Block stock jumps 25% after mass layoffs, stronger Q4 results and raised 2026 guidance
Block shares surged more than 25% in after-hours trading after the company announced layoffs of over 4,000 employees—reducing headcount from just over 10,000 to under 6,000—and outlined a shift to intelligence-driven product development. CEO Jack Dorsey said intelligence tools enable a smaller team to do more and signalled other firms may follow similar structural changes. Block reported strong Q4 results: gross profit grew 24% year-over-year, adjusted EBITDA was $930 million, adjusted diluted EPS was $0.65 (up 38% YoY), and operating income was $485 million. Cash App monthly transacting active users reached 59 million; primary banking actives rose to 9.3 million. Square GPV grew 10% YoY in Q4 and accelerated to over 12% YoY through Feb. 24. Block raised 2026 guidance to $12.20 billion in gross profit (up 18% YoY) and expects full-year adjusted operating income of $3.20 billion (26% margin). Management set four build priorities centered on customer capabilities, composable interfaces, proactive intelligence and orchestration, and said the organizational changes should meaningfully boost adjusted operating income starting in Q2 with larger benefits in H2. Key SEO keywords: Block stock, layoffs, Q4 results, gross profit growth, raised guidance, Cash App, Square GPV.
Bullish
The market reaction—Block shares jumping over 25%—reflects a positive investor read-through: large headcount cuts paired with stronger-than-expected Q4 results and a raised 2026 guidance imply faster path to profitability and higher capital returns (increased buybacks). Key financials support the bullish view: 24% YoY gross profit growth, $930M adjusted EBITDA, 38% rise in adjusted EPS, accelerating Square GPV and Cash App user growth. Management also framed the layoffs as strategic—shifting to intelligence tools and tighter build priorities—which markets often reward when combined with concrete margin improvement and clearer guidance. Short-term impact: elevated buying pressure and volatility as traders react to the news and momentum strategies chase the move. Expect continued interest in Block and related fintech names, with possible profit-taking after initial rally. Long-term: if cost savings materialize and product-driven growth continues (Cash App monetization, lending returns, Square GPV expansion), the move could support sustainable valuation expansion. However, risks remain—execution on intelligence initiatives, potential revenue disruption from workforce reduction, and wider macro or tech-sector downturns could temper gains. Overall, the balance of better-than-expected results plus explicit cost actions justifies a bullish classification, particularly for name-specific trading and fintech sector rotation.