Block Renews Bets on AI, Ecosystem Lending as Growth Softens
Block’s Q1 2025 results presented a paradox: slowing growth amid a flurry of innovation. The company’s gross profit grew 10% year-over-year to $1.38 billion for Cash App and 9% to $898 million for Square. However, this marks a slowdown compared to previous periods, with Cash App’s growth decelerating from 25% a year earlier.
The company’s growth slowdown is attributed to a stalemate in user growth, posing risks to its network-driven model as macro uncertainty impacts consumer confidence. Block’s CEO, Jack Dorsey, acknowledged that “our growth in the first half of this year does not meet our bar.” The company’s gross payment volume (GPV) also missed analyst expectations.
Doubling Down on AI, Digital Lending, and Brand Reinvention
Block is responding by doubling down on three key areas: intelligent automation through its internal AI tool “goose,” credit accessibility via Cash App Borrow, and brand reinvention. The company aims to leverage these initiatives to drive future momentum and deepen user engagement, particularly among direct deposit users within the Cash App ecosystem.
goose, described as an “agentic system,” is being developed as a universal interface for Block’s employees and eventually its customers. Dorsey explained that the system will automate workflows and decision-making at scale, with the goal of making it a “personal CFO for consumers and a COO for sellers” by the end of the year.
Cash App Borrow, the company’s small-dollar, short-duration loan product, is emerging as a key component of its monetization strategy. More than half of all Borrow loans are used within the Cash App ecosystem, suggesting strong network lock-in. Users who deposit their paycheck into Cash App are 2.5 times more likely to accept a Borrow offer than card-only users.
Challenges and Opportunities Ahead
Block faces growing competition from FinTech companies and must navigate macro headwinds. The company’s revised full-year gross profit guidance to $9.96 billion represents a more conservative forecast, reflecting these challenges. International GPV growth continues to outpace the U.S., suggesting an untapped frontier, but scaling in these regions introduces complexity.
By investing in AI, refining its financial offerings, and reimagining its brand for both Gen Z and mid-market enterprises, Block is making a strategic bet that it can still win the future of finance.
