Block raises annual gross profit outlook on consumer spending strength

May 7 (Reuters) – Jack Dorsey-led Block raised its full-year outlook on Thursday as the payments firm benefited from resilient consumer spending and strong growth in its core businesses.

The Oakland, California-based company now expects annual gross profit to be $12.33 billion in 2026, compared with its previous forecast of $12.20 billion.

Shares of the company jumped 7% in extended trading. The stock has risen roughly 9% so far this year as of the last close.

U.S. consumer spending remained broadly resilient in the first three months of 2026, underpinned by a stable labor market and wage growth.

Higher tax refunds also acted as a tailwind, while the U.S.-Israeli war with Iran boosted gasoline prices and drove up receipts at service stations.

Gross profit surged 27% in the quarter, driven by strong growth in Block’s Cash App and Square businesses.

Cash App, which enables peer-to-peer mobile payments, registered a 38% jump in gross profit in the quarter. Consumer lending origination volume at the business surged 82% to $17.6 billion from a year earlier.

The results cap off a broadly strong reporting season for the payments sector, with card giants Visa and Mastercard also posting robust earnings.

Adjusted profit was $513 million, or 85 cents per share, in the three months ended March 31, compared with $355 million, or 56 cents per share, a year earlier.

Meanwhile, Block incurred $852 million in restructuring and other charges in the first quarter.

Earlier this year, the company announced it would cut over 4,000 jobs as part of a broader overhaul to embed artificial intelligence across its operations.

(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Tasim Zahid)