Block's Bitcoin holding gain beats crypto sales profit by 4x

The $229.7 million gain that Jack Dorsey's Block recorded on its Bitcoin (BTC) holdings in the third quarter was over four times larger than the $52 million gross profit generated by its Bitcoin business.

In after-hours trading on November 3, Block shares climbed 5.84% to $80.44, having closed at $76.00. The company exceeded its guidance, with payments and lending accounting for all gross profit growth.

Borrowers and Card Users Powered Block's Quarter

According to Block's shareholder letter, gross profit rose 22% year-over-year to $3.24 billion. Of that amount, Cash App contributed $2.07 billion, a 27% increase.

• Financial Solutions (Cash App Borrow loans) recorded the biggest gross profit increase, up 32% to $1.33 billion, led by Cash App lending.
• Consumer loan originations on Cash App, which include Borrow and Afterpay, expanded 40% to $19 billion.
• Commerce Enablement, which comprises Square payments and Cash App Card spending, remained the largest profit segment, with gross profit rising 19% to $1.85 billion.

The sole category to contract was Bitcoin, whose gross profit declined 50% to $52 million from $104 million a year earlier. Block attributed the decrease primarily to a fee reduction on some Cash App Bitcoin transactions.

Although customers traded a larger volume of Bitcoin, as Block's quarterly filing indicates, the company retained a smaller portion of each dollar transacted. Bitcoin's gross margin narrowed to approximately 2.9% from 5.1%.

The more significant impact of the cryptocurrency appeared lower in the income statement.

Block's Bitcoin Holdings Still Affect Bottom Line

Each quarter, Block marks its Bitcoin investment holdings to market price, and those valuation changes are recorded in GAAP earnings as remeasurement gains or losses.

As of September 30, Block held approximately 9,237 BTC for investment purposes, valued at $771.9 million. The remeasurement gain for the third quarter amounted to $229.7 million, compared with $59.6 million in the same period last year.

The gain represented roughly 38% of Block's pre-tax income of $612.5 million, helping push GAAP net income to $566 million from $462 million.

For three consecutive quarters prior, the same line had reduced earnings. Block recorded a $234.3 million loss in Q4 2025, followed by a $172.8 million loss in Q1 2026, which reduced diluted EPS by $0.29 on a pre-tax basis.

The second quarter contributed another $88.5 million loss. Despite the third-quarter gain, the line still reflects a $31.6 million loss for the first nine months of 2026.

Block excludes these fluctuations from adjusted EPS, which climbed 109% to a record $1.13.

At the time of writing, Bitcoin was trading at $76,632, according to BeInCrypto Markets. Should Bitcoin close December below its September 30 value, Block will incur a fourth-quarter remeasurement loss. The company is scheduled to report those results on February 24, 2027.