Dave Inc./DE (DAVE)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 revenue was $108.0 million, up 47% year-over-year; Adjusted EBITDA reached $44.2 million (+235% YoY) with a record non-GAAP variable margin of 77% as the new 5% fee structure improved monetization and ARPU .
• Full-year 2025 guidance was raised: revenue to $460–$475 million (from $415–$435) and Adjusted EBITDA to $155–$165 million (from $110–$120), reflecting stronger unit economics and operating leverage; management expects variable margins to normalize to upper-60s/low-70s the rest of the year due to seasonality .
• Operational highlights: ExtraCash originations of $1.5 billion (+46% YoY), 28-day delinquency improved to 1.50% (-33 bps YoY), MTMs rose 13% to 2.5 million; Dave Card spend increased 24% to $488 million .
• Capital allocation and platform transition: $50 million share repurchase authorization (began buying ~$7 million in March) and a definitive strategic partnership with Coastal Community Bank to sponsor ExtraCash and banking products, with onboarding starting in Q2 2025 .
• S&P Global Wall Street consensus (EPS/Revenue/EBITDA) was not available for DAVE at the time of this analysis; estimate comparisons to consensus cannot be made and should be treated as unavailable [SpgiEstimatesError].

What Went Well and What Went Wrong

What Went Well

• “We knocked the cover off the ball in Q1” as revenue growth accelerated to its fastest pace since 2021; Adjusted EBITDA grew 235% YoY to $44.2 million and non-GAAP variable margin hit a record 77% .
• New 5% fee structure (with $5 minimum/$15 cap) drove ARPU expansion (Q1 ARPU $171) and improved conversion/retention; Q1 had ~60% of originations on the new model, with full benefit expected from Q2 onward .
• Credit metrics reached record levels (28-day delinquency 1.50%, -33 bps YoY) and provision expense as a percentage of originations declined YoY, supported by CashAI-driven underwriting improvements .

What Went Wrong

• GAAP net income declined year-over-year to $28.8 million due to the absence of a one-time $33.4 million gain on extinguishment of convertible debt recognized in Q1 2024, creating a tough YoY compare .
• Management expects variable margins to normalize to the upper-60s/low-70s for the remainder of the year as tax-refund season passes; provision for credit losses as a percentage of originations is anticipated to trend upward through the year, peaking in Q3 due to calendar dynamics .
• Legal overhang: DOJ litigation remains pending; a motion to dismiss was filed on February 28 with a ruling expected in Q3, which introduces regulatory uncertainty despite management’s confidence in its position .

Financial Results

Segment Breakdown (Revenue)

KPIs

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Revenue grew at the fastest year-over-year pace since 2021… Adjusted EBITDA increased 235%… early success of our new fee structure… enhanced monetization and conversion rates while maintaining strong member retention.” – Jason Wilk, CEO .
• “This is the seventh consecutive quarter we have either raised or exceeded our guidance… approximately 60% of total originations were on the new fee model in Q1, so we will receive the full benefit of the change in Q2 onwards.” – Jason Wilk, CEO .
• “Non-GAAP variable profit grew 67% YoY to $83.4 million, with variable margin reaching 77%… driven by reduced provision expense as a percentage of revenue and payment processing efficiencies.” – Kyle Beilman, CFO .
• “Our Board authorized a $50 million share repurchase program… we began executing in late Q1… deployed over $20 million during the quarter through share repurchases and RSU net settlements.” – Kyle Beilman, CFO .
• “We expect credit performance will normalize following the seasonally strong first quarter with variable margins expected to be in the upper 60s to low 70s…” – Kyle Beilman, CFO .

Q&A Highlights

• ExtraCash trajectory and market share: Management sees a massive TAM (roughly half of America); increased approval limits improve conversion without reducing frequency of advances per member; potential longer-duration credit products ahead .
• Credit performance under new pricing: No adverse selection observed; Q1 credit performance at all-time lows; pricing shift is “all positive” for customer orientation and business metrics .
• ARPU drivers and guide: Continued ARPU expansion expected as fee model fully rolls through; levers include higher ExtraCash limits via CashAI and greater Dave Card adoption .
• Engagement depth: ~97–98% of dollar originations are to repeat customers; median repeat transactions per customer 20–30x; direct deposit penetration still sub-10% but rising engagement through essential spend .
• Product roadmap and Coastal: Longer-duration credit testing later this year (friends/family); results expected to be discussed next year; Coastal integration underway, onboarding new accounts on Coastal beginning Q2 .

Estimates Context

• S&P Global consensus (EPS/Revenue/EBITDA) for DAVE was unavailable due to missing CIQ mapping; therefore, comparisons to Wall Street estimates cannot be provided at this time. Users should treat estimate-based beat/miss assessments as unavailable and rely on company guidance and disclosed results for context [SpgiEstimatesError].
• Management indicated another quarter of “outperformance” vs internal expectations and raised FY guidance accordingly, but this does not substitute for third-party consensus comparisons .

Key Takeaways for Investors

• Monetization inflection: The February 19 rollout of the 5% fee model is driving ARPU, conversion, and retention; with only ~60% of originations under the new pricing in Q1, Q2 and beyond should benefit from full implementation, supporting revenue and EBITDA trajectories .
• Sustained underwriting edge: CashAI continues to improve credit performance even at higher originations; record variable margin (77%) underscores strong unit economics and capital efficiency, though margins should normalize post tax season .
• Raised guide and capital return: FY25 guidance increased meaningfully; share repurchase authorization ($50M) and ~$7M executed in March add support to per‑share economics and signal management’s conviction in cash generation .
• Platform transition: Coastal Community Bank partnership should enhance scale/compliance and enable longer-duration credit offerings; near-term onboarding of new customers begins in Q2 2025, a potential catalyst for product expansion .
• KPIs momentum: MTMs at 2.5M (+13% YoY), ExtraCash originations $1.5B (+46% YoY), delinquency 1.50%, and card spend $488M (+24% YoY) validate engagement and monetization progress; watch CAC as spend ramps into seasonal demand .
• Risk monitor: DOJ litigation remains an overhang; management expects a motion-to-dismiss ruling in Q3; monitor guidance updates on variable margin normalization and provision trends into Q3 (calendar peak receivables) .
• Trading setup: Positive narrative (raised guide, fee model success, capital returns, Coastal partnership) into full-fee benefit in Q2 vs anticipated margin normalization; lack of available consensus limits beat/miss framing—trade on disclosed KPIs and guidance revisions .

Additional Supporting Details

• Liquidity: $89.7 million in cash, cash equivalents, marketable securities, investments, and restricted cash as of March 31, 2025; working capital $264.0 million; stockholders’ equity $199.5 million .
• Conference details and IR materials: Q1 earnings call on May 8, 2025, with transcript and earnings presentation available via investor relations site .
• Fee structure announcement: Simplified 5% fee with $5 minimum and $15 cap; no instant transfer fees to Dave Checking; early testing indicated positive member feedback and enhanced LTV .