Q4 2024 Dave Inc Earnings Call
[music].
Operator: Good morning, everyone, and thank you for participating in today's conference call to discuss Dave's financial results for the fourth quarter and full year ended December 31st, 2024. Today. We are joined with Dave's CEO, Mr. Jason Wilk, and the company's CFO, Mr. Kyle Beilman. By now, everyone should have access to the fourth quarter and full year 2024 earnings press release, which was issued yesterday afternoon. The release is available in the Investor Relations section of Dave's website at investors.dave.com. In addition, this call will be available for webcast replay on the company's website.
Good morning, everyone and thank you for participating in today's conference call to discuss <unk> financial results for the fourth quarter and full year ended December 31, 2024 today.
We are joined with Daves CEO, Mr. Jason and the company's CFO, Mr. Karl Baumann.
By now everyone should have access to the fourth quarter and full year 2024 earnings press release, which was issued yesterday afternoon.
Speaker Change: The release is available in the Investor Relations section of Dave's webcast website at investors that Dave Dot Com. In addition, this call will be available for webcast replay on the company's website. Following management remarks, we will open the call to answer your questions.
Operator: Following management remarks, we'll open the call to answer your questions.
Operator: Certain comments made during this conference call and webcast are considered forward-linking statements under the Private Securities Litigation Reform Act of 1995. These forward-linking 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 any forward-looking statements, which are being made only as of the date of this call.
Certain comments made during this conference call and webcast are considered forward looking statements under the private Securities Litigation Reform Act of 1995.
Speaker Change: 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.
Speaker Change: 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 any 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 update any forward looking statements. The company's presentation also.
Operator: Except as required by law, the company undertakes no obligation to revise or update any forward-looking statements.
Operator: The company's presentation also includes certain non-GAAP financial measures, including adjusted EBITDA, adjusted net income, non-GAAP variable profit and non-GAAP variable margin as supplemental measures of performance of our business. All non-GAAP measures have been reconciled to the most directly comparable GAAP measures in accordance with SEC. you'll find Reconciliation Charge. and other important information in the earnings press release in Form 8K furnished to the SEC.
Speaker Change: Certain non-GAAP financial measures, including adjusted EBITDA adjusted net income non-GAAP.
Speaker Change: Variable profit and non-GAAP variable margin as supplemental measures of performance of our business. All non-GAAP measures have been reconciled to the most directly comparable GAAP measures in accordance with SEC rules.
Speaker Change: You'll find reconciliation charts.
Speaker Change: And other important information in the earnings press release and form 8-K furnished to the SEC I would now like to turn the call over to Dave CEO, Mr. Jason Wilke. Please.
Operator: I would now like to turn the call over to Dave's CEO, Mr. Jason Wilk. please begin.
Please begin.
Jason Wilk: Thank you and good morning everyone. I'm excited to share that we closed out 2024 with a record setting fourth quarter, delivering another period of exceptional growth and profitability. This quarter marked a significant milestone for Dave as we surpassed both $100 million in quarterly revenue, as well as more than $30 million of quarterly adjusted EBITDA for the first time, capping off a year of strong execution and outperformance. As we enter 2024, we had high expectations, and I'm proud to say that we not only surpassed our original guidance from last year, but also exceeded the updated guidance provided in Q1, Q2, and Q3.
Speaker Change: Thank you and good morning, everyone I'm excited to share that we closed out 2024 with a record setting fourth quarter delivering another period of exceptional growth and profitability.
Speaker Change: This quarter marked a significant milestone for Dave as we surpassed $100 million in quarterly revenue as well as more than $30 million of quarterly adjusted EBITDA for the first time capping off a year of strong execution and outperformance.
Speaker Change: As we enter 2024, we had high expectations and I am proud to say that we not only surpassed our original guidance on last year, but also exceeded the updated guidance provided in Q1 Q2 and Q3.
Jason Wilk: This outperformance was driven by strength across all key areas of our business. Multitransacting member, or MTM growth, remains strong, supported by stable CACs and enhanced member retention, demonstrating the efficiency of our acquisition model and the product market fit we continue to achieve. Our pool exceeded expectations as well, fueled by expanding average extra cash sizes and improved engagement in day banking. Credit performance also improved throughout the year. With our V5 Cash AI underwriting model, better separating risk is our extra cash portfolio scale. When taking all this together with our discipline on fixed costs, which declined in 2024 compared to 2023, we drove another year of significant operating leverage and our first full year of profitability since 2019.
This outperformance was driven by strength across all key areas of our business.
Speaker Change: Multi transacting member or MTM growth remains strong supported by stable cats and enhanced member retention demonstrating the efficiency of our acquisition model and the product market fit we continue to achieve.
Speaker Change: ARPA exceeded expectations as well fueled by expanding average actually cast sizes and improved engagement in banking.
Speaker Change: Credit performance also improved throughout the year with RV, five Kashi I underwriting model better separating risk as our extra cash portfolio of scale.
Speaker Change: When taking all this together with our discipline on fixed cost, which declined in 2024 compared to 2023, we drove another year of significant operating leverage in our first full year of profitability since 2019.
Jason Wilk: This strong performance continues to underscore the scalability of our model, the value we provide to millions of Americans, and sets the stage for what we believe will be another year of record performance in 2025.
Speaker Change: This strong performance continues to underscore the scalability of our model the value we provide to millions of Americans and Thats. The stage, what we believe will be another year of record performance in 2025.
Jason Wilk: I always want to show the optimism we have regarding our transition to the new fee structure for extra cash. The new structure is a simple 5% fee on all extra cash transactions, with a $5 minimum and a $15 cap, with no additional transfer fees if they've checked in. This replaces our optional fee model, which allowed members to access credit for as little as $0 per transaction and included optional tips, which are no longer part of the experience. We're confident that this new fee model creates better alignment between us and our members, as the more durable monetization allows us to expand credit access through higher limits and unlock further product optionality for us moving forward.
Speaker Change: I also have to share the optimism we have regarding our transition to the new fee structure for extra cash.
Speaker Change: The new structure of the simple 5% fee on all extra cash transactions with a $5 minimum and a $15 cap with no additional transfer fees are Dave checking.
Speaker Change: This replaces our optional fee model, which now numbers, who access credit for zero dollars per transaction and included optional tips, which are no longer part of the experience.
Speaker Change: We're confident that this new fee model creates better alignment between us and our members as the more durable monetization allows us to expand credit access through higher limits and unlock further product optionality across the board.
Jason Wilk: Through our testing, we observed favorable conversion, retention, and monetization trends for new and existing members, delivering both business and member wins. Given these results, we completed our transition with our previously disclosed early 2025 timeline, and as of February 19, we're fully migrated to the new fee model. These product improvements are aligned to our mission to level the financial playing field, and we believe will be welcomed by all stakeholders, including members, investors, and regulators.
Speaker Change: Through our testing, we observed favorable conversion retention and monetization trends for new and existing members delivering both business a number of wins.
Speaker Change: Given these results we completed our transition with our previously disclosed early 2025 timeline and as of February 19th are fully migrated to the new fee model <unk>.
Speaker Change: These product improvements are aligned to our mission to level, the financial playing field and we believe will be welcomed by all stakeholders, including members investors and regulators.
Jason Wilk: Turning to our growth strategy, I'd like to provide an update on our three strategic pillars, acquiring new members efficiently, engaging them through extra cash, and deepening those relationships through the day card experience. We continue to efficiently acquire members at scale, reflecting the power of our credit-first value proposition and its synergies with our banking product suite. In Q4, member acquisition grew 12% year-over-year based on 26% higher marketing spend, which was partially offset by a 12% increase in CAC at these higher levels of investment. We increased marketing spend given the more significant investment returns we are generating as a result of monetization improvements, which can be observed in our MTM ARPU, which expanded a double-digit year-over-year rate for the past six quarters.
Speaker Change: Turning to our growth strategy I'd like to provide an update on our three strategic pillars.
Speaker Change: Barring new members efficiently engaging them through extra cash and deepening those relationships through the Descartes experience.
Speaker Change: We continue to efficiently acquire members at scale, reflecting the power of our credit first value proposition and our synergies with our banking product suite in Q4 member acquisition grew 12% year over year based on 26% higher marketing spend which was partially offset by a 12% increase in Tac at these higher levels of investment with.
Speaker Change: We increased marketing spend given the more significant investment returns we are generating as a result of monetization improvements, which can be observed in our MTM <unk>, which expanded at a double digit year over year rate for the past six quarters.
Jason Wilk: Our returns remain strong and with the added monetization from the new fee model, we believe that we can sustain favorable returns at higher potential tax in the future, adding to the scalability of our growth engine.
Speaker Change: Our returns remain strong and with the added monetization from the new fee model. We believe that we can sustain favorable returns at higher potential tax in the future and scalability.
Speaker Change: Scalability of our growth engine.
Jason Wilk: Given these facts, we plan to moderately expand marketing investment throughout the 2025 period, while maintaining a disciplined focus on investment returns in order to further drive profitable growth.
Speaker Change: Given these facts, we are kind of moderately expand marketing investment throughout the 2025 period, while maintaining a disciplined focus on investment return in order to further drive profitable growth.
Jason Wilk: Our second strategic pillar centers around continuing to strengthen engagement with our MTMs. Extra cash remains the key entry point for building long term relationships for our members by addressing what is typically their primary need, short term liquidity for gas, groceries, and bills. MTMs rose 17% year-over-year in Q4 to $2.5 million based on the new member acquisition growth I mentioned a moment ago, in addition to continued enhancements to new member conversion and retention. In Q4, extra cash originations reached a record $1.5 billion, up 44% year-over-year and 9% quarter-over-quarter. Even with the $1.5 billion in extra cash originations in Q4, our net receivables balance was just $176 million at quarter-end, further highlighting the capital-efficient nature of our balance sheet.
Speaker Change: Our second strategic pillar centers around continuing to strengthen engagement with our MTS extra.
Speaker Change: Extra cash remains a key entry point for building long term relationships for our members by addressing what a typical with our primary need short term liquidity for gas groceries and bills.
Speaker Change: <unk> rose, 17% year over year in Q4 to $2 5 million based on the new member acquisition growth I mentioned, a moment ago. In addition to continued enhancements the new member conversion and retention.
Speaker Change: In Q4 extra cash originations reached a record $1 5 billion up 44% year over year, and 9% quarter over quarter, even with the $1 5 billion in extra cash originations in Q4, our net receivables balance was 176 million at quarter end further highlighting the capital efficient nature of our balance sheet.
Jason Wilk: As we progress through the first quarter, we anticipate the typical seasonal impact as tax refunds provide important liquidity for our members, reducing their need for extra cash. This growth and originations was fueled by greater MTMs, average extra cash size, and the number of disbursements taken per MTM. Average extra cash size grew 17% year-over-year as a result of two factors. First, this is the early impact for our new fee structure, which we began rolling out in Q4. Second is the impact of our V5 Cash AI underwriting model, which we implemented last spring. Both of these factors allow us to offer higher extra cash approval amounts to our members, which provides the additional benefit of supporting member conversion and retention.
Speaker Change: As we progress through the first quarter, we anticipate the typical seasonal impact as tax refunds provide important liquidity for our members reducing their need for extra cash.
Speaker Change: This growth in originations was fuelled by greater Mtm's average extra cash size and the number of disbursements taken per MTN.
Speaker Change: Average extra cash size grew 17% year over year as a result of two factors.
Speaker Change: This is the early impact of our new fee structure, which we began rolling out in Q4.
Speaker Change: Second is the impact of our <unk> cache underwriting model, which we implemented last spring both of these factors now to offer higher extra cash accrual amount to our members, which provides the additional benefit of supporting member conversion and retention.
Jason Wilk: We plan to continue to optimize Cash AI in order to further enhance the extra cash experience for our members.
Speaker Change: We plan to continue to optimize cash AI in order to further enhance the extra cash experience for our members.
Jason Wilk: Moving to extra cash performance, our Cash AI underwriting engine allows us to enhance credit access for our members while continuing to improve credit performance. In Q4, Cash AI drove a 53 basis point or 24% year over year improvement in the 28 day delinquency rate. Our 28 day delinquency rate is a reliable leading indicator for our 121 day charge off rate, which improves 65 basis points or 32% on a year over year basis to 1.38% for the most recently available quarterly bench bench. Credit performance has steadily improved over several years, even as subprime credit card delinquencies have worsened beyond pre-pandemic levels.
Speaker Change: Moving to actually cash performance, our Kashi I underwriting engine allows us to enhance credit access for our members while continuing to improve credit performance in Q4 cash AI drove a 50 basis point or 24% year over year improvement in the 28 day delinquency rate.
Speaker Change: Our 28 day delinquency rate as a reliable leading indicator for our 121 day charge off rate, which improved 65 basis points or 32% on a year over year basis to 138% for the most recently available quarterly vintage.
Speaker Change: Credit performance has steadily improved over several years, even as subprime credit card delinquencies had worsened beyond pre pandemic levels. This divergence highlights the strength of our proprietary cachet underwriting model, which Leverages real time bank account transaction data rather than lagging FICO scores. Unlike subprime credit cards, which why on an initial underwriting decision for long.
Jason Wilk: This divergence highlights the strength of our proprietary cashier underwriting model, which leverages real-time bank account transaction data rather than lagging FICO's. Unlike subprime credit cards, which rely on an initial underwriting decision for long-duration credit exposure, extra cash's short-term nature allows it to continuously reevaluate customer risk with each transaction. With over 125 million originations to date, this high-frequency, fully automated underwriting approach has enabled superior credit risk separation and ongoing optimization, positioning extra cash as a structurally advantaged product to successfully navigate various economic backdrops.
Speaker Change: Duration credit exposure extra cash or short term nature allows us to continuously re about customer risk with each transaction.
Speaker Change: With over 125 million origination to date. This high frequency fully automated underwriting approach has enabled superior credit risk separation and ongoing optimization positioning extra cash at a structurally advantaged product to successfully navigate various economic backdrops.
Jason Wilk: Additionally, as we've improved member retention, the average tenure of our MTMs has increased. In Q4, the average tenure of an MTM was over 19 months, up 22% from Q4 2022. This important dynamic is worth underscoring. Credit performance typically improves with MTM season on our platform, which should support ongoing strength in credit performance as we continue to scale the business.
Speaker Change: Additionally, as we've improved member retention. The average tenure of our MTN has increased in Q4. The average tenure of the MTM was over 19 months at 22% from Q4 2022. This important dynamic is worth underscoring credit performance typically improves with MTM season on our platform, which should support ongoing strength in credit performance.
Speaker Change: As we continue to scale the business.
Jason Wilk: The third and final pillar of our growth strategy focuses on deepening member relationships by enhancing engagement with Dave Carte. Our strategy leverages the power of our market meeting, extra cash offering to build deeper and long term banking relationships with our members. In Q4, day-of-card engagement continued to grow, with spending up 24% year-over-year to $457 million, driven by a combination of strong growth in banking-active customers, as well as card spend for banking-active customers. Extra cash remains a key driver of trialing the DaveCard as customers have instant access to their funds versus transferring money out to external accounts.
Speaker Change: The third and final pillar of our growth strategy focuses on deepening member relationships by enhancing engagement with Descartes.
Speaker Change: Our strategy Leverages, the power of our market meeting extra cash offering to build deeper long term banking relationships with our members.
Speaker Change: In Q4, Dave card engagement continue to grow with spending up 24% year over year to $457 million driven by a combination of strong growth in banking active customers as well as card spend per banking active customer.
Speaker Change: Extra cash remains a key driver of Trialing, the Descartes as customers have instant access to their funds, whereas the transferring money out to external accounts.
Jason Wilk: There are also no additional fees for sending extra cash to the DaveCard in our new fee model.
Speaker Change: There are also no additional fees or sending extra cost of the Descartes and our new fee model. We plan to further increase our focus on debit card adoption. This year with new product initiatives as the LTV benefits of customers, who use both the card and extra cash are meaningful.
Jason Wilk: We plan to further increase our focus on debit card adoption this year with new product initiatives as the LTV benefits of customers use both the card and extra cash are meaningful. Between the continued momentum we are seeing in extra cash and demand for the day of card, we generated another quarter of double-digit ARPU expansion, which was up 18% year-over-year. This is our sixth consecutive quarter of double-digit ARPU expansion on a year-over-year basis, given the progress we've made increasing extra cash disbursement amounts, which was up 17% year-over-year and 4% sequentially in Q4.
Speaker Change: Between the continued momentum we are seeing an extra cash and demand for the Descartes, we generated another quarter of double digit <unk> expansion, which was up 18% year over year.
Speaker Change: This is our sixth consecutive quarter of double digit ARPA expansion on a year over year basis, given the progress we have made increasing extra cash disbursement amount, which was up 17% year over year and 4% sequentially in Q4.
Jason Wilk: With our new fee model structure fully implemented last month, we anticipate further ARPU expansion in 2025.
With our new fee model structure fully implemented last month, we anticipate further RVO expansion in 2025.
Jason Wilk: Before I provide my closing remarks and turn it over to Kyle, I want to provide an update on two other important topics.
Speaker Change: Before I provide my closing remarks ill turn it over to Kyle I want to provide an update on two other important topics first as we announced yesterday, we finalized our new strategic partnership with coastal community Bank one of the most highly respected sponsor banks and the Fintech ecosystem. This new partnership will enable David leverage coastal scale experience and strong compliance and risk management capabilities.
Jason Wilk: First, as we announced yesterday, we finalized our new strategic partnership with Coastal Community Bank, one of the most highly respected sponsor banks in the FinTech ecosystem. This new partnership will enable Dave to leverage Coastal's scale, experience, and strong compliance and risk management capabilities to sponsor our extra cash and banking product. We believe the partnership will also strengthen our position to launch next generation products that support Dave's mission of leveling the financial playing field for everyday Americans.
Speaker Change: To sponsor, our extra cash and banking products.
Speaker Change: We believe the partnership will also strengthen our position to launch next generation products that support days mission of eyewitness natural Plainfield for everyday Americans.
Jason Wilk: Next, I want to briefly touch on the litigation originally filed by the Federal Trade Commission on November 5th, 2024, and then refer to the Department of Justice, which filed an amended complaint on December 30th, 2021. On February 28th, we filed our motion to dismiss the lawsuit, outlining what we believe to be the technical deficiencies in the amended complaint. We expect a ruling on this motion as early as Q2 of this year. We remain confident in our legal position and are prepared to vigorously defend ourselves throughout the legal process. The lawsuit does not challenge our business model, but rather focuses on consumer disclosures and the process for obtaining consent for associated fees.
Speaker Change: Next I want to briefly touch on the litigation originally filed by the Federal Trade Commission on November five 2024, and then refer to the department of Justice, which filed an amended complaint on December 32024.
Speaker Change: On February 28, we filed our motion to dismiss the lawsuit outlining what we believed to be the technical deficiencies in the amended complaint we expect a ruling on this motion as early as Q2 of this year, we remain confident in our legal position and are prepared to vigorously defend ourselves throughout the legal process.
Speaker Change: The market does not challenge our business model, but rather focuses on consumer disclosures and the process for obtaining consent for associated fees.
Jason Wilk: While we strongly believe we have always operated within the law, we have implemented product changes that aim to improve member experience while addressing the areas in the DOJ-amended complaint that relate to consumer disclosure and compliance.
Speaker Change: While we strongly believe we have always operated in the law, we have implemented product changes that aim to improve member experience, while addressing the areas and the Doj complaint that relate to consumer disclosure and consent.
Jason Wilk: Moving on, it should be clear that our strategic focus on expanding access to extra cash through product and underwriting enhancements, increasing wallet share of our members with Dave Card, and growing our member base has positioned us well for continued growth and profitability over the coming years. We're proud of the strong execution from our team and the meaningful product improvements we've implemented to increase member value and engagement, leading to higher ARPU and lifetime value while remaining disciplined on cost.
Speaker Change: Moving on it should be clear that our strategic focus on expanding access to extra cash through product and underwriting enhancements, increasing wallet share of our members with Descartes and growing our member base has positioned us well for continued growth and profitability over the coming years.
Speaker Change: We're proud of the strong execution from our team and the meaningful product improvements, we have implemented to increase number of value and engagement, leading to higher ARPA and lifetime value while remaining disciplined on cost.
Jason Wilk: As we enter 2025, we are building on a foundation of record-breaking performance, strong operational momentum, and a clear roadmap for continued growth.
Speaker Change: As we enter 2025, we are building on a foundation of record breaking performance strong operational momentum and a clear roadmap for continued growth.
Jason Wilk: Kyle will walk through our financial guidance in a moment, reflecting our expectations to deliver another record year of revenue and profitability. Thank you again to our team for their dedication and execution, and our investors for their continued support.
Speaker Change: Al will walk through our financial guidance in a moment, reflecting our expectations to deliver another record year of revenue and profitability.
Speaker Change: Thank you again to our team for their dedication and execution and our investors for their continued support with that I will turn the call over to Carl to take you through our financial results.
Kyle Beilman: With that, I'll turn the call over to Kyle to take you through our financial results. Kyle?
Kyle Beilman: Thank you and good morning everyone. As Jason highlighted, our fourth quarter and full year 2024 results set new record highs across nearly all metrics, reflecting the strength of our business and the impact of our continued focus on enhancing our members' experience. A record MTM performance underscores the increasing value we're delivering to members, while our disciplined approach to operations has driven meaningful operating leverage, further expanding profitability.
Speaker Change: Thank you and good morning, everyone as Jason highlighted our fourth quarter and full year 2024 results set new record highs across nearly all metrics, reflecting the strength of our business and the impact of our continued focus on enhancing our members' experience are.
Speaker Change: Our record MTM performance underscores the increasing value, we're delivering to members while our disciplined approach to operations has driven meaningful operating leverage further expanding profitability.
Kyle Beilman: Today, I'm happy to walk through our Q4 and full year highlights, discuss the key drivers behind our results, and share our outlook for 2025. Turning to the fourth quarter, total revenue reached $100.9 million, a 38% increase year-over-year. This strong performance was driven by 17% growth in MTMs and an 18% increase in ARPU, reflecting increased engagement and monetization from both Extra Cash and the Dave Card. As Jason highlighted, our disciplined approach to member acquisition has amplified the impact of our marketing investment. driving a 12% year-over-year increase in new members while maintaining our focus on MTM conversion and retention.
Speaker Change: Today, I'm happy to walk through our Q4 and full year highlights discuss the key drivers behind our results and share our outlook for 2025.
Speaker Change: Turning to the fourth quarter total revenue reached $100 9, million% to 38% increase year over year. This strong performance.
Speaker Change: Performance was driven by 17% growth in MTS, and an 18% increase in <unk>, reflecting increasing engagement and monetization from both extra cash and the data card.
Speaker Change: Jason highlighted our disciplined approach to member acquisition has amplified the impact of our marketing investments driving a 12% year over year increase in new members, while maintaining our focus on MTM conversion and retention.
Kyle Beilman: The ARPU increase was fueled by higher engagement and monetization of extra cash supported by cash AI optimization, as well as stronger day of card adoption and higher levels of card We believe that our product roadmap across Extra Cash and DaveCard will continue to drive our Pooh expansion this year. During the fourth quarter, our non-GAAP variable profit increased 58% year-over-year to $72.6 million, a 72% margin relative to total revenue, a new all-time high. Our sustained improvements in variable margin have been driven by a lower provision expense as a percentage of revenue, reflecting significant improvements in credit performance powered by Cash AI.
Speaker Change: The <unk> increase was fueled by higher engagement and monetization of extra cash supported by cash AI optimization as well as stronger Dave card adoption and higher levels of card spend.
Speaker Change: We believe that our product roadmap across extra cash and Dave card, we will continue to drive <unk> expansion this year.
Speaker Change: During the fourth quarter, our non-GAAP variable profit increased 58% year over year to $72 6, million% to 72% margin relative to total revenue a new all time high.
Speaker Change: Our sustained improvements in variable margin have been driven by a lower provision expense as a percentage of revenue reflecting significant improvements in credit performance powered by cash AI. These enhancements have allowed us to improve loss rates, while increasing revenue per extra cash origination.
Kyle Beilman: These enhancements have allowed us to improve loss rates while increasing revenue per extra cash origination. Additionally, we benefited from ongoing optimization of payment processing costs and favorable renegotiations of key vendor contracts that were fully realized in the fourth quarter. As I'll describe in more detail in a moment, we incurred a one-time benefit in our processing costs. Excluding this impact, our non-GAAP variable profit and variable margin would have been $71.3 million and 71% respectively. Now turning to operating expenses, our provision for credit losses increased 15% year over year to $16.6 million from $14.5 million, due largely to higher origination volumes, which increased 44% over that time period, partially offset by our improved credit performance.
Speaker Change: Additionally, we benefited from ongoing optimization of payment processing costs, and a favorable renegotiations of key vendor contracts. They were fully realized in the fourth quarter.
Speaker Change: As I'll describe in more detail in a moment, we incurred a onetime benefit in our processing costs. Excluding this impact our non-GAAP variable profit and variable margin would have been $71 3 million and 71% respectively.
Speaker Change: Now turning to operating expenses, our provision for credit losses increased 15% year over year to $16 6 million from $14 $5 million due largely to higher origination volumes, which increased 44% over that time period, partially offset by our improved credit performance.
Kyle Beilman: As a percentage of extra cash originations, our provision for credit losses fell to 1.12% in the quarter from 1.41% in Q4 last year. We believe this underscores Cash.ai's enhanced ability to better predict credit risk by incorporating additional model variables and leveraging data from the over 125 million unique extra cash transactions we've originated since inception. On a sequential basis, while our 28 day delinquency rate improved by 12 basis points, or 6% in Q4, our loss provision as a percentage of extra cash originations increased from 1.01% in Q3 to 1.12% in Q4 as a result of the calendar dynamics related to quarter end, which we've highlighted in prior calls.
Speaker Change: As a percentage of extra cash originations our provision for credit losses fell to 112% in the quarter from 141% in Q4 last year.
Speaker Change: We believe this underscores cash AI enhanced ability to better predict credit risk by incorporating additional model variables and leveraging data from the over 125 million unique extra cash transactions we've originated since inception.
Speaker Change: On a sequential basis, while our 28 day delinquency rate improved by 12 basis points or 6% in Q4, our loss provision as a percentage of extra cash originations increased from 1.01% in Q3 to 112% in Q4 as a result of the calendar dynamics relate.
Speaker Change: Two quarter, and which we have highlighted in prior calls Q.
Kyle Beilman: Q4 ended on a Tuesday, which is typically the intra-week peak for receivables balances. As a result, our increased receivables balance drove an increase in allowance for credit losses and an increased loss provision. With respect to seasonality, we typically experience the lowest delinquency and loss rates during the first quarter, given the additional liquidity that tax refunds provide to our members. Thus far, credit performance in Q1 has been strong and aligns with our seasonal expectations. Processing and servicing costs in Q4 decreased 16% year-over-year to $6.3 million compared to $7.5 million in the year-ago period. Included in these costs is a one-time rebate benefit associated with a successful vendor renegotiation.
Speaker Change: Q4 ended on a Tuesday, which is typically the intra week peak for receivables balances.
Speaker Change: As a result, our increase receivables balance drove an increase in allowance for credit losses, and an increase loss provision with respect to seasonality, we typically experienced the lowest delinquency and loss rates during the first quarter given the additional liquidity that tax refunds provide to our members thus far credit performance in Q1.
Speaker Change: It has been strong and.
Speaker Change: Aligns with our seasonal expectations.
Speaker Change: Processing and servicing costs in Q4 decreased 16% year over year to $6 3 million compared to $7 5 million in the year ago period include.
Speaker Change: Included in these costs as a one time rebate benefit associated with the successful vendor renegotiation.
Kyle Beilman: Excluding this one-time benefit, processing and servicing costs in Q4 decreased 2% year-over-year to $7.3 million. As a percentage of origination volume, these costs, excluding the aforementioned benefit, improved to 0.5% from 0.7% in the a year ago period as we benefited from a full quarter impact of two vendor contracts which were renegotiated in Q3 of last year. During Q4, advertising and marketing costs increased 25% to $12.6 million, up from $10 million in the prior year period, reflecting our stronger appetite to invest based on the conversion, retention, and unit monetization improvements we've achieved. As Jason mentioned, we plan to moderately expand marketing spend in a disciplined manner throughout 2025 to further take advantage of the stronger LTV to CAC returns we're generating.
Speaker Change: Excluding this onetime benefit processing and servicing costs in Q4 decreased 2% year over year to $7 3 million.
Speaker Change: As a percentage of origination volume these costs, excluding the aforementioned benefit improved to <unk>, 5% from 7% in the year ago period, as we benefited from a full quarter impact of two vendor contracts, which were renegotiated in Q3 of last year.
Speaker Change: During Q4 advertising and marketing costs increased 25% to $12 6 million up from $10 million in the prior year period, reflecting our stronger appetite to invest based on the conversion retention and unit monetization improvements we have achieved.
Speaker Change: As Jason mentioned, we plan to moderately expand marketing spend in a disciplined manner throughout 2025 to further take advantage of the stronger LTV to CAC returns. We're generating we believe this approach will result in the greatest amount of profit dollars in value creation, even if it results in slightly higher tax.
Kyle Beilman: We believe this approach will result in the greatest amount of profit dollars and value creation, even if it results in slightly higher CAC. In terms of compensation and headcount, our compensation-related expenses grew to $27.2 million in Q4 from $23.5 million in the prior year period, due largely to an increase in stock-based compensation related to certain performance-based restricted stock units during the quarter. The specific impact related to these awards in Q4, which were tied to the achievement of certain adjusted EBITDA targets, was $3.8 million. Excluding stock-based compensation expense, compensation and benefits increased by 1% year-over-year, and on a percentage-of-revenue basis, decreased to 17% from 23% in Q4 of last year, further highlighting the operating leverage that were achieved.
Speaker Change: In terms of compensation and head count our compensation related expenses grew to $27 2 million in Q4 from $23 5 million in the prior year period due largely to an increase in stock based compensation related to certain performance based restricted stock units during the quarter.
Speaker Change: The specific impact related to these awards in Q4, which were tied to the achievement of certain adjusted EBITDA targets was $3 8 million, excluding stock based compensation expense compensation and benefits increased by 1% year over year and on a percentage of revenue basis decreased to 17%.
Speaker Change: Sent from 23% in Q4 of last year.
Speaker Change: Further highlighting the operating leverage that we're achieving.
Kyle Beilman: Other operating expenses increased 9% to $17.2 million in the fourth quarter from $15.8 million in the year-ago period, primarily due to amortization expense related to the change in useful lives of certain intangible assets, in addition to legal fees incurred related to the FTC and DOJ litigation. As a percentage of revenue, other operating expenses declined to 17% of revenue in the quarter, down from 22% in the same period last year. Gap debt income improved to $16.8 million, an improvement of $16.6 million versus Q4 of last year. Adjusted net income, which excludes stock-based compensation, as well as changes in fair value to certain non-cash liabilities, was $29.6 million in Q4, compared to $6.6 million in the fourth quarter of 2023.
Speaker Change: Other operating expenses increased 9% to $17 2 million in the fourth quarter from $15 8 million in the year ago period, primarily due to amortization expense related to the change in useful lives of certain intangible assets. In addition to legal fees incurred related to the FTC and Doj litigation.
Speaker Change: <unk>.
Speaker Change: As a percentage of revenue other operating expenses declined to 17% of revenue in the quarter down from 22% in the same period last year.
Speaker Change: GAAP net income improved to $16 8 million, an improvement of $16 6 million versus Q4 of last year adjust.
Adjusted net income, which excludes stock based compensation as well as changes in fair value to certain noncash liabilities was $29 6 million in Q4 compared to $6 6 million in the fourth quarter of 2023.
Kyle Beilman: Adjusted EBITDA for the quarter was $33.4 million. Excluding the one-time benefit and processing and servicing costs I mentioned a moment ago, adjusted EBITDA for Q4 was $32.3 million, which is over 3x compared to the $10 million that we generated in the same period last year. The step change in profitability was driven by revenue growth, variable margin expansion, and improved operating leverage on our fixed cost base. Through consistent execution, we have achieved adjusted EBITDA profitability for five consecutive quarters with a 35% sequential increase relative to Q3. Looking ahead, we expect continued adjusted EBITDA profitability, although the growth trajectory may be uneven as we plan to strategically allocate marketing investments based on the returns that we're generating.
Speaker Change: Adjusted EBITDA for the quarter was $33 4 million.
Speaker Change: Excluding the onetime benefit in processing and servicing costs I mentioned, a moment ago. Adjusted EBITDA for Q4 was $32 3 million, which is over three <unk> compared to the $10 million that we generated in the same period last year.
Speaker Change: The step change in profitability was driven by revenue growth variable margin expansion and improved operating leverage on our fixed cost base through consistent execution, we have achieved adjusted EBITDA profitability for five consecutive quarters.
Speaker Change: 35% sequential increase relative to Q3.
Speaker Change: Looking ahead, we expect continued adjusted EBITDA profitability, although the growth trajectory may be uneven as we plan to strategically allocate marketing investments based on the returns that we're generating and as we make modest and highly disciplined investments in product development data and marketing capabilities that are expected to come online in mid.
Kyle Beilman: And as we make modest and highly disciplined investments in product development, data and marketing capabilities that are expected to come online in mid 2025.
Speaker Change: 2025.
Kyle Beilman: Attorney to the Balance. As of quarter end, we had approximately $91.9 million of cash and cash equivalents, restricted cash, and other highly liquid securities, compared to $76.7 million as of the end of Q3. The increase was primarily attributable to free cash flow generation, offset by an increase in the extra cash receivables balance. The amount drawn on our credit facility remained at $75 million as of the end of the year, as we continue to rely on our own balance sheet cash to fund extra cash origination. versus funding externally. At quarter end, we had $75 million of undrawn capacity on our credit facility, bringing our total liquidity to nearly $167 million.
Speaker Change: Now turning to the balance sheet.
Speaker Change: As of quarter end, we had approximately $91 9 million of cash and cash equivalents restricted cash and other highly liquid securities compared to $76 7 million as of the end of Q3.
Speaker Change: The increase was primarily attributable to free cash flow generation offset by an increase in the extra cash receivables balance.
Speaker Change: The amount drawn on our credit facility remained at $75 million as of the end of the year as we continue to rely on our own balance sheet cash to fund extra cash originations versus funding externally.
Speaker Change: At quarter end, we had $75 million of Undrawn capacity on our credit facility, bringing our total liquidity to nearly $167 million.
Kyle Beilman: Last week, as part of our RSU releases under our incentive compensation We performed a net settlement of the related tax withholding Specifically, we withheld shares corresponding to the payroll tax liability and used approximately $14.5 million of balance sheet cash to make the required tax payments related to the awards. This transaction effectively reduced the number of shares that would have otherwise been sold in the market to cover employee tax obligations by approximately 132,000 shares, thereby mitigating dilution. We believe our stock remains undervalued in light of our strong performance in 2024 and promising prospects for 2025 and beyond.
Speaker Change: Last week as part of our RSV releases under our incentive compensation plan.
Speaker Change: Performed in net settlement of the related tax withholding obligation.
Speaker Change: Specifically, we withheld shares corresponding to the payroll tax liability and used approximately $14 5 million of balance sheet cash to make the required tax payments related to the awards. This transaction effectively reduced the number of shares that would have otherwise been sold in the market to cover employee tax obligations by approximately.
Speaker Change: 132000 shares, thereby mitigating dilution.
Speaker Change: We believe our stock remains undervalued in light of our strong performance in 2024, and promising prospects for 2025 and beyond and as such this transaction represented an attractive capital allocation opportunity.
Kyle Beilman: And as such, this transaction represented an attractive capital allocation opportunity. Moving forward, we will continue to evaluate net settlement transactions as an effective means to manage dilution and optimize our returns on capital.
Speaker Change: Moving forward, we will continue to evaluate in that settlement transactions as an effective means to manage dilution and optimize our returns on capital.
Kyle Beilman: And now to turn to our guidance. For full year 2025, we expect gap revenue to range between $415 and $435 million, reflecting growth of 20 to 25% compared to 2024. We also expect adjusted EBITDA to range between $110 million and $120 million, representing approximately 27% to 39% growth relative to 2024.
Speaker Change: And now to turn to our guidance for full year 2025, we expect GAAP revenue to range between 415 $435 million, reflecting growth of 20% to 25% compared to 2024.
Speaker Change: We also expect adjusted EBITDA to range between $110 million and $120 million, representing approximately 27% to 39% growth relative to 2024.
Kyle Beilman: Our 2025 outlook reflects the strong momentum in our business and our ongoing commitment to driving sustainable and profitable growth. Our focus remains on expanding ARPU and member lifetime value through further engagements and enhancements to our Extra Cash and DaveCard offers. as well as building next generation products that supports Dave's mission of leveling the financial playing field for everyday Americans. Between our growth trajectory, strong variable margins, and fixed expense discipline, we expect to drive another year of record performance in 2025.
Speaker Change: Our 2025 outlook reflects the strong momentum in our business and our ongoing commitment to driving sustainable and profitable growth.
Speaker Change: Our focus remains on expanding <unk> and member lifetime value through further engagements and enhancements to our extra cash and Dave card offerings as well as building next generation products that supports Dave submission of leveling the financial playing field for everyday Americans.
Speaker Change: Between our growth trajectory strong variable margins and fixed expense discipline, we expect to drive another year of record performance in 2025.
Operator: And with that, we can now open up the line for questions. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster.
Speaker Change: And with that we can now open up the line for questions.
Speaker Change: Certainly as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please standby, while we compile the Q&A roster.
Speaker Change: Okay.
Joseph Voffey: And our first question will be coming from Joseph Voffey of Canaccord, Inuit, your line is open. Hey guys, good morning. Terrific results, really, really impressive. So this will be an easy, easy conference call for sure.
Speaker Change: And our first question will be coming from Joseph <unk> of Canaccord Genuity. Your line is open.
Hey, guys. Good morning, terrific results really really impressive.
Speaker Change: So it.
Joseph Voffey: Just on, just on the pricing model, and the changes there, maybe can we drill down a little bit more on, you know, what you learned? I know you said that it, you know, it's helping to drive, you know, the size of, you know, your extra cash transactions and you know, it's a creative to lifetime value, but you know, maybe a little more detail on, on the pricing model and how it's, you know, affecting monetization.
Speaker Change: This will be an easy easy conference call for sure.
Speaker Change: <unk>.
Speaker Change: Just on the pricing model.
Speaker Change: The changes there maybe can we drill down a little bit more on.
Speaker Change: What you learned I know you said that it is helping.
Speaker Change: Drive.
Speaker Change: The size of.
Speaker Change: Your extra cash transactions.
Speaker Change: It's accretive to lifetime value.
Speaker Change: Maybe a little more detail on on the pricing model and how it.
Jason Wilk: And I'll have a quick follow up. So if, and hey, thanks for the comments. It was definitely a fantastic quarter. So if you look to the new pricing model, we had a dynamic with the existing tipping and optional instant transfer fee model where the longer customers stayed on book, the less likely they were to utilize those optional fees. And so as we tried to scale credit limits for the customer base, you tended to see worse monetization. And so now that we have a fixed monetization for the customer, be it the $5 or 5% with the $5 minimum or $15 cap, we're now able to successfully monetize those customers as they stay longer on the book.
Rob: Affecting monetization, Rob a quick follow up.
Rob: So hey, thanks for the comments it was definitely a fantastic quarter.
Rob: So if you look to the new pricing model, we had a dynamic with the existing tipping and optional instant transfer fee model, where the longer customer stayed on book the less likely they were to utilize those those optional fees and so as we tried to scale credit limits for the customer base.
Rob: Wanted to see.
Rob: Worst monetization and so now that we have a fixed monetization for the customer be it $5.
Rob: 5% was the fact that our minimum or $15 cap, we're now able to successfully monetize those customers as they stay longer on the books and so it just resulted in better monetization, which results in higher Arco and ultimately allows us to scale to higher limits too, which also drives better retention. So it's just really.
Jason Wilk: And so it just resulted in better monetization, which results in higher ARPU and ultimately allows it to scale to higher limits too, which also drives better retention. So it's this really powerful flywheel of better ARPU and better retention that's unlocking really strong growth. And we're excited that the whole portfolio has now transitioned as of February. That's great, Jason.
Rob: A powerful flywheel of better <unk> and better retention, that's unlocking really strong growth and we're excited that the whole portfolio is now transitioned as of February 19th.
Jason Wilke: That's great Jason and then.
Joseph Voffey: And then maybe secondly on customer at-cost sales marketing. I mean, it clearly has a solid ROI in it. It looks like you're going to incrementally increase it here this year.
Rob: Secondly on <unk>.
Rob: Customer at cost sales marketing.
Rob: It's clearly a solid ROI and then it looks like Youre going to incrementally increase it here.
Rob: This year, just wondering if you see enough opportunities.
Jason Wilk: Just wondering if you see enough opportunities in the marketplace to continue to increase that spend or at a certain point, is it getting redundant or kind of oversaturated in any kind of certain media channel or other advertising strategy? Thanks a lot. Yeah, like I think what's great about our, our acquisition is that we have no meaningful concentration in any one channel. Word of mouth being the biggest one always has been since we started the company. So we're feeling very strong about that given we're very well diversified across many channels from TV, streaming, We feel that we're going to continue to invest in places where we see strong returns.
Rob: And in the.
Rob: The marketplace.
Rob: Continue to increase that spend or.
Speaker Change: Point is it getting redundant or kind of over saturated.
Speaker Change: Any kind of certain immediate channel or or other advertising strategy. Thanks a lot.
Speaker Change: Yeah look I think what's great about our our acquisition is that we have no meaningful concentration in any one channel word of mouth being the biggest one always has been since we started the company. So we're feeling very strong about that given where our very well diversified across many channels from TV streaming.
Speaker Change: Okay.
Speaker Change: All the digital and social channels as well.
Speaker Change: We feel that we're going to continue to invest in places, where we see strong returns and we're going to take a just a very diligent mindset, how we deploy capital this year and feel very good about the budget.
Kyle Beilman: And we're going to take it just a very diligent mindset to how we deploy capital this year and feel very good about the budget and the ability to just drive efficient growth for 25.
Speaker Change: And the ability to just drive efficient growth for 25%.
Kyle Beilman: Hey Joe, this is Kyle. Good morning, and thanks for joining. I'll just weigh in on that, which is, you know, with the introduction of the new fee model, as well as just the improvements that we've made to the user experience to drive better MTM conversion and retention, we're just seeing, you know, overall, lifetime value benefits. And that just gives us further confidence that, you know, even in an environment where CACs are up, we've, you know, increased lifetime value orders of magnitude, greater than, you know, sort of you know, any increases in CAC that we might see to really sustain the returns at a very attractive level.
Kyle: Hey, John this is Kyle.
John: Good morning, and thanks for joining I'll just weigh in.
Kyle: On that which is.
Kyle: Yes.
Kyle: Introduction of the new fee model.
Kyle: As well as just the improvements that we've made to date.
Kyle: User experience to drive better MTM conversion.
Kyle: And retention, we're just seeing overall lifetime value benefits and that just gives us further confidence that.
Kyle: Even in an environment, where taxes are up we have.
Kyle: Increased lifetime value orders of magnitude.
Kyle: Later than sort of.
Kyle: Hi.
Kyle: Any increases in CAC that we might see.
Kyle: So it really sustain the returns at a very attractive level and thats, what we would expect to see kind of continue to play out in.
Joseph Voffey: And that's what we would expect to see kind of continue to play out in 2025. That's great. Thanks, Kyle. Thanks, Jason. Thank you. One moment for our next question.
Kyle: In 2025.
Speaker Change: That's great. Thanks, Kyle Thanks, Jason.
Kyle: Thank you.
Kyle: One moment for our next question.
Jacob Stephan: Our next question will be coming from Jacob Stephan of Lake Street Capital Markets. Your line is open. Hey guys, thanks for taking my questions. I just wanted to echo the congratulations on the quarter and all the progress you've made as well.
Speaker Change: Our next question will be coming from Jacobs Stephan of Lake Street Capital markets. Your line is now open.
Speaker Change: Yeah, Hey, guys. Thanks for taking my questions just wanted to echo the congratulations on the quarter and all the progress you've made as well.
Jacob Stephan: Maybe the first one for me, you could just kind of help us quantify or maybe some qualitative comments around the uplift and attach rate you're kind of seeing with regards to Dave Checking and Dave Debit with the new fee model. Yeah, great question. So if you look at the new fee model, we've now removed the instant transfer fee, the customer is still paying the mandatory 5% or, or, you know, minimum $5 $15 cap. So far, we're still looking at the the conversion results. It's not a step change, you know, improvement in conversion from EC to the Dave card, but it's not, you know, any material worse either.
Speaker Change: Maybe first one for me you could just kind of help us quantify or maybe some qualitative comments around the the uplift in attach rate youre kind of seeing with regards to Dave checking and Dave debit with the new fee model.
Speaker Change: Okay.
Speaker Change: Yeah, Great question. So if you look at the new fee model, we've now removed the instant transfer fee.
Speaker Change: Customer is still paying the mandatory 5% or.
Speaker Change: Minimum $5 $15 cap.
Speaker Change: So far we're still looking at the conversion results, it's not a step change.
Speaker Change: Improvement in conversion from EC to date card, but it's not any materially worse either so.
Jason Wilk: So we're happy to see that we've seen no impact, take rate, if anything is positive on the take rate for extra cash with the new fee model. But yeah, not a catalyst of growth, because we're because we're not charging that fee anymore. Okay, got it.
Speaker Change: We're happy to see that we've seen no impact take rate and if anything is positive on the take rate for extra cash with the new <unk> model, but not a catalyst of growth because we are.
Speaker Change: <unk>.
Speaker Change: These are not charged in that anymore.
Jason Wilk: And then maybe, you know, to ask a broader sort of macro question, I guess, you know, the overall strength of the consumer. I guess what are you guys seeing in your underwriting? I mean, there's tons of press out there regarding, you know, lower tax, tax refunds this year. But maybe you could kind of help us understand what you're seeing in your own book. Yeah, I think it's been very consistent. And as you can see, in the in the loss rates, we just had another fantastic year with with cash AI with the 1.6% loss rate in Q4.
Speaker Change: Okay got it.
Speaker Change: And then maybe.
Speaker Change: Ask a broader sort of macro question I guess.
Speaker Change: Overall strength of the consumer.
Speaker Change: I guess what are you guys seeing in your underwriting I mean, there's tons of press out there regarding lower tax.
Speaker Change: Refunds this year, but maybe you could kind of help us understand what you are seeing in your own book.
Speaker Change: Just.
Speaker Change: Yes, I think it's been very consistent and as you can see in the loss rates. We just had another fantastic year with with cachet with one 6% loss rate in Q4.
Jason Wilk: You know, we think just given the short duration of extra cash, it just lends itself very well to everyday consumers trying to buy buy discretionary goods with prices still up on things like eggs, gas, you know, we tend to continue to see strong, a strong environment for cash. Yeah, just I'd say pretty consistent from the risk scores that we're seeing with our underwriting models, you know, relative to, you know, Q4, or prior periods, not a lot has changed for us, you know, CAC, I guess, Jason mentioned remains, remains strong. And, you know, like I said, our risk scores for our underwriting models are, you know, within very consistent ranges where we've seen them historically.
Speaker Change: Yes, we think just given the short duration of extra cash it just lends itself very well to everyday consumers trying to buy discretionary goods with price is still up on things like eggs gas, we tend to continue to see strong a strong environment for Tac.
Speaker Change: Got it.
Speaker Change: Yes, just I would say pretty consistent from the risk scores that we're seeing with our underwriting models.
Speaker Change: Relative to.
Speaker Change: Q4 <unk>.
Speaker Change: Periods.
Speaker Change: Not a lot has changed for US guys. Jason mentioned remains remained strong and.
Speaker Change: Like I said, our risk scores for our underwriting models are.
Speaker Change: Within very consistent ranges, where we've seen them historically.
Jacob Stephan: Okay, understood.
Jacob Stephan: Good luck going forward, guys, and congrats. Thanks a lot.
Speaker Change: Okay understood.
Speaker Change: Good luck going forward guys and congrats.
Speaker Change: Thanks, a lot.
Operator: One moment for our next question.
Speaker Change: One moment for our next question.
Jeff Cantwell: Our next question will be coming from Jeff Cantwell of Seaport Research. Your line is open. Hey, thanks very much. Congrats.
Speaker Change: Our next question will be coming from Jeff Cantwell of Seaport Research. Your line is open Jeff.
Speaker Change: Yes.
Hey, thanks very much.
Jeff Cantwell: Maybe just on your 25 guidance, you guided the 20 to 25% revenue growth for the full year. Can you maybe break that down for everyone and tell us about your expectations for growth and service-based revenue and for transaction-based revenue? Lastly, the growth profiles were similar for both of those, but I was hoping you might be able to help us out and provide a little clarity on those.
Speaker Change: Maybe just on your 25 guidance you guided the 20% to 25% revenue growth for full year can you maybe break that down for everyone.
Speaker Change: Tell us about your expectations for growth and service based revenue per transaction based revenue last year. The growth profiles were similar for both in aerospace.
Speaker Change: And you might be able to help us out and provide a little clarity on that just given some of these plan changes and developments you guys hopper product et cetera.
Kyle Beilman: Given some of these planned changes and developments you guys have for product, et cetera, in 2025, can you help everyone out by discussing how you're thinking about these year's line items in terms of growth in the coming year? Thanks. Hey, thanks. Thanks for the question, Jeff. So I'd say in terms of the growth algorithm between user growth and ARPU, we continue to sort of see the, you know, real near term opportunities on the ARPU side with the introduction of the new fee model. And, you know, as we talked about, we see, you know, favorable CAC environment and the improvements that we've made on the retention side to also be a driver for the MTM part of the equation.
Speaker Change: 225 could you help everyone out.
Speaker Change: By discussing how you're thinking about each of those line items in terms of growth in the coming year.
Speaker Change: Hey, Thanks, Thanks for the question Jeff.
Speaker Change: I'd say in terms of the growth algorithm between user growth and <unk>, we continue to sort of see the.
Speaker Change: A real near term opportunity is on the <unk> side with the introduction of the new fee model and as we talked about we see favorable cost environment and the improvements that we've made on the retention side.
Speaker Change: Also be a driver for the MTM part of the equation.
Kyle Beilman: In terms of the various segments, we haven't provided any specific color on the kind of growth trajectory of each of those particular line items. But, you know, I'd say just given that the new, the upside that we've seen from the new fee model, there might be some sort of just near term catalysts on the service based revenue side as a result of that. Gotcha, gotcha. Okay.
Speaker Change: In terms of the various segments.
Speaker Change: Haven't provided any specific color on the kind of growth trajectory of each of those particular line items, but yes.
Speaker Change: I would say just given that the new.
Speaker Change: The upside that we've seen from the new fee model there might be some sort of just near term catalysts on the growth on the service based revenue side as a result of that.
Kyle Beilman: And similarly, on your provision for credit loss line, do you mind just expanding on your commentary earlier, and walk through your expectations for that line over the course of the year? It seems reasonable to assume as you continue to scale, that line would increase in absolute dollar terms. But I'm curious how that tracks against your volume, since it's been modeling at a low one percentage range versus your volume. Maybe can you walk us through how we should be thinking about that line for the year? Thanks again. Thank you.
Speaker Change: Gotcha Gotcha, Okay and similarly.
Speaker Change: On your provisioning for credit loss line do you mind, just expanding on your commentary earlier.
Speaker Change: Walk through your expectations for that line over the course of the year. It seems reasonable to assume as you continue to scale that language increase in absolute dollar terms, but I'm curious how that tracks against your volume since it's been modeling at a low 1% ish range versus your <unk>, maybe can you walk us through how we should be thinking about that line.
Speaker Change: The year, Thanks again.
Kyle Beilman: Yeah, so we haven't provided any specific guidance around, you know, provision as a percentage of revenue per se. Other than the fact that, you know, we continue to see really solid loss rate performance, we have a number of new initiatives on the underwriting side that are in flight for this year that we expect to, you know, further support improvements in credit performance. And we just feel really confident in our ability to kind of manage that part of the business moving forward. But yeah, I mean, in terms of absolute dollar expense of the provision, that should increase as we, you know, continue to grow Originations.
Speaker Change: Yes, so we haven't provided any specific guidance around <unk>.
Speaker Change: Provision as a percentage of revenue per se other.
Speaker Change: Other than the fact that we continue to see really solid loss rate performance. So we have a number of new initiatives on the underwriting side that are in flight for this year that we expect to.
Speaker Change: To further support improvements in credit performance.
Speaker Change: And we just feel really confident in our ability to manage that part of the business moving forward, but yes, I mean in terms of.
Speaker Change: The absolute dollar expense of the provision and that should increase as we.
Kyle Beilman: But like I said, you know, we feel very confident in our ability to kind of sustain the levels of variable margin performance that we've delivered and kind of variable profit growth being the primary thing that we focus on here at the company in terms of kind of growing that pool of, you know, absolute dollars moving forward.
Speaker Change: <unk>.
Speaker Change: Continue to grow originations, but like I said, we feel very confident in our ability to kind of sustain the levels of variable margin performance that we've delivered in kind of variable profit growth being the primary thing that we focus on.
Speaker Change: Here at the company in terms of kind of growing that pool of.
Speaker Change: Absolute dollars moving forward.
Kyle Beilman: On your new partnership that you mentioned with Coastal Community Bank, you might just expand on that a little bit. I'm curious, it sounds like you've converted that over already, is there anything that we should be aware of in terms of functionality, product developments, or anything that might enable you to do more of, or is there any changes relative to your prior relationship that investors should be made aware of from an operating perspective as we think about to go forward? Thank you. Yeah, so actually, the conversation with Coastal kicked off quite a long time ago, roughly over 18 months, actually started talking about a new credit product at Dave.
Speaker Change: If I could just squeeze one last one.
Speaker Change: And your new partnership that you mentioned because of the community Bank, Jim I'd, just expand on that a little bit I'm curious it sounds like you converted about Uber already is there anything that we should be aware of in terms of functionality product developments or anything that might enable you to do more.
Speaker Change: Or is there any changes relative to your prior relationship that investors should be made aware of from an operating perspective as we think about the go forward. Thank you.
Speaker Change: Yes, so actually the conversation with the coastal kicked off quite a long time ago, roughly over 18 months to actually start talking about a new credit product at Dave their ability to offer additional credit products was superior to evolves.
Harold Goetsch: Their ability to offer additional credit products was just superior to Evolve's history there. And so that was the catalyst for the relationship being kicked off. And then we eventually started to discuss the debit relationship as we move forward. So excited about the partnership. They're very well respected in the space, and we're excited to move forward and get customers on board and starting in Q2. Gates. Thanks very much. Congrats on the results. Thanks Jeff. Thank you and one moment for our next question.
Speaker Change: History, there and so that was the catalyst for the relationship being kicked off and then we eventually started to discuss the debit relationship as we move forward. So excited about the partnership they are very well respected in the space.
Speaker Change: And we're excited to move forward and get customers on board it starting in Q2.
Speaker Change: Okay. Thanks, very much congrats on the results.
Speaker Change: Thanks, Jeff Thanks, Jeff.
Speaker Change: One moment for our next question.
Harold Goetsch: Our next question will be coming from Harold Goetsch of B Raleigh Securities. Your line is open. Thank you. Hey, great quarter.
Speaker Change: Our next question will be coming from <unk> <unk> of B Riley Securities. Your line is open now.
Speaker Change: Thank you Hey, great quarter. My question is on monetization and I'm looking at debit card spend.
Harold Goetsch: My question is on like monetization and I'm looking at debit card spend and I'm going to surmise maybe debit card spend is kind of coincident with origination. So is debit card spend has been about 30% of like origination. Is that a good proxy of like Card adoption amongst, you know, amongst your users. It's about 30% of your kind of a total origination. Is that one way of thinking about it or is it very different? I think we've really broken that out, Hal. I mean, I think we just tend to look at, you know, the transaction revenue on a on its own line item.
Speaker Change: I'm going to surmise, maybe debit card spend has kind of coincident with originations so is.
Speaker Change: Debit cards, but it's been about 30% of originations is that a good proxy of like.
Speaker Change: Dave card adoption amongst.
Speaker Change: Luxury users, it's about 30% of your kind of a total origination that is that one way of thinking about it or is it very different.
Speaker Change: I don't think we've really broken that out I think.
Speaker Change: We just tend to look at that transaction revenue.
Jason Wilk: But I think we've historically talked about that conversion of about 30% of EC volume does go to the card, but I wouldn't use that as a proxy of like, how many debit users we have on the platform as a percentage of MTN. Okay, is that where you're from? Yeah, yeah. There's a lot of our debit users who obviously fund with, you know, external sources, you know, payroll and things like that to drive, you know, the total debit spend volume in addition to the extra cash sort of cross attached. So it's, there are multiple sources of funding there to drive card spend.
Speaker Change: On its own line item, but I think we've historically talked about that conversion of about 30% of EC volume does go to the card, but I wouldn't use that as a proxy of like how many debit users we have on the platform as a percentage of MTS.
Speaker Change: Okay is that what are you doing that.
Speaker Change: Yes.
Speaker Change: Yes, thanks very much.
Speaker Change: There is a lot of our debit users, who obviously fund with.
Speaker Change: External sources payroll and things like that to drive.
Speaker Change: The total debit spend volume in addition to the extra cash.
Speaker Change: Sort of cross the <unk>. So there are.
Speaker Change: <unk> sources of funding there to drive.
Speaker Change: Card spend.
Speaker Change: Okay and then.
Jason Wilk: Could you, maybe now that the old pricing is kind of in arrears, like, so many people were taking advantage of basically the free model, you know, waiting two or three days, you know, and now they're paying a fee. Perhaps they're tipping. They used to tip a little bit when they were free, and now they're not tipping, but they're okay with the fees. The fees are fair. Like, what percentage of your volume was on the freemium model, essentially, with the $1 a month, you know, kind of subscription? I'll say the amount of people who tip was definitely the minority.
Speaker Change: Could you maybe.
Speaker Change: Oil pricing is kind of in arrears.
Speaker Change: How many people were taking advantage of basically.
Speaker Change: The Fremont, leading two or three days and now they're they're paying.
Speaker Change: Our fee.
Speaker Change: Perhaps or tipping the used to tip, a little bit when they were free and now they are not shipping, but there though.
Speaker Change: Okay, what the fees the fees are fair what percentage of your volume was on the freemium model essentially with the $1 a month at all.
Speaker Change: Kind of subscription.
Speaker Change: I'll say the amount of people, who Ted was definitely the minority and as that scale up.
Jason Wilk: And as that scale up the on the retention curve that tended to go down, as people scale on the platform. If you looked at people to also well set our free ACH lane out as well. So if you want to take extra cash, not tip and not actually pay us for speed of access, I mean, we had not an insignificant amount of people that were getting completely free access to credit on the day platform for quite a long time. So we were happy to see when we moved in the new fee model that those customers retained.
Speaker Change: The retention curve that tended to go down as people scale on the platform.
Speaker Change: If you look at people that also we also have a free <unk> out as well. So if you wanted to take extra cash not tip and not actually pay us for speed of access.
Speaker Change: Not a significant amount of people that we're getting completely free access to credit on the <unk> platform for quite a long time. So we were happy to see when we move to the new fee model.
Speaker Change: Those customers.
Jason Wilk: And so to us, it just really reinforces the idea that customers knew what they were paying at all times and that the pricing is very fair. And we like that. We like the member business trade off value of the new fee model. Just the one thing that I would add, Hal, is that dynamic sort of became more kind of exacerbated as people moved up the limit curve. So you'd see lower levels of tip engagement and express fee engagement, you know, as you moved up from 100 towards five hundred dollars limits, per se. And so that sort of spread didn't scale commensurate with the risk.
Speaker Change: Paint and so to us it just really.
Speaker Change: <unk> is the idea that customers.
Speaker Change: New or they are paying at all times and that the pricing is very fair and we like that we like to remember business trade out value of the new fee model.
Speaker Change: The one thing that I would add how is that dynamic sort of.
Speaker Change: Became more kind of exacerbated as people moved up the limit curve, so you'd see lower levels of tip engagement and.
Speaker Change: Express fee engagement.
Speaker Change: As you've moved up from 100 towards $500 limits per se and so sorry.
Speaker Change: Spreads didn't scale commensurate with the risk and so this basic new fee model change aligns our incentives to offer higher limits because the fee model does scale with dollar base risk.
Jason Wilk: And so this basic the new fee model change aligns our incentives to offer higher limits because the fee model does scale with dollar based risk. Yeah, okay, terrific.
Harold Goetsch: And next question for you guys, this is probably, you know, maybe something you haven't thought about because in 18 months, your financial situation is very different. But you know, on your current guidance and your current, you know, you guys are running ROEs that are like off a chart. Knoll versus maybe what even your growth rate is, your ROE is. multiples of your growth rate, you know, you're going to be throwing off so much cash you don't know what to do with it. So what is the next step in evolution of your thoughts on capital allocation here as you grow these very high incremental margins and great returns?
Speaker Change: Okay terrific.
Speaker Change: Next question for you guys and this is probably maybe something we haven't thought about because in 18 months your financial situation is very different but.
Speaker Change: On your current guidance and your current you guys are running Roe.
Speaker Change: Mike.
Speaker Change: The charts.
Speaker Change: Versus maybe what your even your growth rate is your view and your ROE is.
Speaker Change: Multiples of your growth rate.
Speaker Change: Gonna be throwing off so much cash out what to do with it so.
Speaker Change: What is the next step in evolution of your thoughts on capital allocation here.
Speaker Change: As you grow at very high incremental margins and great returns.
Kyle Beilman: I think it's a totally fair question, Hal, and I think that the first indication of how we're thinking about that was that net settlement transaction that we conducted last week, where we effectively minimized the amount of dilution through our employees' RSU vesting by about 144,000 shares, and we used about $15 million of balance sheet cash in order to do that. And so in terms of buying back stock, I certainly see that as an opportunity moving forward as we continue to generate free cash flow out of the business. So I wouldn't be surprised to see us do more of that in the future.
Speaker Change: Hi.
Speaker Change: Totally.
Speaker Change: Fair question Harlan I think the first indication of how we're thinking about that was that net settlement transaction that we conducted last week, where we.
Speaker Change: Effectively minimized the amount of dilution.
Speaker Change: Yes.
Speaker Change: Our employees RSC you're investing.
Speaker Change: About 144000 shares.
Speaker Change: And we used about $15 million of balance sheet cash in order to do that.
Speaker Change: And so.
Speaker Change: In terms of buying back stock.
Speaker Change: I certainly see that as an opportunity moving forward as we continue to.
Speaker Change: Generate a free cash flow.
Speaker Change: Out of the business so.
Speaker Change: I wouldn't be surprised to see us do more of that in the future. We're also very excited about continuing to invest in our business.
Kyle Beilman: We're also very excited about continuing to invest in our business. As I alluded to on the call, we're going to make some very modest investments in product development and R&D throughout this year. And then on the M&A front, we continue to sort of keep our eyes open for interesting opportunities that would further advance our strategy through kind of new product or distribution opportunities. So I would say across those three buckets of capital allocation, we're very focused on all three of them.
Speaker Change: I alluded to on the call, we're going to make some very modest investments in product development in R&D throughout this year and then on the M&A front, we continue to sort of keep our eyes open for interesting opportunities that would further.
Speaker Change: Advance our strategy through kind of new product or distribution opportunities. So I would say across those three buckets of capital allocation.
Speaker Change: We're very focused on all three of them okay.
Kyle Beilman: Okay. And then one follow-up, maybe just maybe foreshadow what kind of other lending products you think would fit well that would be... You know, the next step or next evolution of maybe an offering and on the credit side that you could add, what would it look like or generally, I'll give it away, but like, just tease us a little bit here. Yeah, I'd say without giving away too much, we know our customers aspire to have more duration of credit on the platform, not talking about, you know, two or three year type credit. But the fact is, with extra cash, the beauty of it, for us, it's very short term, that the downside to the customer is that all the money you take from us is due on your next paycheck date.
Speaker Change: Okay and one follow up can you maybe just maybe foreshadow what kind of other lending products, you think would fit well that would be.
Speaker Change: The next step or next evolution of maybe an on off rate on the credit side that you could add that what would it look like.
Speaker Change: Generally give it away, but just tease us a little bit here.
Speaker Change: Yes, I would say without giving away too much we know our customers aspire to have more duration credit on the platform not talking about two or three year type credit, but the fact is that extra cash the beauty of it for us its very short term that.
Speaker Change: <unk> of the customers that all the money you take from US as do you on your next paycheck date.
Kyle Beilman: And you know, that limit that limits the types of purchases you're going to make using this type of cash. And so extra cash lends itself very well to gas, groceries, rent, things that are coming up in very short order, you need to bridge the gap in your paycheck. But if you need to buy something that you need a little bit longer duration, Dave wants to be there for you on that transaction as well. And we see out there plenty of competitors doing quite well in the market. And we think given our low CAC and high cross attached to our products, especially using Dave checking as a proxy for that, we feel that there's just a lot of ARPU opportunity to unlock by shipping new credit features.
Speaker Change: And so that limits that limit the types of purchases youre going to make using this type of cash and so actually cash lends itself very well to gas groceries rent things that are coming up in very short order you need to bridge the gap in your paycheck, but if need to buy something that you need a little bit longer duration.
Speaker Change: Dave wants to be there for you on that transaction as well.
Speaker Change: And we see out there plenty of competitors doing quite well in the market and we think given our low CAC and high cross attached to our products, especially using Dave checking as a proxy for that we thought that there's just a lot of <unk> opportunity to unlock by shifting new credit features and Thats, where coastal becomes a key asset process.
Kyle Beilman: And that's where Coastal becomes a key asset for us is their experience in offering longer duration credit is significantly further on than Evolve. Okay, terrific.
Speaker Change: Their experience and offering a longer duration credit is significantly.
Speaker Change: Further on and then evolve.
Harold Goetsch: Thanks. Thank you.
Speaker Change: Terrific. Thanks.
Speaker Change: Thank you.
Operator: One moment for our next question.
Speaker Change: Thank you our next question.
Gary Prestopino: Our next question will be coming from Gary Prestopino of Barrington. Your line is open, Gary. Hey, good morning, all.
Speaker Change: Our next question will be coming from Gary Presta piano, Gary <unk> Barrington. Your line is open Gary.
Speaker Change: Hey, good morning, all.
Kyle Beilman: Hey, Kyle, could you possibly, for Q4, give us a breakdown of the service-based revenues between processing fees, tips, and subscriptions?
Speaker Change: Could you possibly.
Speaker Change: For Q4 give us a breakdown of the service based revenues between processing fees chips and subscriptions.
Kyle Beilman: Uh, Gary, could you mind, um... That should be broken out here in the K for you later today, if you wouldn't mind. So you're filing your K? You're filing your K today. That's fine.
Speaker Change: Gary could you mind John.
Speaker Change: That should be broken out here in the K.
Speaker Change: Yes.
Speaker Change: For you later today.
Speaker Change: Alright, you file in your K you found your K correct. That's fine I was just wondering okay. So look.
Gary Prestopino: I just want to... So look... You basically said with the change in fee structure, there's been no change in funds. Positive to the Dave card.
Speaker Change: You basically said with the change in fee structure, there has been no change in <unk>.
Speaker Change: <unk> departure.
Speaker Change: It's a positive to the Dave card and I'm wondering if you're kind of contemplating some kind of program be it may be lets just say it awards program on the debit side to more so incentivize.
Gary Prestopino: And I'm wondering if you're kind of contemplating some kind of program, be it maybe, let's just say an awards program on the debit side, to more so incentivize deposits onto the Dave debit card so you can grab more transactional revenue over time. So, Gary, are you asking about what types of incentive programs we might put in place to drive further adoption of the Dave card? Right.
Speaker Change:
Speaker Change: Deposits onto the Dave debit cards.
Speaker Change: We have more transactional revenue overtime.
Speaker Change: So Gary are you asking about what types of incentive programs that we might put in place to drive further further adoption of.
Speaker Change: Right right.
Kyle Beilman: Look, it seems to me that's a pretty important part of the puzzle here, although, you know, the extra cash does dwarf it. But the more money you get on those Dave cards, if you're increasing the life of your cardholder, more transactions you keep. You said there really wasn't much of a change in the amount deposited on the Dave card from the new fee structure.
Speaker Change: It look it seems to me that's a pretty important part of the puzzle here. Although you know the extra cash does dwarf it but the more money you get on those Dave cards, if youre, increasing the life of your.
Speaker Change: Your your cardholder more transactions you keep.
Speaker Change: You said, there really wasn't much of a change in the amount of deposits on the day part from the new fee structure.
Kyle Beilman: So I'm trying to get some idea if you're contemplating something like a point system where you pick up points or something for rewards on the Dave card itself. Yeah, look, Gary, I'd say the last several years have very much been focused on the extra cash product. The new fee migration has been very, very important. Debit card we have not completely ignored as we've had really nice growth there on its own because just the natural synergy between extra cash and the Dave card is very strong.
Speaker Change: To get some idea if youre contemplating something like a point system, when you pick up points or something for rewards on.
Speaker Change: On the <unk> card itself.
Speaker Change: Gary I would say the last several years, it's very much been focused on the extra cash product. The new fee migration has been very very important debit card we have not completely ignore because we've had really nice growth there on its own because just of the natural synergy between extra cash and Dave card is very strong, but we do plan to make more investments in R&D. This year.
Kyle Beilman: But we do plan to make more investments in R&D this year on the Dave debit product. There's many ideas, not quite a point system, but you can imagine various things from loyalty to rewards to further incentives on credit to try and drive further adoption there in direct deposit. It's worth noting that we don't need the debit business to survive as a company, but we do note that the stronger retention is very correlated to people that use both extra cash and the Dave card. And so we're excited to continue to drive more ways to fund that adoption.
Speaker Change: On the day of debit product is theres, many ideas not quite a point system, but you can imagine various things from loyalty to rewards to further incentives on credit to try and drive further adoption they're on direct deposit.
Speaker Change: It's worth noting that we don't need the debit business to survive as a company, but we do note that the stronger retention.
Speaker Change: Is very correlated to people that use both extra cash and Dave card and so we're excited to continue to drive more ways to fund that adoption.
Kyle Beilman: Okay, that's good to hear.
Speaker Change: Okay, that's good to hear.
Kyle Beilman: In terms of this new sponsor, Bank Coastal, how do you handle or are most of your new Count Growth, is that going to be placed at coastal versus evolved? That's correct. So starting in Q2, we plan to onboard new customers, and we plan to exclusively offer that to new customers. So we're not managing people on both platforms. And so the idea is that over time, we'll eventually migrate the rest of the population over to Coastal, and they'll be the predominant sponsor bank. We do retain the ability to maintain a redundant bank partnership, should we choose, but the nature is we'll have all of our customers on Coastal, hopefully in the next 12 months or sooner.
Speaker Change: In terms of this new new sponsor bank coastal.
Speaker Change: How do you handle.
Speaker Change: Most of your new <unk>.
Speaker Change: Count growth is that going to be placed at coastal versus the ball.
Speaker Change: Yeah.
Speaker Change: That's correct. So starting in Q2, we plan to onboard new customers and we find it.
Speaker Change: Exclusively offered to that's a new customer so we're not managing people on both platforms and so the idea is that over time will eventually migrate the rest of the population over to.
Speaker Change: Two coastal.
Speaker Change: And there'll be the predominant sponsor bank, we do retain the ability to maintain a redundant bank partnership should we choose but maybe the nature as we'll have all of our customers on <unk>.
Speaker Change: Coastal hopefully in the next 12 months or sooner.
Kyle Beilman: Does Coastal have its own credit card portfolio? Is it a Visa or MasterCard bank? They do offer credit cards, they do offer personal loans. I think they support both MasterCard and Visa to my knowledge.
Speaker Change: This coastal will have its own credit card portfolios of the visa or Mastercard bank.
Speaker Change: They do offer credit cards that do offer our personal loans.
Speaker Change: I think they support both Mastercard and visa to my to my knowledge.
Kyle Beilman: Okay, thank you. We'll continue to be with MasterCard Gary. Okay, but I think importantly, though, they're integrated with Galileo, which is our our sort of issuer processor. And so that does make the, you know, onboarding migration quite a bit easier for us.
Speaker Change: Okay. Thank you will continue to be with Mastercard Gary.
Speaker Change: Okay. Thanks, Sara I think importantly, though they're integrated with Galileo, which is our sort of issuer processor and so that does make the.
Speaker Change: Onboarding migration quite a bit easier for us.
Kyle Beilman: Okay, that's helpful. Thank you.
Speaker Change: Okay. That's helpful. Thank you.
Operator: Thanks.
Jason Wilk: And I would now like to turn the call back to management for closing. Yeah, thanks everyone for the time. Really appreciate it. Another strong quarter. We're feeling great about the company and appreciate your support.
Speaker Change: Thanks.
Speaker Change: And I would now like to turn the call back to management for closing remarks.
Yeah. Thanks, everyone for the time really appreciate it another strong quarter, we're feeling good about the company and appreciate your support.
Operator: And this concludes today's conference call. Thank you for participating.
Speaker Change: And this concludes today's conference call. Thank you for participating you may now disconnect.
Operator: You may now disconnect.
Speaker Change: Okay.
Speaker Change: Okay.
Operator: Thanks for watching!
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: [music].