Dave Inc. Class A Common Stock 2026 Q2 Earnings Call

Please go ahead. Good afternoon, and thank you all for joining us.

The business is performing exceptionally well as we close out the first half of 2026. Q2 revenue grew 30% year-over-year to $171 million, and adjusted EBITDA grew 48% to $76 million at a 44% margin. On the strength of these results and the trends we see in the business, we are once again raising our full year guidance for revenue, adjusted EBITDA, and adjusted diluted EPS. The key takeaway from today's call is that our growth engine remains incredibly strong, with Q2 representing our ninth consecutive quarter of 30% plus revenue growth. Marketing efficiency and overall user growth continue to outperform. That gives us the confidence to lean further into marketing in the second half, which should accelerate MTM growth. Combined with more levers than ever on ARPU, we're well positioned to sustain this trajectory for the foreseeable future.

Turning to our growth pillars. Starting with member acquisition. We added 951,000 new members in the quarter, up 32% year-over-year, our fastest growth in nearly four years, and we delivered it at many times the scale we had back then. We did this while holding CAC flat at $19, which we believe tells us two things. Our brand and funnel are getting more efficient as we grow, and we are still in the early innings of penetrating the enormous 185 million customer TAM in the U.S. Moving to our second pillar, engagement through ExtraCash. Originations reached $2.3 billion, up 27% year-over-year, as member engagement and overall demand remains very strong.

Additionally, average ExtraCash size reached a new high of $215, meaning members are getting more of the short-term liquidity they need for gas, groceries, and rent from Dave, while also driving incremental monetization for us. We are monetizing that growing demand more effectively than ever. Last quarter, we removed a $15 fee cap for new members. Earlier this quarter, we removed that fee cap for a large portion of grandfathered members, and we plan to increase the fee cap to $20 for the remaining grandfathered members effectively August. The more efficient monetization enables us to increase average origination sizes per user with planned initiatives to raise our maximum well above $500 without compromising margin. We additionally began rolling out Cash AI V6, the latest generation of our proprietary cash flow underwriting engine.

V6 is built on more than 700 model features, nearly 400 of which are brand new. As with any model upgrade, V6 is designed to expand gross profit dollars within our controlled range of loss rates, not necessarily to drive the lowest possible loss rates. With stronger growth spreads from our new pricing, the model has greater flexibility to optimize unit economics. Early results suggest V6 is delivering higher credit limits and is driving the desired outcome of expanded gross profit dollars. Those higher limits also deepen member value, which tends to compound into better conversion, retention, and reactivation, and ultimately, MTM and revenue growth. A win-win. Moving to our third pillar, deepening card engagement. Dave Card was approximately $530 million, up 7% year-over-year, as card volume continues to benefit from its natural synergy with ExtraCash.

As we discussed last quarter, we have deliberately shifted our focus from new debit focus initiatives to our new Dave Flex Card, which we believe has more differentiation in the market to win top of wallet spend, given our advantages in underwriting. We continue to expand test cohorts as unit economics have improved and early engagement has been promising. Our focus remains to test in order to optimize through year-end. We do not expect Dave Flex to contribute meaningful revenue in 2026, and is not embedded in our guidance. We will share more as performance data matures. Before I turn it over to Kyle, a couple strategic updates. First, on our partnership with Coastal Community Bank. During the quarter, we began funding ExtraCash receivables through our new structure with Coastal.

As it scales, it makes our funding model significantly more capital efficient, lowers our cost of funds, and frees up meaningful liquidity to pursue high-return investment opportunities and return capital to shareholders. We have already unlocked nearly $100 million of cash on the balance sheet as a result of this favorable arrangement. Finally, on the DOJ matter, we have no updates and continue to vigorously defend our position. In closing, halfway through the year, this business is delivering exactly what we said it would. Members are growing quickly, credit is further improving from an already favorable level, and we're expanding revenue per user. My thanks to the entire Dave team for another exceptional quarter. With that, I'll turn it over to Kyle.

Thanks, Jason, good afternoon, everyone. The second quarter brought together the things we care most about. Durable, high-quality revenue growth driven by a healthy mix of efficient customer acquisition and improving revenue per user, all while delivering strong credit performance. We additionally delivered on continued operating leverage and growing capital efficiency as we moved receivables off balance sheet to Coastal. The combination, in addition to the ongoing momentum we continue to see, gives us the confidence to raise our full-year outlook across all metrics. Today, I'll cover the drivers of the quarter and how we are thinking about the ARPU trajectory, credit and provision, margins, capital, and our financial targets for the year. As always, there is a detailed KPI breakdown in the earnings supplement on our IR site. Starting with revenue. Total revenue was $171 million, up 30% year-over-year, nearly 8% sequentially.

Growth was driven by a 17% increase in MTMs to $3.08 million, 11% ARPU growth. New member conversion, retention, reactivation performed well, this quarter the mix shifted toward member-led growth as acquisition re-accelerated. The mix shift is deliberate and healthy as a result of the sizable ramp we're seeing at the top of the funnel. Let me expand on the ARPU trajectory Jason mentioned a moment ago. As acquisition increases, newer members represent a larger share of the MTM base. Their ARPU begins lower and expands with tenure, more than doubling on average from the acquisition month to the fourth month on book. At the same time, several monetization tailwinds are stacking. By late August, nearly all of our members are expected to have either no fee cap or a $20 cap, we expect the share with no fee cap to continue increasing.

Lifting the fee cap gives us meaningful monetization headroom to expand ExtraCash limits, not only up to the current $500 maximum, but as Jason mentioned, we have plans to go beyond that, increasing both member value and total monetization. Additionally, our high-margin subscription mix continues to expand, reaching 9% of total revenue, compared with 6% a year ago. Together, these factors reinforce our confidence in the ARPU opportunity ahead, even before accounting for the impact of Dave Flex and other future products. The quarterly cadence will reflect acquisition mix, as newer cohorts mature and these monetization levers scale, we expect to enter 2027 with a significantly larger MTM base and increasing monetization across that base. Turning to credit and provision. Our 28-day past due rate, which we believe is the most direct measure of underlying credit quality, improved 14 basis points year-over-year to 2.12%.

Sequentially, the rate increased due to seasonal normalization following Q1's tax refund season. More importantly, year-over-year performance strengthened from roughly flat in Q1 to 6% better in Q2, even as originations grew by 27%. Credit performance has remained strong thus far in the quarter, based in part from the early impact of the V6 model rollout, which we expect will deliver Q3 loss rates in a similar range to Q2 with the benefit of higher ExtraCash origination sizes. Provision for credit losses was $29 million, up 14% year-over-year. Provision reflects three main drivers, portfolio growth, credit performance, and the day of the week on which the quarter ends. Sequentially, provision increased 8%, compared with a 15% increase in gross ExtraCash receivables, including the portion funded through Coastal. Both Q2 and Q1 ended on a Tuesday, which is typically the intraweek peak in outstanding receivables.