• Revenue: $100.9 million in Q4, a 38% increase year-over-year.
• Adjusted EBITDA: $33.4 million in Q4; excluding a one-time benefit, $32.3 million.
• Non-GAAP Variable Profit: $72.6 million in Q4, a 72% margin relative to total revenue.
• Provision for Credit Losses: $16.6 million in Q4, a 15% increase year-over-year.
• GAAP Net Income: $16.8 million in Q4, an improvement of $16.6 million versus Q4 of last year.
• Adjusted Net Income: $29.6 million in Q4 compared to $6.6 million in Q4 2023.
• Cash and Cash Equivalents: $91.9 million as of quarter end.
• ExtraCash Originations: $1.5 billion in Q4, up 44% year-over-year.
• Member Acquisition Growth: 12% year-over-year in Q4.
• Average Revenue Per User (ARPU): Increased 18% year-over-year in Q4.
• Marketing Costs: $12.6 million in Q4, a 25% increase year-over-year.
• Compensation-Related Expenses: $27.2 million in Q4, up from $23.5 million in the prior year period.
• Dave Card Spending: $457 million in Q4, up 24% year-over-year.
• CashAI Underwriting Model: Improved 28-day delinquency rate by 53 basis points year-over-year.
• 2025 Revenue Guidance: Expected to range between $415 million and $435 million.
• 2025 Adjusted EBITDA Guidance: Expected to range between $110 million and $120 million.

• Warning! GuruFocus has detected 4 Warning Signs with OFS.

Release Date: March 04, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Dave Inc (NASDAQ:DAVE) achieved record-setting fourth quarter results with over $100 million in quarterly revenue and more than $30 million in quarterly adjusted EBITDA.
• The company surpassed its original and updated guidance for 2024, driven by strong performance across all key business areas.
• Monthly Transacting Member (MTM) growth remained robust, supported by stable customer acquisition costs (CACs) and enhanced member retention.
• The new fee structure for ExtraCash transactions is expected to improve monetization and align better with customer needs, potentially increasing credit access.
• Dave Inc (NASDAQ:DAVE) finalized a strategic partnership with Coastal Community Bank, enhancing its ability to offer next-generation financial products.

Negative Points

• The company is facing litigation from the Federal Trade Commission and the Department of Justice regarding consumer disclosures and fee consent processes.
• Advertising and marketing costs increased by 25% year-over-year, reflecting a higher investment in customer acquisition.
• Provision for credit losses increased by 15% year-over-year due to higher origination volumes, despite improved credit performance.
• The transition to the new fee model may not have significantly improved conversion rates for Dave Card adoption.
• There is uncertainty regarding the impact of lower tax refunds on consumer behavior and credit performance in the upcoming year.

Q & A Highlights

Q: Can you provide more details on the new pricing model and its impact on monetization? A: Jason Wilk, CEO: The new pricing model, which includes a fixed fee of 5% with a $5 minimum and $15 cap, has improved monetization by ensuring consistent revenue from customers over time. This change has led to higher ARPU and better retention, creating a strong growth flywheel. The transition to this model was completed by February 19.

Q: How do you plan to manage customer acquisition costs and marketing investments in 2025? A: Jason Wilk, CEO: We have a diversified acquisition strategy across multiple channels, including word of mouth, TV, and digital platforms. We plan to continue investing in areas with strong returns and maintain a disciplined approach to capital deployment. Kyle Beilman, CFO, added that the new fee model and improved user experience have increased lifetime value, allowing for sustained attractive returns even if CACs rise.

Q: What impact has the new fee model had on the attach rate for Dave Checking and Dave Debit? A: Jason Wilk, CEO: The new fee model has not significantly changed the conversion rate from ExtraCash to the Dave Card, but it has positively impacted the take rate for ExtraCash. The removal of the instant transfer fee has not negatively affected conversion rates.

Q: Can you discuss the impact of the macroeconomic environment on your underwriting and credit performance? A: Jason Wilk, CEO: Our underwriting remains consistent, and we've seen strong credit performance with a 1.6% loss rate in Q4. The short-term nature of ExtraCash suits consumers' needs for discretionary spending, and our risk scores have remained stable. Kyle Beilman, CFO, noted that credit performance aligns with seasonal expectations, particularly with tax refunds providing liquidity.

Q: What are your expectations for revenue growth in 2025, and how do you see service-based and transaction-based revenue evolving? A: Jason Wilk, CEO: We expect 20% to 25% revenue growth in 2025, driven by ARPU expansion and favorable CAC conditions. While specific growth trajectories for service-based and transaction-based revenue weren't detailed, the new fee model is expected to provide near-term catalysts for service-based revenue.

Q: Can you elaborate on the new partnership with Coastal Community Bank and its implications? A: Jason Wilk, CEO: The partnership with Coastal Community Bank, which began over 18 months ago, will allow us to offer additional credit products and improve our debit relationship. Coastal's experience in credit products is superior, and we plan to onboard new customers to Coastal starting in Q2, eventually migrating all customers to them.

Q: How are you planning to handle capital allocation given your strong financial performance? A: Jason Wilk, CEO: We are considering stock buybacks, as demonstrated by a recent net settlement transaction to minimize dilution. We also plan to invest in product development and R&D, and explore M&A opportunities that align with our strategy.

Q: What potential new credit products are you considering? A: Jason Wilk, CEO: We are exploring credit products with longer durations than ExtraCash, which is currently due on the next paycheck date. This would allow customers to make larger purchases with longer repayment terms. Coastal Community Bank's experience will be instrumental in developing these offerings.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.