Chime Financial, Inc. Class A Common Stock 2026 Q2 Earnings Call

Good afternoon, everyone, thank you for joining us for Chime's second quarter 2026 earnings conference call. Joining me today are Chris Britt, our co-founder and CEO, and Matt Newcomb, our CFO. Mark Troughton, our president, will participate in the Q&A session. As a reminder, we will disclose non-GAAP financial measures on this call. Definitions and reconciliations between our GAAP and non-GAAP results can be found in our earnings release and earnings presentation posted on our IR website at investors.chime.com. We will also make forward-looking statements on this call, including statements about our business, future outlook, and goals. Such statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those described. Many of these risks and uncertainties are described in our SEC filings, including our Form 10-Q filed on May 7th, 2026.

Forward-looking statements represent our beliefs and assumptions only as of the date such statements are made. We disclaim any obligation to update any forward-looking statements except as required by law. I'll now hand the call over to Chris.

Thanks, Peter, thank you all for joining us today. Q2 was an exceptionally strong quarter, with outperformance across key areas of our business. Active members grew 20%. Revenue increased 27% on a year-over-year basis. We accelerated growth of both card purchase volume and payment revenue. Our enterprise team signed on a top U.S. employer for our Chime Workplace solution. Our strong momentum is translating to the bottom line, with adjusted EBITDA margin expanding to 15% for the quarter, up 12 points year-over-year. We also posted our second consecutive quarter of GAAP net income. Our results illustrate that Chime is emerging as the clear market leader and brand of choice for banking mainstream America. We continue to take share of primary accounts from large legacy banks while deepening relationships with our over 10 million active members.

The momentum from recent product launches and our ambitious product roadmap gives us confidence in our ability to achieve our vision to be the market leader in primary bank accounts in the U.S., enabling financial progress for millions of Americans who are frustrated with incumbent bank brands. Our new Chime Prime membership tier was a big contributor to success this quarter. Launched in early April, Chime Prime membership is available to any member making $3,000 or more of qualifying direct deposits per month. With 5% cashback rewards in the category of their choice, a 3.75% savings APY, higher MyPay limits, automatic qualification for an Instant Loan, credit building, and lifestyle perks like Priority Pass lounge access, we believe Chime Prime offers one of the most rewarding ways for mainstream America to manage their everyday spending.

The core premise of Chime Prime is to provide even more value to members who engage with us deeply and to broaden our appeal to an even wider range of consumer segments. Four months in, it's clear that that strategy is working. Once again, our fastest-growing segment is among consumers with more than $75,000 in annual income. At the same time, the percentage of new direct depositors that reach Chime Prime status is higher than ever. Chime Prime is encouraging members to expand their relationship with us, with more members than ever making Chime their primary financial partner. Because Prime members spend more, have higher product attach rates, and are more likely to adopt our Chime Card, they generate substantially higher RPAM, more than double the average Chime member. Looking ahead, we'll continue to add new features to make Chime Prime even more compelling.

For example, later this quarter, we plan to roll out a revolving unsecured line of credit in beta, offering a new flexible liquidity product for Prime members with larger liquidity needs. Overall, we're thrilled with Chime Prime's early momentum and expect it to become a sustained driver of our expansion into higher-earning consumer segments. Turning to recent product news, last month, we announced the launch of Chime Invest, marking an important evolution for us from spending and savings towards helping our members build long-term wealth. While there are plenty of investment apps out there, what differentiates Chime Invest is its seamless integration into the banking app that millions of Americans rely on for their everyday money management. Almost 40% of Americans don't have any equity ownership, so we're eager to play a role in helping more consumers participate in the upside of our country's economic growth.

We can not only help our members get started, but unlike standalone investment apps, we can create a more consistent habit of investing when a paycheck arrives in your Chime account. Chime Invest includes managed portfolios created by a registered investment advisor and free self-directed investing that enables members to choose individual equities and ETFs. We're also excited to support Trump accounts pending rollover guidance from the Treasury, and we congratulate them on their successful launch last month. With nearly 80% of members already using our high-yield savings product, we're confident that we can drive adoption and consistent usage of Chime Invest early in our members' financial journey. We believe this will give Chime members a better shot at long-term wealth creation because, of course, time in the market matters more than timing the market.

Like Chime Prime, we expect Chime Invest to play an important role in attracting and retaining a broader segment of consumers to our expanding portfolio of products. Now transitioning to Chime Enterprise. I'm proud to report some exciting wins for the team. Earlier this week, we announced that Allied Universal, one of the largest employers in the U.S. with approximately 320,000 North American-based employees, has signed on to offer Chime Workplace, our employee financial wellness suite, featuring MyPay at Work. This partnership represents a transformative win and demonstrates that our workplace value proposition can attract the largest employers in the country. We also recently signed a national retailer with about 35,000 employees, and we'll have more to share in the coming weeks when we launch that partnership. With this growing momentum and strong pipeline, we expect Chime Enterprise to become a meaningful contributor to member growth in 2027.

Turning to our liquidity products, where we continue to see great performance. MyPay transaction profit grew 3x year-over-year, driven by strong origination volumes of $4.5 billion for the quarter and a sequential improvement in loss rate. We're particularly excited about the performance of Instant Loans, our low-cost and flexible installment loan product. Originations grew nearly 70% quarter-over-quarter to $300 million, with strong loss rate performance seen across our cohorts, particularly among repeat borrowers. Based on the momentum we're seeing, we expect Instant Loans to exit Q3 with an annualized revenue run rate of more than $100 million. Our Instant Loan product has the highest NPS across our product offerings and is the foundation of a new lending platform for us.

Looking ahead, we see enormous growth potential in expanded loan eligibility, limits, and duration as we extend our lending footprint into higher-income segments with larger liquidity needs. At the core of our competitive advantage is our success in developing primary account relationships. These recurring direct deposits drive more precise underwriting and an advantaged loan repayment position. The significant scale of our spending and lending platform puts us in a strong position to report on the financial health of mainstream American consumers. While geopolitical uncertainties drive headlines, as with recent quarters, we continue to see strong evidence of a healthy consumer. Adjusted for inflation, direct depositor income, account balances, and discretionary and non-discretionary spending continue to grow, and we see no signs of stress across the performance of our liquidity products.

On AI, we continue to scale Jade, our AI financial partner, to more members who are using it to understand what's happening with their money and help them make better decisions. For example, last week, Jade flagged that my food delivery spend was running above my normal pattern and asked if I wanted to set a limit. I accepted, and now Jade tells me when I'm on pace to exceed it. While no single transaction is going to change your life, we all know that smart money moves compound over time and collectively lead to financial progress. AI will continue to make financial advice more widely available than ever, and increasingly free. What I'm most excited about with Jade is the AI-driven, personalized advice and actions that can only take place from within your primary bank account. We'll be sharing more on Jade soon.

To sum up, Q2 was another strong quarter. Our results and raised full-year outlook reflect the momentum in our business and the strength of our strategy. We recently announced an internal reorganization that will reduce our workforce by approximately 10%. While these decisions are incredibly difficult, they will create a flatter and faster organization. We continue to see that smaller teams with fewer layers that use AI are shipping faster and getting even more work done. AI also continues to drive outsized efficiency gains, as we see in our cost to serve. In our roadshow, we highlighted our 3 to 5X cost to serve advantage relative to incumbents. If you look at where we landed Q2, we've now reduced our cost to serve by an average of 10% for each of the last four years. This is a reflection of our digital-first model, enhanced further by AI.

We're still early in our journey to become the leader in primary accounts for everyday Americans. The opportunity ahead is significant, and we believe that we're well-positioned to win. I'll now turn it over to Matt to cover our financial results and updated outlook.