The Public Ledger: Fintech is Fun Again

Hello, Fintech Friends!

We're in the middle of earnings season, and AI is dominating every call. That's not new, but what's different this year is that products built with AI are becoming real.

A year ago, it was "we're investing in AI" with a slide. Last week, Block told investors that Moneybot is already available to all Cash App users and Managerbot is in the hands of more than 1 million Square sellers, with general availability scheduled for June. Toast spent half its earnings call on Toast IQ, which has 40,000 weekly active customer locations. Toast serves 171,000 restaurant locations in total, so almost a quarter of its base is using Toast IQ weekly.

Managerbot is Block's AI agent for Square sellers. It surfaces daily performance by location, tracks sales velocity against inventory and flags potential stockouts, drafts staff schedules, suggests marketing campaigns, and surfaces catalog issues like missing item photos or duplicate tax rates. It runs on third-party frontier models, including Anthropic's Sonnet and OpenAI's GPT family.

Toast IQ is Toast's AI assistant for restaurants. It analyzes real-time and historical data across menus, labor, and sales, answers operational questions, and takes direct actions like removing menu items or editing schedules from chat. Toast IQ Grow adds a Marketing Agent that builds audiences and runs campaigns. Scheduling, payroll, inventory, food cost, and bookkeeping agents are next.

Block and Toast are not waiting to be disrupted by vibecoded software. They are the ones building agentic products on top of years of transactions and customer workflows. A general coding agent cannot tell a restaurant in California it's losing money opening early on Saturdays for sporting events. It cannot warn a Square seller that a bestseller is about to run out based on sales velocity. Toast and Block can, because they have the POS data, the labor schedules, the inventory, and years of customer history.

Fintech companies have become software companies; now, they are becoming agentic companies. Jack Dorsey told investors Block is evolving into an "intelligence company." Toast's Aman Narang said Toast is becoming an "agent platform" that does the work for the restaurant, not just provides the software. This might sound pretentious, but the products and adoption are real.

The market will sort the talkers from the builders eventually. In the meantime, fintech is fun again. Engineers everywhere say AI made coding fun, and the same thing is happening with fintech. There was a stretch where everything was about take rates, attach rates, and basis-point margin improvement. Now shareholder letters read like release notes. We're back to building. Building things that seemed impossible a year ago.

So grab popcorn and let Jack Dorsey and Aman Narang cook.

Jev Kazanins

p.s. Have feedback? Reach out on X

Block $XYZ ( ▼ 2.55% ) reported Q1 2026 on May 7. Gross profit grew 27% YoY to $2.91 billion, accelerating from 24% in Q4 2025. Cash App gross profit was up 38% YoY, Square 9% YoY, and adjusted operating income rose 56% YoY to $728 million at a 25% margin. Block raised full-year guidance to 19% YoY gross profit growth and 62% YoY adjusted EPS growth. The stock climbed on the report.

The 40% headcount cut in February did not slow any of this. Jack Dorsey wrote in the shareholder letter that production code changes per engineer are up over 2.5x since January, with incident rates after a production code change down more than 70% versus Q1 2025. The acceleration in gross profit and the drop in incident rates support Dorsey's claim that a smaller AI-tooled team can move faster while shipping fewer bugs.

Read more: Block Q1 2026 Shareholder Letter

Coinbase $COIN ( ▼ 2.77% ) laid off about 700 employees last week, roughly 14% of staff. CEO Brian Armstrong's memo told workers that Coinbase needs to be "lean, fast, and AI-native," citing both AI and market volatility. First quarter results landed two days later. Revenue fell 31% YoY to $1.41 billion, missing the $1.52 billion analysts expected, and Coinbase booked a $394 million net loss. The bright spots were an all-time high 8.6% global trading market share and 169% YoY growth in derivatives volume.

Coinbase has cut staff before. The 2022 crypto winter brought two rounds of layoffs, 18% in June and 20% the following January. Neither was framed around AI. This round comes with a new label, but the trigger looks familiar, with spot volumes down 37% QoQ and another quarterly loss. When the next cycle turns, we'll see whether the org changes hold or whether this is the same downturn cut with new framing.

Read more: Coinbase posts steep first-quarter loss

Toast $TOST ( ▼ 3.18% ) shares dropped almost 15% last Friday, the day after the company reported its first quarter results. The numbers themselves were strong. Revenue came in at $1.63 billion, up 22% YoY, gross profit grew 29% YoY, and net income more than doubled to $126 million. Toast added 7,000 net locations to reach roughly 171,000, with gross payment volume up 22% YoY to $51.3 billion. Management also raised full-year guidance to $2.29 to $2.32 billion in recurring gross profit and $790 to $810 million in adjusted EBITDA.

The Q2 guide is what dragged the stock. Toast called for $185 to $195 million in adjusted EBITDA for the second quarter, below the Street estimates, and said hardware and tariff costs will pressure margins more in 2027 than in 2026. The company is buying memory chips early and holding more inventory than usual to keep its POS terminals and handhelds in supply for customers through next year as chip prices and tariffs both rise. AI makes software cheaper, and hardware more expensive.

Read more: Toast Announces First Quarter 2026 Financial Results