while the revised annual forecast represents a smaller adjustment to the company's previous expectations.

Those figures address different questions: the quarterly result measures reported performance, while the annual outlook sets out management's expectations. Neither establishes how much of the improvement came from the overhaul or how much additional growth the changes might produce.

Dorsey's letter presented the transformation in broader terms than payments processing. He described a shift away from conventional financial products toward delivering intelligence when customers need it, a characterization that remains management's assessment of the company's direction.

Cash App seeks a banking role

Executives want Cash App to serve people excluded from conventional banking, rather than remain primarily a way to transfer money and divide shared expenses. Their ambition is to make it function more like a bank, although that description does not establish a change in its regulatory status.

Square serves merchants, giving Block a different customer relationship from Cash App's consumer business. Management wants to widen Square's reach while improving coordination between the two operations; those are related objectives, but they are not interchangeable measures of progress.

If that coordination succeeds, the commercial test would be whether Block can build broader relationships with both merchants and individuals. If the businesses expand separately without closer integration, growth alone would not demonstrate that management's combined strategy is working.

Cash App settlement remains unresolved

Block is also seeking an agreement with the US Department of Justice concerning alleged past customer abuses involving Cash App, according to the report. Dorsey's shareholder letter offered no update on those negotiations, and senior executives declined to provide details in an interview.

The absence of an update leaves the potential settlement's cost, terms and timing unclear. Those details matter separately from the gross profit outlook: an operating forecast does not resolve the financial or business obligations that an eventual agreement might impose.

If a settlement requires payments or changes to Cash App's practices, those obligations would become another test for the revamp. For now, the concrete benchmarks are Block's raised 2026 forecast, progress toward closer coordination with Square and any disclosed resolution of the Justice Department talks.