Block Q2 Net Income Falls 83% on Bitcoin Loss, Cash App Fee Cut

Net income attributable to common stockholders fell to $89mn from $538mn a year earlier, the Jack Dorsey-led fintech said in its Q2 2026 shareholder letter. Gross profit rose 25% to $3.17bn and adjusted diluted earnings per share climbed 65% to $1.02, both beating the guidance Block issued three months earlier and prompting the company to raise its full-year outlook.

Bitcoin drag

The non-cash loss came from Block's own bitcoin holdings, which it marks to market each quarter under fair-value accounting. Changes in the bitcoin price flow directly through the income statement: Block booked a $212mn gain on the same position a year earlier, meaning the year-on-year comparison is partly a bitcoin-price effect. Its balance-sheet bitcoin position stood at $533.9mn on 30 Jun, down from $777.5mn at year-end 2025.

The Bitcoin Ecosystem business line, which spans Cash App bitcoin trading, mining venture Proto and self-custody wallet Bitkey, saw gross profit fall 31% to $72mn even as the broader Cash App business grew gross profit 31% from a year earlier to $1.97bn. Bitcoin Ecosystem revenue fell 13% to $1.89bn from a year earlier but rose 5% from the first quarter.

Behind the fee cut

Block attributed the 31% gross profit decline to "a strategic decision to reduce the fee we charge on certain bitcoin transactions on Cash App and bitcoin trading dynamics." Cash App removed fees and spreads on bitcoin purchases above $2,000 and on all recurring buys in February, positioning bitcoin as an everyday payment and savings tool rather than a fee-generating trading product. Purchases below $2,000 still carry a fee. 

Block did not disclose whether the fee change has lifted user activity enough to offset the revenue loss, though the sequential revenue uptick came in the first full quarter after the cut took effect.

The company also confirmed that its Cash App USD Coin (USDC) stablecoin integration, which rolled out to nearly 60mn users in late May across Solana, Ethereum, Polygon and Arbitrum, is now generally available.

Owned-capability thesis

Dorsey framed crypto and artificial intelligence as parts of one owned-capability strategy. "To us the models are interchangeable, and everything that matters, the harness, the data, and the distribution, is ours," he wrote, grouping Bitkey, Proto, custom Cash App Cards and the new Cash App Tags tap-to-pay hardware under a 'hard capability owned end to end' thesis, with Buzz – Block's July-launched agent collaboration platform – cast under a parallel 'harness, data and distribution' thesis for AI.

Block raised full-year 2026 guidance to $12.51bn in gross profit, up 21%, and adjusted diluted EPS of $4.02, up 70%. Third-quarter interest expense is guided at $50mn to $55mn.