Block Shares Surge 8% After Q1 Earnings Beat, Bitcoin Loss
Rongchai Wang May 08, 2026 03:06
Block’s shares jumped 8% in after-hours trading despite a $309M net loss due to Bitcoin revaluation, as Q1 earnings topped estimates.
Block (formerly Square), Jack Dorsey’s payments firm, saw its shares climb 8% in after-hours trading on Thursday following a surprising Q1 earnings beat. The company reported earnings of 85 cents per share, significantly surpassing the Zacks consensus estimate of 68 cents per share — a 25.68% surprise. Shares closed at $75.70 in after-hours trading, reflecting investor confidence despite Block posting its first quarterly net loss in three years.
The $309 million net loss for Q1 2026 was largely attributed to a $172.8 million revaluation loss on the company’s Bitcoin holdings. Block held 8,883 BTC as of March 31. The loss aligns with Bitcoin’s 23.8% price drop over the quarter, as BTC slid from $106,712 at the start of January to $81,309 by the end of March. Revenue from Bitcoin-related services, including Cash App, fell to $1.8 billion, down from $2.33 billion in Q1 2025.
However, Block’s gross profit grew 27% year-over-year to $2.9 billion, driven by strong performance across its payment services. Bitcoin transactions contributed $63 million to the gross profit, with Cash App remaining a key growth driver. Dorsey’s vision of integrating Bitcoin into mainstream payments continues to reshape the company’s offerings. As of late April, over 800,000 U.S. merchants have enabled Bitcoin transactions through Block's platforms.
Strategic Adjustments and Bitcoin Push
Block’s Q1 performance came amid a broader restructuring effort, which included a 40% workforce reduction (approximately 4,000 employees). The company aims to shift toward AI-driven efficiency while expanding Bitcoin-related services. Recent initiatives include launching proof-of-reserves transparency for Bitcoin balances on Cash App and Square, introducing a touchscreen hardware wallet called Bitkey, and offering 5% Bitcoin cashback rewards for Square merchants. Additionally, Cash App now allows users to auto-convert payments into Bitcoin and has raised withdrawal limits to $10,000 per day and $25,000 per week.
Sean Emory, founder and CIO of Avory & Co., noted the positive momentum, stating that Block "had a strong quarter" and "beat and raised" guidance expectations. Despite Bitcoin’s price volatility, Block appears committed to its strategy of broadening adoption and enhancing transparency, aligning with Dorsey’s long-term view of Bitcoin as a payments-focused asset.
Bitcoin and Market Implications
Bitcoin’s Q1 performance weighed heavily on crypto-related businesses. Its market cap dropped to $1.63 trillion as of May 7, reflecting a subdued sentiment among investors. This underscores the challenges tied to Bitcoin’s volatility, particularly for firms like Block that maintain substantial Treasury allocations in crypto.
Nevertheless, Block’s focus on Bitcoin integration offers a hedge against traditional payment models and positions it uniquely in the fintech space. The company’s decision to reduce Bitcoin transaction fees on Cash App could further drive adoption, even as it temporarily impacts revenue.
Looking ahead, Block’s ability to balance its Bitcoin-focused initiatives with operational efficiency will be critical. With BTC trading at $81,309 and showing only minor daily fluctuations (-0.22% as of May 7), macroeconomic conditions and crypto market trends will likely play a significant role in shaping the company’s next quarters.
Image source: Shutterstock- block
- bitcoin
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