Block pre-announces $1.8 billion of bitcoin noise it is spending October to grow
Twenty-six days before its November 3 print, Block pre-released $1.8 billion of Cash App bitcoin revenue and a $229.7 million gain, numbers its own note says barely touch profit. Its first consumer bitcoin ad campaign is built to grow exactly that line.
Vincent Jiang · 3 min read
A disclosure built to be skipped
Block+2.22% — Block, up 2.22 percent today put out a preliminary note on October 8 that, a day later, had drawn no coverage beyond the automated market-data scrape it arrived on 1. It pegs Q3 2026 Cash App Bitcoin Ecosystem Revenue, which Block says "primarily represents the total bitcoin buy volume facilitated on Cash App," at about $1.8 billion, and expects a $229.7 million remeasurement gain on its corporate bitcoin stash, recognized below operating income, GAAP only 1. Full results land November 3 15. The note also says how to read those numbers: bitcoin swings create "significant variability in reported revenue and GAAP net income" but only "modest impacts" on gross profit, adjusted operating income and adjusted EPS 1. The day's Block headlines went to the FTC instead 4.
October grows the line the note discounts
Since October 1, Block has been running "Bitcoin Does," its first consumer bitcoin campaign, at the roughly 60 million "bitcoin-curious" Americans a Block-commissioned August survey identified, on Instagram, Fox Sports and before two December films 278. Cash App now pays up to 2% back in bitcoin just for holding a balance 3, and 5% back for paying Square sellers 7. Block's October marketing is built to grow a line its own disclosure tells investors to discount. The line needs the help: Q2 bitcoin revenue fell 13% year over year to $1.89 billion, and bitcoin gross profit dropped 31% to $72 million after Block cut trading fees, including scrapping them on buys over $2,000 7.
Gross profit is the tell; net income is the weather
On the measure Block says bitcoin barely touches, the record is one-directional: five straight quarterly increases, $2.29 billion in Q1 2025 to $3.17 billion in Q2 2026, up 25% year over year, at a record 27% adjusted operating margin 6910. GAAP net income over the same quarters went from +$538 million to a $309 million loss and back to +$89 million 9. The $229.7 million bitcoin gain is simply the newest item below that line 1.
Gross profit rose five straight quarters while net income swung to a loss and back
- Gross profit
- GAAP net income
Data
| Gross profit | GAAP net income | |
|---|---|---|
| Q1 '25 | $2.29B | $0.19B |
| Q2 '25 | $2.54B | $0.54B |
| Q3 '25 | $2.66B | $0.46B |
| Q4 '25 | $2.87B | $0.12B |
| Q1 '26 | $2.91B | -$0.31B |
| Q2 '26 | $3.17B | $0.09B |
Read the November 3 print the way Block wrote it
The week's filings carry the bear case too. The FTC probe, made public in court papers late on October 7 after more than 1,500 complaints, describes Square and Cash App customers locked out of as much as $2.5 million since 2022, and ties the service failures to staffing cuts; Block cut more than 40% of its workforce in early 2026 and says it is working with the agency in good faith 46. Insiders disclosed five sales totaling about $6.87 million between September 16 and October 7 1. On November 3, the numbers that should decide the multiple are gross profit and the raised $12.5 billion full-year guide 10. If the $1.8 billion bitcoin line moves the stock instead, that move prices noise Block has already labeled.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
