Payments company Block (NYSE: $XYZ), led by Jack Dorsey, disclosed earlier this week that it had accrued $764 million toward a proposed resolution with the U.S. Department of Justice, as its third-quarter results showed Bitcoin-related gross profit falling by half.

The accrual exceeds the $566 million in net income Block reported for the quarter. However, the company still beat Wall Street estimates and raised its full-year 2026 outlook. Bitcoin, which accounts for more than a quarter of Block's revenue, now contributes just 2% of gross profit, down from 4% a year earlier, as reported in the company's quarterly filing.

According to Block's shareholder letter, gross profit increased 22% to $3.24 billion, led by a 27% increase in its Cash App to $2.07 billion and 14% growth at Square to $1.16 billion. Adjusted operating income surged 92% to $923 million, representing a record 29% margin, while adjusted earnings per share more than doubled to $1.13, beating analysts' expectations of $1.03. Revenue reached $6.72 billion, ahead of the $6.58 billion consensus estimate. Block excluded $435 million in contingency, restructuring and other charges from its adjusted operating income.

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Bitcoin (CRYPTO: $BTC) remained a weak spot in the results. Gross profit from Block's Bitcoin ecosystem fell 50% to $52 million from $104 million a year earlier, which the company attributed primarily to a strategic decision to lower fees on certain Bitcoin transactions through its Cash App. Bitcoin revenue also declined to $1.80 billion from $2.02 billion. The contraction follows year-over-year gross profit declines of 26% in the first quarter and 31% in the second.

Block also noted that it reached an agreement in principle in October with the Justice Department. The proposed resolution includes a gross monetary component of approximately $964 million, which would be reduced to a net payment of about $764 million after credits for previous regulatory resolutions. Block had accrued the full amount as of Sept. 30, meaning it has recognized the expected expense but has not yet completed the payment. Reports describe the agreement as a deferred prosecution arrangement related to anti-money-laundering compliance failures, under which criminal charges would be deferred for three years.

Block raised its full-year guidance, projecting gross profit of $12.626 billion, representing 22% growth, and adjusted operating income of $3.519 billion, equivalent to a 28% margin. The company expects adjusted earnings of $4.15 per share, above the analyst consensus of $4.04.

Looking further ahead, Block expects gross profit to increase by at least 15% in 2027 to $14.519 billion, while adjusted operating income is projected to climb 30% to $4.575 billion.

Analysts remain positive on the stock. According to analyst data compiled by CryptoProwl, Block carries a consensus Buy rating among 12 analysts, with an average price target of $96.75, about 10% above Wednesday's closing price of $87.63.

Shares of Block (NYSE: XYZ) are currently sitting at $87.60 in premarket trading.