Block Inc (SQ.US), led by Jack Dorsey, disclosed in its latest earnings report that its core payment app, CashApp, experienced a 31% year-over-year decline in Bitcoin gross profit due to a proactive reduction in transaction fees. This data highlights the company's balancing act between expanding its cryptocurrency operations and improving user experience, signaling a new adjustment phase in its digital asset strategy.
Delving into the digital asset segment for the second quarter of 2026 (April to June 2026), revenue totaled $1.89 billion, a 13% decline from $2.17 billion in the same period last year, but a 5% sequential increase from the prior quarter. Data shows that gross profit for this segment fell from $105 million to $72 million, primarily attributed to fee adjustments and a slowdown in global cryptocurrency trading volumes during 2026. Within this, CashApp contributed $1.81 billion in Bitcoin-related revenue.
On the balance sheet, due to valuation fluctuations in assets held by the U.S. Treasury, Block Inc recorded an unrealized loss of $88.5 million, compared to an unrealized gain of $212.2 million in the same period last year. As of May 8, 2026, the company held 9,032 BTC, an increase of 35 coins from 8,997 at the end of the first quarter, with a total market value exceeding $586 million. Affected by accounting treatment adjustments, consolidated net income fell from $538 million to $89 million.
Despite pressure in its crypto business, the company's overall financial performance remained robust. Block Inc’s total gross profit increased 25% year-over-year to $3.17 billion, with CashApp gross profit rising 31% to $1.97 billion and Square gross profit growing 13% to $1.16 billion. Management has consequently raised its full-year 2026 gross profit forecast to $12.51 billion, projecting a revenue growth rate of 21%. Additionally, Block Inc completed the integration of USDC, allowing users to use Circle's issued stablecoin on multiple blockchains.
Following the earnings release, the stock price initially rose 4.5% in after-hours trading before declining 2%, settling near $84.20, reflecting divergent market reactions. As the regulatory environment becomes increasingly complex, Block Inc is preparing to submit its audited financial statements for the third quarter of 2026 to the U.S. Securities and Exchange Commission. This move serves not only as a validation of short-term performance but also as a critical test of its long-term compliance framework and digital asset strategy resilience. Investors should closely monitor future disclosure details to assess the company's true profitability amid cryptocurrency cycle fluctuations.
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