Block Inc., the payments technology company, projected a robust gross profit growth of mid-teens percentage annually over the next three years, aiming for approximately $15.8 billion by 2028. This forecast was unveiled at the company’s first investor day since 2022, amid growing skepticism among Wall Street analysts regarding Block’s future prospects. The company has seen its stock plummet by over 30% in 2025, contrasting sharply with gains in major market indexes. Following the announcement, trading of Block shares was temporarily halted but resumed with a 9% spike.
This fresh financial guidance arrives just two weeks after Block reported its sixth consecutive quarter missing revenue estimates. In response to a saturated point-of-sale market, Block has been pivoting its strategy, diversifying its offerings through Cash App and integrating artificial intelligence tools for sellers. In its new outlook, Block anticipates adjusted operating income to grow about 30% annually, projected to surpass $4.6 billion by 2028. The adjusted earnings per share are also expected to rise in the low 30% range, potentially hitting $5.50 in three years.
Ahead of the announcement, Chief Financial Officer Amrita Ahuja told CNBC that the company is transitioning into a new phase of execution. “Since 2022, our last investor day, we’ve nearly doubled our gross profit,” Ahuja noted, highlighting that earnings before interest, taxes, depreciation, and amortization (EBITDA) have more than tripled during the same period. As part of its commitment to growth, Block introduced a new non-GAAP cash flow metric tailored to evaluate the capital needed for its lending products. By 2028, Block expects this to exceed $4 billion, equivalent to about 25% of its gross profit.
Looking specifically to 2026, the company projects a 17% increase in gross profit to reach $11.98 billion. Both adjusted operating income and earnings per share are set to rise over 30%, targeting $2.7 billion and $3.20, respectively. Ahuja has emphasized Block’s adoption of a “rule of 40” investment strategy, focusing on the combination of revenue growth and profit margin exceeding this threshold. “We’re on track to meet that metric this year and have realigned our structure around a unified roadmap and technical infrastructure,” Ahuja stated. She further explained that these changes have facilitated a quicker and more connected decision-making process within the company’s ecosystem.
In a significant move to enhance shareholder value, Block also announced the expansion of its share repurchase program by an additional $5 billion, complementing the existing $1.1 billion authorization as of September 30. Historically, the previous buyback program authorized up to $4 billion in purchases. Notably, CEO Jack Dorsey, a co-founder who helped establish the company as Square in 2009, attended the investor event, marking a rare public appearance for him in recent years.
As Block focuses on recalibrating its business strategy and demonstrating growth potential, investors remain watchful for forthcoming adjustments in the market landscape. This strategic pivot plays a critical role as the company seeks to maintain momentum amidst fierce competition and evolving consumer habits.
Original Source: https://www.cnbc.com/2025/11/19/block-unveils-3-year-outlook-sees-gross-profit-in-2028-of-15point8b.html
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Publish Date: 2025-11-20 02:10:00
