Sparsity processing within a compute block can be done on unpacked data. The compute block includes a sparsity decoder that generates a combined sparsity vector from an activation sparsity vector and a weight sparsity vector. The activation sparsity vector indicates positions of non-zero valued activations in an activation context. The weight sparsity vector indicates positions of non-zero valued weights in a weight context. The combined sparsity vector comprises one or more zero valued bits and one or more non-zero valued bits. The sparsity decoder may determine the position of a non-zero valued bit in the combined sparsity vector and determine an address for the non-zero valued activation and the non-zero valued weight based on the position of the non-zero valued bit. The non-zero valued activation and the non-zero valued weight may be provided to a PE for performing MAC operations.