Yesterday was a rough one for Jack Dorsey, the billionaire CEO of Block, which makes credit card readers and point-of-sale software for small businesses and owns popular banking app Cash App. During Block’s first quarter earnings call for 2025, the company announced that gross profit grew just 9%, compared with the 11% it had predicted, falling about $30 million short of expectations. Block also shrunk its previous full-year 2025 forecast for gross-profit growth from 15% to 12%.
The results are a stark contrast to Block’s expansion over the prior two years, when gross profit rose 25% in 2023 and 18% in 2024. The worsening trend has alarmed investors and pulled the stock down more than 20% today, slashing Dorsey’s net worth by about $600 million.
On the May 1 earnings call, Block chief financial officer Amrita Ahuja said the company in February and March saw less money coming into consumers’ Cash App accounts than expected. Consumer spending softened, especially in users’ travel and entertainment purchases. She said Block is trying to be cautious in its revised full-year growth forecast due to the drop it saw in consumer spending.
Over the past five years, Jack Dorsey’s company has seen its stock rise and fall more dramatically than that of any other major fintech company aside from PayPal. The 16-year-old San Francisco business hit a peak market value of more than $110 billion in 2021. It saw most of that value evaporate in 2022 amid the downturn of the fintech market. Today, Block has a market capitalization of $28 billion, making Dorsey’s entire enterprise worth $1 billion less than what Block paid just to acquire buy-now, pay-later business Afterpay in 2021. Now Dorsey is pulling a bunch of levers to try to turn the company around, including improving internal efficiency and innovation in its Square point-of-sale business, hiring a traditional sales force for Square, squeezing more revenue out of its Cash App users and selling bitcoin mining devices.
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Block’s massive stock drop has been caused by slowing growth in both its Cash App and Square businesses. Cash App lets consumers do everything from making purchases and peer-to-peer payments to borrowing money, and it has a large base of 57 million monthly active users. But that number hasn’t budged upward over the past 16 months.
Block’s small business Square products have seen a major deceleration too. “Square went from being this massive market-share gainer to a share maintainer or even a share donor, depending on the quarter you’re looking at,” says Ken Suchoski, an equity research analyst at Autonomous. Companies like Toast and Fiserv-owned Clover have expanded much faster, with Toast gobbling up 50% to 60% of new restaurants that sign up for a point-of-sale system, according to Suchoski. Adam Frisch, a former payments company CEO who now leads fintech research at investment bank Evercore ISI, says, “Toast is the best product out there, but they’re the most expensive too.”
Frisch thinks the slump for Square’s merchant business is due to “self-inflicted wounds” related to “lack of organizational focus and limited product development.” He adds, “I’m shocked that Block has been able to get to the point where it is without having that kind of organizational rigor.” But he thinks the company has improved significantly over the past year.
In Block’s fourth quarter earnings call in February 2025, Dorsey addressed the topic. He said that, for the first time since he founded the company, Square had created “a prioritized roadmap across our entire company and all of our product, services and surface areas … We have a directly responsible individual on task for each one. That gives us a lot more accountability.” Frisch believes this development “went largely overlooked by Wall Street, but it’s important from an operational perspective.” Last week, Block announced that it consolidated its different Square apps into a single app to improve the user experience for merchants and offer them more software-based services.
Dorsey has also been revamping Square’s sales strategy. Historically, Square focused on micro-businesses like coffee shops and made its product easy to self-serve digitally without hiring a large sales force. Over the past two years it has been moving upmarket, landing more mid-market merchants that earn $500,000-plus in annual revenue. In late 2024, Square launched a “field sales” initiative to put more local reps on the ground and will continue hiring more salespeople, Block CFO Amrita Ahuja said on the company’s first quarter earnings call yesterday.
Having a larger, more proactive sales force has worked well for Toast and payments company Shift4, says Jevgenijs Kazanins, a product manager at Estonia-based LHV Bank who analyzes public fintech companies and writes about them for his Popular Fintech newsletter. “Toast and Four are heavily sales-driven companies,” Kazanins says. Ahuja said yesterday that Square’s processing volume grew 9.6% in April, a seemingly faster pace than expected, and that Square’s products are now gaining market share.
For Cash App, Block is leaning into a couple of areas to rejuvenate growth, analysts say. It’s trying to get more Cash App customers to sign up for direct deposit of their paychecks, since that leads people to engage more with the app, using it to make purchases and borrow money, earning more revenue for Block.
But Dorsey has been trying to do this for years–since before Covid began, Suchoski notes–and hasn’t gained strong traction. As of December 2024, 2.5 million of Cash App’s 57 million active users had set up direct deposit, an increase of 25% from the year prior. In the fight for more direct-deposit customers, Cash App faces formidable competition from the largest U.S. banks and digital bank Chime, which has been aggressively encouraging its own customers to sign up for direct deposit since it was founded 13 years ago. As of May 2024, most of Chime’s seven million monthly active customers had signed up for direct deposit, according to the company.
A more promising area of growth for Cash App has been Borrow, its short-term, small-dollar loans for which it charges a 5% fee. In its first quarter earnings report for 2025, Block said it’s rolling out this feature to “millions more” Cash App users, almost doubling the number of people eligible for the loans by expanding to more U.S. states. This expansion comes after Block recently received approval from the FDIC to use the banking charter it secured years ago for Square to issue consumer loans through Cash App Borrow.
Suchoski estimates that Block’s lending businesses, including Cash App Borrow, Afterpay and Square Loans (where it lends to its Square’s merchant customers), are driving 30% to 40% of Block’s annual gross-profit growth. Afterpay has been growing roughly 20% to 25% per quarter over the last two years, similar to the expansion rate of other large buy-now, pay-later providers, Suchoski says.
Some investors worry that, in a shaky U.S. economy where fears of a recession have risen, lending businesses become riskier–especially those serving lower-income customers, like Block. Ahuja said yesterday that Block is upping lending limits to people who get their paycheck direct-deposited into Cash App. She says they’re seeing “consistent repayment rates” so far, and since the average loan is less than 30 days, they can adjust quickly if defaults start to rise.
Dorsey mentioned a few other areas Block is expanding into on the earnings call. He wants to target teens and families as new Cash App users, especially after the company has finally integrated Afterpay into Cash App. He said Block has built a new internal AI tool called Goose that helps software engineers be more productive, adding that the tech is improving the whole company’s productivity and will eventually be used for customer-facing features in Cash App and Square.
The Block CEO has long been a fan of bitcoin, and he said the company is on track to start selling chips and systems for minting bitcoin later this year. “We believe the bitcoin hardware supply industry is a $3 billion to $6 billion annual revenue industry,” he said yesterday, adding that Block’s new “Proto” products “will allow even consumers and tinkerers to play with mining.” While Cash App has offered bitcoin buying and selling for years, crypto-based products account for just 3% of Block’s gross profit today, Suchoski estimates.
