Q1 2024 Dave Inc Earnings Call

Operator: Good morning everyone, and thank you for participating in today's conference call to discuss Dave's financial results for the first quarter ended March 31st, 2024. Joining us today are Dave's CEO, Mr. Jason Wilk, and the company's CFO, Mr. Kyle Beilman.

Good morning, everyone and thank you for participating in today's conference call to discuss Dave's financial results for the first quarter ended March 31, 2020 for joining US today are Dave <unk> CEO, Mr. Jason and the company's CFO, Mr. Kyle Beeman.

Operator: By now, everyone should have access to the first quarter 2024 earnings press release which was issued earlier today. This release is available in the investor relations section of Dave's website at investors.dave.com. In addition, this call will also be available for webcast replay on the company's website.

By now everyone should have access to the first quarter of 2024 earnings press release, which was issued earlier today. This release is available at the Investor Relations section.

Website.

Dot Dot Com. In addition, this call will also be available for webcast replay on the company's website. Following management's remarks, we'll open the call to your questions certain comments made on this conference call and webcast are considered forward looking statements under the private Securities Litigation Reform Act.

Operator: Following management's remarks, we'll open the call to your questions. Certain comments made on this conference call and webcast are considered forward-looking statements under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain known and unknown risks and uncertainties as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. These forward-looking statements are also subject to other risks and uncertainties that are described from time to time in the company's filings with the SEC.

<unk> 1995. These forward looking statements are subject to certain known and unknown risks and uncertainties as well as assumptions that could cause actual results to differ materially from those reflected in these forward looking statements.

These forward looking statements are also subject to other risks and uncertainties that are described from time to time in the company's filings with the SEC do not place undue reliance on forward looking statements, which are being made only as of the date of this call except as required by law. The company undertakes no obligation to run.

Operator: Do not place undue reliance on forward-looking statements, which are being made only as of the date of this call. Except as required by law, the company undertakes no obligation to revise or publicly release the results of any revision to any forward-looking statement. The company's presentation also includes certain non-GAAP financial measures, including adjusted EBITDA, as supplemental measurements of the performance of our business. All non-GAAP measurements have been reconciled to the most direct. I would now like to turn the call over to Dave's CEO, Mr. Jason Wilk. Please go ahead.

Buys or publicly release the results of any revisions to any forward looking statements. The company's presentation also includes certain non-GAAP financial measures, including adjusted EBITDA.

Some mental measurements of performance of our business all non-GAAP measurements have been reconciled to the most direct.

Directly comparable GAAP measures in accordance with the SEC rules, you'll find reconciliation charts and other important information in the earnings press release form 8-K furnished by the SEC.

I would now like to turn the call over to Dave CEO, Mr. Jason Wilke. Please go ahead.

Jason Wilk: Thank you, and good morning everyone. Dave's strong business performance from last year continued into 2024 as we exceeded our growth and profitability targets in the first quarter. Revenue grew by 25% year over year, our second consecutive quarter of accelerating revenue growth, and our operating expenses declined on a year-over-year basis for the fourth consecutive quarter as we continue to lean into the operating leverage inherent in our business model. As a result, we posted our second consecutive quarter of profitability, generating $13.2 million of adjusted EBITDA in the first quarter, representing a nearly $18 million improvement relative to Q1 of last year and a 32% improvement sequentially.

Dave: Thank you and good morning, everyone.

Jason Wilk: <unk> strong business performance from last year continued into 2024, as we exceeded our growth and profitability targets in the first quarter revenue grew by 25% year over year, our second consecutive quarter of accelerating revenue growth and our operating expenses declined on a year over year basis for the fourth consecutive quarter as we continue to lean into the operating leverage inherent.

Dave: And our business model.

Dave: As a result, we posted our second consecutive quarter of profitability generating $13 2 million of adjusted EBITDA in the first quarter, representing a nearly $18 million improvement relative to Q1 of last year and a 32% improvement sequentially.

Jason Wilk: As a result, we have raised our adjusted EBITDA guidance for 2024 to reflect these outstanding results as we further expand our monthly transacting member base beyond the 2.1 million member inflection point at which we achieved profitability in 4Q of last year. We are one of the pioneers in leveraging AI and machine learning techniques within financial services. Harnessing the power of AI is an additional source of operating leverage across the business with our internally developed cash AI underwriting engine and our AI-enabled chatbot called Dave GPG. Cash AI underwrites our members' cash flow data as we're able to detect income and spending patterns as well as employment signals at a granular level.

Dave: As a result, we have raised our adjusted EBITDA guidance for 2024 to reflect these outstanding results.

Dave: Further expand our multi transacting member base beyond the $2 1 million member inflection point at which we achieve profitability in <unk> of last year.

Dave: We are one of the pioneers in leveraging AI and machine learning techniques within financial services harnessing the power of AI as an additional source of operating leverage across the business with our internally developed cash AI underwriting engine and our AI enabled chat bot called Dave GPT.

Dave: Cash AI underwrites, our numbers cash flow data as we are able to detect income and spending patterns as well as employment signals at a granular level.

Jason Wilk: Extra cash's short duration lends itself to cashflow underwriting, as we have originated nearly 100 million extra cash advances since inception, with steadily improving loss rates, providing a tremendous opportunity for cash AI machine learning to continually optimize. We believe Cache.ai's time-tested and data-rich ability to underwrite effectively through multiple economic cycles creates a powerful moat that continues to distinguish Dave from new and existing competitors. With Cash.ai, we've demonstrated our ability to consistently grow origination volume while improving loss rates, further validating our ability to continue to scale while creating more opportunities for member value and improving monetization moving forward.

Dave: Extra cash as short duration lends itself to a cash flow underwriting as we've originated nearly $100 million extra cash advances since its inception with steadily improving loss rates, providing a tremendous opportunity for Kashi is machine learning to continually optimize.

Dave: We believe cash is time tested and data rich ability to underwrite effectively through multiple economic cycles creates a powerful moat that continues to distinguish <unk> from new and existing competitors.

Dave: With casualty I, we've demonstrated our ability to consistently grow origination volume, while improving loss rates further validating our ability to continue to scale, while creating more opportunities for member value and improved monetization moving forward.

Jason Wilk: Meanwhile, Dave GPT has helped us reduce member success-related costs while increasing member satisfaction and supporting member retention, which is a win-win for our members and for our cost structure. In the first quarter of 2024, we extended our live chat hours of operation based on the strong resolution rates we have been achieving with DavePPT.

Dave: Meanwhile, Dave GPT has helped us reduce members' success related costs, while increasing member satisfaction in supporting member retention, which is a win win for our members and for our cost structure in the first quarter of 2024, we extended our live chat hours of operation based on the strong resolution rates, we have been achieving with DVT.

Jason Wilk: This increased the mix of member contacts that we are handling through the highly cost-effective DaveGPT platform while contributing to a 14% sequential increase in our member success net promoter scores in the quarter. Overall, we are continuing to invest deeply in AI as part of our strategy to maximize efficiency, generate operating leverage, and further differentiate ourselves in the market. With that said, I'd now like to provide more detail on the first quarter and our continued progress on Dave's growth strategy of acquiring new members efficiently, engaging them effectively with interest-free credit via Extra Cash, and deepening our relationship with them via Dave Carr Banking Engagement.

Dave: This increase the mix of member contacts that were handling through the highly cost effective Dave GPT platform, while contributing to a 14% sequential increase in our members' success net promoter scores in the quarter.

Dave: Overall, we are continuing to invest deeply in AI as part of our strategy to maximize efficiency generate operating leverage and further differentiate ourselves in the marketplace.

Dave: But that said I would now like to provide more detail on the first quarter and our continued progress on days growth strategy of acquiring new members efficiently engaging them effectively with interest free credit the extra cash and deepening our relationship with them via Dave card banking engagement.

Jason Wilk: We continue to focus on acquiring members efficiently as one of our key competitive differentiators. We've made considerable progress strengthening new member conversion, as well as existing member retention and reactivation over the past year, which is translating into greater lifetime value for our members. Given that our cap remained highly efficient in the first quarter at $16, which is consistent with the level we achieved in the year-ago period, the returns on our marketing investments are expanding alongside member lifetime value.

Dave: We continue to focus on acquiring members efficiently as one of our key competitive Differentiators. We've made considerable progress strengthening new member conversion as well as existing member retention and reactivation over the past year, which is translating into greater lifetime value of our members.

Dave: Given that our CAC remained highly efficient in the first quarter at $16, which is consistent with the level. We achieved in the year ago period. The returns on our marketing investments are expanding alongside member lifetime value.

Jason Wilk: Relative to the prior quarter, our CAC rose by $1 as a result of seasonally softer demand for extra cash as tax refunds often support the liquidity needs of our member base during the first quarter. Being an election year, we are keeping a watchful eye on potential election impacts on our TAC, though we have not experienced any thus far.

Dave: Relative to the prior quarter, our Tac rose by $1 as a result of seasonally softer demand for extra cash as tax refunds often support the liquidity needs of our member base during the first quarter.

Dave: Being an election year, we are keeping a watchful eye on potential election impact on our cash that we have not experienced any thus far.

Jason Wilk: The member acquisition environment has remained very constructive thus far in Q2, and we remain optimistic about our ability to drive efficient member growth moving forward. That said, we will continue to exercise discipline as November approaches as we remain committed to our goal of ensuring our return hurdles are met with the marketing dollars we deploy. The second pillar of our growth strategy is driving greater MTM engagement through the extra cash product as a starting point for the member journey.

Dave: The member acquisition environment has remained very constructive thus far in Q2, and we remain optimistic about our ability to drive efficient member growth moving forward.

Dave: That said, we will continue to exercise discipline as November approaches as we remain committed to our goal of ensuring our return hurdles are met with the marketing dollars we deploy.

Dave: The second pillar of our growth strategy is driving greater MTM engagement through the extra cash product as a starting point for the member journey.

Jason Wilk: Our monthly transacting member base continues to grow, with MTMs up 14% year over year and 6% sequentially to a record 2.2 million. This growth was favorably impacted by the meaningful progress we've made strengthening member retention and reactivation, as well as the successful implementation of our next generation subscription billing system, which has helped to enhance subscriber retention and is expected to enable us to expand subscription opportunities in the future. For the second consecutive quarter, we dispersed over $1 billion in extra cash advances to our members, increasing Origination 32% year-over-year and 2% sequentially.

Dave: Our monthly transacting member base continues to grow with MTN is up 14% year over year, and 6% sequentially to a record $2 $2 million.

Dave: This growth was favorably impacted by the meaningful progress we've made strengthening member retention and reactivation as well as the successful implementation of our next generation subscription billing system, which has helped to enhance subscriber retention and is expected to enable us to expand subscription opportunities in the future.

Dave: For the second consecutive quarter, we disbursed over $1 billion in extra cash advances to our members increasing origination 32% year over year and 2% sequentially.

Jason Wilk: This sustained growth, particularly during a seasonally softer quarter, is a testament to the strength of our proprietary cash AI underwriting model, which allows us to effectively underwrite more DAVE members for higher extra cash advance sizes while improving upon credit performance. Our 28-day delinquency rate remained significantly below Q1 2023 at 1.83%, a 77-basis point improvement year-over-year.

Dave: This sustained growth, particularly during a seasonally softer quarter is a testament to the strength of our proprietary cash AI underwriting model, which allows us to effectively underwrite more Dave members for hire extra cash event sizes, while improving upon credit performance.

Dave: Our 28 day delinquency rate remained significantly below Q1, 2023 at 183%, a 77 basis point improvement year over year.

Jason Wilk: This extends our track record of improving our already stellar credit performance, differentiating ourselves from incumbents. As mentioned on prior calls, we remain focused on investments in our cash AI underwriting model to expand credit access for our members as we aim to scale the member base while continuing to improve our ability to evaluate credit risk. Credit performance in the first quarter benefits from the additional liquidity that tax refunds provided to our members.

Dave: This extends our track record of improving our already stellar credit performance differentiate ourselves from incumbents.

Dave: As mentioned on prior calls we remain focused on investments in our casualty underwriting model to expand credit access for our members as we aim to scale the member base, while continuing to improve our ability to evaluate credit risk.

Dave: Credit performance in the first quarter benefits from the additional liquidity, which tax refunds provided to our members as.

Jason Wilk: As a result of that dynamic, we expect our 28-day delinquency rate to normalize through the rest of the year, consistent with historical patterns, though well below 2023 levels, on a light quarter basis, attributable to the sustained improvements we've made to risk management.

Dave: As a result of that dynamic we expect our 28 day delinquency rate to normalize through the rest of the year consistent with historical patterns. So well below 2023 levels on a like quarter basis attributable to the sustained improvements we've made to the risk management.

Jason Wilk: Lastly, on to the third pillar of our guiding framework, deepening member relationships by driving top-of-wallet spending through our DaveCard offer. Our approach has been to leverage extra cash to drive cross-attachment to the Dave Card by making the extra cash funds available more quickly and inexpensively if sent to the Dave Card. These products are naturally complementary, which we expect to more fully leverage going forward by making members' experiences on either product even better when they use both products.

Dave: Lastly, under the third pillar of our guiding framework deepening member relationships by driving top of lower spending through our data card offering.

Dave: Our approach has been to leverage extra cash to drive cross attach the Dave card by making the extra cash bonds available more quickly and inexpensively incentive the Descartes.

Dave: These products are naturally complementary, which we expect to more fully leverage going forward by making members' experiences on either product even better when they use both products.

Jason Wilk: Our strategy is proving effective with cross attach rates up approximately 10% on a year over year basis. This is an efficient way for us to drive trial with a DAPE card and an important step in building the trust required to win direct deposit relationships.

Dave: Our strategy is proving effective with cross attach rates up approximately 10% on a year over year basis.

Dave: This is an efficient way for us to drive trial with the Descartes and an important step in building the trust required to win direct deposit relationships.

Jason Wilk: Direct deposit relationships are notably impactful given the 5-6x transaction revenue ARPU increase we typically capture once a direct deposit relationship has been established. We're still in the early stages of winning direct deposit, and, on top of all, it's spending behavior with our members, which is a strategic focus for us in 2024. Overall, our Dave card continues to gain traction, with spending volume in the first quarter up 34% year-over-year and 7% sequentially to a record $394 million.

Dave: Direct deposit relationships are notably impactful given the 5% to six X transaction revenue ARPA increase we typically capture once a direct deposit relationship has been established.

Dave: We're still in the early innings of winning direct deposit and top of wallet spending behavior with our members, which is a strategic focus for us in 2024.

Dave: Overall, our <unk> card continues to gain traction with spending volume in the first quarter up 34% year over year, and 7% sequentially to a record $394 million.

Jason Wilk: Average transactions per MTM post a 15% year-over-year increase based on our continued focus on driving members to spend their extra cash on their DaveCard as well as improvements in extra cash engagement. This metric declined on a sequential basis due to the full quarter impact of Dave's new subscription billing system, which caused a higher proportion of subscribers only to transact one time per month.

Dave: Average transaction per MTM posted a 15% year over year increase based on our continued focus on driving members to spend the extra cash on there Dave card as well as improvements in extra cash engagement.

Dave: This metric declined on a sequential basis due to the full quarter impact of days, new subscription billing system, which caused a higher proportions with Viper only MTN dew transact onetime per month.

Jason Wilk: We believe there is plenty of room to continue growing this metric, as we began capitalizing on the opportunities to incentivize direct deposit engagement. Pulling together the progress we've made across extra cash, DaveCard, and subscriptions, we recorded a 10% increase in ARPU and Q1 on a year-over-year basis due to improvements in both extra cash engagement and monetization, as well as growth in DaveCard ARPU. Our food declined 5% sequentially in Q1 due to seasonally lower demand for extra cash during tax refund season, as well as a full quarter impact under the new subscription billing system, which increased the mix of subscriber-only MTMs who typically generate the lowest ARPA.

Dave: We believe there is plenty of room to continue growing this metric as we began capitalizing on the opportunity to incentivize direct deposit engagement.

Dave: Pulling together of the progress we've made across extra cash D card subscriptions, we recorded a 10% increase in <unk> in Q1 on a year over year basis due to improvements in both extra cash engagement and monetization as well as growth in <unk>.

Dave: <unk> declined 5% sequentially in Q1 due to seasonally lower demand for extra capturing tax refund season, as well as a full quarter impact under the new subscription billing system, which increased the mix of subscriber only mtm's you typically generate the lowest ARPA.

Jason Wilk: To wrap things up before I pass this over to Kyle, our outlook remains very positive. Our strategy and value proposition are squarely aligned with the needs of target customers, and the macro backdrop remains supportive of our growth. Our team is executing well, and I'm proud of the great work that we're delivering. We remain focused on identifying and executing on product improvements to expand member ARPU and lifetime value, as well as continuing to grow our monthly transacting member base beyond the 2.1 million member inflection point at which we achieve profitability.

Dave: To wrap things up before I pass it over to Kyle our outlook remains very positive our strategy and value proposition are squarely in line with the needs of target customers in the macro backdrop remains supportive of our growth.

Dave: Our team is executing well and I'm proud of the great work that we're delivering.

Kyle: We remain focused on identifying and executing on product improvements to expand number ARPA and lifetime value as well as continuing to grow our monthly transacting member base beyond the $2 1 million member inflection point at which we achieve profitability.

Jason Wilk: We plan to do this while remaining disciplined with our costs and utilizing our world-class technology, including the use of AI, to deliver substantial operating leverage. We look forward to further delivering value to our customers and shareholders as we solidify Dave as a superior banking solution for everyday Americans. With that, I will turn the call over to Kyle to take you through our financial results.

Kyle: We plan to do this while remaining disciplined with our cost and utilizing our world class technology, including the use of AI to deliver substantial operating leverage we look forward to further delivering value to our customers and shareholders as we solidify Dave is a superior banking solution for everyday Americans.

Dave: With that I will turn the call over to Carl to take you through our financial results Kyle.

Kyle Beilman: Thank you and good morning everyone. As Jason mentioned, our first quarter results represent new records across many of our key metrics. Our business continues to demonstrate significant operating leverage by driving higher revenue, largely through expanded ARPU and member retention. We've also improved our cost structure through efficient marketing spend, strong credit performance, and the optimization of our variable and fixed costs. Now, to dive a little deeper into our results.

Carl: Thank you and good morning, everyone as Jason mentioned, our first quarter results represent new records across many of our key metrics. Our business continued to demonstrate significant operating leverage by driving higher revenue largely through expanded <unk> member attention. We've also improved our cost structure through efficient marketing spend and strong credit performance.

Dave: Vince and the optimization of our variable and fixed costs.

Dave: Now to dive a little deeper into our results revenue in Q1 was $73 6 million up 25% from Q1 of last year.

Kyle Beilman: Revenue in Q1 was $73.6 million, up 25% from Q1 of last year. This revenue growth was driven by a 14% increase in MTMs and a 10% increase in ARPU. The MTM growth was driven by the continued efficiency of our member acquisition strategy, in addition to improvements in member retention and reactivation we achieved that led to strong existing member engagement.

Dave: This revenue growth was driven by the 14% increase in MTS and a 10% increase in <unk>.

Dave: MTM growth was driven by the continued efficiency of our member acquisition strategy. In addition to improvements in member retention and reactivation, we achieved that led to strong <unk>.

Dave: Existing member engagement.

Kyle Beilman: Increases in extra cash engagement and growth in DaveCard spend led to the uplift in ARPU. Non-GAAP variable profit in Q1 increased 47% to $49.9 million, representing a 68% margin relative to our GAAP revenue, up approximately 1,000 basis points from Q1 of last year. I would like to note that we revised our variable margin calculation to reflect non-gap variable profit as a percentage of gap revenue. In prior disclosures, variable margin reflected non-GAAP variable profit as a percentage of non-GAAP revenue.

Dave: Increases in extra cash engagement and growth and Dave card spend led to the uplift in <unk>.

Dave: non-GAAP variable profit in Q1 increased 47% to $49 9 million, representing a 68% margin relative to our GAAP revenue up approximately 1000 basis points from Q1 of last year.

Dave: I would like to note that we revised our variable margin calculation to reflect non-GAAP variable profit as a percentage of GAAP revenue.

Dave: In prior disclosures variable margin reflected non-GAAP variable profit as a percentage of non-GAAP revenue we.

Kyle Beilman: We made this change to align with the basis upon which our revenue guidance is predicated. With respect to the improvement we experienced on variable margin, the sustained increase into 2024 was driven largely by the continued optimization of our cash AI underwriting engine, which has ingested the credit performance of nearly 100 million unique extra cash advances originated since our inception. We believe this provides us with a significant competitive advantage in evaluating credit risk.

Dave: We made this change to align with the basis upon which our revenue guidance is predicated.

Dave: With respect to the improvement we experienced on variable margin. The sustained increase into 2024 was driven largely by the continued optimization of our cash AI underwriting engine, which has injected the credit performance of nearly 100 million unique extra cash advances originated since our inception.

Dave: We believe this provides us with a significant competitive advantage in evaluating credit risk the resulting improvement in credit loss experience has allowed us to reduce loss rates, while increasing the revenue we can generate per extra cash advance.

Kyle Beilman: The resulting improvement in credit loss experience has allowed us to reduce loss rates while increasing the revenue we can generate per extra cash advance. Additionally, our variable margin performance in Q1 was bolstered by our 2023 focus on vendor stack efficiency as we further optimized our usage of the payment networks and renegotiated contracts with several key vendors. Moving to first quarter operating expenses, our provision for credit losses decreased 18% to $9.9 million compared to $12 million in Q1 of last year. As a percentage of extra cash originations, the provision declined to 0.9% in the first quarter compared to 1.5% in the year-ago period. This decrease in loss provision relates to the ongoing underwriting improvements we've made to Cache. AI

Dave: Additionally, our variable margin performance in Q1 was bolstered by our 2023 focus on vendor stack efficiency as we further optimize our usage of the payment networks and renegotiated contracts with several key vendors.

Dave: Moving to first quarter operating expenses are provision for credit losses decreased 18% to $9 9 million compared to $12 million in Q1 of last year.

Dave: As a percentage of extra cash originations the provision declined <unk>, 9% in the first quarter compared to one 5% in a year ago period.

Dave: This decrease in loss provision relates to ongoing underwriting improvements we have made the cash AI.

Kyle Beilman: As Jason mentioned, compared to the first quarter of last year, our 28-day delinquency rate improved by 77 basis points to 1.83%, which represents a 30% improvement, while we grew originations by 32% year-over-year to over $1 billion for the second consecutive quarter. Going forward, we anticipate provision expenses will increase consistent with historical patterns as we expect to grow originations and as seasonal dynamics normalize. But for the avoidance of doubt, we expect our provision for credit losses for the remainder of the year to remain lower than 2023 levels, consistent with the improvements in credit performance we've been experiencing.

Dave: As Jason mentioned compared to the first quarter of last year, our 28 day delinquency rate improved by 77 basis points to 183%, which represents a 30% improvement while we grew originations by 32% year over year to over $1 billion for the second consecutive quarter.

Dave: Going forward, we anticipate provision expenses will increase consistent with historical patterns as we expect to grow originations and as seasonal dynamics normalize.

Dave: But for the avoidance of doubt, we expect our provision for credit losses for the remainder of the year to remain lower than 2023 levels consistent with the improvements in credit performance we've been experiencing.

Kyle Beilman: Processing and servicing costs during the first quarter were $7.7 million compared to 7.1 million in the year-ago period, representing 8% year over year growth. Additionally, we grew revenue by 25% over the same period. As a percentage of origination volume, processing and servicing costs improved nearly 20 basis points to 0.7% compared to 0.9% in the year-ago period.

Dave: Processing and servicing costs during the first quarter was $7 7 million compared to $7 1 million a year ago period, representing 8% year over year growth, while we grew revenue by 25% over the same period.

Dave: As a percentage of origination volume processing and servicing costs improved nearly 20 basis points to <unk>, 7% compared to <unk>, 9% in a year ago period.

Kyle Beilman: This improvement was largely driven by the structural improvements we've made to our payments infrastructure from late 2022 through the middle of 2023. We expect to sustain these improvements going forward and realize modest scale synergies as we continue to grow the business. Advertising and marketing expenses decreased 3% to $9.1 million during the first quarter compared to $9.4 million in the year-ago period, as we were able to achieve our MTM growth targets at lower levels of acquisition and spend.

Dave: This improvement was largely driven by the structural improvements we have made to our payments infrastructure from late 2022 through the middle of 2023.

Dave: We expect to sustain these improvements going forward and realized modest scale synergies as we continue to grow the business.

Dave: Advertising and marketing expenses decreased 3% to $9 1 million during the first quarter compared to $9 4 million in a year ago period, as we're able to achieve our MTM growth targets at lower levels of acquisition and spend.

Kyle Beilman: As Jason mentioned, our CAC of $16 in the first quarter remained highly efficient and was in line with the CAC we achieved a year ago. We expect marketing investment over the coming quarters to expand in order to capitalize on the higher levels of demand for extra cash as we emerge from the seasonally slower first quarter. We believe we can achieve higher returns on investment at greater scale throughout the remainder of the year. Compensation expense was $24.6 million in the first quarter compared to $24.4 million in the year-ago period.

Dave: As Jason mentioned, our tack of $16 in the first quarter remains highly efficient and was in line with the CAC, we achieved in a year ago period.

Dave: We expect marketing investment over.

Dave: Over the coming quarters to expand in order to capitalize on the higher levels of demand for extra cash as we emerge from the seasonally slower first quarter we.

Dave: We believe we can achieve higher returns on investment at greater scale throughout the remainder of the year.

Dave: Compensation expense was $24 6 million in the first quarter compared to $24 4 million in the year ago period.

Kyle Beilman: As a percentage of revenue, compensation expense declined from 41% in Q1 of 2023 to 33% in Q1 of 2024, demonstrating the significant operating leverage benefits that our technology platform affords us, the benefits of which will continue to compound as we scale from here. As Jason alluded to, AI plays a major role in how we're able to consistently grow our revenue base while keeping compensation expenses largely flat since mid-2022. We believe Cache AI is a highly scalable system such that we can scale extra cash originations exponentially without the need to make significant additions to our credit team. Within member success, we're able to service millions of members with an efficiently sized team, thanks in large part to Dave GPT.

Dave: As a percentage of revenue compensation expense declined from 41% in Q1 of 2023% to 33% in Q1 of 2020 for demonstrating the significant operating leverage benefits that our technology platform affords us the benefits of which will continue to compound as we scale from here.

Dave: As Jason alluded to AI plays a major role in how we are able to consistently grow our revenue base, while keeping compensation expenses largely flat since mid 2022.

Dave: We believe cash AI is a highly scalable.

Dave: Such that we can scale extra cash originations exponentially without the need to make significant additions to our credit team.

Dave: Within members' success, we're able to service millions of members with an efficiently sized team. Thanks in large part to Dave GPT.

Kyle Beilman: Finally, we have integrated AI-based tools within our engineering team, which has enhanced the productivity of our engineers and allowed us to grow that function only modestly over the last two years while we have grown the broader business significantly. Other operating expenses decreased 9% to $16.9 million in the first quarter, compared to $18.5 million in the year-ago period. This improvement was largely based on our ability to execute on cost rationalization opportunities with our fixed cost base, in addition to the benefits of a key vendor contract renegotiation, which occurred in the fourth quarter of 2023.

Dave: Finally, we have integrated AI based tools within our engineering team, which has enhanced the productivity of our engineers and allowed us to grow that function only modestly over the last two years, while we have grown the broader business significantly.

Dave: Other operating expenses decreased 9% to $16 $9 million in the first quarter compared to $18 5 million in the year ago period.

Dave: This improvement was largely based on our ability to execute on cost rationalization opportunities with our fixed cost base. In addition to the benefits of a key vendor contract renegotiation, which occurred in the fourth quarter of 2023.

Kyle Beilman: Gap net income for the first quarter improved to $34.2 million compared to a gap net loss of $14 million in the first quarter of 2023. We have also started disclosing Adjusted Net Income or Loss, which adjusts our gap net income or loss for stock-based compensation, changes in fair value of certain non-cash liabilities, as well as any one-time gains and losses, such as a $33 million gain on the discounted repurchase of the FTX convertible note during the first quarter.

Dave: GAAP net income for the first quarter improved to $34 2 million compared to a GAAP net loss of $14 million in the first quarter of 2023.

Dave: We have also started disclosing adjusted net income or loss, which adjusts our GAAP net income or loss for stock based compensation changes in fair value to certain noncash liabilities as well as any onetime gains <unk> losses, such as a $33 million gain on the discounted repurchase of the fts convertible note during the.

Dave: First quarter.

Kyle Beilman: With that in mind, adjusted net income for the first quarter of 2024 was $8.1 million compared to an adjusted net loss of $7.3 million in the first quarter of 2023. Adjusted EBITDA for the first quarter of 2024 was $13.2 million compared to an adjusted EBITDA loss of $4.5 million during the year-ago period. This improvement was once again due to a combination of revenue growth and variable margin expansion, rationalized marketing spend, and tight cost controls across the business.

Dave: With that context, adjusted net income for the first quarter of 2024 was $8 1 million compared to an adjusted net loss of $7 3 million in the first quarter of 2023.

Dave: Adjusted EBITDA for the first quarter of 2024 was $13 2 million compared to an adjusted EBITDA loss of $4 5 million during the year ago period.

Dave: This improvement was once again due to a combination of revenue growth and variable margin expansion rationalized marketing spend and tight cost controls across the business.

Kyle Beilman: We're very proud that we have expanded our adjusted EBITDA profitability for the second consecutive quarter and grown it by 32% sequentially. We expect to continue growing Adjusted EBITDA over time, albeit not on a linear trajectory, as, among other things, we optimize marketing investment levels on an ongoing basis based on the efficiency of our cap and the overall expected return profile of that spend. Now turning to the balance sheet. As of March 31st, 2024, we had approximately $101.5 million of cash and cash equivalents, marketable securities, investments, and restricted cash compared to $157.3 million at December 31st, 2023. The decrease in cash was driven by the repurchase of the $71 million convertible note issued to FTX Ventures.

Dave: We're very proud that we have expanded our adjusted EBITDA profitability for the second consecutive quarter and grown it by 32% sequentially.

Dave: Expect to continue growing adjusted EBITDA over time, albeit not on a linear trajectory as among other factors, we optimized marketing investment levels on an ongoing basis based on the efficiency of our tap and the overall expected return profile of that spend.

Dave: Now turning to the balance sheet.

Dave: As of March 31, 2024, we had approximately $101 5 million of cash and cash equivalents marketable securities investments and restricted cash compared to $157 3 million at December 31, 2023 <unk>.

Dave: The decrease in cash was driven by the repurchase of the $71 million convertible note issued to <unk> ventures.

Kyle Beilman: Excluding the impact of this note repurchase transaction, our cash position increased during the first quarter of 2024. As of quarter end, our net receivables balance was $104.9 million, a decrease of approximately $7.9 million sequentially. It's important to think about this net receivables balance relative to the over $1 billion of origination volume during Q1, as we believe this underscores our ability to grow extra cash originations in a capital efficient manner, given the short duration and high velocity of the portfolio.

Dave: Excluding the impact of this note repurchase transaction, our cash position increased during the first quarter of 2024.

Dave: As of quarter end, our net receivables balance was $104 9 million a decrease of approximately $7 $9 million sequentially.

Dave: It's important to think about this net receivables balance relative to the over $1 billion of origination volume during Q1 as we believe this underscores our ability to grow extra cash originations in a capital efficient manner, given the short duration and high velocity of the portfolio.

Kyle Beilman: The amount drawn on our credit facility remained at $75 million as of the end of Q1, as we continue to rely on our balance sheet cash during the first quarter to fund extra cash origination versus our credit facility, given the cost of capital difference compared to the returns on corporate cash.

Dave: The amount drawn on our credit facility remained at $75 million as of the end of Q1 as we continue to rely on our balance sheet cash during the first quarter to fund the extra cash originations.

Dave: Versus our credit facility, given the cost of capital difference compared to the returns on corporate cash.

Kyle Beilman: Overall, we believe we have ample liquidity to execute our growth plan moving forward, and we continue to believe that Dave is well positioned to achieve the profitability objectives we have laid out without the need to raise additional equity capital. Now, to turn to guidance. We continue to expect full year 2024 revenue to range between $305 million and $325 million, representing growth of 18% to 25% compared to full year 2023. As a reminder, we are now providing our revenue guidance on a gap basis rather than the non-gap revenue basis to which we had guided in prior years.

Dave: Overall, we believe we have ample liquidity to execute our growth plan moving forward and we continue to believe that Dave is well positioned to achieve the profitability objectives, we have laid out without the need to raise additional equity capital.

Dave: Now to turn to guidance.

Dave: We continue to expect full year 2020 for revenue to range between $305 million and $325 million representing growth of 18% to 25% compared to full year 2023.

Dave: As a reminder, we are now providing our revenue guidance on a GAAP basis, rather than the non-GAAP revenue basis to which we have guided in prior years.

Kyle Beilman: We have raised our 2024 adjusted EBITDA guidance to a range between $30 million and $40 million, representing a $40 to $50 million improvement compared to 2023. We continue to expect our adjusted EBITDA to remain positive on a quarterly basis going forward, though the growth may not be linear, as I mentioned. Finally, we expect to make modest and carefully calibrated investments in product development and data capabilities throughout the rest of 2024, which will further position us for long-term growth in the years ahead.

Dave: We have raised our 2024 adjusted EBITDA guidance to a range between 30 million to $40 million, representing a $40 million to $50 million improvement compared to 2023.

Dave: We continue to expect our adjusted EBITDA to remain positive on a quarterly basis going forward, though that growth may not be linear as I mentioned.

Dave: Finally, we expect to make modest and carefully calibrated investments in product development and data capabilities throughout the rest of 2024, which will further position us for long term growth in the years ahead.

Dave: Overall, our outlook remains positive and we are well positioned to execute on our growth plan and objectives throughout the remainder of 2024 and beyond.

Kyle Beilman: Overall, our outlook remains positive, and we are well positioned to execute on our growth plan and objectives throughout the remainder of 2024 and beyond. And with that, I'll now hand it back over to Jason to conclude our call.

Dave: And with that I'll now hand, it back over to Jason to conclude our call.

Jason Wilk: The first quarter was a great start to the year for our company. Our team has done a fantastic job to get us here, and I look forward to continuing our momentum throughout 2024. Operator, we can now open the call for questions.

Jason: The first quarter was a great start to the year for our company. Our team has done a fantastic job to get us here and look forward to continuing our momentum throughout 2024, operator, we can now open the call for questions.

Operator: Certainly, and ladies and gentlemen, as a reminder, if you do have a question at this time, please press star 1 1 on your telephone, and our first question comes from the line of Devin Ryan from JMP securities. Your question, please.

Jason: Certainly and ladies and gentlemen, as a reminder, if you do have a question at this time. Please press star one on your telephone and our first question comes from the line of Devin Ryan from JMP Securities. Your question. Please.

Devin Patrick Ryan: Great. Good morning, Jason and Kyle. How are you? Doing well, Devin. Good morning. Morning. So, first question here on originations.

Devin Patrick Ryan: Great Good morning, adjacent and Carl how are you.

Devin Patrick Ryan: Doing well Kevin good morning.

Devin Patrick Ryan: Obviously, as you guys highlighted, they grew modestly despite kind of normal seasonal dynamics. So I'm curious, was there just not seasonality in the industry because of the market backdrop? Or would you kind of characterize that as more of a Dave specific dynamic either because of higher average advances or adding members or other efforts to drive engagement? And then also, just curious, because you kind of grew through normal seasonality? What does that suggest for kind of a normal, maybe seasonal, rebound into the second quarter? Thanks.

Speaker Change: Good morning.

Devin Patrick Ryan: So first question here on originations, obviously as you guys highlighted they grew modestly despite kind of a normal seasonal dynamics. So I'm curious.

Devin Patrick Ryan: Was there just not seasonality in the industry because of the market backdrop or would you kind of characterize that as more of a date specific dynamic either because of higher average advances are adding members or other efforts to drive engagement and then also just curious because you kind of grew through normal seasonality what does that suggest for kind of a norm.

Speaker Change: Maybe seasonal rebound into the second quarter.

Jason Wilk: I'm happy to take the first part of the question. So Devin, I think it's a little bit of both.

Speaker Change: I'm happy to take the first part of the question. So Devin I think it's a little bit of both we've done a lot of great work on optimizing the cash AI engine to optimize for higher advance them as for our customers, which is increasing engagement.

Jason Wilk: We've done a lot of great work on optimizing the cash AI engine to optimize for higher advance limits for our customers, which is increased engagement. But I also think that there is a tougher macro backdrop going on with things like credit cards and first on loan still tightening their belts on credit originations, which leads to more volume on extra cash. So I think that helped us beat some of the season and seasonality dynamics.

Speaker Change: But I also think that there is a tougher macro backdrop going on with things like credit cards, and personal loans still tightening their belt on credit originations, which leads to more volume on extra cash. So I think that helped us beat some of the seasonal seasonality dynamics.

Kyle Beilman: Yeah, just to jump in and add to that, you know, I think that, you know, Jason's point, a lot of the improvements that we continue to make to extra cash and cash AI have really augmented customer retention and reengagement opportunities with our existing, you know, non-transacting MTMs for us to go out and kind of reacquire into engaged MTMs. And so that's just bolstered the overall kind of performance of the book.

Speaker Change: Yes, just to jump in and add to that I think.

Speaker Change: Jason's point, a lot of the improvements that we continue to make the extra cash and cash AI is really augmented customer retention and reengagement opportunities with our existing.

Speaker Change: Non transacting mtm's for us to go out and kind of re acquire into engaged mtm's and so thats just bolster the overall kind of <unk>.

Speaker Change: Performance of the book.

Speaker Change: But I'd say it from a macro standpoint or an industry wide standpoint.

Kyle Beilman: But I'd say from a macro standpoint, or an industry-wide standpoint, we did see, you know, relatively consistent performance in terms of total cash refund inflows into customer accounts, which just leads me to believe that it was more, I think, what we were doing on our end to drive reengagement than something that had changed dramatically in the macro.

Speaker Change: We did see relatively consistent performance in terms of total cash refund inflows into into customer accounts.

Speaker Change: Just leads me to believe that it was more I think what we were doing on our end to drive Reengagement then something.

Speaker Change: Had changed dramatically in the macro.

Devin Patrick Ryan: Got it. Okay. Appreciate the color, guys.

Speaker Change: Got it okay. Appreciate the color guys and then.

Speaker Change: Another one here just on origination so.

Devin Patrick Ryan: And then another one here just on origination. So continuing to see the average size pick up a bit and did again from the prior quarter to $159 transaction. I know this has been a focus of the firm, so good to see that.

Speaker Change: To see the <unk>.

Speaker Change: Average size pick up a bit and did again from the prior quarter to $159 transaction I know this has been a focus of the firm.

Devin Patrick Ryan: Where do you see that going over time, assuming a reasonable backdrop continues? And then kind of how should we think about the interplay with that and revenue per advance or credit as well? And then also, how important are higher advances to kind of your differentiation story for your customers?

Speaker Change: So good to see that where do you see that going over time, assuming a reasonable backdrop continues.

Speaker Change: Kind of how should we think about the interplay with that and revenue per advance.

Speaker Change: Or credit as well and then also how important are higher advancers higher advances.

Speaker Change: Your differentiation story for your customers.

Jason Wilk: I think part of that has to do, Devin, with just time on books. So the longer our customers retain, the engine gets better. So naturally, as retention improves, we can see advanced limits continue to scale up over time. So I'd expect that number to keep growing as we do a better job with the cache AI engine, as well as continue to improve retention.

Speaker Change: I think part of that has to do definitely with just time on book So the longer customers retain the engine gets better so naturally as retention improves we can see advanced payments continue to scale up over time, So I would expect that number to keep growing as we do a better job with the with the Kashi I engine as well as keeping their retention.

Speaker Change: Continuing to improve the retention.

Kyle Beilman: But in terms of monetization, Devin, you know, we expect to continue to grow monetization as we increase the origination size, which is just overall kind of accretive to ARPU. So it is a focus of ours to kind of pull people up the limit curve as we, you know, just to Jason's point, there is a benefit to time on book, but there are also just better risk-splitting opportunities that we have within the portfolio to, you know, find the, you know, optimal amount to give to each customer and ensure that, you know, we're providing the most value through the product that we can by kind of And there are monetization benefits to that for the company.

Speaker Change: But in terms of monetization Devin.

Speaker Change: Expect to continue to grow monetization as we increased the origination side switch to assess overall kind of accretive to arcos. So it is a focus of ours to kind of pull people up the limit curve as we just.

Speaker Change: To Jason's point.

Speaker Change: There is a benefit.

Speaker Change: Time on book, but there is also just better risks splitting opportunities that we have within the portfolio to.

Speaker Change: Find that.

Speaker Change: Optimal amount to give to each customer and ensuring that we're providing most value through the product that we can buy it kind of pulling people up the limit spectrum in.

Speaker Change: There is modernization benefits to that for the company. So.

Speaker Change: Yes.

Speaker Change: <unk> of ours, we expect that number to continue to growth throughout the year based on a number of initiatives that we have.

Kyle Beilman: So, yeah, it is a focus of ours. We expect that number to continue to grow throughout the year, based on a number of initiatives that we have, you know, within that part of the business. So we, you know, we would expect that to kind of increase as we move forward from here.

Speaker Change: Within that part of the business so.

Speaker Change: We would expect that to kind of increase as we move forward from here.

Jason Wilk: Devin, just to highlight, we changed the monetization to percent-based pricing last year, so the scale does work well. As we scale up origination amounts, that should lead to increased monetization. To just further illustrate the point.

Speaker Change: Kevin just to highlight we changed the monetization to present based pricing last year. So the scale does worthwhile as we scaled origination amounts that should lead to increased monetization.

Speaker Change: Further the point.

Devin Patrick Ryan: Yep, exactly. Okay, thank you.

Kevin: Yes exactly okay. Thank you if I can just ask another one here on.

Speaker Change: Spend so obviously another.

Devin Patrick Ryan: If I can just ask another one here on spend, so obviously another nice quarter of volume growth, I think up 7% from last quarter, up 34% year over year. So, love to just get a little bit more flavor around expectations to continue to drive customer engagement and spend activity, kind of what specifically you're doing in the strategy. And Jason, I know you also alluded to kind of strategies to drive more direct deposit usage. So I would love to kind of hear more broadly about that. Thanks.

Speaker Change: Nice quarter of volume growth up 7% from last quarter up 34%.

Speaker Change: Year over year.

Speaker Change: Wanted to just get a little bit more flavor around expectations to continue to drive.

Speaker Change: Customer engagement spend activity kind of what specifically you are doing.

Speaker Change: And the strategy.

Speaker Change: Jason I know you also alluded to kind of.

Speaker Change: Strategies to drive more direct deposit usage, so just love to kind of hear more broadly about that thanks.

Jason Wilk: Sure. So right now, we're really not doing too much. I would say it's mostly just customer messaging about the benefits of banking with Dave, highlighting no overdraft fees, and no minimum balance fees. From an incentive perspective, all we're really doing at this point is offering customers a slight discount on their instant transfer fee for the advance if they send it to the Dave card, which does leads to pretty meaningful engagement. And as noted, that cross attaches up 10%.

Jason: Sure. So right now we're really not doing too much I would say, it's mostly just.

Jason: Customer messaging about the benefits of banking with Dave highlighting no overdraft fees no matter of a balanced fees from an incentive perspective, all were really doing at this point is offering customers a slight discount on their instant transfer fee for the advance if they send it to the <unk> card, which does does lead to a pretty meaningful engagement and as noted that cross attach.

Jason: Is up 10% so.

Jason: So we will continue to lead in there, but we are excited to start looking at different ways to incentivize customers to set up direct deposit we know the ARPA was worth $5 to six X. We can convert somebody and so we're certainly not leaning in there whether or not we will be testing some various strategies here in Q2, and leading and further in Q3.

Jason Wilk: So we'll continue to lean in there. But we are excited to start looking at different ways to incentivize customers to set up direct deposit. We know the ARPU is worth five to six times what we can convert somebody. And so we're certainly not leaning in there. There are enough we will be testing some various strategies here in Q2, and leaning in further in Q3 to see what the sort of upper bound of opportunity lies within extra cash to sort of cross the direct deposit cross.

Jason: See what the sort of upper bound of opportunity lies within extra cash to sort of direct deposit cross attached.

Jason: Okay.

Devin Patrick Ryan: Got it. Okay, great. I will leave it there, let someone else ask, but I appreciate it, guys. Of course.

Speaker Change: Got it okay, great I will leave it there and let someone else ask but I appreciate it guys. Thanks a lot.

Operator: Thank you. One moment for our next question, and our next question comes from the line of Gary Prestopino from Barrington Research. Your question, please.

Speaker Change: Thank you one moment for our next question.

Speaker Change: And our next question comes from the line of Gary <unk> from Barrington Research. Your question. Please.

Gary Frank Prestopino: Good morning, all. First of all, Jason, you talked about, and I couldn't write it down fast enough, talked about some changes to the subscriber model in terms of, I think maybe I'm reading into this, but what you are charging per month. I mean, could you go into that a little bit more and how those changes played out in the quarter.

Gary: Good morning, a couple of questions here.

Gary: First of all Jason you talked about and I couldnt write it down fast enough talking about some changes too.

Gary: The subscriber model in terms of I think maybe I'm reading into this but what you are charging per month, I mean could you go into that a little bit more and how those changes.

Gary: Played out in the quarter.

Jason Wilk: There was no actual change. And Good morning, Gary.

Jason: There was no actual change and good morning, Gary.

Jason: There was no actual change to the price. It is still one dollar we are looking at various price points to test throughout Q2, and Q3 in the three to $5 price point range, but there's nothing that we've solidified its not something thats in our financial model today.

Jason Wilk: There was no actual change to the price. It is still $1. We are looking at various price points to test throughout Q2 and Q3 in the $3 to $5 price point range, but that's nothing that we've solidified. It's not something that's in our financial model today.

Jason: The subscription billing optimization, we talked about is more of a new billing platform, which got the system in a position to be able to test new price points. So that's really what we highlighted in the call. It has nothing to do with new additional monetization.

Kyle Beilman: Yeah, Gary, I think just to add to that, the important dynamic to call out that we touched on in the, you know, in our notes was just that we had an increase in subscriber-only MTMs in the quarter, which is just a reflection of the benefits of the new billing system that we rolled out. So that's the dynamic that we wanted to kind of expand upon, and the notes, like I said. Okay.

Speaker Change: Yeah, Gary I think just to add to that the important dynamic to call out that we touched on.

Jason:

Speaker Change: And in the in our notes was just that.

Speaker Change: We had an increase in subscriber only mtm's in the quarter, which is just a I think a reflection of the benefits of the new billing system that we rolled out. So that's that was the dynamic that we wanted to kind of expand upon.

Speaker Change:

Speaker Change: And in the notes like I said.

Gary Frank Prestopino: Okay, um, the quarterly delinquency rate going down fairly dramatically year over year and sequentially. Is it your feeling, I know you've got this great model and all that, but is it your feeling that as you are proliferating more in the market and getting more positive? Preston, or whatever, that you are starting to drive a little bit stronger socioeconomic kind of individual to the Dave platform?

Speaker Change: Hey.

Speaker Change: The quarterly delinquency rate.

Speaker Change: Down fairly dramatically year over year and sequentially.

Speaker Change: Youre feeling I know you've got this great model and all that but is it your feeling that as you are proliferating more in the market and getting more positive.

Speaker Change: Hum.

Speaker Change: The press or whatever that you are starting to drive.

Speaker Change: A little bit stronger socioeconomic line of individuals to the data platform.

Speaker Change: Yeah.

Speaker Change: Yes.

Jason Wilk: I would say as we expand our set of channels from marketing, we are seeing a broader consumer and tend to tick up in age as we look at channels like television. But ultimately, I would look at the delinquency performance improvement really just as a testament to the extra cash AI engine, which is all AI driven and is continuously looking at the previous performance of the book and looking at the real-time events we have on the customer, most notably real-time access to their checking account data, which we know their income and sort of employment status.

Speaker Change: I would say as we <unk>.

Speaker Change: Expand our set of channels on marketing, we are seeing a broader consumer and tends to tick up in age as we look at channels like TV.

Speaker Change: But ultimately I would I would look at the delinquency performance improvement really just is a testament to the the extra cash cash AI engine, which is all AI driven and as contingency and looking at the previous performance of the book and looking at the real time events, we have on the customer most notably real time access to their check.

Speaker Change: The account data, which we know their income and sort of employment status.

Kyle Beilman: And just to add to that real quick, Gary, you know, Jason touched on the time on book dynamic. As we increase the retention rate of our customer base over time, you know, the average tenure of origination has also gone up, which leads to, you know, better performance on the delinquency rates. Because, as you can expect, the longer that someone's with the company as a customer, the better performance that we see on the credit side. So, you know, we expect that to also just further support performance moving forward as, you know, retention continues to improve.

Speaker Change: That's helpful.

Speaker Change: Add to that real quick Gary Yes, Jason touched on the time on book dynamic as we increase the retention rate of our customer base over time.

Speaker Change: The average tenure of origination has also gone up which leads to better performance on the delinquency rates because as you can expect the longer that someone's with the company as a customer the better performance that we see on the credit side, So and we expect that to also just further support the performance moving forward.

Speaker Change: And our retention continues to improve.

Gary Frank Prestopino: I mean, do you have a metric you can share with us of, you know, recurring revenue? Extra cash.

Speaker Change: I mean do you have a metric you can share with us.

Speaker Change:

Speaker Change: Recurring.

Speaker Change: Extra cash.

Jason Wilk: We have not called that out explicitly, but the number of existing customer repeat originations in a given month or quarter is in excess of 95%.

Speaker Change: We have not.

Speaker Change: Called that out explicitly but the number of <unk>.

Speaker Change: Existing customer repeat originations in a given month or quarter is.

Speaker Change: In excess of 95%.

Speaker Change: Okay.

Gary Frank Prestopino: Okay. That's a good stat.

Speaker Change: That's a good step.

Gary Frank Prestopino: What else did I want to ask here? Oh, yeah, you said the attach rates on the Dave card with the extra cash are about 10% grew by 10%. I think when we first started talking, you were at about 30% of extra cash advances on the Dave card. Where are you now?

Speaker Change: What else could I wanted to ask here.

Speaker Change: Yes.

Speaker Change: The attach rates on the Dave card with the extra cash or about 10 grew 10%.

Speaker Change: When we first started talking you were at about 40% of extra cash advances on the Dave Clark.

Speaker Change: Are you now.

Jason Wilk: Pretty consistent Gary, it's right around 30% of originations get sent to the Dave card, and about 50% of new customers are trialing the Dave card with an extra cash origination within their first couple months as a customer.

Speaker Change: Pretty consistent Gary a threat around the 30% of originations get sent to the Descartes.

Speaker Change: And about 50% of new customers are trialing that Dave card with a with an extra cash origination within their first couple of months as a customer.

Speaker Change: Okay.

Gary Frank Prestopino: Okay, and then just lastly, I don't want to get ahead of the skis here, but you know, we often talked about the fact that 20% adjusted EBITDA margin was a target for the company. It looks like you're at 17.6% this quarter, and you know, really in the early stages of your, your, your, your lifespan here. Any changes to that potential target they are given what and how well you are performing.

Speaker Change: Okay, and then just just lastly, I don't want to get ahead of the skis here, but you would often talk about the fact that.

Speaker Change: 20% adjusted EBITDA margin was a target.

Speaker Change: For the company it looks like you were at 17, 6%.

Speaker Change: This quarter.

Speaker Change: Really in the early stages of your your lifespan here.

Speaker Change: Any changes to that potential target there given.

Speaker Change: How well you are performing.

Kyle Beilman: Gary, I don't recall putting that a specific long-term EBITDA target out there for the company, certainly not something that we've you know established as part of our, you know, Outlook. I certainly. You know, I don't I don't want to comment too much on that. That 20%. I think there's just a ton of operating leverage built into the business model that as we continue to grow. There's a significant margin potential here that is, I would say, well in excess of that 20%. That's not something that we've discussed as a management team or as part of our disclosure.

Speaker Change: Gary I don't recall, putting that a specific long term EBITDA target out there for the company certainly not something that we have.

Speaker Change: Established as part of our.

Speaker Change: Outlook.

Speaker Change: Certainly.

Speaker Change: I don't want to comment too much on that 20% I think there's just a ton of operating leverage built into the business model that.

Speaker Change: As we continue to grow.

Speaker Change: Yes.

Speaker Change: There's a significant margin potential here.

Speaker Change: That is I would say well well in excess of 20% of that is not something that we've discussed is a manner.

Speaker Change: Management team and as part of our disclosures.

Speaker Change: Disclosures.

Speaker Change: Okay. Thank you.

Operator: Thank you. As a reminder, ladies and gentlemen, if you do have a question at this time, please press star one one on your telephone. And our next question comes from the line of Zachary Gunn from FT Partners. Your question, please.

Speaker Change: Thank you and as a reminder, ladies and gentlemen, if you do have a question at this time. Please press star one on your telephone.

Speaker Change: And our next question comes from the line of Zachary.

Zachary: Ft Partners your question please.

Zachary Gunn: Hey there, and thanks for taking my question. I guess I saw on the deck that you fully rolled out the percentage-based fee structure to all numbers in 4Q. I know that's a change from the previous tiered dollar fee structure. We're just curious if you're seeing kind of any headwinds and larger origination sizes or any changes in consumer behavior with that. Just any commentary there would be great.

Zachary: Hey, there and thanks for taking my question I guess I saw on the deck that you've fully rolled out the percentage based fee structured all numbers in <unk> I know that's a change from the previous peer dollar fee structure.

Zachary: We're just curious if you're seeing kind of any headwinds in large origination side is there any changes in consumer behavior with that just any commentary there would be great.

Zachary Gunn: Thank you for joining the call, Zachary. I appreciate it. I appreciate it. But look, I think that, you know, there's nothing really to speak of there.

Speaker Change: Thank you for joining the call and Zachary I appreciate it I appreciate it on but look I think that.

Speaker Change:

Kyle Beilman: You know, it's been a positive change for us from a monetization standpoint that just brings more consistency to monetization as we scale up origination sizes, and we've seen customers respond well. And what we like about the model is that it just really incentivizes us and aligns us with our customers to be able to pull them up the limit curve and kind of provides the right incentives for us to continue to do that. So, yeah, it's been a positive change.

Speaker Change: Nothing really to speak of there it's been a positive change for us from a monetization standpoint that just brings more consistency to the monetization as we scale up origination sizes.

Speaker Change: And we've seen customers respond well.

Speaker Change: And what we like about the model is that it just really incentivize as us and aligns us with our customers to be able to pull them up the limit curve.

Speaker Change: And kind of.

Speaker Change: <unk> provides the right incentives for us to continue to do that and so yes, it's been a it's been a positive change.

Jason Wilk: The customer is less price sensitive and more credit responsive, and so, as Kyle mentioned, the percent-based pricing has allowed us to better scale the limit for the members, so it's been a good business member value exchange.

Speaker Change: Yes, I would just add the customers less price sensitive and more credit credit responsive and so as Carl mentioned the perfect based pricing has allowed us to better scale to limit for the for the members that's been a good business member value of exchange.

Zachary Gunn: Got it. That makes sense. And then, just as a follow-up, you mentioned improved credit performance, and I get that there's some benefit in the quarter from tax refunds and seasonality, but can you maybe just give us some commentary on the credit box? Are you holding that the same? I know there are comments about the macro being challenging, so just, you know, anything in terms of what you're seeing with the credit box right now.

Speaker Change: Got it that makes sense and then just as a follow up.

Speaker Change: You mentioned improved credit performance and I get that there is some benefit in the quarter from tax refunds and seasonality, but can you maybe just give us some commentary on the credit box or are you holding up the same I know there's comments about the macro being challenging.

Speaker Change: Anything in terms of what Youre seeing with the credit box right now.

Speaker Change: Yeah.

Kyle Beilman: I think Q1 performance is really just demonstrative of the continuous improvements that we've made to our underwriting system over time. We've originated extra cash nearly 100 million times to date.

Speaker Change: Yes, I think Q1 performance is really just demonstrative of the continuous improvements that we've made to our underwriting system over time, we've originated extra cash nearly 100 million times to date and so that's just a significant amount of performance data for us to continue to refine our models.

Kyle Beilman: And so that's just a significant amount of performance data for us to continue to refine our models. And so that just allows us to kind of better split the risk between the portfolio, and find new ways to segment customers to again sort of align the right amount or the right offer with the right risk profile of our customer base. So we're continuing to feel very good about the performance there and our outlook for performance for a number of reasons as we continue to just refine the model, as I spoke of.

Speaker Change: So.

Speaker Change: And that just allows us to kind of better risk split between the portfolio find new ways to segment customers to.

Speaker Change: Again sort of aligned the right amount or the right offer with the right risk profile of our customer base. So.

Speaker Change: We're continuing to feel very good about the performance there and our outlook for our performance for.

Speaker Change: A number of reasons as we continue to just refine the model as I spoke of others. The benefits of just average time on book going up over time.

Kyle Beilman: There are benefits to just average time on book going up over time. That's supportive of better delinquency performance. And it's just a really important and key focus of ours to continue to drive performance out of the portfolio here. So it's We're feeling good overall about the trajectory of it moving into the, you know, throughout the rest of the year.

Speaker Change: <unk> better delinquency performance in.

Speaker Change: It's just a really important and key focus of ours to continue to drive performance out of the out of the portfolio here. So.

Speaker Change: We're feeling good overall about the trajectory of it moving into the.

Speaker Change: Throughout the rest of the year.

Kyle Beilman: That makes sense. Thanks so much. Thanks, Zachary.

Speaker Change: That makes sense. Thanks, so much.

Operator: Thank you. One moment for our next question, and our next question is a follow-up question from Devin Ryan from JMP Securities. Your question, please.

Speaker Change: Exactly.

Speaker Change: Thank you one moment for our next question.

Speaker Change: And our next question is a follow up question from Devin Ryan from JMP Securities. Your question. Please.

Speaker Change: Yeah.

Devin Patrick Ryan: Yeah, thanks, guys, for taking the follow-up here. So just one on marketing, and you heard, obviously, the commentary; you'll look to ramp that up a little bit. And then we can back into some overall expense numbers, just based on the revenue and EBITDA guide. But you know, just how should we be thinking about that?

Devin Patrick Ryan: Yes, thanks, guys for taking the follow up here, so just one on marketing and.

Devin Patrick Ryan: You heard obviously the commentary Youll look to ramp that a little bit and then we can back into some overall expense numbers just based on the revenue and EBITDA guide.

Devin Patrick Ryan: Is that going to come through in the way of promotions or kind of targeted ad placement? And then, you know, how do you guys think, because you guys have been obviously running pretty lean here over the last year and done a great job of getting very strongly positive adjusted EBITDA and even gap profitability recently? But how much, you know, can you really lean in on marketing? You know, if you want to turn that back on, where can you really benefit from that investment?

Devin Patrick Ryan: But just how should we be thinking about that is that going to come through in the way of promotions.

Devin Patrick Ryan: Or kind of targeted AD placement and then how do you guys think because you guys have been obviously running pretty lean here over the last year and done a great job on getting that very strongly positive adjusted EBITDA and GAAP profitability recently booked.

Devin Patrick Ryan: But how much can you really lean in on marketing.

Devin Patrick Ryan: Turn that back on where you can really benefit.

Devin Patrick Ryan: From that investment how should we think about the return on investment before you start to think maybe diminishing returns and I asked the question, obviously, because we look at your CAC and LTV performance and it would seem to support.

Devin Patrick Ryan: You know, how should we think about the return on investment before you start to hit maybe diminishing returns? And I asked the question, obviously, because we look at your CAC and LTV performance, and it would seem to support more marketing that you can get a benefit from that. So I'd love to hear a little bit more about the components of it, where it's going to come from, and then how you're thinking about it more broadly.

Devin Patrick Ryan: More marketing that you can get the benefit of all of that so just love to hear a little bit more about that.

Devin Patrick Ryan: Components of it were going to come from and then how youre thinking about it more broadly.

Jason Wilk: Sure, Jason, do you want me to take that? Yeah, go ahead, Kyle.

Speaker Change: Traditionally you want me to take that yes go ahead sure.

Kyle Beilman: Sure Devin, as we mentioned in the notes, we expect to ramp up marketing spend throughout the remainder of the year as we come out of a seasonally softer period in Q1 with tax refunds. I'd say the overwhelming majority of that spend will come in the form of top of the funnel marketing spend across our key channels, where we have very effective tracking in place to manage the efficiency of that spend. So we do expect that to be a growth catalyst for us moving through the rest of the year. Our returns are very solid. We look at things on a gross profit-based payback period. Our payback periods are sub-six months at this point.

Speaker Change: So Devin look as we mentioned in the notes, we expect to ramp marketing spend throughout the remainder of the year as we come out of it.

Devin Patrick Ryan: Seasonally a softer period in Q1 with tax refunds.

Speaker Change: I'd say the overwhelming majority of that spend will come in the form of a top of funnel marketing spend across our key channels, where we have very effective tracking in place to manage the efficiency of that spend.

Speaker Change: Do you expect that to be a growth catalyst for us moving through through the rest of the year on our returns are are very solid when you look at things on a kind of a gross profit.

Speaker Change: The payback period, our payback periods are sub six months at this point.

Kyle Beilman: So it is an opportunity for us to lean into more spend there to drive value creation through that investment. That's how we think about marketing, through the lens of an investment, not an expense, necessarily. And we evaluate it based on the return profiles of those investments. So we do expect, like I said, to ramp things up here moving into Q2 and through the remainder of the year, but certainly to do it in a disciplined way to drive returns.

Speaker Change: So it is an opportunity for us to lean into more spend there to drive.

Speaker Change: Value creation through that investment that's how we think about marketing.

Speaker Change: A lens of an investment not not an expense necessarily and we kind of evaluate it based on the return profiles of those investments. So we do expect like I said to ramp things up here.

Speaker Change: Moving into Q2 and through the remainder of the year, but certainly.

Speaker Change: To do it in a disciplined way to drive returns.

Devin Patrick Ryan: Got it. Okay. Thanks for the call. I appreciate it.

Speaker Change: Got it okay. Thanks for that color I appreciate it.

Operator: Thank you. This does conclude the question and answer session as well as today's program. Everyone, have a great day. You may now disconnect.

Speaker Change: Thank you. This does conclude the question and answer session as well as today's program.

Speaker Change: Everyone have a great day, you may now disconnect.

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