Q4 2023 Earnings Summary
Reported on Feb 28, 2025 (Before Market Open)
Pre-Earnings Price$21.90Last close (Mar 4, 2024)
Post-Earnings Price$27.38Open (Mar 5, 2024)
Price Change
$5.48(+25.02%)
- Strong Financial Performance and Profitability: Dave achieved profitability in Q4 2023, generating $10 million of adjusted EBITDA and positive GAAP net income. Total GAAP revenue increased by 23% year-over-year to $73.2 million , and non-GAAP variable profit grew by 80% to $45.9 million, representing a 61% margin. The company has provided guidance for 2024, expecting GAAP revenue to grow 18% to 25% and adjusted EBITDA to range between $25 million and $35 million, reflecting a $35 million to $45 million improvement relative to 2023. This strong financial performance and positive outlook indicate a solid foundation for future growth.
- Improved Operational Efficiency and Cost Management: Dave significantly enhanced its operational efficiency by reducing customer acquisition costs (CAC) by over 50% and decreasing advertising and marketing expenses by 16% to $10 million in the fourth quarter. Variable margins increased by 2,200 basis points compared to Q2 2022 , and the provision for credit losses decreased by 28% to $14.5 million. Processing and servicing costs also decreased by 10%. These improvements highlight the company's ability to scale efficiently and enhance profitability through disciplined cost management.
- Growth in Core Business and Member Engagement: The company reached a milestone by disbursing over $1 billion in ExtraCash advances in Q4, representing a 29% growth from last year. The 28-day delinquency rate improved by 139 basis points to 2.19%, despite the growth in origination volume. Dave Card spending volume increased to $369 million, a 41% year-over-year increase. With cross-attach rates from ExtraCash into Dave Card reaching approximately 50% among ExtraCash actives , the company is deepening its relationship with members, potentially leading to higher lifetime value and sustained revenue growth.
- Dave expects soft demand for its ExtraCash product in the first quarter of 2024 due to tax refunds providing additional liquidity to members, which may negatively impact revenue growth in that period.
- The company plans to increase investments in product development and data capabilities in 2024, which may raise operating expenses and affect profitability, potentially slowing down the margin improvements achieved in 2023.
- Despite efforts to deepen engagement, the average transactions per Monthly Transacting Member remained roughly flat sequentially at 6.4%, indicating potential challenges in driving increased spending among existing users.