XYZ's Square gains traction in restaurants and mid-market as new commerce tools and customer wins help drive payment volume and gross profit growth.
Block $SQ’s XYZ Square is strengthening its presence in the restaurant and mid-market segments through point-of-sale and commerce solutions that help sellers accept payments, manage operations and improve customer engagement. New restaurant-focused offerings, including the early-access Square for Drive-Thru solution, are helping the company gain traction in higher-throughput food and beverage businesses.
A key example is Square’s partnership with The Hat, the restaurant chain known for its pastrami sandwiches. The Hat selected Square as a unified commerce platform to support operations across its 11 locations as it expands beyond California. The company needed real-time operational visibility, standardized workflows and seamless coordination across its restaurant portfolio.
Square for Restaurants addresses these requirements through centralized menu management and unified reporting, enabling leadership to monitor performance across locations and improve operational efficiency. The Hat also uses Square Register, paired with receipt printers and cash drawers, to support high-volume counter service, while Square Marketing helps strengthen customer engagement and loyalty as the brand enters new markets.
Square is seeing similar adoption from other restaurant brands, including Black Seed Bagels, which recently implemented Square’s unified commerce platform across its New York City locations. These product additions and customer wins are contributing to stronger business performance. In first-quarter 2026, Square’s gross profit rose 9% year over year to $982 million, while gross payment volume increased 13% to $61.2 billion, reflecting strong momentum in food and beverage, mid-market and international markets.
Toast TOST added two notable enterprise wins: Hungry Howie’s selected Toast for a rollout across roughly 500 locations, using its restaurant technology suite for complex pizza operations, and The Alinea Group chose Toast as its preferred platform across Michelin-starred restaurants and bars, including Alinea, Next, The Aviary and The Office.
Fiserv’s FISV Clover recently expanded its restaurant offerings with Clover Reserve powered by Tabit, an enterprise-grade POS and hospitality solution for full-service and fine-dining restaurants. The platform adds advanced floor management, tableside service and unified payments, strengthening Clover’s push into complex restaurant operations, similar to Square’s restaurant-focused expansion.
Shares of Block have risen 20.6% over the past year, outperforming the broader industry but underperforming the S&P 500 Index.
Image Source: Zacks Investment Research
In terms of forward 12-month P/E, XYZ stock is trading at 16.55X, which is at a discount to the Zacks Internet Software industry’s 26.48X.
Image Source: Zacks Investment Research
Block’s estimate revisions reflect a positive trend. The Zacks Consensus Estimate for full-year 2026 EPS has been revised northward 1.1% over the past month. It indicates a significant increase year over year.
Image Source: Zacks Investment Research
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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