Block Records $764 Million Liability for Proposed U.S. Justice Department Agreement
Key Facts
Block recorded a $764 million liability on September 30, 2026, against an expected net cash payment of that amount under a preliminary agreement it reached with the U.S. Department of Justice in October. In its filing with the U.S. Securities and Exchange Commission, the company said the proposed agreement would defer prosecution for 3 years over an allegation that it failed to maintain an effective anti-money-laundering program under the Bank Secrecy Act. The expected gross cash component is about $964 million, with credits for prior regulatory settlements reducing the net amount to about $764 million. The agreement remains subject to a final agreement satisfactory to all parties and court approval, so the settlement is not yet complete. The liability adds a significant financial burden alongside quarterly results, which showed gross profit growth despite mixed performance across the company’s businesses.
Block’s net revenue was $6.719 billion in the third quarter of 2026, compared with $6.115 billion in the same period of 2025, an annual increase of 10%. Gross profit rose to $3.2 billion, up 22% from a year earlier. Cash App posted gross profit of $2.1 billion, an increase of 27%, while Square gross profit was about $1.2 billion, up 14%. The divergence between the segments highlights the importance of growth in the app business and Square’s activity in supporting quarterly profitability. The company also raised its 2026 gross profit outlook to $12.63 billion from $12.51 billion in its prior estimate.
Cash App financial products, particularly Cash App Borrow, contributed to higher financial revenue, with Borrow revenue increasing by $193.6 million in the third quarter. The company attributed the increase to wider product availability and higher lending volume. Chief Financial Officer Amrita Ahuja said spending through Cash App Card remained strong, as did repayment rates on Borrow. She added that these indicators reflect consumers’ ability to manage their money. The business grew as losses on transactions, loans and consumer receivables rose 65.6% to $601.7 million in the quarter, placing lending performance and its credit risks within the broader results picture.
By contrast, revenue from the bitcoin ecosystem fell 11% to $1.804 billion in the third quarter of 2026. Block said the decline resulted from a lower average bitcoin price, partly offset by higher trading volume. The ecosystem accounted for 27% of the company’s revenue, down from 33% in the third quarter of 2025. But its share of gross profit was only 2%, compared with 4% a year earlier, illustrating the difference between its weight in revenue and its contribution to gross profit. Quarterly gross profit growth therefore coincided with declines in bitcoin revenue and its share of gross profit.
Alongside raising its 2026 outlook, Block forecast gross profit of $3.32 billion in the fourth quarter and $14.52 billion for 2027. The forecasts followed 22% gross profit growth in the third quarter, while Cash App gross profit grew at a faster 27% pace. On November 3, 2026, the company’s shares rose 7% in extended trading after results were announced. The proposed agreement with the Justice Department remains separate from these forecasts, as its terms await completion of a final agreement and court approval. If Block fully complies with the agreement’s obligations throughout its 3-year term, the department will seek final dismissal of the deferred charges; the company warned that final losses could exceed the recorded liability.