Nearly six months into the reorganization, Dorsey says the answer is beginning to emerge.
“The biggest proof point is our shipping velocity,” Dorsey told analysts during Block’s second-quarter earnings call. He pointed to Buzz, the company’s new platform where AI agents and employees can collaborate on software development and other work. “We have a very small team on a product like Buzz,” he said, adding that Block uses it internally to develop products and coordinate projects.
The company says the changes are allowing smaller teams to move faster. AI is now involved in nearly every change to Block’s production code, while the number of code changes per engineer has risen 150% since the beginning of the year. Square shipped 130 features during the first half, more than three times as many as it shipped during the same period last year.
Block also says the overhaul is lowering personnel costs. Product development expenses declined 17% year over year on a GAAP basis during the quarter, reflecting reduced employee-related costs following the February reorganization. The company has continued spending in areas where it sees growth opportunities, however, including sales, Cash App and AI infrastructure.
The next step is taking those internal AI capabilities to customers. Block launched Buzz publicly in July and plans to offer hosted versions for companies that don’t want to manage their own infrastructure. Dorsey said Block intends to make money from Buzz but hasn’t settled on a single pricing model.
Other AI agents are already moving into Block’s consumer and merchant products. Moneybot, Cash App’s financial assistant, has more than 1 million weekly engaged accounts. Managerbot is automating marketing, profit-margin analysis and operational fixes for Square sellers. Dorsey also identified agents that can make transactions as a “natural place” for Block to explore.
That AI push arrived alongside accelerating growth in the company’s main businesses:
- Cash App: Gross profit increased 31% year over year to $1.97 billion. Commerce volume rose 17% to $56.5 billion, while consumer lending originations jumped 59% to $18.9 billion. Cash App had 59 million monthly transacting accounts in June, up 3%, while primary banking accounts increased 17% to 9.4 million.
- Square: Gross profit rose 13% to $1.16 billion and payment volume increased 13% to $72.8 billion. U.S. payment volume grew 10%, its strongest pace since the second quarter of 2023. International payment volume climbed 28%, or 25% after accounting for currency movements.
- Financial services: Gross profit from Block’s financial solutions business surged 43%, led by Cash App’s consumer lending products. Square’s credit card reached more than $1 billion in annualized spending. Square Financial Services also began offering eligible sellers a 3.5% annual percentage yield on savings and processed its first Square acquiring transaction in June. Block expects deposits eventually to provide a lower-cost source of funding for loans.
Across the company, second-quarter revenue increased 9% to $6.62 billion. Gross profit rose 25% to $3.17 billion. Block reported operating income of $447 million and net income attributable to common shareholders of $89 million, or 15 cents per diluted share. Adjusted operating income reached a record $864 million and adjusted earnings rose 65% to $1.02 per diluted share.
Block raised its full-year outlook following the quarter. It now expects gross profit of $12.51 billion, up 21%, and adjusted operating income of $3.47 billion. Adjusted earnings are projected to rise 70% to $4.02 per share. Those figures don’t settle the broader debate over AI and jobs, but they give Block something concrete to show for an overhaul that was impossible to ignore.
