Dave Inc./DE Q4 FY2024 earnings call

• 2024 was a record-breaking year with the fourth quarter surpassing $100 million in quarterly revenue and over $30 million in quarterly adjusted EBITDA for the first time. It also marked the first full year of profitability since 2019.
• Transitioned to a new fee structure for ExtraCash, a simple 5% fee on all ExtraCash transactions with a $5 minimum and $15 cap, completed by February 19, 2025.
• Three strategic pillars: efficiently acquiring new members, enhancing engagement with MTMs through extra cash, and deepening member relationships via the Dave Card experience. Plan to moderately expand marketing investment in 2025 while focusing on returns.
• Finalized a new strategic partnership with Coastal Community Bank to leverage its scale, experience, and capabilities for sponsoring ExtraCash and banking products.
• Addressed litigation from FTC and DOJ, filed motion to dismiss in February 2025, confident in legal position and implemented product changes to improve member experience and address disclosure/consent areas.

In the fourth quarter, total revenue reached $100.9 million, a 38% increase year-over-year. This was driven by 17% growth in multi-transacting members (MTMs) and an 18% increase in ARPU. Non-GAAP variable profit increased 58% year-over-year to $72.6 million, with a 72% margin relative to total revenue, a new all-time high. The strong performance was also due to higher engagement and monetization from both extra cash and the Dave card. MTMs grew 17% year-over-year, and ARPU increase was fueled by higher engagement and monetization of extra cash supported by cash AI optimization, as well as stronger Dave card adoption and higher levels of card spend.

• GAAP revenue for full year 2025 is expected to range between $415 million and $435 million, reflecting 20% to 25% growth compared to 2024.
• Adjusted EBITDA for full year 2025 is expected to range between $110 million and $120 million, representing approximately 27% to 39% growth relative to 2024.
• Outlook reflects strong momentum, focus on expanding ARPU and member lifetime value through extra cash and Dave Card enhancements, and building next-generation products.

• Litigation from FTC and DOJ, which filed an amended complaint on December 30, 2024. The lawsuit focuses on consumer disclosures and the process for obtaining consent for associated fees. Technical deficiencies in the amended complaint were outlined in the motion to dismiss filed on February 28, 2025.
• Uncertainties related to the outcome of the litigation which could impact the business if results differ materially from forward-looking statements.

Q: Joseph Vafi asked about the pricing model changes, how it affects monetization and customer at cost sales, marketing ROI.

A: Jason Wilk stated the new pricing model addresses issues with prior tipping and optional fees, leading to better monetization, higher ARPU, and better retention. Regarding marketing, they are well diversified across channels and will continue to invest where strong returns are seen. Kyle Beilman added on lifetime value benefits with new fee model.

Q: Jacob Stephan asked about uplift in attach rate with Dave checking and debit with new fee model, and consumer strength in underwriting.

A: Jason Wilk said no step change in conversion from extra cash to Dave card take rate with new fee model. Kyle Beilman mentioned consistent risk scores in underwriting and strong CAC.

Q: Jeff Cantwell asked about 2025 guidance breakdown, new partnership with Coastal Community Bank.

A: Jason Wilk explained the new partnership with Coastal Community Bank was kicked off over 18 months, excited about their ability to offer additional credit and debit products. Kyle Beilman added on 2025 guidance focus on growth and ARPU expansion.

Q: Harold Goetsch asked about monetization, capital allocation, and future lending products.

A: Jason Wilk discussed monetization dynamics, mentioned capital allocation including net settlement transactions, buying back stock, investing in product development, and keeping eyes open for M&A. He teased future lending products to address longer duration credit needs.

Q: Gary Prestopino asked about service-based revenue breakdown, new sponsor bank Coastal Community Bank.

A: Kyle Beilman said service-based revenue breakdown would be in the K filing. Jason Wilk stated new account growth will be placed at Coastal Community Bank starting in Q2, planning to onboard new customers exclusively there and eventually migrate the rest.