Block's Dorsey evangelizes AI reorganization for financial services

• Key insight: Block's earnings beat Wall Street analyst estimates, and the payment company boosted its outlook for the rest of the year. 
• What's at stake: Block is relying heavily on AI after cutting 40% of its staff earlier this year.
• Forward look: Block is seeking ways to monetize new AI tools such as its Buzz development feature. 

Financial-services provider Block is shipping products faster and has a rosy earnings outlook,  progress that the company contends is due to  artificial intelligence-driven efficiencies, even as the cost of AI goes up. 
 "We have a more cohesive context and memory for the entire company," CEO Jack Dorsey said during Wednesday's late-afternoon earnings call . "We're well along on the path to implementing these tools faster."

Dorsey and other Block executives say the company this year has tripled the amount of products that it develops and delivers to clients by using new forms of AI. The improvement comes after Block cut 40% of its staff, a controversial move the company attributed to AI. Block's AI-driven reorganization also comes as banks consider how to manage the cost of AI, an innovation that's supposed to cut expenses, and large payment companies weigh the impact of AI on employment.

Block, which faces competitive threats from other payment firms such as PayPal, Stripe, card networks and traditional banks, told analysts it's managing both the opportunities and challenges borne by AI. "Our [AI] budgets are going up.  But we don't think the right answer is to contract use of these tools." Amrita Ahuja, Block's chief financial officer and chief operating officer said during the earnings call.

Raising expectations

Block reported earnings of $87 million, or 15 cents per share, in the second quarter, down from $538 million, or 88 cents per share, a year ago. Revenue rose to $6.6 billion from $6.1 billion a year ago.

Square's gross profit was up 13% in the quarter to $1.16 billion and Cash App's gross profit was up 31% to $1.97 billion.

Zacks Investment Research estimates were for adjusted diluted EPS of 86 cents and revenue of $6.54 billion. 

Block raised its full year outlook for gross profit growth of 21%, up from its earlier outlook of 19%; and adjusted diluted EPS of $4.02, up from $3.85. In a letter to shareholders, Block attributed much of this success to AI, which has helped the company improve workflows inside the organization and develop the products Block sells to merchants and consumers through its Square business-facing unit and Cash App.

"Intelligence tools are the next major technology shift, but machine learning is not new to Block," Dorsey said in his letter. Dorsey earlier this year said the Block made its large job cuts to get ahead of the impact of AI on labor costs. The costs of the downsizing were largely contained to the first quarter and expenses therefore should start going down, according to a research note from RBC Capital Markets. 

Recent AI moves

Block in July launched Buzz, an internally developed system for AI agent collaboration, communication and code repositories. Buzz will be used internally and externally.

"There's a lot of avenues to monetize Buzz," Dorsey said, adding it would tailor development based on needs of particular merchants. "Sellers also want help with AI, and we can make it simpler to use and give sellers time back rather than having a burden of learning." To manage the expense of AI, Ahuja said the company uses a "model agnostic" strategy that she said does not "lock" the company into a large language model from a particular provider. She also argues that open source AI models often develop faster, and being flexible can manage AI-related resources. 

"We see the headlines about AI expenses," Ahuja said. "We think we're well-positioned."

During its earnings call, Block said its Moneybot digital assistant is available for all Cash App users, and agentic AI is helping write or review nearly all production code changes in June. 

Block also updated improvements to Cash App during its earnings call. The P2P service acts as a bridge for both the merchant and consumer sides of Block's business. That includes cryptocurrency trading and enabling users to send and receive stablecoins on Cash App's transfer system. 

Block additionally expanded loans through Cash App Borrow, since the FDIC in March 2025 approved Square Financial Services' application to originate and service loans through Cash. Block's Cash App Borrow product has originated more than $27 billion in loans in the five quarters since March 2025, more than the $9 billion Block reported for Borrow in the full calendar year 2024. Cash App's users include younger consumers and gig economy workers, key demographics for alternative credit. Block is among the fintechs that are adding services to rival banks, a strategy that increasingly includes offering credit. 

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Block also expanded buy now/pay later by expanding ties between Cash App and the Afterpay BNPL service. 

A key factor in Cash App's growth will be a function of Cash App Borrow's scaling while keeping loss rates contained, BofA analysts said. 

"We believe investors remain willing to reward strong execution, particularly if management demonstrates that recent efficiency gains are sustainable and that ecosystem initiatives continue to strengthen the connectivity between the Cash App and Square ecosystems," BofA Global Research analysts said in a research note.