Block EPS surges 65%, stock drops despite strong earnings

Block posted one of its best quarters ever on August 5, delivering adjusted earnings per share of $1.02, a 65% jump from the same period last year. The market’s response? A 6% selloff that sent shares to $79.02 by the following session’s close. The numbers that should have been enough By almost every traditional metric, Block’s Q2 2026 was exceptional. Revenue hit $6.62 billion for the quarter, while gross profit climbed 25% year-over-year to roughly $3.17 billion. The adjusted operating income margin reached 27%, a record for the company. Block was confident enough in its trajectory to raise full-year 2026 guidance for the third consecutive time. The company now targets $12.51 billion in gross profit for the year, representing 21% growth, alongside an adjusted operating income goal of $3.47 billion at a 28% margin. Why investors hit the sell button anyway The culprit appears to be Cash App, Block’s consumer-facing payments platform. Square, the company’s merchant-focused business, posted a solid 13% year-over-year increase in gross profit. Block has historically experienced post-earnings declines when growth commentary on individual business segments falls short of market expectat...