The Block share price is in focus today after Q4 2025 results topped expectations and 2026 guidance improved. Block (NYSE: SQ) reported adjusted EPS of US$0.65 on revenue of US$6.25 billion, with Cash App gross profit up 33%. Management now targets US$12.2 billion in gross profit and US$3.2 billion in adjusted operating income for 2026. A workforce reduction of over 40% points to faster margin expansion. For Australian investors holding CDIs on the ASX, overnight moves in the US session often set the tone for local trading.

Q4 2025 beat and what changed

Block earnings 2025 landed ahead of many expectations, with adjusted EPS at US$0.65 on US$6.25 billion revenue. The mix leaned toward higher-margin lines, lifting gross profit growth above revenue growth. Management highlighted disciplined spend, lower stock-based compensation as a share of revenue, and early AI gains supporting operating leverage. This backdrop explains the sharp reaction in the Block share price and SQ stock today.

Cash App gross profit rose 33%, driven by rising monetisation per monthly active, improved card usage, and continued direct deposit adoption. Seller gross profit also expanded as larger merchants adopted more software modules. Free cash flow stayed positive, helped by lower capex and leaner opex. The improvement in profit quality, not just quantity, is key to the Block share price rerating.

2026 guidance and the margin path

Management lifted 2026 guidance to US$12.2 billion in gross profit and US$3.2 billion in adjusted operating income. That implies a stronger margin profile versus 2025. The update backs the view that Block can compound profit at scale while keeping growth investment targeted. Investors will watch quarterly pacing against these targets and any mix shifts between Cash App and Seller.

Three levers underpin the outlook. First, deep operating cuts, including a workforce reduction of over 40%, lower fixed costs. Second, AI-driven automation reduces support and risk costs. Third, product bundling raises attach rates across ecosystems. Execution on these levers would support sustained margin expansion and justify recent strength in the Block share price.

Cash App momentum and Seller health

Cash App growth remains a core pillar, with gross profit up 33%. Engagement rose across card, peer-to-peer, and direct deposit. Management is pushing into credit, savings, and investing, broadening lifetime value. For Australians, this shows the strategic weight behind consumer finance, which can smooth cycles. Cash App growth is a central reason SQ stock today is outperforming peers.

Seller continues to diversify, with more mid-market wins and better software attach. Payments volume growth, improved take rate from value-added tools, and disciplined risk controls lifted gross profit. As mix tilts to software, margins benefit. This balance between Cash App and Seller reduces reliance on any single engine, supporting a higher multiple for the Block share price, if execution holds.

What this means for Australian investors

Aussie holders typically gain exposure through CDIs that track US moves. Overnight gains in New York often flow into the local open, adjusted for AUD and FX. Liquidity is highest in the US line, so price discovery tends to occur there first. Keep position sizing tight around results days when spreads and volatility can widen.

On recent data, SQ traded around a trailing P E near 50 with a B+ Meyka grade and a BUY suggestion. Two analysts list Buy, consensus 4.0. Key risks include competitive pressure in consumer finance, credit losses from new lending, and execution on cost reductions. Watch FX impacts for ASX investors and any updates to 2026 guidance.

Final Thoughts

Block delivered a clean Q4 2025 beat, strong Cash App momentum, and a step-up in 2026 profitability targets. The market is rewarding clearer operating leverage, led by over 40% workforce cuts and rising software attach. For Australian investors, the key is pacing. Track quarterly gross profit versus the US$12.2 billion goal, operating income trajectory toward US$3.2 billion, and Cash App growth durability. Use US session moves to guide ASX entries and set stops to manage volatility. If execution matches guidance, the Block share price can support a higher multiple. If churn, credit costs, or competition bite, expect swift multiple compression. Stay data-driven and revisit the thesis each quarter.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.