Block Inc. Posts $309M GAAP Loss on Bitcoin Accounting Rule, Raises Full-Year Guidance
Jack Dorsey's fintech company beat adjusted earnings estimates by 25% in Q1 2026, but a mandatory mark-to-market accounting change on its Bitcoin treasury resulted in a headline net loss despite otherwise strong operational results.
Block Inc. (NYSE: XYZ), the fintech company formerly known as Square, reported a GAAP net loss of $308.7 million for the first quarter of 2026, the company announced May 7. The loss, equal to $0.52 per share, was driven largely by a $172.8 million non-cash charge tied to a new accounting standard requiring companies to mark their Bitcoin holdings to market at the end of each reporting period, along with other contributing items. Strip out that charge and Block's adjusted earnings per share came in at $0.85, well ahead of the $0.68 analyst consensus. Investors responded by pushing the stock up 9.8% in after-hours trading.
The Accounting Rule Driving the Headline Number
The $172.8 million loss is not the result of Block selling Bitcoin at a loss. It is a mandatory consequence of FASB's ASU 2023-08, an accounting standard that took effect for fiscal years beginning after December 15, 2024. Under the old rules, companies recorded losses only when crypto prices dropped below their purchase cost and stayed there, but could never record gains even if prices fully recovered.
The new standard requires fair value measurement at every reporting date, with both gains and losses flowing directly through GAAP net income. Because Bitcoin's price on March 31, 2026, was below Block's average acquisition cost for its treasury position, the company was required to record the difference as a loss. The charge is non-cash and has no effect on operating performance.
Block held 8,997 BTC in its corporate treasury as of the end of Q1, valued at approximately $692.3 million. The company added 114 BTC during the quarter. Block's approach to treasury accumulation is guided by its "Bitcoin Blueprint," a strategy codified in May 2024 under which the company reinvests approximately 10% of monthly Bitcoin gross profits back into Bitcoin. Including Bitcoin held on behalf of Cash App and Square customers, Block's total holdings stood at 28,355 BTC, worth roughly $2.2 billion, according to a third-party verified Proof-of-Reserves report published in late April. Block ranks 14th among publicly listed companies by Bitcoin treasury size.
Revenue Beat and Guidance Raise
Total revenue reached $6.06 billion, slightly below the $6.11 billion analyst estimate. Gross profit grew 22% year over year to $2.80 billion. Cash App's Bitcoin Ecosystem Revenue, which measures total Bitcoin purchase volume flowing through the app, came in at $1.7 billion, down roughly 31% from $2.46 billion in Q1 2025 and short of the $2.11 billion consensus estimate. Block had disclosed the preliminary figure on April 8. As the company stated in its official preliminary filing: "Cash App's Bitcoin Ecosystem Revenue, which primarily represents the total bitcoin buy volume facilitated on Cash App, is $1.7B."
Analysts attributed the decline to a normalisation of retail Bitcoin trading activity following the elevated volumes of the 2024 post-halving period, rather than a collapse in underlying demand.
Despite the miss on the Bitcoin revenue line, Block raised its full-year 2026 guidance. The company now expects gross profit between $12.2 billion and $12.33 billion, up 18% year over year, with adjusted operating income of $3.2 billion at a 26% margin. That operating income figure would represent a 54% increase from 2025, an improvement driven in part by a workforce reduction of more than 40% and the deployment of internal AI agents to replace certain headcount functions. Adjusted EPS guidance stands at $3.85 for the full year. For Q2 2026, Block guided to $3.04 billion in gross profit.
Cash App reported 59 million monthly active users as of Q4 2025, a return to user growth, alongside 9.3 million primary banking actives, up 22% year over year. Primary banking users generate roughly ten times the gross profit per user compared with those who use Cash App only for peer-to-peer transfers, underscoring the operational health behind the headline loss.
What This Means Outside the United States
Cash App is available only in the United States, which limits Block's direct consumer reach across Africa and South Asia. The company's footprint in those regions runs through separate channels. Block's TBD subsidiary has partnered with Yellow Card, an African crypto exchange, to offer Bitcoin and stablecoin-settled cross-border payments across 16 countries, including Nigeria, Ghana, and South Africa. The partnership, announced in April 2023, is operational across those corridors.
In testing, transfers from the US to markets including Nigeria, Ghana, and Kenya settled in roughly 60 seconds.
Sub-Saharan Africa remains the most expensive remittance corridor in the world, with average fees of 7.9% to 8.46% on a $200 transfer, according to the Milken Institute. Crypto rails using Bitcoin's Lightning Network or stablecoins can reduce that cost to under 1%, according to Mariblock. On-chain transaction volume across Sub-Saharan Africa reached $205 billion in the 12 months through June 2025, up 52% year over year, with stablecoins accounting for roughly 43% of that total.
Block's Bitkey hardware wallet, designed for Bitcoin self-custody, is available in more than 95 countries including Nigeria and India. The company has identified both markets as places where Bitcoin addresses real needs around savings and payments, not just speculation, according to company communications. Block began accepting Bitkey pre-orders from Indian customers in December 2023 and has cited India alongside Nigeria as a priority market for its hardware and broader financial infrastructure.
The FASB remeasurement loss also carries a regional policy dimension. Regulators in Nigeria, Kenya, and South Africa are still building out digital asset frameworks, and large non-cash losses on corporate Bitcoin holdings can complicate conversations with institutional partners who rely on audited financials.
What Comes Next
Block's stablecoin roadmap adds another layer to watch. Miles Suter, Bitcoin Product Lead at Block, had indicated that USDC integration on Cash App was targeted for early 2026, though the company has not publicly confirmed whether that timeline has been met or revised.
If that functionality eventually extends beyond the US, it would open a new channel for diaspora remittances across South Asian corridors including India, Bangladesh, and Pakistan, all among the world's largest remittance-receiving markets. The company has not announced international expansion plans for Cash App.