Dave Inc./DE Q3 FY2024 earnings call

Key Achievements - Record revenue of nearly $93 million, up 41% y-o-y, with ARPU and monthly transacting members at quarterly records. - Variable margin expanded nearly 1,300 basis points y-o-y, driven by strong credit performance from Cash AI and new underwriting model. - Achieved 63% sequential increase in adjusted EBITDA to approximately $25 million. ### Growth Strategy Pillars - Efficient Member Acquisition: Acquired 4% more members y-o-y despite spending nearly 10% less on marketing, with CAC down 14% y-o-y to $15. - ExtraCash Engagement: MTMs grew 23% y-o-y to 2.4 million, ExtraCash originations reached $1.4 billion (up 46% y-o-y), and 28-day delinquency rate improved to 1.78%. - Dave Card Strengthening: Dave Card spending volume up 19% y-o-y to $407 million. Plan to allocate more R&D resources to elevate Dave Card experience in 2025. ### New Sponsor Bank - Entered nonbinding letter of intent to form strategic partnership with a respected sponsor bank, anticipating it will diversify commercial relationships and enable launch of next-generation products. ### ExtraCash Monetization - Testing simplified mandatory fee structure to remove optional tips and instant transfer fees, aiming to scale better, improve investor clarity, and address regulatory focus.

In the third quarter, Dave achieved record revenue of nearly $93 million, up 41% from the year ago period. ARPU and monthly transacting members were at quarterly records. Variable margin expanded nearly 1,300 basis points year-over-year. Non-GAAP variable profit in Q3 was $64.2 million, representing a 69% margin relative to GAAP revenue. ExtraCash originations grew 46% year-over-year to $1.4 billion. Dave Card spending volume was up 19% year-over-year to $407 million. ARPU increased 14% year-over-year and 11% sequentially.

• Raised full year 2024 revenue guidance to $340 million to $343 million, up from previous range of $310 million to $325 million. - Raised full year 2024 adjusted EBITDA guidance to $71 million to $74 million, up from previous range of $40 million to $50 million.

• FTC matter: Company believes in strong defense but notes regulatory focus on consumer disclosures and consent for fees, though no changes to financial forecast due to FTC action. - Uncertainty around regulatory environment under potential new administrations, though expectation of a more business-friendly environment.

Q: Devin Ryan asked about the new sponsor bank announcement, including economics comparison to existing relationships and product roadmap.

A: Jason Wilk stated costs are comparable, and the bank can help launch next-generation credit and banking products, including a new credit product next year.

Q: Harold Goetsch inquired about Cash AI's role in credit performance and customer acquisition costs.

A: Jason Wilk said Cash AI has a full quarter of testing with improved models, leading to lower loss rates and better conversion/retention. Kyle Beilman added MTM retention rates are at all-time highs, supporting credit performance.

Q: Jacob Stephan asked about balancing topline growth and EBITDA growth.

A: Kyle Beilman said marketing investments are governed by acceptable returns, with strong gross profit flow-through to EBITDA.

Q: Mark Palmer asked about ExtraCash origination size and regulatory environment post-U.S. elections.

A: Kyle Beilman said existing customers drive most of the ExtraCash origination size growth. Jason Wilk expected a more business-friendly regulatory environment under a potential new administration.

Q: Gary Prestopino asked about direct deposit on the Dave Card, ExtraCash advances to the Dave Card, and FTC matter.

A: Jason Wilk said they don't disclose direct deposit but focus on bank primacy. ExtraCash advances to the Dave Card are steady. On FTC, uncertainty remains but company is confident in its position.