Block Rallies as AI Push Turns Cash App Into a Lending Hub

Block’s first-quarter earnings report was the company’s first since its sweeping organizational restructuring and staff reductions earlier this year, and management used the call to highlight accelerating toward artificial intelligence-driven automation, embedded financial services and tighter connections between Cash App consumers and Square merchants.

CEO Jack Dorsey told analysts the company’s internal reorganization was intended to flatten processes as Block leans more heavily into AI tools across engineering, underwriting and commerce workflows.

“One of the strongest outcomes of the action we took is just the speed of decision-making and the ability to act on that decision through the tools,” Dorsey said during the Q&A portion of the call. “Now that these AI tools are handling more of the mundane task and we’re automating a lot more, we can focus on being a lot more creative and being a lot more innovative again.”

The comments came as Block reported accelerating growth across both Cash App and Square while raising its full-year outlook. Gross profit rose 27% year over year to $2.91 billion, while adjusted operating income climbed 56% to $728 million. Cash App gross profit increased 38% and Square gross profit rose 9%.

Cash App Lending, BNPL Drive Growth

The call detailed how Block is trying to reposition Cash App from a peer-to-peer payments platform into a broader financial and commerce ecosystem centered on lending, installments, local merchant discovery and AI-driven engagement.

During the quarter, Block expanded buy now, pay later (BNPL) capabilities across Cash App, including Afterpay Pre, which lets eligible users split purchases into installments using the Cash App Card. The company also extended BNPL functionality into peer-to-peer transactions and Cash App Pay.

Consumer lending origination volume increased 82% year over year to $17.6 billion during the quarter, driven largely by Cash App Borrow and BNPL activity. Commerce enablement volume climbed 18% to $55 billion.

CFO Amrita Ahuja said engagement across multiple products — rather than simple user growth — is driving the economics of the platform.

Cash App monthly transacting actives reached 59 million in March, while primary banking actives climbed 18% year over year to 9.7 million. Inflows per active customer increased to $1,494 during the quarter.

Management also highlighted Cash App Score, a newly introduced underwriting and financial management feature that surfaces recommendations intended to help customers improve their borrowing profiles. The company said early testing showed 80% of users took at least one recommended action after receiving guidance from the system.

Neighborhoods and AI

The AI strategy extends to sellers as well. Managerbot, Block’s AI tool for merchants, has now been deployed to more than 1 million sellers and is expected to reach all Square sellers in June.

The company is also trying to deepen ties between merchants and consumers through Neighborhoods, a local loyalty and discovery initiative embedded inside Cash App. Sellers representing $320 million in annualized GPV are now participating in the program, up 190% since December. Block also said more than 100,000 Cash App accounts now follow at least one Neighborhoods seller.

On the seller side, Square GPV increased 13% year over year to $61.2 billion, with international GPV growth reaching 35%. Growth among food-and-beverage sellers accelerated to 21%, while mid-market seller growth hit 22%, the strongest pace the company has seen since early 2023.

Block also pointed to growing traction among field sales teams and ISO partnerships, with more than 140 active ISO partners now contributing merchant volume growth.

Looking ahead, Ahuja said Block expects continued momentum from embedded lending products and seller expansion initiatives even as lending growth begins to normalize from exceptionally strong comparisons.

“We’re really just getting started on that,” Ahuja said, referring to consumer lending infrastructure being integrated across the Cash App ecosystem, “and seeing growth continue and momentum continue into the back half.”

Shares were up 7.6% in after-hours trading.