The Volatility Flagged Last Quarter Just Ran the Other Way
Last quarter's post flagged that Block's corporate bitcoin position had grown large enough to swing reported net income by hundreds of millions of dollars on fair-value moves alone - and Q2 2025 confirms it, in the opposite direction. The bitcoin investment posted a $212.2 million remeasurement gain this quarter, against a $70.1 million loss in Q2 2024 - a $282.3 million favorable swing that, combined with genuine operating improvement, pushed net income up 183.5% year-over-year to $538.3 million.
That "combined with genuine operating improvement" matters: unlike a quarter where the whole story is the bitcoin line, GAAP operating income also grew a real 58.0% to $484.3 million, a sixth consecutive profitable quarter and the second-strongest single-quarter operating income in this backfill (after Q1 2025's $329.3 million, which this quarter beat by nearly 50%). Total net revenue declined 1.6% to $6.05 billion - a second straight quarter of decline, though smaller than Q1's 4.9% drop - while gross profit grew 13.6% to $2.54 billion, the widest gap yet in this backfill between headline revenue (shrinking) and gross profit (growing double digits).
The Prescription
Block should keep pointing to operating income, not net income, as the metric that actually reflects two consecutive quarters of real business improvement - the 58% operating-income growth this quarter is unaffected by the bitcoin swing and stands on its own. What it should stop doing is letting two consecutive quarters of opposite-direction, headline-moving bitcoin swings (a $326.8 million net-income hit in Q1, a $282.3 million net-income boost this quarter) go by without giving investors a standard, quarter-over-quarter reconciliation of "net income excluding bitcoin remeasurement" - the company already discloses the raw remeasurement figure in its financial statements, but doesn't consistently present the adjusted comparison in its own investor-facing commentary, leaving readers to do the arithmetic themselves every single quarter.
Key Financial Metrics
Q2 2025 vs. Q2 2024, consolidated, reported in USD
| Metric | Q2 2025 | Q2 2024 | YoY |
|---|---|---|---|
| Total Net Revenue | $6,054.5M | $6,155.6M | ⚠️ -1.6%, second straight decline |
| Gross Profit | $2,536.5M | $2,233.5M | ✅ +13.6% |
| Operating Income | $484.3M | $306.6M | ✅ +58.0%, sixth straight profitable quarter |
| Bitcoin Remeasurement Gain (Loss) | $212.2M | $(70.1)M | ✅ $282.3M favorable swing |
| Net Income | $538.3M | $189.9M | ✅ +183.5% |
| Adjusted EBITDA» | $891.4M | $759.5M | ✅ +17.4% |
| Free Cash Flow» (standalone quarter) | ~$343.0M | ~$481.0M | ⚠️ -28.7% |
| Balance sheet metric | Jun 2025 | Mar 2025 | Change |
|---|---|---|---|
| Cash and Cash Equivalents | $6,384.2M | $7,088.8M | ⚠️ -9.9% |
| Total Assets | $36,858.4M | $36,395.6M | ✅ +1.3% |
| Total Liabilities | $14,735.5M | $14,960.5M | ✅ -1.5% |
| Total Stockholders' Equity | $22,122.9M | $21,435.1M | ✅ +3.2% |
Block's Q2 2025 net income of $538.3 million is up 183.5% year-over-year, but roughly half of the improvement traces to a bitcoin fair-value swing running in the opposite direction from Q1's; the more durable signal is operating income, genuinely up 58% for a sixth straight profitable quarter, even as headline revenue declined for a second consecutive quarter.
Segment Comparison: Cash App vs. Square
Q2 2025 vs. Q2 2024
| Metric | Cash App Q2 2025 | Cash App Q2 2024 | YoY | Square Q2 2025 | Square Q2 2024 | YoY |
|---|---|---|---|---|---|---|
| Segment Gross Profit | $1,500.5M | $1,298.9M | ✅ +15.5% | $1,026.8M | $922.6M | ✅ +11.3% |
Cash App
Cash App's segment gross profit growth reaccelerated to 15.5% from Q1's 9.7% - the growth gap with Square that briefly closed last quarter has reopened, though at a narrower margin (4.2 points this quarter, versus the 10-20 point gaps typical through 2023-2024).
Square (formerly Seller)
Square's segment gross profit growth of 11.3% also accelerated from Q1's 9.5%, on GPV» growth of 7.5% - both segments improving together this quarter, a healthier pattern than either segment decelerating while the other compensates.
Key Operational Metrics
Q2 2025 vs. Q2 2024
| Metric | Q2 2025 | Q2 2024 | YoY |
|---|---|---|---|
| GPV | $66,615M | $61,941M | ✅ +7.5% |
| GPV (H1 2025 cumulative) | $123,412M | $116,366M | ✅ +6.1% |
| Bitcoin Investment Fair Value (period-end) | $931.7M | $514.6M | ✅ +81.0% |
| Bitcoins held (period-end) | ~8,692 | ~8,211 | ✅ +481 bitcoins added |
Beyond the Usual
The Bitcoin Position Has Now Grown for Five Straight Quarters
The corporate bitcoin position has grown every single quarter since Q2 2024's first increase - from 8,038 bitcoins at the end of 2023 to roughly 8,692 now, a sustained accumulation pattern rather than a one-off addition. Combined with the fair-value accounting adopted in Q4 2023, a steadily growing position means the earnings-volatility effect flagged last quarter will likely keep growing in absolute dollar terms too, not shrink back toward irrelevance.
Target Valuation Range
~2.9x EV/TTM Revenue at quarter-end - a sharp recovery from Q1's ~1.8x, driven by the share price partially rebounding. The multiple has re-rated back toward FY2024 levels even though TTM revenue is now flat-to-declining - a sign the market is pricing the operating-income trend (58% growth, sixth straight profitable quarter) more than the top-line softness.
| Market cap → enterprise value | Q2 2025 (period-end) |
|---|---|
| Share price (period-end, Jun 30 2025) | $67.93 |
| Weighted-average diluted shares (Q2 2025) | ~618.9 million |
| Market capitalization | ~$42.0 billion |
| Total liabilities | $14.74 billion |
| Less: cash and cash equivalents | $6.38 billion |
| Enterprise value | ~$50.3 billion |
| Peer-multiple sanity check | TTM ending Q1 2025 | TTM ending Q2 2025 | Change |
|---|---|---|---|
| Enterprise Value | ~$42.4 billion | ~$50.3 billion | ✅ +19% |
| TTM Revenue | ~$23.94 billion | ~$23.83 billion | roughly flat |
| EV/Revenue | ~1.8x | ~2.1x | ✅ re-rated on price alone |
| DCF scenario (illustrative, EV/Revenue-multiple-based) | Key assumption | Implied EV | Implied share price |
|---|---|---|---|
| Bear | Revenue keeps declining and the operating-income streak breaks; multiple compresses to ~1.8x forward revenue | ~$44.0 billion | ~$54 |
| Base | Operating income keeps growing at a double-digit pace and both segments hold this quarter's growth rate; multiple holds near ~2.3x forward revenue | ~$56.0 billion | ~$69 |
| Bull | Revenue stabilizes and turns positive again, and the bitcoin position's swings stop dominating the net-income narrative; multiple re-rates to ~3x forward revenue | ~$73.0 billion | ~$90 |
| Current (period-end close) | — | ~$50.3 billion | $67.93 |
Block, Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, filed with the SEC.