The news: Block’s gross profit grew 24% YoY to $2.87 billion in Q4 2025, notching its first $1 billion gross profit month in December, per its earnings.

• Cash App’s gross profit rose 33% YoY to $1.83 billion.
• Square’s gross profit increased 7% YoY to $993 million.

Despite Block outperforming its gross profit outlook for Q4, CEO Jack Dorsey announced that the company would reduce its workforce by 40%, laying off about 4,000 employees.

• “We're going to build this company with intelligence at the core of everything we do,” Dorsey wrote in an X post.
• He added that, although Block’s customer count and profits are growing, AI tools and smaller teams are enabling a “new way of work” that changes what it means to build and run a company.

Inside Block’s performance: Cash App continues to be the engine for Block’s growth, especially through the popularity of its lending products:

• Cash App Borrow origination volume grew 233% YoY.
• Cash App primary banking actives increased 22% YoY to 9.3 million.
• The Cash App Card’s GMV YoY growth accelerated to its fastest pace since Q3 2024.
• And Cash App monthly actives hit 59 million users.

This performance suggests that the combination of Cash App Green and a marketing push with Timothée Chalamet is converting Cash App into a central app for younger consumers’ payment and banking needs.

This push in banking and lending mirrors buy now, pay later (BNPL) rival Klarna’s recent earnings, which also marked strong growth in interest-bearing loans and banking.

Square also performed modestly; its gross profit grew 7% YoY. Lending was also the key driver of Square’s lift in profit; Square Loan’s origination volume growing 23% YoY.

Why this matters: Block’s results are a contradictory pairing of strong growth and shrinking headcount.

This combination is part of what is fueling public anxiety around AI, and Dorsey’s strategy of explicitly slashing Block’s team to boost productivity changes the narrative in a few ways.

• Linking AI tools directly to workforce reduction reinforces the idea that AI replaces workers rather than supporting them.
• The company isn’t cutting because growth stalled, making layoffs strategic rather than defensive.

Implications for fintechs: If Block can grow lending and profits with a leaner team, others could face pressure to prove they can do the same, normalizing a culture of AI-linked layoffs across financial services. Already, 47% of US HR leaders said AI was a top factor likely to influence layoff decisions—nineteen percentage points higher than declining financial performance, per Careerminds.

But early attempts have had mixed results: Klarna had to walk back customer service layoffs after part of its AI strategy failed.