This story was originally published on Payments Dive. To receive daily news and insights, subscribe to our free daily Payments Dive newsletter. Dive Brief: With a new round of job cuts, digital payments provider Block is reducing overhead costs and keeping its headcount under a 12,000-employee cap the company adopted in 2023, according to analysts. The reductions amount to up to 10% of Block's workforce, or roughly between 1,100 to 1,150 employees, Baird analyst David Koning estimated in a note to inves ...

Core Viewpoint - Block is reportedly considering layoffs that could impact 10% of its workforce as part of a broader business overhaul aimed at achieving a $12 billion gross profit target for the year [1][4]. Group 1: Layoffs and Business Overhaul - The company has been informing hundreds of employees about potential job eliminations during annual performance reviews, indicating a significant restructuring effort [2]. - As of late November, Block had under 11,000 employees and has been revamping its staffing and business model since 2024, focusing on integrating Cash App with Square and expanding into AI and crypto [3]. - Job cuts have been occurring across various teams during the performance review period, which extends through the latter part of the month [4]. Group 2: Financial Performance and Credit Services - Block's recent earnings performance has been inconsistent, with its stock experiencing a substantial decline over the past year, and the company is set to report earnings on February 26 [4]. - The company has provided over $200 billion in credit to customers through its Cash App Borrow, Afterpay, and Square Loans products, targeting borrowers often excluded from traditional credit systems [5]. - Block emphasizes that with the right technology, inclusive lending and responsible risk management can coexist, forming the basis for sustainable credit for future generations [5]. Group 3: Credit Underwriting System - Block's Chief Risk Officer highlighted the limitations of the current credit underwriting system, which is outdated and struggles to keep pace with modern financial behaviors [6]. - Nearly 100 million Americans are reportedly blocked from affordable credit due to scoring models that rely on outdated data, rather than current financial behavior [7]. - A shift towards near real-time data could enhance understanding of consumer money management and creditworthiness, addressing the gaps in the current system [7].

Block's Jack Dorsey Block Inc., the Jack Dorsey-led fintech company behind Cash App, Square and Afterpay, is preparing to cut up to 10% of its staff as part of a broader business overhaul, Bloomberg reported Saturday, citing people familiar with the matter. Block did not immediately respond to a request for comment from (similarly-named, but entirely independent) The Block. The cuts are happening across multiple teams as managers carry out year-end performance evaluations expected to run through late Fe ...

This story was originally published on Payments Dive. To receive daily news and insights, subscribe to our free daily Payments Dive newsletter. Dive Brief: Digital payment provider Block announced the opening of an office in Dublin, Ireland, intended to expand the company's European footprint. In addition to workspaces, the new location will include a product demo lab where Block can show off its products to potential customers, a Thursday news release on the company's website said. "We're here to dr ...

Core Viewpoint - The U.S. financial technology sector is poised for growth as President Trump's focus shifts to affordability, potentially benefiting fintech companies over traditional lenders [1][2]. Fintech Sector Opportunities - Companies like Affirm Holdings Inc, SoFi Technologies Inc, and Block Inc are well-positioned to capitalize on the affordability trend, according to Citigroup [3]. - Other potential beneficiaries include Toast Inc and Shopify Inc, which are also highlighted for their consumer-friendly services [3]. Traditional Lenders' Response - Traditional lenders initially experienced a rally following Trump's return to the White House, anticipating a more lenient regulatory environment. However, the renewed focus on affordability may shift investor attention towards fintech challengers [4]. Fintech Growth Metrics - Block reported over $200 billion in global lending through its credit products, indicating significant growth in the fintech sector [5]. - SoFi announced a $1.5 billion fundraising plan aimed at enhancing its capital position and supporting future growth [5]. Mixed Outlook on Specific Companies - Kerrisdale has expressed concerns about Affirm, labeling it a "Buy Now, Cry Later" story, suggesting that its rapid growth may reflect underlying risks similar to past subprime lending failures [6]. - Affirm's growth of over 30% in gross merchandise volume since 2022 is noted, but concerns about weakening credit quality due to high-interest rate lending are raised [6]. Reactions to Affordability Initiatives - Trump's affordability initiatives, including blocking institutional investors from acquiring single-family homes, have received mixed reactions, with some praising the efforts while others warn of potential market instability [7]. - The proposed nationwide 10% cap on credit card interest rates could limit access to credit, potentially hindering consumers' ability to build credit and pushing them towards less regulated options [8]. Price Performance - Over the past year, SoFi and Affirm Holdings saw stock price increases of 48.32% and 29.05%, respectively, while Block's stock declined by 25.64% [9].

Market Overview - U.S. stock markets faced a significant downturn, with the S&P 500 and Nasdaq experiencing their largest drop in over three months, primarily due to heightened risk-off sentiment linked to President Trump's tariff threats regarding Greenland [1] - The market capitalization of major stocks, including Nvidia and Apple, decreased by approximately $700 billion [1] Stock Performance - The Nasdaq fell by 2.39% to 22,954.32, the S&P 500 dropped 2.06% to 6,796.86, and the Dow Jones Industrial Average lost 1.76% to 48,488.59 [2] - Netflix Inc. saw its shares decline by 1.08% to close at $87.05, with an after-hours drop of 4.84% to $82.84 [2] - IBM's stock decreased by 4.68% to $291.35, with analysts predicting an 8% rally in the near future despite the decline [5] - United Airlines shares dropped by 4.34% to $108.57 but gained 3.46% in after-hours trading to $112.33 [6] - Block Inc.'s stock fell by 5.03% to $62.63, with a 52-week range of $94.25 to $44.27 [8] - Strategy Inc. shares plunged by 7.76% to $160.23, with a significant drop from its historical highs [11] Company Developments - Netflix announced a switch to an all-cash offer for acquiring Warner Bros. Discovery's studio and streaming businesses, maintaining a total price of $82.7 billion [3] - The acquisition includes major franchises such as "Game of Thrones," "Harry Potter," and DC superheroes, enhancing Netflix's content library [4] - United Airlines reported record fourth-quarter revenue of $15.4 billion and a diluted EPS of $3.19, despite a $250 million pre-tax hit from the government shutdown [7] - Block Inc. highlighted its alternative lending ecosystem, providing over $200 billion in credit, with stable loss rates since 2013 [9] - Strategy Inc. increased its Bitcoin holdings to 709,715 BTC, acquired for $53.92 billion, making it one of the largest corporate holders globally [12]

Core Insights - Block has provided over $200 billion in credit through its various products, including Cash App Borrow, Afterpay, and Square Loans [1] - The company focuses on inclusive lending, targeting customers often excluded from traditional credit systems, and reports strong repayment behavior among these borrowers [2] Product Performance - Cash App Borrow offers short-term loans averaging 21 days, with 70% of borrowers having FICO scores below 580, and boasts a 97% repayment rate [3] - Afterpay, a buy now, pay later service, has seen 96% of installments paid on time [3] - Square Loans, aimed at small businesses, reports a loss rate of less than 3% [3] Data Utilization - Block employs near real-time behavioral data for underwriting instead of relying solely on credit bureau reports [3] - The internal Cash App Score is based on customers' earning, saving, spending, and repayment patterns [4] Competitive Advantage - The integrated ecosystem of Block provides unique advantages over traditional banks and pure-play credit companies, enabling better customer experiences and underwriting [5] - The interconnectedness of Block's services enhances customer retention and financial management capabilities [6] Market Position - Cash App has emerged as one of the largest consumer finance platforms in the U.S., with millions of users treating it as their primary bank account [7]

Core Insights - Block has provided over $200 billion in credit through its Cash App Borrow, Afterpay, and Square Loans products, targeting customers often excluded from traditional credit systems [1][2] Group 1: Credit Products and Performance - Cash App Borrow offers short-term loans averaging 21 days, with 70% of borrowers having FICO scores below 580 and achieving a 97% repayment rate [3] - Afterpay, a buy now, pay later product, reports that 96% of installments are paid on time [3] - Square Loans, aimed at small businesses, has less than 3% loss rates [3] Group 2: Technology and Risk Management - Block utilizes near real-time behavioral data for underwriting instead of traditional credit bureau reports, enhancing repayment behavior among its customer base [3][4] - The company's internal Cash App Score is based on customers' earning, saving, spending, and repayment patterns, allowing for better risk assessment [4] Group 3: Integrated Ecosystem - Block's integrated ecosystem provides unique advantages over traditional banks and pure-play credit companies, enabling a comprehensive financial picture for better customer experience [5] - The interconnectivity of Block's services, such as Cash App users spending through Square merchants, enhances customer retention and lending insights [6] Group 4: Market Position - Cash App has emerged as one of the largest consumer finance platforms in the U.S., with millions of customers using it as their primary bank account [7]

Core Viewpoint - Block's stock has experienced a slight decline recently due to profit-taking after gains linked to holiday payment volumes and Cash App growth [1] Group 1: AI Price Prediction - An AI price-prediction model forecasts a modest decline for Block over the next 60 days, with a base-case projection indicating a potential price of $150 by 2030 [2][3] - The model's analysis suggests that current momentum and volatility will lead to a gradual decrease rather than a significant drop [3] Group 2: Business Model and Performance - Block's strength is attributed to its dual-engine model, combining Square's merchant payment processing with Cash App's consumer Bitcoin and P2P transfers [4] - Recent increases in gross payment volume indicate steady adoption among small businesses, although Bitcoin volatility negatively impacts ecosystem revenue [4] Group 3: Technical Indicators - Technical signals indicate caution, with negative MACD suggesting fading momentum and RSI in neutral territory indicating potential exhaustion [5] - The average predicted price for Block is $65.20, with an implied move suggesting a decline over the next month [8] Group 4: Growth Drivers and Challenges - Cash App is a significant growth driver, benefiting from increased Bitcoin sales amid a favorable regulatory environment under President Trump's administration [6] - Regulatory risks surrounding crypto custody present challenges, tempering enthusiasm for near-term growth [6] - Square's expansion into emerging markets and the adoption of enterprise tools like Square for Restaurants are expected to enhance long-term prospects [7]

Core Insights - The fintech sector is undergoing significant transformation driven by innovations in digital payments, credit underwriting, and user experience, with Block, Inc. and Upstart Holdings emerging as key players due to their disruptive business models and strategic growth initiatives [2][3]. Block's Case - Block is developing a comprehensive fintech platform through its Square, Cash App, and Afterpay ecosystems, providing end-to-end solutions across various financial services [4]. - In Q3 2025, Block's net revenues increased by 2.3% year-over-year, with gross profit rising by 18.3%, driven by Cash App's growth of 24.3% and Square's increase of 9.2% [4][9]. - New product introductions, such as Cash App Pools and enhancements to Square's AI assistant, are aimed at deepening user engagement and expanding service offerings [5]. - Block is aggressively investing in partnerships to enhance its market position, including collaborations with Thrive and Blackbird Bakery to improve service delivery [6]. - Despite its growth, Block faces challenges from shifts in consumer spending and increasing competition from peers like PayPal and Shopify [7]. Upstart's Case - Upstart operates as an AI-driven lending marketplace, connecting consumers with over 100 banks and credit unions, and reported a 71% revenue increase year-over-year in Q3 2025, with loan originations climbing by 80% [8][9]. - The company has diversified its offerings beyond personal loans into auto lending, HELOCs, and small-dollar loans, which accounted for nearly 12% of total originations in Q3 2025 [10]. - Upstart's AI automation powered 91% of loans in Q3 2025, enhancing scalability and reducing approval times [12]. - The company continues to expand its lending partnerships, aiming to increase its market reach [11]. - However, Upstart's reliance on AI-driven models poses risks, particularly in economic downturns, though management has initiated upgrades to mitigate volatility [13]. Comparative Estimates - The Zacks Consensus Estimate for Block's 2025 sales implies a modest growth of 0.8%, with EPS expected to decline by 28.2% [14]. - In contrast, Upstart's 2025 sales are projected to grow by 62.8%, with positive trends in EPS estimates over the past 60 days [16][17]. Valuation and Performance - Over the past month, Block and Upstart shares have increased by 1.8% and 1.6%, respectively, outperforming the S&P 500 [19]. - Block is trading at a forward Price/Sales (P/S) ratio of 1.48X, while Upstart's P/S ratio stands at 3.64X, both below their one-year medians [19]. Conclusion - Block has a strong payments ecosystem but faces short-term challenges from consumer spending and competition, while Upstart shows clearer operating leverage and growth potential through AI-driven innovations [21].