Block's Square Growth Engine: Can GPV Keep Accelerating?
Block Inc.'s XYZ Square business is positioned for faster Gross Payment Volume (“GPV”) growth as international expansion, stronger traction with larger sellers and new commerce solutions drive higher payment activity across its ecosystem. Square's GPV, a key measure of payment activity, increased 13% year over year to $61.2 billion in the first quarter of 2026, or 11.5% on a constant-currency basis.
Growth was broad-based. U.S. GPV rose 8.2% year over year, while international GPV jumped 35%, or 26% on a constant-currency basis. International markets accounted for 22% of total Square GPV, up from 18% a year ago, reflecting the platform's expanding global presence.
Momentum is also accelerating in high-value segments. Food and beverage GPV increased 21% year over year, while mid-market seller GPV grew 22%, marking the strongest growth in both categories since the first quarter of 2023. Larger merchants typically generate higher payment volumes, creating a favorable mix for sustained GPV growth.
Product innovation is opening additional transaction opportunities. Square's Drive-Thru solution enables quick-service restaurants to manage drive-thru, kiosk and in-store orders on one platform, while Neighborhoods, which connects Square sellers with Cash App consumers, expanded to merchants representing $320 million in annualized GPV, up 190% from December.
Customer wins further support GPV’s growth prospects. Square is expanding across larger and multi-location merchants, including Steak Escape, GOLFTEC, Magnolia Soap & Bath Co., Sofive Soccer Centers and Ladurée Canada, aiding continued GPV acceleration.
How Are Block’s Competitors Faring?
Toast TOST supports restaurant POS, payments, ordering and kitchen workflows. In first-quarter 2026, Toast’s ARR grew 26% year over year to $2.2 billion. It added about 7,000 net new locations and generated $126 million of net income plus $179 million of adjusted EBITDA. This scale makes Toast a strong rival in restaurants and QSRs.
Shift4 Payments FOUR offers integrated payments for restaurants, hospitality, stadiums, gaming and larger merchants. In first-quarter 2026, Shift4 reported $549 million of revenues, up 49% year over year, with EPS of 97 cents. Its strength in high-volume merchant categories makes it relevant as Square moves further upmarket.
XYZ’s Price Performance, Valuation & Estimates
Shares of Block have rallied 24.1% over the past three months, outperforming the broader industry and the S&P 500 Index.
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In terms of forward 12-month P/E, XYZ stock is trading at 17.35X, which is at a discount to the Zacks Internet Software industry’s 27.03X.
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Block’s estimate revisions reflect a positive trend. The Zacks Consensus Estimate for full-year 2026 EPS has been revised northward marginally. It indicates a significant increase year over year.
Image Source: Zacks Investment Research
Block currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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