Block’s Bitcoin Gross Profit Halves After Cash App Fee Cuts

Block’s Bitcoin Ecosystem gross profit fell 50% year over year to $52 million in the third quarter, primarily because it lowered fees on certain Cash App Bitcoin transactions.

Bitcoin trading volume grew, but lower average Bitcoin prices weighed on revenue. Meanwhile, gross profit across Block as a whole rose 22% to $3.235 billion.

Bitcoin Trading Rises While Lower Fees Squeeze Margins

The results, released Nov. 3, cover the three months ended Sept. 30. Bitcoin Ecosystem revenue fell about 11% to $1.804 billion, compared with approximately $2.021 billion a year earlier.

Block attributed that revenue decline to a lower average Bitcoin price, partly offset by higher trading volume. The volume increase helped soften the revenue decline, although it was not enough to prevent a sharp drop in gross profit.

Most Bitcoin Ecosystem revenue includes the total value of Bitcoin sold to customers, while its costs mainly reflect what Block pays to acquire those coins. This results in a significantly lower gross profit than the overall revenue figure implies.

The figures put Bitcoin Ecosystem gross margin at roughly 2.9%, down from about 5.1% a year earlier. Users benefit from lower platform charges due to the fee cuts, while Block faces reduced earnings from their transactions.

Cash App and Square Keep Overall Gross Profit Growing

Cash App generated approximately $2.07 billion in gross profit, up 27% year over year, while Square contributed $1.157 billion, an increase of 14%. Those companies enabled Block to flourish even with a smaller contribution from Bitcoin.

The App reached 60 million monthly transacting active accounts in September, compared with 58 million a year earlier. That measure covers activity across the app’s products, including payments, transfers, and borrowing.

Block also raised its full-year outlook, now expecting $12.626 billion in gross profit for 2026, representing 22% annual growth. Its fourth-quarter forecast calls for $3.32 billion in gross profit.

Proposed DOJ Resolution Carries $764 Million Net Payment

Separately, Block reached an agreement in principle with the U.S. Department of Justice (DOJ) in October over allegations that it failed to maintain an effective anti-money-laundering program under the Bank Secrecy Act.

The proposed resolution has an estimated $964 million gross monetary component. Credits for earlier regulatory resolutions would reduce the expected net payment to about $764 million.

Block had also recorded a $764 million provision for the matter as of Sept. 30. A final agreement that works for everyone and court approval are still needed for the plan to go forward.

Under the proposed three-year deferred prosecution agreement, the DOJ would defer the charge while Block meets its obligations. If the company fully complies throughout that period, prosecutors would aim to permanently dismiss the deferred charge, while any breach could lead to prosecution.