Block's AI-driven workforce cuts are showing up in faster code shipping and lower costs. CEO Jack Dorsey says the internal platform Buzz is the proof point. Full-year guidance raised.
Alpha Score of 52 reflects moderate overall profile with strong momentum, poor value, moderate quality, strong sentiment.
Block drew attention in February when CEO Jack Dorsey said he would cut roughly 40% of the workforce and put artificial intelligence at the center of the company. Six months in, Dorsey says the experiment is starting to produce hard numbers.
“The biggest proof point is our shipping velocity,” Dorsey told analysts on Block’s second-quarter earnings call. He pointed to Buzz, the company’s internal platform where AI agents and employees collaborate on software development. “We have a very small team on a product like Buzz,” he said. Block uses Buzz to develop products and coordinate projects.
The company says AI is now involved in nearly every change to its production code. The number of code changes per engineer has risen 150% since the start of the year. Square shipped 130 features in the first half, more than three times the number it shipped during the same period last year.
Product development expenses fell 17% year over year on a GAAP basis during the quarter, reflecting lower employee-related costs after the February cuts. Block has kept spending in areas where it sees growth, including sales, Cash App and AI infrastructure.
Block launched Buzz publicly in July and plans to offer hosted versions for companies that don’t want to manage their own infrastructure. Dorsey said Block intends to make money from Buzz but hasn’t settled on a single pricing model.
Other AI agents are already moving into Block’s consumer and merchant products. Moneybot, Cash App’s financial assistant, now has more than 1 million weekly engaged accounts. Managerbot automates marketing, profit-margin analysis and operational fixes for Square sellers. Dorsey identified agents capable of making transactions as a “natural place” for Block to explore.
Second-quarter revenue rose 9% to $6.62 billion. Gross profit increased 25% to $3.17 billion. Block reported operating income of $447 million and net income attributable to common shareholders of $89 million, or 15 cents per diluted share. Adjusted operating income reached a record $864 million, and adjusted earnings rose 65% to $1.02 per diluted share.
Block raised its full-year outlook. It now expects gross profit of $12.51 billion, up 21%, and adjusted operating income of $3.47 billion. Adjusted earnings are projected to rise 70% to $4.02 per share.
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