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Call sheet · Q1'26

Block (SQ)

Q1'26 earnings call · held May 7, 2026 · compared with the Q4'25 call · management-credibility review
8/12
Disclosure score
2 high, 3 medium, 1 low flags
Financial quality
Bottom line
The sleeper story is Block becoming a genuine AI-native development organization with 2.5x code velocity gains that could structurally change their cost structure, while everyone focuses on the headline beats. The obvious 27% gross profit growth masks that Borrow has peaked and they're desperately pivoting to BNPL-everywhere as the next growth driver. The binding constraint is consumer credit capacity, not product innovation or market opportunity. Jack said 'intelligence tools have changed what it means to build' but provided zero revenue attribution. My view changes if they can show Managerbot drives measurable seller retention improvements by Q3.

The 30-second version

  • AI code velocity up 2.5x since January is the real story, not the headline beats
  • Borrow's hypergrowth is normalizing but Cash App found its next act in BNPL everywhere
  • Square's ISO channel quietly exploded to 140+ partners from basically zero

What changed this quarter

MetricQ4'25Q1'26Change
Gross Profit$2.87B (24% YoY)$2.91B (27% YoY)+300 bps acceleration
Adjusted Operating Income$588M (46% YoY)$728M (56% YoY)+1000 bps acceleration
Adjusted EPS$0.85 (38% YoY)$0.85 (52% YoY)+1400 bps growth acceleration
Cash App Gross Profit$1.83B (33% YoY)$1.88B (38% YoY)+500 bps acceleration
Square Gross Profit$1.04B (7.5% YoY)$1.03B (9% YoY)+150 bps acceleration
Square GPV$44.2B (10.3% YoY)$45.8B (13% YoY)+270 bps acceleration
Monthly Transacting Actives59M (flat QoQ)59M (4% YoY)Growth resumed YoY
Primary Banking Actives9.3M (22% YoY)9.7M (18% YoY)-400 bps deceleration
Consumer Lending Originations$18.5B (69% YoY)82% YoY growth+1300 bps acceleration
Borrow Originations223% YoY growthNot disclosedMetric disappeared

Accountability tracked

7 new promises made4 narrative shifts flagged6 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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