Block raises profit outlook as Dorsey targets first AI-tool revenue this quarter

Block raised its 2026 profit outlook and said it expects its AI tools to generate their first revenue in the fourth quarter. Shares rose more than 9% in premarket trading on November 4 after better-than-expected earnings, as CEO Jack Dorsey outlined a push to replace outside software vendors with Block’s own AI platform.

The payments company behind Cash App and Square is pursuing two uses for the technology: cutting its own dependence on external software and offering similar tools to other businesses. The commercial effort is still early. Block began testing its Buzz AI agent platform with prospective customers in October, according to Yahoo Finance.

Profit growth follows a smaller workforce

For the quarter ended September 30, Block reported gross profit of $3.24 billion, up 22% from a year earlier. Operating income rose 14% to $428 million. Its adjusted operating income grew much faster, rising 92% to $923 million—a separate measure from the reported operating-income figure.

Yahoo Finance attributed part of the adjusted profit improvement to lower personnel costs. In February, Block cut 40% of its workforce, or about 4,000 jobs, in Dorsey’s AI-focused overhaul. Those savings are distinct from the new revenue the company hopes to earn by selling AI tools.

Earnings per share reached $1.13, up 109% year over year. Block also said it exceeded its quarterly guidance for gross profit, adjusted operating income and adjusted diluted earnings per share. Its higher full-year forecast now calls for $12.626 billion in gross profit, 22% above 2025.

Looking into 2027, Block projected total gross profit of $14.52 billion. That was about $110 million above Wall Street expectations, according to BTIG. The underlying payments businesses also expanded: Square’s payment volume rose 14% to $76.4 billion, while Cash App reached 60 million monthly active users in September.

Dorsey puts merchants’ software vendors in view

On the November 3 earnings call, Dorsey described a role for AI agents beyond helping people write software. He said agents could handle merchants’ product ordering and inventory management, including automatically updating supplies based on volume trends. Those are Dorsey’s claims about the technology’s readiness, not independently verified results.

Staff communication is another target. Dorsey said many sellers use third-party systems to communicate with employees, and Block has introduced them to its own tools. He described those tools as a place where teams can communicate, collaborate and build with AI agents, rather than use a separate service for each activity.

Buzz is a free, open-source shared workspace for people and AI agents. Dorsey said it can run privately on a user’s own network or system and work with different AI models. In his shareholder letter, he positioned it as a way to reduce dependence on Slack, Discord and GitHub.

Customer feedback will shape the business model

The fourth-quarter revenue expectation applies to Block’s AI tools; it is not a disclosed sales figure for Buzz. Alongside the October customer tests, Dorsey said the company was still working out its AI revenue model and would base it on user feedback. The earnings update therefore sets a commercial timetable without settling how the tools will make money.