Block says gross profit in 2028 will approach $16 billion as company unveils 3-year outlook

At its first investor day since 2022, Block provided a three-year outlook calling for mid-teens annual gross profit growth to roughly $15.8 billion by 2028, adjusted operating income growth of about 30% annually to more than $4.6 billion, and adjusted EPS growth in the low-30% range to $5.50; for 2026 the company expects gross profit of $11.98 billion, adjusted operating income of $2.7 billion and EPS of $3.20. Management introduced a new non-GAAP cash‑flow metric to capture capital needs for lending (forecast at over $4 billion, or ~25% of gross profit, by 2028), said it has adopted a “rule of 40” investment framework and reorganized around a single technical roadmap as it shifts further from crowded point‑of‑sale hardware into Cash App services and AI tools. The guidance and a $5 billion expansion of the share‑repurchase program arrive amid investor skepticism—Block shares have fallen more than 30% in 2025 after six straight revenue misses—and management, including CFO Amrita Ahuja and CEO Jack Dorsey, framed the package as a new phase of execution.

Analysis

At its first investor day since 2022, Block provided a three-year financial outlook calling for mid‑teens annual gross profit growth to about $15.8 billion by 2028, adjusted operating income growth of roughly 30% annually to over $4.6 billion, and adjusted EPS growth in the low‑30% range to $5.50; management also guided 2026 gross profit of $11.98 billion, adjusted operating income of $2.7 billion and EPS of $3.20. The update follows six consecutive quarters of revenue misses, a greater than 30% YTD share price decline in 2025 and a trading halt around the announcement, indicating market skepticism despite the optimistic targets.

Management emphasized strategic shifts: accelerating services tied to Cash App, deploying AI tools for sellers, consolidating around a single technical roadmap, and adopting a "rule of 40" framework that it expects to achieve this year. CFO Amrita Ahuja highlighted that gross profit is nearly double 2022 levels and that EBITDA has more than tripled, while the company introduced a new non‑GAAP cash‑flow metric to capture lending capital needs projected to exceed $4 billion (about 25% of gross profit) by 2028.

The guidance and a $5 billion expansion of buybacks provide shareholder‑friendly signals but increase execution risk given recent revenue shortfalls and the capital intensity of lending growth; meeting low‑30% EPS and 30% operating income CAGR targets requires sustained margin improvement and disciplined deployment of the new lending cash. Investors should treat the outlook as achievable only with clear, near‑term evidence of gross profit acceleration, lending capital efficiency and integration of Cash App/AI initiatives.

Key Decisions for Investors

• Require quarterly proof points before materially increasing exposure—focus on quarterly gross profit, adjusted operating income, EPS trends and the new lending cash‑flow metric as gating criteria
• Consider opportunistic accumulation only if the company posts sequential gross profit beats and demonstrates lending capital efficiency<->if not, reduce exposure given six straight revenue misses and significant share price decline
• Use the expanded $5 billion buyback as a potential catalyst but do not rely on it as a substitute for operational execution—size positions to reflect execution risk
• Hedge downside risk or limit position size while management executes the transition to Cash App services and AI tools, because the plan raises capital intensity and execution complexity