Can NerdWallet Outrun the AI Disruption?
A 141% explosion in loan revenue masked a shrinking credit card vertical in Q4, leaving analysts wondering if the platform is investing enough in the next generation of financial search.
Hey Toaster Readers,
This week is sponsored by our friends at Fintel Connect.
We’ve got a packed edition headlined by NerdWallet’s growth paradox, hitting record revenue of $836.6 million even as AI-driven search erosion poses an existential threat to their core model. The AI disruption continues at Block, which is cutting its workforce by 40% in a massive bet on smaller, automated teams. In payments, the landscape is shifting as Stripe expresses interest in acquiring veteran incumbent PayPal, while Klarna surges to 55 million monthly users in its evolution toward becoming a global digital bank. We’re also breaking down Bilt’s new rewards for mortgage spending and a sobering Equifax report showing U.S. consumer debt has accelerated to $18.20 trillion.
Lots to break down. Let’s get toasting!
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— Nick Madrid, Co-Founder of The Free Toaster and Uncovered Media
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NerdWallet’s Growth Paradox: Record Profits Amidst Losing Ground
NerdWallet reported $225 million in revenue for Q4 2025 as the company managed shifts in consumer search behavior. Operating as a financial matchmaking platform, the business earns commissions by connecting users with credit cards, loans, and insurance products. The Loans division saw the most significant movement with a 141% revenue increase to $42.3 million, while the Emerging segment covering banking and investing grew 57% to $52.9 million. Insurance revenue rose 13% to reach $81.2 million, helping offset double-digit declines in the Credit cards and SMB categories. By the end of the year, the team doubled its non-GAAP operating income to $96 million and maintained a cash balance of $98 million. It looks like the company is navigating a tricky search environment by leaning on its lending and banking growth to keep the numbers steady. (NerdWallet)
Toasters Take
We’ll be honest. These numbers are a little puzzling.
The credit cards decline is about what you’d expect. Organic search headwinds have been hitting the category hard, and NerdWallet hasn’t been able to make up the difference in paid media. That’s partly because paid search in the cards vertical is ruthlessly competitive, and NerdWallet is still developing its muscle there. What makes it sting a little more is the broader context: lenders we talk to are actually growing in affiliate channels in cards right now. This isn’t a category that’s rolled over. NerdWallet is losing ground in a market that’s still very much alive.
The insurance story deserves more scrutiny. Auto insurance has been one of the more volatile media categories of the past five years. It surged early in the pandemic, went completely quiet through 2022 and 2023 as carriers pulled back hard, and has roared back through 2024 and 2025 as those same carriers returned with serious budgets. The question worth sitting with is whether NerdWallet’s insurance growth reflects genuine platform strength and execution, or whether they’re simply well-positioned to catch incremental media spend from carriers with money to burn. Those are very different stories.
Stepping back, NerdWallet deserves real credit for growing through what could have been a genuinely ugly stretch. An AI-driven erosion of organic search traffic was an existential threat to their core publisher model, and they navigated it. That’s not a small thing.
But here’s the question that’s hard to shake. If the cards business doesn’t recover, and if insurance carriers eventually cool on their media budgets, what does this business actually look like? Those two scenarios happening at the same time would be a very uncomfortable place to model out. The growth pillars carrying 2025 could deflate at the same moment the legacy credit cards business stays structurally impaired.
The R&D line also stood out. At 7% of revenue and essentially flat year-over-year in dollar terms, it raises a real strategic question for a company whose core business is being disrupted by AI. NerdWallet built its reputation as a trusted destination for financial guidance. That model depends on people showing up to find answers. AI is actively rewiring how consumers do exactly that. If NerdWallet isn’t leaning hard into building its own AI-native experience, someone else will do it for them and take the traffic with it. The window to be the disruptor rather than the disrupted doesn’t stay open forever.
We're going deep on all of this on the The Free Toaster News Pod this week, including bringing in a category expert to help us unpack the insurance question properly. If you have a strong POV on any of this and want to join the conversation, we record Fridays at 1:30pm ET. Reply to this email and let us know.
Sponsored by Fintel Connect
Your Next Customer Relies on LLMs for Financial Advice - Is Your Financial Brand Showing up?
Fintel Connect’s first-of-its-kind report, “Competing for Visibility in the Age of AI“ reveals how large language models (LLMs) - including ChatGPT, Gemini, Perplexity, and Copilot are transforming how consumers discover, compare, and choose financial products. Consumers aren’t clicking through search results anymore - they’re asking LLMs for answers. And who gets cited matters more than ever.
In this report, you’ll learn:
Affiliate dominance: Over 60% of AI-sourced financial content comes from affiliates like NerdWallet and Bankrate.
Model differences: Gemini prioritizes bank content (72%), while ChatGPT, Copilot, and Perplexity rely heavily on affiliates.
New visibility tactics: Generative Engine Optimization (GEO) strategies to optimize brand presence in AI-powered search.
Zero-click behavior: Affiliates are now the gatekeepers of visibility as consumers increasingly get answers without clicking.
Why it matters: Whether you’re a marketing leader, affiliate manager, or growth executive, this report breaks down how to position your financial brand to be discovered, cited, and trusted - with actionable strategies to ensure your financial institution shows up where it matters most: when customers are ready to engage and convert.
The Free Toaster Podcast takes the biggest fintech, credit, and payments stories of the week and breaks down what they mean for growth, distribution, and product strategy. If you read the newsletter, this is the conversation behind it.
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Payments Processor Stripe Expresses Interest in PayPal
Stripe is reportedly looking into buying all or parts of PayPal, the veteran digital payments company that helped define the early era of online commerce. As a private firm that builds the software and infrastructure for businesses to accept internet payments, Stripe is making a move that would significantly consolidate the market. While Stripe recently reached a valuation of $159 billion, PayPal has struggled to maintain its pace against mobile-wallet competition from Apple and Google. Patrick Collison, Stripe's president, noted that the company has "had, obviously, a tough time over the past few years" as the competitive landscape changed. Even with PayPal's recent difficulties in updating its technology, the news of a potential deal sent its stock up by a substantial 6.7%. This indicates that investors still see value in the legacy firm, even if it needs a serious hardware and software refresh to stay relevant. It looks like a case of a younger, high-growth firm trying to absorb an older incumbent that once dominated the field. If the deal moves forward, it could reshape how a massive chunk of the internet handles its money. (Bloomberg)
Klarna Reaches 55 Million Monthly App Users as Usage Surges 53% Year Over Year
Klarna now serves 55 million monthly active users as a global digital bank and flexible payments provider that facilitates 3.4 million transactions per day. The company reported a 53% increase in daily engagement compared to last year, with 9 million people using the app on a daily basis. CEO Sebastian Siemiatkowski noted that when people use the app every day, it shows the company is delivering on its vision of becoming a digital bank for the next generation. This growth follows the introduction of several new features, including a debit card, cashback rewards, and peer-to-peer payments in Europe. Recent data from McKinsey suggests these trends align with broader shifts, as nine in ten consumers in the US and Europe now use digital payments. By integrating banking, spending, and shopping into one hub, the platform aims to capture the growing number of users who often leave home without a physical wallet. Klarna appears to be successfully transitioning from a checkout tool into a primary resource for daily money management. (Klarna)
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Block Cuts 40% of Its Work Force Because of Its Embrace of A.I.
Block is cutting its workforce by 40% as the company transitions to a smaller team structure reliant on artificial intelligence. This financial technology firm, which operates Square, Cash App, and Tidal, expects to lose about 4,000 employees in the process. CEO Jack Dorsey claims that intelligence tools change the fundamental requirements of running a business and allow smaller teams to work more effectively. Investors responded by sending the share price up over 26% in after-market trading despite the substantial cost of the layoffs. During a video call to discuss the cuts, Dorsey wore a hat with the word LOVE on it while employees responded with dozens of thumbs down emojis. One worker even questioned the fashion choice during the meeting where Dorsey explained his preference for acting decisively rather than cutting staff gradually. The move represents a significant bet that software can replace a large portion of the company's human staff. While Dorsey believes most companies are late to this shift, his approach marks one of the most visible instances of a firm citing AI as the primary reason for a major staff reduction. (NY Times)
Bilt Rewards Revamps Credit Card Lineup with New Tiered Options for Rent and Mortgage Spending
Bilt Rewards updated its credit card lineup with the Bilt Card 2.0, offering three different tiers aimed at users who want to earn points on rent, mortgages, and daily purchases. Column N.A. issues these cards while the fintech company Cardless Inc. manages the servicing for the Blue, Obsidian, and Palladium versions. You can choose between earning 4% back on everyday spending via Bilt Cash or using a multiplier specifically for housing payments. The Palladium Card sits at the top of the stack with a $200 annual credit and lounge access, though it requires a $495 annual fee. Bilt Rewards handles housing payments by pulling the total directly from your bank account so the transaction does not use up your available credit limit. On the first of every month, the Rent Day promotion allows you to earn double points on non-housing purchases up to a 1,000-point limit. You can add five authorized users to the account to help accumulate points faster, but the primary cardholder stays responsible for all debt. It is a straightforward way to get some kickbacks from a monthly expense that usually offers none. (Bilt)
Equifax National Market Pulse Data Shows U.S. Consumer Debt Accelerating
Equifax released new credit data showing that total U.S. consumer debt reached $18.20 trillion by the end of 2025, a 3.7% increase from the previous year. As a global data and technology firm, Equifax tracks these trends to help financial institutions and government agencies evaluate the economic health of the population. While overall delinquency rates began to drop from recent peaks, they still sit at levels higher than the norms seen before the pandemic. Bankcard balances drove much of this growth, climbing to a substantial $1.12 trillion as consumers continue to rely on revolving credit. This rising debt highlights a persistent K-shaped divide where higher-income earners benefit from asset growth while others deal with the weight of inflation and high borrowing costs. Auto loan balances remained largely flat, but many people are now turning to leasing to find lower monthly payments for expensive vehicles. Student loan debt dipped slightly by 1.4%, yet the resumption of wage garnishment poses a new risk to how people prioritize their monthly bills. It is a complicated picture that shows the American consumer is still spending even if the financial ground feels increasingly uneven. (Equifax)
Figure Doubles Consumer Loan Volume and Adds Auto Lending
Figure Technology Solutions doubled its consumer loan volume year-over-year as the blockchain-native capital marketplace continues to shift how private credit moves. The company hit $2.7 billion in volume for Q4, which represents a 131% increase and suggests borrowers are finding utility in decentralized finance. Their Figure Connect platform now handles over half of that volume, a milestone Michael Tannenbaum says represents "structural progress in how the business operates" by reducing reliance on balance sheet intermediation. They also expanded their reach by partnering with Agora Data to bring auto lending into the mix, effectively creating a capital markets highway for vehicle assets. While the core business grows, Figure also scaled its crypto-backed and small business loans. It is interesting to watch a team build out infrastructure like their new On-chain Public Equity Network while the rest of the market stays cautious. They have found a niche where the tech functions as intended and the growth numbers keep the shareholders engaged. Figure is proving that even technical changes in capital markets can be a win when the execution is this consistent. (Figure)
Gap Inc. Launches Encore, a New and More Rewarding Loyalty Experience For Lovers of Fashion & Entertainment
Gap Inc. launched a new loyalty program called Encore that connects its Old Navy, Gap, Banana Republic, and Athleta brands. As the largest specialty apparel company in America, the retailer is moving beyond standard discounts to offer members things like early product access and events with partners like Disney. CEO Richard Dickson mentioned that customers are looking for brands that shape culture rather than just simple transactions. The program includes three tiers named Core, Premier, and All-Access and it features a marketplace for limited products and charitable donations. For frequent shoppers, a new Mastercard provides points on apparel purchases made at other retailers too. This strategy attempts to turn a basic rewards system into a broader platform tied to entertainment and fashion. It is a clear move to increase customer engagement by linking clothing sales to exclusive brand experiences. (Gap)
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Other News We’re Reading
(Fintech) Stripe Publishes 2025 Annual Letter And Announces Tender Offer To Provide Liquidity To Current And Former Employees (Stripe)
(Lending) FinWise Bancorp Announces Agreement With Albert Corporation To Offer Millions Of Americans Transparent, Affordable And Convenient Short-Term Personal Loans (FinWise Bancorp)
(Fintech) Fintech Chime Sees 2026 Revenue Above Estimates On Strong Demand; Shares Surge (Reuters)
(Cards) LoanPro Partners With NXTMOVES To Deliver Scalable, End-To-End Credit Card Program Management (Business Wire)
(Fintech) Plaid Scores $8 Billion Valuation In Move Closer To 2021 Heyday (Bloomberg)
(Banking) D.C. United Announces Landmark Multi-Year Partnership With Lafayette Federal Credit Union (D.C. United)
(Lending) Synchrony And Polaris Renew Consumer Financing Partnership To Offer Flexible Payment Options For Powersports Customers (Synchrony)
(Lending) Instnt And MarkIII Launch Industry’s First “Double-Indemnity” Solution To Revolutionize The $18 Trillion Consumer Lending Market (PR Newswire)
(Banking) VolCorp Partners With Veep To Offer Earned Wage Access To Credit Unions (CUInsight)
(Banking) Payoneer Files Application For U.S. National Trust Bank Charter To Strengthen Regulated Financial Infrastructure For Global Businesses (Payoneer)
(Payments) Why Adyen Has Partnered With Medius For Corporate Cashback (Fintech Magazine)
(Banking) Credit Unions Caution Against Fighting Bias With ‘Disparate Impact’ Rule (Credit Union Times)
(Payments) Barclays Considers Blockchain Platform For Payments, Deposits (Bloomberg)
(Banking) Backbase And Plaid Partner To Bring Open Finance To AI-Powered Banking (Backbase)
(Cards) MetaMask And Mastercard Partner To Launch The US MetaMask Card, With First-Time Availability In New York (MetaMask)
(Crypto) Meta’s (Possible) Crypto Comeback Highlights Stablecoin Acceleration (Forbes)
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Catch you next week,
The Free Toaster Team
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