Block Renews Bets on AI, Ecosystem Lending as Growth Softens

For a company long hailed as a tech disruptor in financial services, Block’s Q1 2025 results present a paradox. One of slowing growth amid a flurry of innovation. 

The question looming over the company is this: Can its investments in artificial intelligence (AI), digital lending, and ecosystem cohesion reignite momentum?

“Our growth in the first half of this year does not meet our bar,” said Block’s CEO Jack Dorsey to start the company’s Thursday (May 1) earnings call.

Cash App delivered $1.38 billion in gross profit for the quarter, up 10% year over year. While respectable, this marks a slowdown compared to the 25% growth it saw a year earlier. Square, Block’s more mature business unit serving merchants, brought in $898 million in gross profit, also up 9%. The company’s gross payment volume (GPV) also missed analyst expectations.

A key challenge came from Cash App’s monthly transacting actives. “Growth in gross profit per transacting active is rising,” the company’s shareholder letter stated, “but we haven’t meaningfully expanded our user base.”

For a business reliant on network effects, this flatline could pose a risk. Block’s share price was down nearly 20% in after-hours trading.

Read more: Block Doubles Down on Banking Base as FinTech Competition Grows

Block, the parent company of Square, Cash App, and Afterpay, was once a pioneer in offering point-of-sale systems for small and medium-sized businesses (SMBs). The company now faces growing competition from FinTech companies.

Both Dorsey and the company’s CFO Amrita Ahuja laid out a detailed business plan blending long-term technological bets with near-term go-to-market acceleration.

Block revised its full-year gross profit guidance to $9.96 billion, representing 12% year-over-year growth — a more conservative forecast reflecting macro headwinds and decelerated growth in Cash App’s core metrics. And with gross profit growing just 9% year over year, the company is now doubling down on three fronts: intelligent automation, credit accessibility, and brand reinvention.

Perhaps the boldest claim in Block’s Q1 update revolves around its internal AI initiative: “goose.” Described as an “agentic system,” goose aims to be the universal interface for Block’s employees — and eventually its customers. The goal: to automate workflows and decision-making at scale.

“Our first goal is to make goose our single interface for all of our functions,” explained Dorsey, noting that goose is already improving engineering productivity by 30%, and adding that the system will ultimately expand to every role in the company.

“By the end of this year, goose will act as a personal CFO for consumers and a COO for sellers,” Dorsey said.

Cash App Borrow — Block’s small-dollar, short-duration loan product — is emerging as a keystone of its monetization strategy. After receiving FDIC approval to issue consumer loans nationwide via Square Financial Services, the company is accelerating rollout across its Cash App user base.

Read also: Cash App’s Growing Number of Direct Deposits Marks Progress in Expansion Efforts

More than half of all Borrow loans are used within the Cash App ecosystem, the company reported, suggesting strong network lock-in. Notably, users who deposit their paycheck into Cash App are 2.5 times more likely to accept a Borrow offer than card-only users, and 13 times more likely than users with neither a Cash App Card nor direct deposit.

This integrated financial model — what Block calls its “bank our base” strategy — aims to deepen engagement by turning casual users into multiproduct customers. Borrow is central to that transformation.

To reduce risk, Block leans heavily on real-time machine learning models that assess user behavior and payment patterns. “Healthy loss rates” have been maintained across historical cohorts, according to the company, and underwriting improvements are underway to offer higher credit limits.

In Square, international GPV growth (15% year over year) continues to outpace the U.S. (5.6%), suggesting an untapped frontier, but scaling in these regions introduces complexity.

Block’s Q1 2025 may not have delivered the fireworks of previous years, but it reflects a company that is actively recalibrating. By investing in AI, refining its financial offerings, and reimagining its brand for both Gen Z and mid-market enterprises, Block is making a bet that it can still win the future of finance.

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