Block Inc., the payments company behind Square and Cash App, inched past Wall Street’s earnings expectations on Tuesday and lifted its outlook slightly following a revamp announced earlier this year.

By Lauren Tara LaCapra Its third-quarter gross profit — a closely watched measure — was up 22% to $3.2 billion compared with the average analyst estimate of $3.1 billion. Block now expects $12.6 billion in gross profit for 2026, according to a shareholder letter by founder Jack Dorsey, up from an earlier outlook of $12.5 billion.

“We believe we’ve meaningfully crossed the chasm of transforming our company from one that creates traditional financial products into one that streams intelligence as people need it,” he wrote.

His letter did not offer an update on negotiations with the US Department of Justice about a settlement Block is trying to reach regarding past customer abuses on Cash App. In an interview, senior Block executives declined to offer any details.

Block has been trying to reinvent itself in several ways. Executives want to make Cash App not just a payments vehicle for bill-splitting, but a bank of sorts for people locked out of the traditional financial system. They are also trying to expand the reach of Square, which is for merchants rather than individuals, and get the two businesses to coordinate more.

In late February, Dorsey announced a major round of job cuts as well as artificial intelligence initiatives that were supposed to make the overall company more efficient.

The stock surged after the revamp was announced, rising from around $50 to as high as $86.92 in August, but has since meandered lower and remains well short of its $289 record high reached in 2021, when the company was called Square. It traded at around $76 Tuesday.

Analysts have been watching progress on expenses, since the workforce reduction itself involved costs, and the company has been reinvesting savings into ideas to generate revenue.

Third-quarter operating expenses, at $2.8 billion, were up compared with the year-ago and previous period.

In the interview, executives said the revamp is delivering results that vastly exceed the company’s expectations, initially outlined in 2025.

“We have fundamentally rewired our cost base and continued to drive our cost base down,” said Amrita Ahuja, Block’s foundational lead, who oversees finance, legal, and people functions. ‘Rule of 50’She cited a “rule of 40” metric the company had been aspiring to, which is a measurement of profit growth relative to revenue popular in certain technology circles, saying it has not just surpassed that but is now attaining “rule of 50.”Owen Jennings, another senior executive who acts as Block’s business lead, pointed to performance metrics the C-suite has been paying close attention to.

Among them: the integration of Cash App and Square users in a program called Neighborhoods; active monthly users on Cash App; and metrics around Block’s AI bets. A new one called “first machine intelligence revenue” measures how the company is making money from selling the AI tools it develops internally.

“What’s become clear is that if we can use these tools at scale at our company, then they’re a good fit for companies and individuals at all sizes,” he said.

As part of its operations, Block also has a Bitcoin business, which primarily acts as a venue for customers to trade the cryptocurrency. Its results tend to ebb and flow with Bitcoin prices.

The company pre-reported results from part of that business on Oct. 8, and on Tuesday posted a roughly $230 million loss from Bitcoin investments.