Block simply proved a controversial wager proper. 5 months after reducing 40% of its employees and blaming the transfer on synthetic intelligence, the funds firm posted second-quarter outcomes that beat virtually each Wall Road estimate.
A development within the tech sector has been growing alongside the rise of AI. Corporations have cited the usage of AI as a cause to slash jobs, with many seeing it as a ruse to masks tighter margins.
A Layoff That Cut up Wall Road
In February, CEO Jack Dorsey lower over 4,000 jobs at Block, shrinking the corporate from greater than 10,000 staff to underneath 6,000. Dorsey mentioned the choice got here from a place of power, not monetary misery, and argued that smaller groups paired with AI instruments might construct extra with much less.
The transfer break up opinion instantly. Block’s inventory jumped roughly 20% on the announcement, however critics questioned whether or not AI was the actual driver. Days earlier, OpenAI CEO Sam Altman had warned that some corporations had been partaking in what he referred to as AI washing, blaming the know-how for cuts they might have made regardless.
Commentators shortly utilized that label to Block, citing the corporate’s personal compliance troubles, together with a January ruling that allow claims towards its board proceed, in an AI washing debate that has adopted Block since.
On Wednesday, Block reported gross revenue of $3.17 billion for the second quarter, up 25% 12 months over 12 months and above its personal $3.04 billion steerage. Income reached $6.62 billion, topping the $6.49 billion analysts anticipated, whereas adjusted earnings per share hit $1.02 towards an 87 cent forecast.
Sq. gross cost quantity grew 10%, its strongest tempo in three years, and Money App counted 59 million month-to-month transacting customers in June.
Doing Extra With Much less
Enterprise lead Owen Jennings informed MarketWatch the corporate shipped extra options within the first half of 2026 than in the identical interval final 12 months.
“We are able to ship higher-quality merchandise a lot, way more shortly, and that’s due to all of the innovation that we’ve been pushing on because it pertains to AI.”
— Owen Jennings,
CFO Amrita Ahuja mentioned the arrogance extends past one quarter, as Block raised its full 12 months outlook to $12.51 billion in gross revenue and $4.02 in adjusted earnings per share, up from $12.33 billion and $3.85 beforehand. Money App gross revenue rose 31% to $1.97 billion, helped partly by viral merchandise just like the Money App Magic Wand cost tags.
Block’s wager lands amid a broader wave of tech layoffs tied to AI, from Oracle’s cuts to Amazon, Dell, and Meta trimming their ranks. Few have posted a beat-and-raise quarter this clear since.
Whether or not rivals can level to comparable features will resolve if Block’s method turns into the trade playbook or a cautionary outlier within the rising record of AI pushed job cuts.
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