The Public Ledger: Block Cuts Deep

Hello, Fintech Friends!

Last week, a research firm called Citrini published a thought experiment about AI destroying the economy by 2028. IBM fell 13%. DoorDash, Amex, and Blackstone all dropped 6% or more. The market panicked over a hypothetical scenario where AI agents replace white-collar workers and consumer spending collapses.

Three days later, Block made it real.

On Thursday's earnings call, Jack Dorsey announced Block would cut from over 10,000 employees to just under 6,000. Not because the business was struggling. Because, he said, AI tools mean a smaller team can do more. He predicted most companies will reach the same conclusion within a year.

The business backs him up. It's not just healthy, it's accelerating.

Q4 gross profit hit $2.87 billion, up 24% YoY. Full-year gross profit grew 17% YoY and crossed $10 billion for the first time. Cash App monthly actives are growing again. Primary banking actives grew 22% to 9.3 million. Borrow originations tripled. Square is waking up too: GPV growth accelerated to 10% in 2025, and Q1 2026 is tracking above 12%.

The 2026 guidance: 18% gross profit growth, $3.2 billion in adjusted operating income, and margins expanding every quarter.

These aren't crisis numbers. This is a company with strong momentum.

Of course, there's a gap between "AI makes engineers more productive" and "we can cut 40% of the entire company because of AI." Block isn't just cutting engineers. It's cutting across the organization.

That gap is where the bloat story could fill in. Block nearly tripled headcount between 2019 and 2025, from 3,835 to over 10,200. It wasn't alone. As Bob Hammel pointed out, the entire fintech sector ballooned during COVID: 2.5x at Toast, 4x at Adyen, 1.5x at Shopify.

The truth is probably both. AI is genuinely changing productivity. And Block was overstaffed for years. But knowing the truth may not matter much. Markets are forward looking, and Block's stock could use a new story.

The company's stock peaked above $250 in 2021, fell back to pre-COVID levels, and stayed there. Even as fundamentals improved through 2024 and 2025, the market kept shrugging.

Every earnings beat got a "yeah, but." Hindenburg's short report in 2023 raised compliance questions. Cash App user growth stalled. Square seemed to be losing share to Toast and Clover. Dorsey was too absent. Now he's too present.

Is this time different? The numbers say yes. The muscle memory says buckle up.

Jev
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Stripe processed $1.9 trillion in total payment volume in 2025, up 34% YoY, according to the company's Annual Letter. That puts it ahead of Adyen, which reported €1.4 trillion (roughly $1.6 trillion), up 8% on a reported basis. Adjusted for Block's departure from the platform, Adyen's underlying growth was closer to 21%. Still well below Stripe's pace.

But the gap isn't just payments. Stripe's Revenue suite handles billing, invoicing, and revenue recognition. It's on track to hit $1 billion in annual run rate in 2026. Its customer list already includes OpenAI, Anthropic, and NVIDIA. Investors keep asking why Stripe is valued so much higher than Adyen. Perhaps it's in a different business now?

Read more: Stripe's 2025 Annual Letter

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In January, the OCC gave it conditional approval for a U.S. national bank charter. CEO David Velez framed 2026 as "the year we begin transitioning from a Latin American leader to a global digital banking platform." He was careful not to oversell it. The U.S. investment is still small, the strategy is still under wraps, and he acknowledged the market is competitive. But he made one thing clear: Nubank didn't get a bank charter to sit on it.

Read more: Q4 2025 Earnings Release

Circle reported its first full-year results as a public company. USDC ended the year at $75 billion in circulation, up 72% YoY. Full-year revenue was $2.7 billion, up 64% YoY. Adjusted EBITDA of $582 million grew 104%. But CEO Jeremy Allaire is looking past the stablecoin numbers.

"We are entering a world where tens or even hundreds of billions of AI agents will interact and perform economic functions over the Internet," he wrote. "They'll need programmable digital dollars and open infrastructure to do it." Allaire's thesis is that blockchains, stablecoins, and AI aren't separate trends. They're converging into one infrastructure layer.

Read more: Q4 2025 Earnings Release