The Public Ledger: Everyone Is Selling AI

Hello, Fintech Friends!

I was listening to Toast's second-quarter earnings call last week. The results were great. Revenue grew 23% YoY to $1.9 billion, net income nearly doubled to $154 million, and the company added a record 9,500 net new locations.

But something else about the call stuck with me. Just a year ago, lending looked like the biggest opportunity for payments companies. Toast Capital, Stripe Capital, Square Loans, Shopify Capital… Every company that processed a merchant's sales was expected to turn that data into loans, because it could see cash flows the banks could not and could take repayment straight out of daily card sales.

AI changed that. Now every payments company uses this data to build more software.

On Toast's call, the spotlight was on Toast IQ, the company's new family of AI agents. The first one, Toast IQ Grow, takes over a restaurant's digital marketing. It fixes the website, the SEO, and the online ordering, then builds campaigns from the restaurant's own transaction data. Toast knows what guests ordered, how often they come back, and when they stop coming, and because it runs the point of sale, it ties every campaign to the orders it produced.

"Over time, we plan to build on Toast IQ Grow and roll out a series of agentic products on top of our software platform using our data and context advantage. This opens up a market opportunity beyond software," CEO Aman Narang said on the call. "Marketing, scheduling and payroll, and bookkeeping and tax are services restaurants often pay for today. In many cases, they're spending a multiple of what they spend on software."

Toast Capital, the business that was supposed to be the next growth engine, got two sentences on the call.

And Toast is not alone. Block spent more than a decade building Square Loans on top of its sellers' card sales, and on its own earnings call the product got a passing mention in a list of gross profit drivers. The excitement was reserved for Managerbot, an AI agent inside the Square dashboard that watches a seller's business and flags problems with inventory, staffing, and marketing before the seller asks.

At Shopify, Capital came up once on the earnings call, inside a line about transaction losses, while Sidekick, the company's AI assistant, got the airtime. When Shopify’s president, Harley Finkelstein, meets Shopify's largest merchants, he asks for the number one question sitting with their data team, then has Sidekick answer it on the spot. "It is a mind-blowing experience for anyone who hasn't used it."

The move makes sense to me for three reasons.

Software carries better margins. Lending gross profit comes with credit losses, funding costs, and capital held against defaults. An AI agent mostly costs inference.

Software expands the market. Lending to your merchants is capped by how much they can borrow. Replacing their outsourced service providers, the agencies, and the bookkeepers is a much bigger pool.

And software is less risky. A loan book gets tested every downturn, and underwriting mistakes surface two years later as charge-offs. An agent's worst case is churn.

But objective reasons aside…software and AI are simply more fun, for equity analysts to cover and for employees to work on. As I wrote earlier this year, fintech is fun again, but let’s not forget that there is still a lot of money to be made in lending.

Jev Kazanins

Have feedback? Reach out on X or LinkedIn.

Nubank $NU ( ▲ 1.81% ) reported another monster quarter. It now serves 139 million customers, almost 118 million of them in Brazil, 16 million in Mexico, and more than 5 million in Colombia. Revenue grew 39% to $5.9 billion, and net income reached $1.1 billion for the first time in the company's history (up 49% from a year ago). Return on equity hit a record 33%. The growth came from lending. Nubank is shifting more of its $45.3 billion in deposits out of low-yield instruments and into loans, and the credit portfolio grew 37% to $39.4 billion.

On the earnings call, an analyst noted that Nubank now earns roughly as much as Itau, Brazil's largest bank, makes from its retail operation, and asked how Nubank can continue growing. A big part of CEO David Velez's answer was Mexico. His base case is a business 60% to 70% the size of Brazil, and since Mexico has a higher income per capita, it could end up just as big. Colombia is growing ahead of plan too, with Velez calling the business "significantly overperforming." And he didn't even have to mention the US, where Nubank won conditional approval for a bank charter in January.

Read more: Nu Reports Second Quarter 2026 Financial Results

Adyen $ADYEN reported first-half results last week. Processed volume rose 24% YoY to €803.8 billion, net revenue grew 19% YoY to €1.3 billion, and EBITDA reached €641.5 million at a 49% margin. That's almost Rule of 70 there. Digital, the company's largest segment, grew revenue 13% YoY, Unified Commerce grew 25% YoY, and Platforms grew 37% YoY. For the full year, Adyen expects revenue growth of 21% to 23% YoY.

Adyen built everything in-house for 20 years, then broke its no-acquisition rule twice this year. It bought Talon.One, a Berlin loyalty platform, and then Orb, whose software handles usage-based billing. "We started by building the world's most advanced payments processing stack. Now we are expanding that same engineering-first mindset to solve customer pain points before, at, and after the transaction," Co-CEO Ingo Uytdehaage said on the earnings call. I wrote about why Adyen is moving beyond payments processing after their first acquisition.

Read more: Adyen H1 2026 Shareholder Letter

Klarna $KLAR ( ▼ 2.19% ) reported its second-quarter results on August 17. GMV grew 18% YoY to $36.6 billion, revenue grew 27% YoY to $1.04 billion, and transaction margin dollars, Klarna's gross profitability measure, grew 42% YoY to $446 million. Net income came in at $9 million, against a $53 million loss a year ago. The stock still fell about 20%, because Klarna trimmed its full-year GMV outlook on weak consumer spending in Germany, and announced leadership changes.

The selloff might be missing what is working. The US, Klarna's largest market by revenue, grew GMV 27% YoY and revenue 37% YoY, and the guidance cut leaves US assumptions unchanged. The newer products keep growing too. Fair Financing, Klarna's point-of-sale installment product, financed $4.7 billion of purchases in the quarter, up 82% YoY. Klarna Memberships reached 2 million paying subscribers, 8x more than a year ago, while the Klarna Card reached 6.5 million active users across 16 countries, up from 1.3 million.

Read more: Klarna Reports Second Quarter 2026 Results