Analysts: Block's shift to an AI strategy may benefit Square's business the most.

Following strong earnings and the company's push forward with its AI transformation strategy, fintech company Block.com is expected to see its merchant payments business, Square, be a major beneficiary of this strategic shift. The earnings report showed that Block.com achieved operating profit of $485 million in the fourth quarter, with adjusted operating profit reaching $588 million. Net income attributable to common shareholders was $116 million, and adjusted EBITDA was $930 million. The company also raised its 2026 gross profit guidance to $12.2 billion, representing a year-over-year increase of approximately 18%. Block.com CEO Jack Dorsey recently announced that the company will lay off more than 40% of its workforce, reducing its total number of employees from over 10,000 to less than 6,000, in order to promote a leaner, AI-centric operating model. Analysts believe that Block.com is one of the first fintech companies to fundamentally reassess its workforce structure and productivity. In addition, the company recently increased its holdings by 103 Bitcoins, bringing its total holdings to approximately 8,883 BTC, worth about $577 million, making it the fourteenth largest enterprise in the world in terms of Bitcoin holdings. Dorsey stated that the company rapidly expanded its workforce during the pandemic, while simultaneously establishing separate systems for Square and Cash App, resulting in redundant personnel. Block is currently pushing for organizational consolidation and plans to increase gross profit per employee to over $2 million, approximately four times the pre-pandemic level. Analysts believe that with AI driving efficiency improvements, Square's business is poised to be the first to achieve scaled revenue growth.