Block Announces $5B Buyback and 30% Annual Growth Goal in Bold Three-Year Strategy

Core Insights - Block, Inc. shares increased nearly 9% following the announcement of a strategic plan to achieve $15.8 billion in gross profit by 2028 and a $5 billion share repurchase program, indicating strong confidence in future profitability [1][6] - The company is shifting focus from its core point-of-sale operations to consumer services, AI tools, and Bitcoin infrastructure, as outlined during the 2025 Investor Day [1] Financial Targets - Block aims for mid-teens percentage gross profit growth annually through 2028, with adjusted operating income expected to rise about 30% per year, reaching $4.6 billion by 2028 [2] - Adjusted earnings per share are projected to exceed 30% annual growth, reaching $5.50 by 2028 [2] - For fiscal year 2026, gross profit is projected to increase by 17% to nearly $12 billion, with adjusted operating income and earnings per share expected to exceed 30%, reaching $2.7 billion and $3.20 respectively [4] Performance Metrics - Block aims to achieve the "Rule of 40" benchmark in 2026, combining revenue growth and profit margin over 40%, which is a key target for software and fintech firms [5] - The new non-GAAP cash flow metric is forecasted to account for 25% of gross profit, exceeding $4 billion by 2028 [4] Share Repurchase Program - The expanded buyback program adds $5 billion to the existing $1.1 billion, totaling approximately $6.1 billion available for share repurchases, reflecting confidence in cash generation [6] Recent Performance - Block reported mixed Q3 results, with earnings and revenue slightly below analyst expectations; however, gross profit rose 18.3%, primarily driven by a 24.3% increase in Cash App [7] - Monthly active users for Cash App reached 58 million, with profit per user increasing by 25.3% and Gross Payment Volume growing 10.9% year-over-year [7] - Subscription and services revenue increased by 22.6%, indicating healthy recurring income streams, while Bitcoin-related revenue fell by 19% [8] - Despite the decline in Bitcoin revenue, Block maintains strong liquidity with ample cash reserves against manageable debt levels [8]