Block Pushes Square Further Into Restaurants: Can Growth Accelerate?

Block’s XYZ Square is expanding its restaurant footprint with Cascadia Pizza Co., which returned to Square in 2026 after reassessing its restaurant and franchise tools. Cascadia has grown from a single Washington food truck into 17 corporate restaurants, franchise locations, food trucks and catering operations across five states. It now uses Square for Restaurants, Square Franchise Suite and Square hardware.

Cascadia relies on Square for centralized reporting, menu control and offline payments, while individual franchisees maintain separate Square accounts. This aligns with Square’s push toward larger, more complex sellers.

Other deals reinforce that expansion. Square expanded its partnership with OpenTable, bringing reservations, payments and guest data into a more connected view for restaurants. Before that, The Baked Bear said it plans to add at least five new stores beyond its 36-location footprint. Square’s earlier Google expansion also brought U.S. food sellers into AI-powered Ask Maps discovery and ordering.

These moves support Square’s broader momentum. Block has expanded field sales and ISO partnerships, with more than 200 active ISO partners helping accelerate new seller additions. In the second quarter of 2026, Square’s Gross Payment Volume (GPV) rose 13% to $72.8 billion, food-and-beverage GPV grew 20% and Square gross profit increased 13% to $1.16 billion.

Block is pairing its wider Square reach with stronger profitability and increased investment in growth. The company’s second-quarter 2026 gross profit rose 25% to $3.17 billion, adjusted operating income reached $864 million at a 27% margin, while adjusted earnings per share (EPS) hit $1.02. Block expects $12.51 billion of gross profit and $3.47 billion of adjusted operating income in 2026, leaving investors to watch whether wider Square adoption can drive faster growth.

How Are Block’s Competitors Faring?

PayPal Holdings PYPL expanded its partnership with Rainforest in February 2026, launching embedded-payments integration for vertical software platforms. The integration embeds PayPal, Venmo and PayPal Pay Later into software-platform checkouts while simplifying merchant onboarding, reporting, reconciliation and digital payment acceptance. The integration is designed to help software platforms shift more payment volume away from offline methods.

Adyen ADYEY expanded its partnership with Toast into the United States in August 2026, adding Adyen to Toast’s U.S. payments ecosystem. The partnership is intended to support faster settlement, broader payment choice and international scaling. Toast processed GPV exceeding $215 billion across approximately 180,000 locations worldwide in the 12 months ended June 30, 2026.

XYZ’s Price Performance, Valuation & Estimates

Shares of Block have risen 15.6% over the past three months, which outperformed 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 24.84X, which is at a discount to the Zacks Internet Software industry’s 27.93X.

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Block’s estimate revisions reflect a positive trend. The Zacks Consensus Estimate for full-year 2026 EPS has been revised upward over the past month. It indicates 70.4% increase year over year.

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Block currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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