Q2 2026 Dave Inc Earnings Call

August 5, 2026

Operator: Good afternoon, everyone. Thank you for participating in today's conference call to discuss Dave's financial results for Q2 ended 30 June 2026. Joining us today are Dave's CEO, Mr. Jason Wilk, and the company's CFO and COO, Mr. Kyle Beilman. By now, everyone should have access to the Q2 2026 earnings press release, which was issued today after the market closed. The release is available in the investor relations section of Dave's website at investors.dave.com. This call will also be available for webcast replay on the company's website. Please note that this call is being recorded. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question, please press star one one on your telephone and wait for your name to be announced.

Speaker #2: Good afternoon, everyone, and thank you for participating in today's conference call to discuss Dave's financial results for the second quarter ended June 30th, 2026.

Speaker #2: Joining us today are Dave's CEO, Mr. Jason Wilk, and the company's CFO and COO, Mr. Kyle Beilman. By now, everyone should have access to the second quarter 2026 earnings press release, which was issued today after the market closed.

Speaker #2: The release is available in the investor relations section of Dave's website at investors.dave.com. This call will also be available for webcast replay on the company's website.

Speaker #2: Please note that this call is being recorded. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session to ask a question.

Speaker #2: Please press star 11 on your telephone, and wait for your name to be announced to withdraw your question. Please press star 11 again. Certain comments made during this conference call and webcast are considered forward-looking statements under the Private Securities Litigation Reform Act of 1995.

Operator: To withdraw your question, please press star one one again. Certain comments made during this conference call and webcast are considered forward-looking statements under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. These forward-looking statements are also subject to other risks and uncertainties that are described from time to time in the company's filings with the SEC. Do not place undue reliance on any forward-looking statements, which are being made only as of the date of this call. The company undertakes no obligation to revise or update any forward-looking statements, except as required by law.

Speaker #2: These forward-looking statements are subject to certain known and unknown risk and uncertainties as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements.

Speaker #2: These forward-looking statements are also subject to other risk and uncertainties that are described from time to time in the company's filings with the SEC.

Speaker #2: Do not place undue reliance on any forward-looking statements which are being made only as of the date of this call. The company undertakes no obligation to revise or update any forward-looking statements except as required by law.

Speaker #2: The company's presentation also includes certain non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA margin, adjusted net income, non-GAAP gross profit, non-GAAP gross margin, adjusted earnings per share, and compensation expense excluding stock-based compensation.

Operator: The company's presentation also includes certain non-GAAP financial measures, including adjusted EBITDA, Adjusted EBITDA Margin, adjusted net income, non-GAAP gross profit, non-GAAP gross margin, adjusted earnings per share, and compensation expense, excluding stock-based compensation as supplemental measures of the performance of our business. All non-GAAP measures have been reconciled to the most directly comparable GAAP measures in accordance with the SEC rules. You will find reconciliation tables 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's CEO, Mr. Jason Wilk. Please go ahead.

Speaker #2: As supplemental measures of the performance of our business, all non-GAAP measures have been reconciled to the most directly comparable GAAP measures in accordance with the SEC rules.

Speaker #2: You will find reconciliation tables and other important information in the earnings press release and Form 8K furnished to the SEC. I would now like to turn the call over to Dave's CEO, Mr. Jason Wilk.

Speaker #2: Please go ahead.

Jason Wilk: Good afternoon, and thank you all for joining us. The business is performing exceptionally well as we close out H1 2026. Q2 revenue grew 30% year-over-year to $171 million, and Adjusted EBITDA grew 48% to $76 million at a 44% margin. On the strength of these results and the trends within the business, we are once again raising our full year guidance for revenue, Adjusted EBITDA, and adjusted diluted EPS. The key takeaway from today's call is that our growth engine remains incredibly strong, with Q2 representing our ninth consecutive quarter of 30% plus revenue growth. Marketing efficiency and overall user growth continue to outperform. That gives us the confidence to lean further into marketing in H2, which should accelerate MTM growth. Combined with more levers than ever on ARPU, we're well positioned to sustain this trajectory for the foreseeable future.

Speaker #3: Good afternoon. And thank you all for joining us. The business performing exceptionally well as we close out the first half of 2026. Q2 revenue grew 30% year-over-year to $171 million, and adjusted EBITDA grew 48% to $76 million, at a 44% margin.

Speaker #3: On the strength of these results and the transition in the business, we are once again raising our full-year guidance for revenue, adjusted EBITDA, and adjusted diluted EPS.

Speaker #3: The key takeaway from today's call is that our growth engine remains incredibly strong, with Q2 representing our ninth consecutive quarter of 30%-plus revenue growth.

Speaker #3: Marketing efficiency and overall user growth continue to outperform. That gives us the confidence to lean further into marketing in the second half, which should accelerate MTM growth.

Speaker #3: Combined with more leverage than ever on ARPU, we're well positioned to sustain this trajectory for the foreseeable future. Turning to our growth pillars, starting with member acquisition, we added 951,000 new members in the quarter.

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

Speaker #3: Up 32% year-over-year. Our fastest growth in nearly four years, and we delivered it at many times the scale we had back then. We did this while holding CAC flat at $19, which we believe tells us two things.

Speaker #3: Our brand and funnel are getting more efficient as we grow, and we are still in the early innings of penetrating the enormous $185 million customer TAM in the US.

Speaker #3: Moving to our second pillar, engagement through extra cash. Originations reached $2.3 billion, up 27% year-over-year, as member engagement and overall demand remains very strong.

Speaker #3: Additionally, average extra cash size reached a new high of $215, meaning members are getting more of the short-term liquidity they need for gas, groceries, and rent from Dave while also driving incremental monetization for us.

Jason Wilk: Additionally, average ExtraCash size reached a new high of $215, meaning members are getting more of the short-term liquidity they need for gas, groceries, and rent from Dave, while also driving incremental monetization for us. We are monetizing that growing demand more effectively than ever. Last quarter, we removed a $15 fee cap for new members. Earlier this quarter, we removed that fee cap for a large portion of grandfathered members, and we plan to increase the fee cap to $20 for the remaining grandfathered members effectively August. The more efficient monetization enables us to increase average origination sizes per user with planned initiatives to raise our maximum well above $500 without compromising margin. We additionally began rolling out CashAI V6, the latest generation of our proprietary cash flow underwriting engine. V6 is built on more than 700 model features, nearly 400 of which are brand new.

Speaker #3: And we are monetizing that growing demand more effectively than ever. Last quarter, we removed the $15 fee cap for new members. Earlier this quarter, we removed that fee cap for a large portion of grandfathered members, and we plan to increase the fee cap to $20 for the remaining grandfathered members effectively in August.

Speaker #3: The more efficient monetization enables us to increase average origination sizes per user, with planned initiatives to raise our maximum well above $500 without compromising margin.

Speaker #3: We additionally began rolling out cash EI v6, the latest generation of our proprietary cash flow underwriting engine. v6 is built on more than 700 model features, nearly 400 of which are brand new.

Speaker #3: As with any model upgrade, v6 is designed to expand gross profit dollars within our controlled range of loss rates, not necessarily to drive the lowest possible loss rates.

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

Speaker #3: And with stronger growth spreads from our new pricing, the model has greater flexibility to optimize unit economics. Earlier results suggest v6 is delivering higher credit limits and is driving the desired outcome of expanded gross profit dollars.

Speaker #3: Those higher limits also deepen member value, which tends to compound into better conversion, retention, and reactivation, and ultimately MTM and revenue growth, a win-win.

Speaker #3: Moving to our third pillar, deepening card engagement, Dave Card was approximately $530 million up 7% year-over-year, as card volume continues to benefit from its natural synergy with extra cash.

Speaker #3: As we discussed last quarter, we have deliberately shifted our focus from new debit-focused initiatives to our new Dave Flex Card, which we believe has more differentiation in the market to win top-of-wallet spend, given our advantages in underwriting.

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

Speaker #3: We continue to expand test cohorts as unit economics have improved and early engagement has been promising. Our focus remains to test and learn and optimize through year-end.

Speaker #3: We do not expect Dave Flex to contribute meaningful revenue in 2026, and it is not embedded in our guidance. We will share more as performance data matures.

Speaker #3: Before I turn it over to Kyle, a couple of strategic updates. First, on our partnership with Coastal Community Bank, during the quarter, we began funding extra cash receivables through our new structure with Coastal.

Speaker #3: As it scales and makes our funding model significantly more capital-efficient, lowers our cost of funds, and frees up meaningful liquidity to pursue high-return investment opportunities and return capital to shareholders.

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

Speaker #3: We have already unlocked nearly $100 million of cash on the balance sheet as a result of this favorable arrangement. Finally, on the DOJ matter, we have no updates and continue to vigorously defend our position.

Speaker #3: In closing, halfway through the year, this business is delivering exactly what we said it would. Members are growing quickly, credit is further improving from an already favorable level, and we are expanding revenue per user.

Speaker #3: My thanks to the entire Dave team for another exceptional quarter. And with that, I'll turn it over to Kyle.

Speaker #2: Thanks, Jason. And good afternoon, everyone. The second quarter brought together the things we care most about: durable, high-quality revenue growth driven by a healthy mix of efficient customer acquisition and improving revenue per user, all while delivering strong credit performance.

Kyle Beilman: Thanks, Jason, good afternoon, everyone. The Q2 brought together the things we care most about. Durable, high-quality revenue growth driven by a healthy mix of efficient customer acquisition and improving revenue per user, all while delivering strong credit performance. We additionally delivered on continued operating leverage and growing capital efficiency as we moved receivables off balance sheet to Coastal. The combination, in addition to the ongoing momentum we continue to see, gives us the confidence to raise our full-year outlook across all metrics. Today, I'll cover the drivers of the quarter and how we are thinking about the ARPU trajectory, credit and provision, margins, capital, and our financial targets for the year. As always, there is a detailed KPI breakdown in the earnings supplement on our IR site. Starting with revenue. Total revenue was $171 million, up 30% year over year, and nearly 8% sequentially.

Speaker #2: We additionally delivered on continued operating leverage and growing capital efficiency, as we moved receivables off balance sheet to Coastal. The combination, in addition to the ongoing momentum we continue to see, gives us the confidence to raise our full-year outlook across all metrics.

Speaker #2: Today, I will cover the drivers of the quarter and how we are thinking about the ARPU trajectory, credit and provision, margins, capital, and our financial targets for the year.

Speaker #2: As always, there is a detailed KPI breakdown in the earnings supplement on our IR site. Starting with revenue, total revenue was $171 million, up 30% year-over-year and nearly 8% sequentially.

Speaker #2: Growth was driven by a 17% increase in MTMs to $3.08 million, and 11% ARPU growth. New member conversion, retention, and reactivation performed well, and this quarter the mix shifted toward member-led growth as acquisition re-accelerated.

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

Speaker #2: The mix shift is deliberate and healthy, as a result of the sizable ramp we're seeing at the top of the funnel. So let me expand on the ARPU trajectory Jason mentioned a moment ago.

Speaker #2: As acquisition increases, newer members represent a larger share of the MTM base. Their ARPU begins lower and expands with tenure, more than doubling on average from the acquisition month to the fourth month on book.

Speaker #2: At the same time, several monetization tailwinds are stacking. By late August, nearly all of our members are expected to have either no fee and we expect the share with no fee cap to continue increasing.

Speaker #2: Lifting the fee cap gives us meaningful monetization headroom to expand extra cash limits, not only up to the current $500 maximum, but as Jason mentioned, we have plans to go beyond that.

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

Speaker #2: Increasing both member value and total monetization. Additionally, our high-margin subscription mix continues to expand, reaching 9% of total revenue compared with 6% a year ago.

Speaker #2: Together, these factors reinforce our confidence in the ARPU opportunity ahead, even before accounting for the impact of Dave Flex and other future products. The quarterly cadence will reflect acquisition mix, and as newer cohorts mature and these monetization levers scale, we expect to enter 2027 with a significantly larger MTM base and increasing monetization across that base.

Speaker #2: Turning to credit and provision, our 28 day-pass due rate, which we believe is the most direct measure of underlying credit quality, improved 14 basis points year-over-year to 2.12%.

Speaker #2: Sequentially, the rate increased due to seasonal normalization following Q1's tax refund season. More importantly, year-over-year performance strengthened from roughly flat in Q1 to 6% better in Q2, even as originations grew by 27%.

Kyle Beilman: Sequentially, the rate increased due to seasonal normalization following Q1's tax refund season. More importantly, year-over-year performance strengthened from roughly flat in Q1 to 6% better in Q2, even as originations grew by 27%. Credit performance has remained strong thus far in the quarter, based in part from the early impact of the v6 model rollout, which we expect will deliver Q3 loss rates in a similar range to Q2 with the benefit of higher ExtraCash origination sizes. Provision for credit losses was $29 million, up 14% year over year. Provision reflects three main drivers, portfolio growth, credit performance, and the day of the week on which the quarter ends. Sequentially, provision increased 8%, compared with a 15% increase in gross ExtraCash receivables, including the portion funded through Coastal. Both Q2 and Q1 ended on a Tuesday, which is typically the intra-week peak in outstanding receivables.

Speaker #2: Credit performance has remained strong thus far in the quarter, based in part from the early impact of the V6 model rollout, which we expect will deliver Q3 loss rates in a similar range to Q2, with the benefit of higher extra cash origination sizes.

Speaker #2: Provision for credit losses was $29 million, up 14% year-over-year. Provision reflects three main drivers: portfolio growth, credit performance, and the day-of-the-week on which the quarter ends.

Speaker #2: Sequentially, provision increased 8% compared with a 15% increase in gross extra cash receivables, including the portion funded through Coastal. Both Q2 and Q1 ended on a Tuesday, which is typically the intra-week peak in outstanding receivables.

Speaker #2: As we noted last quarter, Q1 established the loss reserve at that peak, so we did not expect Q2's Tuesday quarter end to create the same incremental pressure.

Kyle Beilman: As we noted last quarter, Q1 established the loss reserve at that peak, so we did not expect Q2's Tuesday quarter end to create the same incremental pressure. And that's what we saw. With a neutral day of week effect, provision as a percentage of ExtraCash originations improved by 1 basis point sequentially. Looking ahead, Q3 and Q4 will end on a Wednesday and Thursday respectively, which should be favorable for provision as a percentage of originations and for gross margin. On gross margin, we said last quarter that Q1 would be the low point for the year, and margin expanded sequentially as expected. non-GAAP gross profit was $124 million, up 34% year over year, and non-GAAP gross margin was 72%, up about 300 basis points year over year.

Speaker #2: And that's what we saw. With a neutral day-of-week effect, provision has a percentage of extra cash originations improved by 1 basis point sequentially. Looking ahead, Q3 and Q4 will end on a Wednesday and Thursday, respectively, which should be favorable for provision as a percentage of originations and for gross margin.

Speaker #2: On gross margin, we said last quarter that the first quarter would be the low point for the year, and margin expanded sequentially as expected.

Speaker #2: Non-GAAP gross profit was $124 million, up 34% year-over-year, and non-GAAP gross margin was $72%, up year-over-year. We continue to expect gross margin to expand into the mid-'70s over the balance of the year, and that is after absorbing the fees under the Coastal funding financial network and transaction costs.

Kyle Beilman: We continue to expect gross margin to expand into the mid-70s over the balance of the year, and that is after absorbing the fees under the Coastal funding arrangement, which are recorded in financial network and transaction costs. Now, working down the P&L. This was the quarter we began accelerating our top-of-funnel marketing. Advertising and activation expense was $20 million, up 32% year over year and 43% sequentially. Part of the sequential increase reflects a deliberately lighter Q1 when tax refunds temporarily reduced members' need for short-term liquidity and marketing is typically less efficient. The balance of the step-up was by design. ExtraCash demand remained strong while acquisition returns improved as the removal of fee caps enhanced monetization for new members, credit quality improved, and CAC remained stable as we scaled. As Jason noted, given those returns, we plan to expand investment over the balance of the year.

Speaker #2: Now, working down the P&L, this was the quarter we began accelerating our top-of-funnel marketing. Advertising and activation expense was $20 million, up 32% year-over-year and 43% sequentially.

Speaker #2: Part of the sequential increase reflects a deliberately lighter first quarter when tax refunds temporarily reduced members' need for short-term liquidity, and marketing is typically less efficient.

Speaker #2: The balance of the step-up was by design. Extra cash demand remained strong, while acquisition returns improved as the removal of fee caps enhanced monetization for new members, credit quality improved, and CAC remained stable as we scaled.

Speaker #2: As Jason noted, given those returns, we plan to expand investment over the balance of the year, which should be further supported by the ongoing rollout of cash AI v6.0 that we expect to drive both stronger conversion and higher monetization as a result of higher limits.

Kyle Beilman: Which should be further supported by the ongoing rollout of CashAI v6.0 that we expect to drive both stronger conversion and higher monetization as a result of higher limits. On fixed costs, total compensation was $36 million, including $16 million of stock-based compensation tied to performance-based restricted stock awards granted in 2024, 2025, and earlier this year, as achievement of the underlying 2026 financial targets became probable during the quarter. Excluding stock-based compensation grew 7% year over year and declined 5% sequentially, as modest headcount additions were more than offset by the seasonal step-down in payroll taxes. Our incremental investment over the next couple of quarters is planned to be concentrated in three areas: product development, marketing, and embedding AI more deeply across the organization, which we expect will deliver greater speed and scalability to our business over time.

Speaker #2: On fixed costs, total compensation was $36 million, including $16 million of stock-based compensation tied to performance-based restricted stock awards granted in 2024, 2025, and earlier this year, as achievement of the underlying 2026 financial targets became probable during the quarter.

Speaker #2: Excluding stock-based compensation, compensation grew 7% year-over-year and declined 5% sequentially as modest headcount additions were more than offset by the seasonal step-down in payroll taxes.

Speaker #2: Our incremental investment over the next couple of quarters is planned to be concentrated in three areas. Product development, marketing, and embedding AI more deeply across the organization, which we expect will deliver greater speed and scalability to our business over time.

Speaker #2: Those investments are modest and may temper fixed-cost leverage over the next two quarters. Thereafter, we expect operating leverage to become more pronounced as the business continues to scale.

Kyle Beilman: Those investments are modest, and may temper fixed cost leverage over the next two quarters. Thereafter, we expect operating leverage to become more pronounced as the business continues to scale. Finally, other operating expenses include approximately $4.4 million of non-recurring items. Excluding those items, other operating expenses were down sequentially. Pulling it together on profitability, Adjusted EBITDA grew 48% year over year to $76 million, more than one and a half times the rate of revenue growth. Adjusted EBITDA Margin was 44%, up nearly 600 basis points year over year. Sequentially, margin remained flat despite the marketing step-up I just described. That was a deliberate investment at what we believe are attractive returns and does not change our expectation for continued annual Adjusted EBITDA Margin expansion. Below the operating line, several items affected the comparability of our GAAP net income results for this quarter.

Speaker #2: Finally, other operating expenses include approximately $4.4 million of non-recurring items. Excluding those items, other operating expenses were down sequentially. Pulling it together on profitability, adjusted EBITDA grew 48% year-over-year to $76 million, more than 1.5 times the rate of revenue growth.

Speaker #2: Adjusted EBITDA margin was 44%, up nearly 600 basis points year over year. Sequentially, margin remained flat despite the marketing step-up I just described. That was a deliberate investment at what we believe are attractive returns and does not change our expectation for continued annual adjusted EBITDA margin expansion.

Speaker #1: Below the operating line, several items affected the comparability of our GAAP net income results for this quarter. We recorded $37 million of non-cash charges from the required quarterly mark-to-market of our warrant and earn-out liabilities as our share price appreciated during the quarter.

Kyle Beilman: We recorded $37 million of non-cash charges from the required quarterly mark-to-market of our warrant and earn-out liabilities as our share price appreciated during the quarter. These items are excluded from our adjusted results as they do not reflect operating performance. Note that the warrant and earn-out securities expire in January 2027, thereby eliminating the non-cash gains and losses in our P&L that we've been subject to over the last several years. GAAP net income was $7 million compared to $9 million a year ago, reflecting the non-cash charges I just described. Adjusted Net Income was $56 million, up 39% year over year, and adjusted diluted EPS was $4.12, up 48%, reflecting both solid financial performance and our lower share count that now includes a full quarter of the repurchases we completed in March following the convertible note transaction.

Speaker #1: These items are excluded from our adjusted results as they do not reflect operating performance. Note that the warrant and earn-out securities expire in January of 2027, thereby eliminating the non-cash gains and losses in our P&L that we've been subject to over the last several

Speaker #2: GAAP net income was $7 million, compared to $9 million a year ago, reflecting the non-cash charges I just described. Adjusted net income was $56 million, up 39% year-over-year and adjusted diluted EPS was $4.12, up 48%, reflecting both solid financial performance and our lower share count that now includes a full quarter of the repurchases we completed in March, following the convertible note transaction.

Speaker #1: Now, turning to our capital position, we ended the quarter with $254 million of cash investments and restricted cash, up 77 million from $178 million at March 31st.

Kyle Beilman: Now turning to our capital position, we ended the quarter with $254 million of cash, investments, and restricted cash, up $77 million from $178 million at 31 March. The increase was primarily driven by $93 million funded through the Coastal arrangement, offset by share repurchases during the quarter. As a result of the Coastal structure, net cash from ExtraCash receivables shifted from a $51.7 million use of cash in Q2 of last year to a $30.5 million source of cash this quarter, demonstrating how the arrangement reduces our direct funding requirements and enhances the free cash flow generation of the business. We repurchased 19 million of shares during the quarter, leaving 94 million available under our authorization. Our capital priorities remain unchanged. Fund high return organic growth and repurchase shares opportunistically when we believe doing so creates attractive per share value. Turning to our updated 2026 outlook.

Speaker #1: The increase was primarily driven by $93 million funded through the Coastal arrangement, offset by share repurchases during the quarter. As a result of the Coastal structure, net cash from extra cash receivables shifted from a $51.7 million use of cash in the second quarter of last year to a $30.5 million source of cash this quarter, demonstrating how the arrangement reduces our direct funding requirements and enhances the free cash flow generation of the business.

Speaker #2: We repurchased $19 million of shares during the quarter, leaving $94 million available under our authorization. Our capital priorities remain unchanged: fund high-return organic growth and repurchase shares opportunistically when we believe doing so creates attractive per-share value.

Speaker #1: Turning to our updated 2026 outlook, based on first-half results and the trajectory we see, we are raising guidance across all three metrics. We now expect revenue of $725 million to $735 million, representing 32% year-over-year growth at the midpoint, up from our prior range of $710 million to $720 million.

Kyle Beilman: Based on H1 results and the trajectory we see, we are raising guidance across all three metrics. We now expect revenue of $725 to 735 million, representing 32% year-over-year growth at the midpoint, up from our prior range of $710 to 720 million. We expect Adjusted EBITDA of $315 to 325 million, from $305 to 315 million. We expect adjusted diluted EPS of $17 to 17.50, up from $16.25 to 16.75, assuming a 23% effective tax rate. Our updated outlook assumes a higher level of advertising and activation investment in the H2 than contemplated in our prior outlooks, reflecting the attractive returns we are seeing. A near term growth mix weighted more towards MTMs, continued ARPU support from pricing actions, cohort maturation, subscription mix, and CashAI v6.0.

Speaker #1: We expect adjusted EBITDA of $315 million to $325 million, from $305 million to $315 million. And we expect adjusted diluted EPS of $17 to $17.50, up from $16.25 to $16.75, assuming a 23% effective tax rate.

Speaker #1: Our updated outlook assumes a higher level of advertising and activation investment in the second half than contemplated in our prior outlooks, reflecting the attractive returns we are seeing, a near-term growth mix weighted more towards MTMs, continued ARPU support from pricing actions, cohort maturation, subscription mix, and cash AI v6.0, gross margin expansion toward the mid-70s, inclusive of the Coastal fees, and no meaningful revenue contribution from Flex.

Kyle Beilman: Gross margin expansion toward the mid-70s, inclusive of the Coastal fees, and no meaningful revenue contribution from Flex. In closing, our Q2 results demonstrate the durability of our growth, continued control over credit, and the flexibility of our operating model. We are increasing investment where returns are strongest while maintaining discipline on costs, and the Coastal transition is expected to further strengthen our liquidity and capital position. We believe these factors support the updated outlook that we provided today and position us well for the balance of 2026. With that, operator, please open the line for questions.

Speaker #2: In closing, our second quarter results demonstrate the durability of our growth, continued control over credit, and the flexibility of our operating model. We are increasing investment where returns are strongest while maintaining discipline on costs and the Coastal transition is expected to further strengthen our liquidity and capital position.

Speaker #2: We believe these factors support the updated outlook that we provided today, and position us well for the balance of 2026. With that, operator, please open the line for questions.

Speaker #3: Thank you. 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.

Operator: Thank you. As a reminder, to ask a question, please press *11 on your telephone and wait for your name to be announced. To withdraw your question, please press *11 again. One moment for questions. Our first question comes from Devin Ryan with Citizens JMP. You may proceed.

Speaker #3: One moment for questions. And our first question comes from Devin Ryan with Citizens Bank. You may proceed.

Speaker #4: Thanks. Hi, Jason. Hi, Kyle. How are you?

Devin Ryan: Thanks. Hi, Jason. Hi, Kyle. How are you?

Speaker #1: Hey, Devin.

Kyle Beilman: Hey, Devin.

Speaker #4: I want to ask a question on the new pricing. Good to see that. So on the removal of the fee cap, if you can, what percentage of advances were being impacted by the $15 cap above $300?

Devin Ryan: Want to ask a question on the new pricing. Good to see that. On the removal of the fee cap, if you can, what percentage of advances were being impacted by the $15 cap above $300? We can do some math on that, but it'd be great just if you can give us a little bit of color. Ultimately just trying to get a sense of how much this will benefit the blended fee per advance. I appreciate the number's probably been growing, but just trying to dig in a little bit on the actual impact of this. Thanks.

Speaker #4: We can do some math on that, but it'd be great just if you can give us a little bit of color and then ultimately just trying to get a sense of how much this will benefit the blended fee-per-advance.

Speaker #4: And I appreciate the numbers probably have been growing, but just trying to dig in a little bit on the actual impact of this. Thanks.

Speaker #1: Hey Devin, it's Kyle. Appreciate the question. I mean, we didn't remove the fee cap for existing users in the second quarter—that's rolling out as we speak.

Kyle Beilman: Hey, Devin, it's Kyle. Appreciate that. We didn't remove the fee cap for existing users in Q2. That's rolling out as we speak. It was really just impacting new customer cohorts in the quarter. As you can imagine, new customers, their limits start out smaller and grow over time. It's really that above $300 cohort of new customers that we would've had enhanced monetization for as a result of the fee change. That number's pretty small just given that represents a small portion of new customers. New customers represent an overwhelming minority of the overall MTM base. I would say it had very little impact in the quarter, but will compound very dramatically over time as that proportion becomes a larger mix of the overall MTM base moving forward.

Speaker #1: And so it was really just impacting new customer cohorts in the quarter. And so as you can imagine, new customers their limits start out smaller and grow over time.

Speaker #1: And so it's really that above $300 cohort of new customers that we would have had enhanced monetization for as a result of the fee change.

Speaker #1: And that number is pretty small, just given that that represents a small portion of new customers and new customers represent an overwhelming minority of the overall MTM base.

Speaker #1: And so I would say it had very little impact in the quarter. But we'll compound very dramatically over time as that proportion becomes a larger mix of the overall MTM base moving forward.

Speaker #1: And I think really, really importantly, the movement of that fee cap plus the fee cap on existing customers just gives us a ton of room on the extra cash origination size as we don't have a cap on our monetization.

Kyle Beilman: I think really importantly, the movement of that fee cap plus the fee cap on existing customers just gives us a ton of room on the ExtraCash origination side as we don't have a cap on our monetization. We can continue unlocking higher limits as a result of that dynamic. That just gives us a lot of stored energy within the business moving forward. We think that really is impactful and something we really wanted people to take away from this call. Just to recap, very minimal impact in Q2, but expect it to be very meaningful on an ongoing basis.

Speaker #1: We can continue unlocking higher limits as a result of that dynamic. It just gives us a lot of stored energy within the business moving forward.

Speaker #1: And so we think that that really is impactful and something we really wanted people to take away from this call. So just to kind of recap, very minimal impact in Q2, but expect it to be very meaningful on an ongoing basis.

Speaker #4: I appreciate that, Kyle. Maybe I could have been more clear. Essentially, what I was just trying to get at is the amount of advances above $300.

Devin Ryan: Appreciate that, Kyle. Maybe I could've been more clear. Essentially what I was just trying to get at is the amount of advances above $300. Just within now that more are essentially not going to be capped on a go-forward basis. There's already, we can do our own estimates of how much of the advances are in that 3 to $500 range currently that are now going to have a fee uplift. I was just essentially just trying to dig in around what that blended base would be going forward.

Speaker #4: So just within because now that more are essentially not going to be capped on a go forward basis, and there's already we can do our own estimates of how much of the advances are in that 3 to $500 range currently that are now going to have a fee uplift.

Speaker #4: That was essentially just trying to dig in around what that blended base is.

Speaker #1: Yeah. It's roughly it's the rough majority, I would say. Just not the existing.

Kyle Beilman: Yeah. It's the majority. It's the rough majority I would say.

Devin Ryan: Yeah.

Kyle Beilman: Just of the existing.

Devin Ryan: Okay. Great. Okay. Appreciate that. Then as the follow-up, as you consider obviously going higher and potentially even above $500, it'd be good to get some color around kind of the different customer cohorts and credit across early versus more seasoned customers. I'm assuming obviously the more seasoned, the better the credit profile, but obviously, the more seasoned, typically the larger advance as well. As you kind of go up-market to some degree, not up-market, but into higher advances, what does that look like from a credit perspective for the firm? Are the higher advances actually better credit profiles because you have more data on these customers, and so that kind of drives the comfort. Which I guess the point being, if you go even above $500, you could still end up at a better credit profile.

Speaker #4: Okay. Okay. Okay. Great. Okay. Appreciate that. And then as the follow-up, as you consider obviously going higher and potentially even above $500, it'd be good to get some color around kind of the different customer cohorts and the credit across early versus more seasoned customers.

Speaker #4: I'm assuming obviously the more seasoned, the better the credit profile, but obviously the more seasoned typically the larger advance as well. So as you kind of go up market to some degree, not up market, but into higher advances, what does that look like from a credit perspective for the firm?

Speaker #4: And are the higher advances actually better credit profiles because you have more data on these customers? And so that kind of drives the comfort, which I guess the point being, if you go even above $500, you can still end up at a better credit profile.

Speaker #1: Hey, hey, Devin and Jason. So I'd say the majority of the higher-limit customers are mostly tenured members. So we know a lot about them.

Kyle Beilman: Hey, Devin, it's Jason. I'd say the majority of the higher-limit customers are mostly tenured members. We know a lot about them. They're highly repeat members. We feel very good about letting them go well in excess of the $500 limit, given we have the more flexible and scalable pricing model at this point. If they need extra money above and beyond $500 for a short-term liquidity issue, we're not going to say no to that. Excited to test into some new cohorts and existing cohorts on the take rate behavior, utilization trends, and ultimately ARPU and origination size uplift as a result of the change.

Speaker #1: They're highly repeat members. And so we feel very good about letting them go well in excess of the $500 limit given we have the more flexible and scalable pricing model at this point.

Speaker #1: And so if they need extra money above and beyond $500 for a short-term liquidity, issue, we're not going to say no to that. And so excited to test into some new cohorts and existing cohorts on the take-rate behavior, utilization trends, and ultimately ARPU.

Speaker #1: And origination size uplift as a result of the change.

Speaker #4: Yep, got it. Okay, well, appreciate it, guys, and thanks for the update.

Devin Ryan: Yep. Got it. Okay. Well, appreciate it, guys, and thanks for the update.

Speaker #1: Thanks so much. I mean, Devin, maybe just one quick thing to add onto Jason's point, if I can. The interesting thing when you look at the users at the very high end of the limit spectrum, their loss rates are very, very low.

Kyle Beilman: Thanks so much.

Kyle Beilman: I mean, Devin, maybe just one quick thing to add onto Jason's point, if I can. The interesting thing when you look at the users at the very high end of the limit spectrum, their loss rates are very low. On a dollar-weighted basis, we feel like unlocking higher limits on our DPD rate can actually reduce our overall DPD rate because on a weighted basis, those users' loss rates are so low. We just think it could be quite additive given the sort of net monetization impact of the very low loss rates that we see on those cohorts and the higher gross monetization that we think we can generate as we move those specific users up higher. Yeah. That was the premise of the question.

Speaker #1: And so on a dollar-weighted basis, we feel like unlocking higher limits on our DPD rate can actually reduce our overall DPD rate because on a weighted basis, those users' loss rates are so low.

Speaker #1: And so, we just think it could be quite additive, given the sort of net monetization impact of the very low loss rates that we see on those cohorts.

Speaker #1: And the higher gross monetization that we think we can generate as we move those specific users up higher.

Speaker #4: Yeah. That was the premise of the question. So appreciate that, Kyle.

Devin Ryan: Yeah

Devin Ryan: Yeah.

Devin Ryan: appreciate that, Kyle.

Speaker #2: Thank you. And as a reminder to ask a question, please press star 11 on your telephone. Our next question comes from Joseph Affie with Kennick Originuity.

Operator: Thank you. As a reminder, to ask a question, please press *11 on your telephone. Our next question comes from Joseph Vafi with Canaccord Genuity. You may proceed.

Speaker #2: You may proceed.

Speaker #5: Hey, guys. Good afternoon. Once again, terrific results. I see a momentum stock in fintech out there. Maybe could you just drill down a little bit on the card strategy from here?

Joseph Vafi: Hey, guys. Good afternoon. Once again, terrific results. Nice to see a momentum stock in fintech out there. Maybe kind of just drill down a little bit on the Flex card strategy from here. I know the new Flex card's coming out. Maybe we could kind of double-click on the opportunity there. Is there a kind of target market to grow payment volume interchange revenue kind of more in line with ExtraCash and the rest of the revenue line? How should we be thinking about what your plan is here on that line item? A quick follow-up.

Speaker #5: I know you're the new flex cards coming out. Maybe we could kind of double-click on the opportunity there. And is there a kind of target market to grow payment volume interchange revenue kind of more in line with extra cash and the rest of the revenue line?

Speaker #5: Or how should we be thinking about what you're what your plan is here on that line item? And then a quick follow-up.

Speaker #1: Well, I think the flex card is highly differentiated within two markets we're looking at. One, BNPL, where there's high fragmentation in the with the idea you have to go to a merchant online to check out versus our card as a flexibility of a credit card where you can go shop anywhere, anytime, at any merchant online or offline.

Jason Wilk: Well, we think the Flex card is highly differentiated within two markets we're looking at. One, BNPL, where there's high fragmentation with the idea you have to go to a merchant online to check out, versus our card has the flexibility of a credit card where you can go shop anywhere, anytime at any merchant, online or offline. Compared to subprime credit cards that are monetizing via late fees and significant compounding APRs, ours has a monthly fee plus a small per-transaction. We feel that the market's massive, helps us continue to penetrate the 185 million customer TAM of which we are already going after with ExtraCash. The margin profile of Flex is fairly similar to that of ExtraCash.

Speaker #1: Compared to subprime credit cards that are monetizing via late fees and significant compounding APRs, our product has monthly fee plus a small per fee transaction.

Speaker #1: But we feel that the market's massive helps us continue to penetrate the 185 million customer TAM of which we are already going after with extra cash.

Speaker #1: And the margin profile flex is fairly similar to that of extra cash. We just feel like it's an opportunity to have a different vehicle with a slightly longer duration that helps customers get into different categories of spend, which we see in BNPL and credit card, whereas with extra cash, it tends to be mostly for things like gas, grocery, and more of the non-discretionary items.

Jason Wilk: We just feel like it's an opportunity to have a different vehicle with a slightly longer duration that helps customers get into different categories of spend, which we see in BNPL and credit card. Whereas with ExtraCash, it tends to be mostly for things like gas, grocery, and more of the non-discretionary items. We feel it's very differentiated. We are using CashAI as the underpinning for the underwriting for that product, and we are continuing to roll it out to more and more test cohorts, starting with our higher credit quality members, and then further penetrating from there.

Speaker #1: But I feel it's very differentiated. We're using cash AI as the underpinning for the underwriting for that product. And we are continuing to roll it out to more and more test cohorts starting with our higher credit quality members and then further penetrating from there.

Speaker #5: Got it. Thanks, Jason. And then any update on I mean, you have a lot going on, obviously, but any update on making that direct deposit relationship perhaps a little bit more of a strategic goal versus maybe where you are now?

Joseph Vafi: Got it. Thanks, Jason. Any update on, you have a lot going on, obviously. Any update on making that direct deposit relationship perhaps a little bit more of a strategic goal versus maybe where you are now? Thank you very much.

Speaker #5: Thank you very much.

Speaker #1: Yeah. Thanks, Joe. I think over time, we envision ourselves deepening the direct deposit penetration with our customers. But we really want to focus our efforts right now on deepening our relationship within credit within compared to debit and direct deposit, of which there's very little differentiation in the market.

Jason Wilk: Yeah. Thanks, Joe. I think over time, we envision ourselves deepening the direct deposit penetration with our customers. We really want to focus our efforts right now on deepening our relationship within credit. We think compared to debit and direct deposit, of which there's very little differentiation in the market, most competitors having to give away cash bounties to get sign-ups. We think that the harder problem to solve is through underwriting this population of consumers effective as we do right now. If we can lean further into new credit products like Dave Flex and then further lean into ExtraCash via higher limits, that's the harder problem to solve. We feel that that's where our product resources are best spent right now versus trying to find new ways to get people over to a non-differentiated product.

Speaker #1: Most competitors having to give away cash bounties to get sign-ups. We think that the harder problem to solve is through underwriting this population of consumers effective as we do right now.

Speaker #1: And if we can lean further into new credit products like Flex and then further lean into extra cash via higher limits, that's the harder problem to solve.

Speaker #1: And we feel that that's where our product resources are best spent right now versus trying to find new ways to get people over to a non-differentiated product.

Speaker #1: It is our view, though, that the more things we can do for our members in short-term credit, the better chance we have of people considering us as their primary account and moving their paycheck.

Jason Wilk: It is our view, though, that the more things we can do for our members in short-term credit, the better chance we have of people considering us as their primary account and moving their paycheck. If they don't, we're completely fine with them having either ExtraCash or Dave Flex being their top of wallet, which what we're really going for ultimately is our strategy, not necessarily where your paycheck goes into.

Speaker #1: And if they don't, we're completely fine with them having either extra cash or Flex being their top-of-wallet, which is really what we're going for ultimately as our strategy.

Speaker #1: Not necessarily where your paycheck goes into.

Speaker #5: Great. Thanks very much for that. Congrats again.

Joseph Vafi: Great. Thanks very much for that. Congrats again.

Speaker #1: Thank you.

Jason Wilk: Thank you.

Speaker #2: Thank you. Our next question comes from Chris Dang with UBS. You may proceed.

Operator: Thank you. Our next question comes from Chris Zhang with UBS. You may proceed.

Speaker #6: Hi. And thanks for taking my question. The first question is about the increase in the second-half marketing event. It's definitely encouraging to see you're leaning more into the short payback, low cap opportunity.

Chris Zhang: Hi, thanks for taking my question. The first question is about the increase in the H2 marketing event. It is definitely encouraging to see you are leaning more into the short payback, low CAC opportunity. Since the component of the revenue growth in the H2 may shift a little bit, maybe can you give us a better sense of maybe some of the metrics you are looking at in terms of the market you spend? Are you targeting a certain payback period, a certain CAC, or maybe just a little more color on that would be helpful.

Speaker #6: But since the component that the revenue growth in the second half may shift a little bit, maybe can you give us a better sense of maybe some of the metrics you're looking at in terms of the marketing spend?

Speaker #6: Are you targeting a certain payback period, a certain cap, or maybe just a little more color on that would be helpful?

Speaker #1: Yeah. Thanks, Chris. So as you said, before, we're not solving for the lowest possible cap, but we are looking for just generating positive returns on all of our incremental add dollars.

Jason Wilk: Thanks, Chris. As you said before, we're not solving for the lowest possible CAC, but we are looking for just generating positive returns on all of our incremental ad dollars. We're seeing just incredibly positive trends here. Our CAC has been roughly flat sequentially at $19 at many multiples of the scale we've achieved at prior periods of $19 CAC. It's very promising to see. We think we're seeing a lot of the benefits around our investments in brand, investments in our funnel optimizations, and therefore feel very good about leaning more into marketing in the H2. We've consistently gotten questions from investors about that, given the short payback periods that are record sub 4 months now, why not spend more in?

Speaker #1: And so we're seeing just incredibly positive trends here. Our cap has been flat, roughly flat sequentially at $19. At many multiples of the scale, we've achieved at prior periods of $19 cap.

Speaker #1: So it's very promising to see within we're seeing a lot of the benefits around our investments in brand, investments in our funnel optimizations, and therefore feel very good about leaning more into marketing in the second half.

Speaker #1: We've consistently gotten questions from investors about that, given the short payback periods that are record sub four months now. Why not spend more? And so we've been testing our way into incrementality, and we've seen some really positive outcomes there, which is giving us more confidence to lean in in the second half.

Jason Wilk: We've been testing our way into incrementality, and we've seen some really positive outcomes there, which is giving us more confidence to lean in in the H2.

Speaker #6: All right. Awesome. Thanks for the great coverage. And just to have a separate question related to the second draw impact: on the one hand, we know that it's definitely an improvement in terms of the customer experience.

Chris Zhang: All right. Awesome. Thanks for the great color, Jason. Just have a separate question related to the Second Draw impact. On the one hand, we know that it's definitely an improvement in terms of the customer experience. There can be also incremental ExtraCash just from the Second Draw. On the other hand, we thought that some of the customers might just be more conservative in terms of getting the first draw, knowing that there could be a second chance, but not ending up using the Second Draw. I'm not sure if this is the right way to think about it, but maybe if you can talk about some of the puts and takes and maybe some of the impact on the Q2 results we have seen from that initiative. That'd be helpful. Thank you.

Speaker #6: And there can be also incremental extra cash just from the second draw. But on the other hand, we thought that some of the customers might just be more conservative in terms of getting the first draw, knowing that there could be a second chance, but not ending up using the second draw.

Speaker #6: I'm not sure if this is the right thing right way to think about it, but maybe if you can talk about some of the puts and takes and maybe some of the impact on the second quarter results you have seen from that initiative that would be helpful.

Speaker #6: Thank you.

Speaker #1: Hey, Chris. Yeah. Thanks for the question. This is Kyle. I mean, so that was one of the things that we were looking at, which is what we refer to as sort of utilization and so of the approved limit for customers.

Kyle Beilman: Hey, Chris. Thanks for the question. This is Kyle. That was one of the things that we were looking at, which is what we refer to as sort of utilization. Of the approved limit for customers, how much of that approved limit do they ultimately take? We did test that throughout the quarter to make sure that it was both additive to the customer experience, as you mentioned, because it's just a better feature, but that it wasn't negatively impacting monetization. We had a pretty sizable test cohort of that available to throughout the quarter, and it was all positive from a utilization perspective. Definitely a win-win from the standpoint of better customer experience, providing more flexibility with the product, and then on the business side, making sure that we weren't eroding monetization as well.

Speaker #1: How much of that approved limit do they ultimately take? And we did test that throughout the quarter to make sure that it was both additive to the customer experience, as you mentioned, because it's just a better feature, but that it wasn't negatively impacting monetization and we had a pretty sizable test cohort of that available too throughout the quarter.

Speaker #1: And it was all positive from a utilization perspective. So definitely a win-win from the standpoint of better customer experience, providing more flexibility with the product, and then on the business side, making sure that we weren't eroding monetization as well.

Speaker #1: I'd say it was a pretty modest impact just given that the testing ramp throughout the quarter. But that was something that is accretive to overall average origination size per customer as a result of that utilization dynamic.

Kyle Beilman: I'd say it's a pretty modest impact given that the testing ramp throughout the quarter. That was something that is accretive to overall average origination size per customer as a result of that utilization dynamic being more favorable with the Second Draw.

Speaker #1: Being more favorable with the second draw.

Speaker #6: Chris, the only thing I'd add there is just with the increase in extra cash limits over time, we plan to test that feature will become more and more valuable is somebody looking to take a much larger EC might want to take that in two tranches.

Jason Wilk: Chris, the only thing I'd add there is just with the increase in ExtraCash limits over time, we plan to test. That feature will become more and more valuable as somebody looking to take a much larger ExtraCash might want to take that in two tranches.

Speaker #2: All right. That makes a ton of sense. Thanks a lot, Jason and Kyle. Appreciate it.

Chris Zhang: All right. That makes a ton of sense. Thanks a lot, Jason and Kyle. Appreciate it.

Speaker #1: Thank you.

Jason Wilk: Thank you.

Speaker #2: Thank you. Our next question comes from Adam Frisch with Evercore. You may proceed.

Operator: Thank you. Our next question comes from Adam Frisch with Evercore. You may proceed.

Speaker #7: Hi. This is Ethan Hammett in for Adam Frisch. Thank you for taking my question. So regarding the Flex trial, do you have any early reads on credit quality usage trends and potential cannibalization of extra cash volumes as a result of the usage of Flex?

Ethan Hammett: Hi, this is Ethan Hammett in for Adam Frisch. Thank you for taking my question. Regarding the Flex trial, do you have any early reads on credit quality, usage trends, and potential cannibalization of ExtraCash volumes as a result of the usage of Flex?

Speaker #1: I'd say conversion trends are positive, well in line with what we expected for the product. And same with the credit cannibalization as well with respect to extra cash.

Jason Wilk: I'd say conversion trends are positive, well in line with what we expected for the product, and the same with the credit cannibalization as well with respect to ExtraCash. We're very pleased to see it as a complimentary solution. Customers that are using Flex are still utilizing ExtraCash, and they do use the product in very different ways for different types of purchases. All in line there, continue to expand the test cohorts. Unit economics are continuing to improve, and we're excited about this thing being a big business for the company over time once we get past our test trial period.

Speaker #1: We're very pleased to see that it's a complementary solution. Customers that are using Flex are still utilizing extra cash when they do use the product in very different ways for different types of purchases.

Speaker #1: So all in line there continue to expand the test cohorts unit economics are continuing to improve and we're excited about this thing being a big business for the company over time once we get past our test trial period.

Speaker #7: Great. Thank

Ethan Hammett: Great. Thank you.

Speaker #2: Thank you. Our next question comes from Hal Ghosh with B. Riley Securities. You may proceed.

Operator: Thank you. Our next question comes from Hal Goetsch with B. Riley Securities. You may proceed.

Speaker #8: Hey, guys. Terrific results. I just want to get your thoughts on gross ads in the quarter, 951,000. So it looks to be a record high and up 31% year over year.

Hal Goetsch: Hey, guys. Terrific results. Just want to get your thoughts on gross adds in the quarter of 951,000. Looks to be a record high and up 31% year-over-year. Just wondering, what are the tactics you're using to really move that number higher? It's meaningfully better than Q1, and it's much better than Q2 a year ago. Thanks.

Speaker #8: I was just wondering, what are the tax rates you're using to really move that number higher? It's meaningfully better than Q1, and it's much better than Q2 of a year ago.

Speaker #8: Thanks.

Speaker #1: Thanks, Kyle. Look, I think the good news here is it's just more of the same we are just proving our ability to expand our marketing acquisition dollars across our channels.

Jason Wilk: Thanks, Hal. Look, I think the good news here is it's just more of the same. We are just proving our ability to expand our marketing acquisition dollars across our channels. We've also gotten a lot more efficient on the things like onboarding. Our CashAI has done a very good job at offering better limits at the front door, and all those things do factor into our ability to have efficient CAC. Nothing new. We're on very scaled channels. We have no exposure to search or AI disruption whatsoever. These are big brand channels, TV, streaming television, and all the social channels. Overall, feeling very good, and the numbers speak for themselves.

Speaker #1: But we've also gotten a lot more efficient on the things like onboarding, cash AI has done a very good job at offering better limits at the front door.

Speaker #1: And so all those things do factor into our ability to have efficient CAC. And so nothing new. We're on very scaled channels. We have no exposure to search or AI disruption whatsoever.

Speaker #1: These are big brand channels, TV, streaming, television, and all the social channels. So overall, feeling very good. And the numbers speak for themselves.

Speaker #8: Yeah. Terrific.

Hal Goetsch: Yeah. Terrific.

Kyle Beilman: Yeah. I mean, just to jump in there, I mean, to see acquisition up almost at an exact same rate as our amount of spend and speaking to the sort of incrementality of that spend at nearly 100% at this level of scale, I think just speaks to the overall size of the market that we're serving and to Jason's point, just the execution and channel expansion that we're doing on top of funnel there. Yeah, just wanted to make that incrementality point.

Speaker #1: I mean, just to jump in there, I mean, to see acquisition up almost at an exact same rate as our amount of spend. And speaking to the sort of incrementality of that spend at nearly 100% at this level of scale, I think just speaks to the overall size of the market that we're serving and to Jason's point, just the execution and channel expansion that we're doing on top of funnel there.

Speaker #1: But yeah, I just wanted to make that incrementality point. It's super impressive as far as I'm concerned.

Hal Goetsch: Excellent

Kyle Beilman: Super aggressive as far as I'm concerned.

Speaker #8: Yeah. Could you second follow up for follow up? Could you refresh our memory of using cash flow underwriting and seeing transaction data? What percentage of your monthly transaction members or total user base are transacting in BNPL transactions that you can see?

Hal Goetsch: Yeah. A second follow-up for Kyle. Could you refresh our memory of using cash flow underwriting and seeing transaction data, what percentage of your Monthly Transacting Members or total user base are transacting in BNPL transactions that you can see? Have you ever given that number out or refresh our memories on that?

Speaker #8: Have you ever given that number out or refreshed our memories on that?

Speaker #1: It's more than half.

Kyle Beilman: It's more than half.

Speaker #8: More than half. Yeah. All right. That's terrific. Okay. Hey, thanks for the call, guys. Thank you.

Hal Goetsch: More than half. Yeah. All right. That's terrific. Okay. Thanks for the call, guys. Thank you.

Speaker #1: Yeah. Thank you, Kyle.

Jason Wilk: Yeah. Thank you, Hal.

Speaker #2: Thank you. Our next question comes from Ryan Tomasello with KBW. You may proceed.

Operator: Thank you. Our next question comes from Ryan Tomasello with KBW. You may proceed.

Speaker #7: Thanks, everyone. A few questions on Flex. Based on the early data points you're seeing, do you have any data you can share on where the average monthly credit limits are shaking out for that product?

Ryan Tomasello: Thanks, everyone. A few questions on Flex. Based on the early data points you're seeing, do you have any data you can share on where the average monthly credit limits are shaking out for that product? How much wallet share you're able to capture with those early adopters, inclusive of ExtraCash? I think in the past, you've talked about ExtraCash credit, wallet share of credit usage being, I believe, sub 20%. Just curious where you think that could go with Flex over time. Thanks.

Speaker #7: And how much wallet share you're able to capture with those early adopters inclusive of extra cash? I think in the past, you've talked about extra cash credit wallet share of credit usage being, I believe, sub-20%.

Speaker #7: Just curious where you think that could go with Flex over time. Thanks.

Speaker #1: Yeah. Hey, Ryan. Thanks for the question. So again, feeling very good about the Flex numbers. We have been targeting roughly 2x the limit as the sort of go-to-market for that product to get people not only more duration, as Flex is paying for, versus ExtraCash is paying one.

Jason Wilk: Yeah. Hey, Ryan. Thanks for the question. Again, feeling very good about the Flex numbers. We have been targeting roughly 2x the limit as the sort of go to market for that product to get people not only more duration as Flex is paying 4 versus ExtraCash is paying 1, and the larger limits also expected to be a big driver of utilization there. Far, too early to say on the trends you're mentioning. We're not ready to give that level of disclosure yet, but looking forward to giving more color on that as we season the product portfolio and get the product in the hands of more core people.

Speaker #1: And the larger limits also expected to be a big driver of utilization there. So far, too early to say on the trends you're mentioning.

Speaker #1: I mean, we're not ready to give that level of disclosure yet, but looking forward to giving more color on that as we season the product portfolio and get the product in the hands of more and more people.

Speaker #7: And then, on the funding side, how much capacity does the arrangement with Coastal give you for extra cash funding? And when should we expect that to be fully migrated?

Ryan Tomasello: On the funding side, how much capacity does the arrangement with Coastal give you for ExtraCash funding, and when should we expect that to be fully migrated? For Flex, should we expect a similar funding arrangement with Coastal that's off balance sheet?

Speaker #7: And then for Flex, should we expect a similar funding arrangement with Coastal that's off-balance sheet?

Kyle Beilman: Hey, Ryan, this is Kyle. To answer the first part of the question, we had roughly $93 million drawn on a $225 million facility as of the end of the quarter. We are in discussions with them about increasing the size of that facility as well, and they've indicated that there is appetite to do that. Part of the scaling there is dictated or dependent on our full migration from our Evolve Bank & Trust partnership as well, which we were in the process of migrating away from. We have plenty of capacity there to continue ramping up originations on that facility and feel like it's, based on our discussions with them, that there's a lot of room to expand that moving forward as well. That we would also expect to replicate that structure with Coastal as it pertains to Flex as well.

Speaker #1: Hey Ryan, this is Kyle. So to answer the first part of the question, we had roughly $93 million drawn on a $225 million facility as of the end of the quarter.

Speaker #1: We are in discussions with them about increasing the size of that facility. As well, and they've indicated that there is appetite to do that.

Speaker #1: And part of the scaling there is dictated, or dependent on, our full migration from our Evolve Bank partnership as well, which we are in the process of migrating away from.

Speaker #1: But we have plenty of capacity there to continue ramping up originations on that facility, and we feel, based on our discussions with them, that there's a lot of room to expand that moving forward as well.

Speaker #1: And we would also expect to replicate that structure with Coastal as it pertains to Flex as well.

Speaker #8: Great. Thanks, guys.

Ryan Tomasello: Great. Thanks, guys.

Speaker #1: Thank you.

Kyle Beilman: Thank you.

Speaker #2: Thank you. Our next question comes from Jeff Candwell with Seaport Research. You may proceed.

Operator: Thank you. Our next question comes from Jeff Cantwell with Seaport Research. You may proceed.

Speaker #8: Hey, thanks, guys. A couple of quick questions. I wanted to follow up on what you said earlier on direct deposit. Thinking back, that area has been kind of an on-again, off-again initiative for you guys.

Jeff Cantwell: Hey, thanks, guys. A couple of quick questions. I wanted to follow up on what you said earlier on direct deposit. Thinking back, that area has been kind of an on-again, off-again initiative for you guys. Understandably so, I would say, because of the other areas like Dave Flex that have very good synergies with your existing strategy. On direct deposit, my question is how would you plan on driving more direct deposit customers as you look ahead? I'm curious how you're thinking about it and thought it would be worth asking or how you're maybe thinking about it now, particularly as you move past 15 million total members. Maybe there's a growing number there that might be interested if you offered that product. Would love to hear your updated thoughts, if you don't mind. Thanks.

Speaker #8: And I understand, and we saw, I would say, because of the other areas like Dayplex that have very good synergies with your existing strategy.

Speaker #8: But on direct deposit, my question is, how would you plan on driving more direct deposit customers as you look ahead? I'm curious how you're thinking about it.

Speaker #8: I thought it'd be worth asking her how you're maybe thinking about it now, particularly as we pass 15 million total members. Maybe there's a growing number there that might be interested if you offered that product.

Speaker #8: So we'd love to hear your updated thoughts if you don't mind. Thanks.

Speaker #1: Thanks, Jeff. Well, look, ultimately, we think that the more we can do for our customers within short-term credit, to help solve liquidity issues, for both discretionary and non-discretionary items, we have a better chance that someone considering us their primary account.

Jason Wilk: Thanks, Jeff. Well, look, ultimately, we think that the more we can do for our customers within short-term credit to help solve liquidity issues for both discretionary and non-discretionary items, we have a better chance of someone considering us their primary account. Now, our new thinking at this point is that we just focus on being top of wallet for our customers. We often give the example of if your paycheck goes into your Chase account, but you spend all your money on your Amex card, who has top of wallet? I'd argue Amex does. We think that within our differentiation with underwriting, we have a better chance to win the primary share of wallet with credit versus asking for someone to switch their bank account, which has a lot of friction associated with it.

Speaker #1: Our new thinking at this point is that we just focus on being top of wall for our customers. We often give the example of if your paycheck goes into your Chase account, we spend all your money on your Amex card.

Speaker #1: Who has top of wall? I'd argue Amex does. And we think that within our differentiation with underwriting, we have a better chance to win the primary share of wall with credit versus asking for someone to switch their bank account, which has a lot of friction associated with it.

Speaker #1: Nonetheless, we do feel like the more we do for our members, the better chance we have at winning that relationship. And you can imagine there are levers we can pull around reducing the cost of credit increasing credit limits to winning that direct deposit.

Jason Wilk: Nonetheless, we do feel like the more we do for our members, the better chance we have at winning that relationship. You can imagine there are levers we can pull around reducing the cost of credit, increasing credit limits to winning that direct deposit. It's just not a strategic area of focus at this point.

Speaker #1: It's just not a strategic area of focus. At this point.

Speaker #7: Yeah. Yeah. Okay. Thanks for that. And then on cash AI version 6, can you just underline for us the differences between version 6 versus version 5.5 and version 5 back in the day?

Jeff Cantwell: Yeah. Okay. Thanks for that. Then on CashAI version 6, can you just underline for us the differences between version 6 versus version 5.5 and version 5 back in the day? I guess any details in terms of the increase in average origination sizes or improvement in loss rates. I am just curious because having details that might help us as we think about our models and expectations going forward. Thanks.

Speaker #7: I guess any details in terms of the increase in average origination size or improvement in loss rates. I'm just curious because having details that might help us as we think about our models and expectations going forward.

Speaker #7: Thanks.

Speaker #1: Yeah, Jeff, so I think at a very high level, we expect—and what we've seen from testing data thus far—is that with the 6.0, we will see higher average origination sizes, as well as lower loss rates.

Kyle Beilman: Yeah, Jeff, I think at a very high level, we expect and what we've seen from testing data thus far is that with the 6.0, we will see a higher average origination sizes as well as lower loss rates. From a net monetization perspective, you're going to get an amplified benefit of those dynamics. We're rolled out to, call it a third of our user base as of right now with that model, and everything looks quite positive. We haven't quantified necessarily what those origination sizes are at this point. What we will say is that the new model from a risk-splitting perspective in combination with the removal of the fee caps will give us a lot of room to run on average origination size moving forward. We feel very confident in that as a monetization lever for the business moving forward.

Speaker #1: So from a net monetization perspective, you're going to get an amplified benefit of those dynamics. And we're rolled out to call it a third of our user base as of right now with that model.

Speaker #1: And everything looks quite positive. We haven't quantified necessarily what those origination sizes are at this point, but we said what we will say is that the new model from a risk-splitting perspective in combination with the removal of the fee caps will give us a lot of room to run on average origination size moving forward.

Speaker #1: And we feel very confident in that as a monetization lever for the business moving forward. And that will support our overall objectives on the ARPU expansion part of our growth algorithm.

Kyle Beilman: That will support our overall objectives on the ARPU expansion part of our growth algorithm. As far as impacts, that's what we're prepared to share at this point. In terms of the model itself, there's more features. As Jason mentioned in the prepared remarks, there's about 400 new features in the model. The total number of features in the model is up about 50%, and the risk-splitting capabilities of the new model are far superior. Just some of the features that we're more focused on or that are new here is really about kind of competitor utilization, more institution-level features on where users are coming to us from that are really driving the impact there.

Speaker #1: So I mean, as far as impacts, that's what we're prepared to share at this point. In terms of the model itself, there's more features as Jason mentioned in the prepared remarks.

Speaker #1: There's about 400 new features in the model. The total number of features in the model is up about 50%. And the risk-splitting capabilities of the new model are far superior and just some of the features that we're more focused on or that are new here is really about kind of competitor utilization, more institution-level features on where users are coming to us from that are really driving the impact there.

Speaker #8: Okay. Great. Thanks very much.

Jeff Cantwell: Okay, great. Thanks very much.

Speaker #2: Thank you. Our next question comes from Jacob Steffen with Lake Street Capital Markets. You may proceed.

Operator: Thank you. Our next question comes from Jacob Stephen with Lake Street Capital Markets. You may proceed.

Speaker #9: Hey, guys. Appreciate you taking the first, looking at kind of the larger size advances, your 121-day kind of charge-off rate ticked up in the quarter a little bit.

Jacob Stephan: Hey, guys. Appreciate you taking the questions. Maybe just first, looking at the larger size advances, your 121-day charge-off rate ticked up in the quarter a little bit. While you pushed the size higher above the $500 limit and the commentary figured about loss rates similar to Q2, I guess how do you separate the size-driven loss dollars versus a rate deterioration in v6.0?

Speaker #9: But while you pushed the size higher above kind of the $500 limit, and kind of the commentary figured about loss rate similar to Q2, I guess how do you separate kind of the size-driven loss dollars versus a rate deterioration in V6.0?

Speaker #1: Well, so first of all, the 121-day loss rate is the estimates at this point for Q2 are actually better than they were in Q2 of 2025.

Kyle Beilman: Well, first of all, the 121-day loss rate is, the estimates at this point for Q2 are actually better than they were in Q2 of 2025, and that's really primarily a function of just the iterations that we had made to v5.5. No real impact there from v6. I think we're being relatively conservative with our statements around loss rate performance being equitable quarter on quarter based on the impacts of v6. I think there is some opportunity to potentially drive those loss rates down. Our real focus with v6 is on keeping loss rates generally where they are. We're very happy with the unit economics in this loss rate range. We're really driving up average origination size, as we mentioned. There are other dynamics at play there as we ramp up acquisition.

Speaker #1: And that’s really primarily a function of just the iterations that we had made to V5.5—no real impact there from V6. I think we’re being relatively conservative with our statements around loss rate performance being equitable quarter on quarter.

Speaker #1: Based on the impacts of V6, I think there is some opportunity to potentially drive those loss rates down. But our real focus with V6 is on keeping loss rates generally where they are.

Speaker #1: We're very happy with the unit economics kind of in this loss rate range. We're really driving up average origination size as we mentioned. And there are sort of other dynamics at play there as we ramp up acquisition.

Speaker #1: New user origination sizes are smaller, so that's a little bit of a headwind to the headline average origination size. And new user loss rates tend to be a little bit higher than the average performance across the portfolio.

Kyle Beilman: New user origination sizes are smaller. That's a little bit of a headwind to the headline average origination size. New user loss rates tend to be a little bit higher than the average performance across the portfolio. Net net, moving forward, we expect that loss rates will come in and around this level that we observed in Q2 while meaningfully scaling average origination size moving forward, driving much higher net monetization.

Speaker #1: But sort of net-net, moving forward, we expect that loss rates will come in at around this level that we observed in the second quarter.

Speaker #1: While meaningfully scaling average origination size moving forward, driving much higher net monetization.

Speaker #9: Okay, got it. And I guess, when you look at the competitive environment, it feels like there have been quite a few earned wage access products out there.

Jacob Stephan: Okay. Got it. I guess, when you look at the competitive environment, it feels like there's been quite a few earned wage access products out there now from some of the larger neobanks. I guess, how do you feel like Dave stacks up in comparison, and also just maybe give us a sense on how the consumer is adjusting to several different products being in the market.

Speaker #9: Now from some of the larger kind of neobanks. But I guess how do you feel like Dave stacks up in comparison and also just maybe give us a sense on how the consumer is adjusting to several different products being in the market?

Speaker #1: Well, one, clearly, it's not impacting our ability to acquire customers. This is a record quarter for us on new sign-ups with cap being flat.

Jason Wilk: Well, one, clearly it's not impacting our ability to acquire customers. It was a record quarter for us on new sign-ups with CAC being flat. Either way, it just shows the size of the market. Importantly, our go-to-market is also very different in the sense that you can access credit just by linking a bank account. We view the friction associated with our competition, which largely requires a direct deposit, to Dave as far less friction, which leads to better speed to value, more referrals. A third of our acquisitions still comes via friends and family. We just feel very good about where we sit in the stack and our ability to acquire, whereas our competitors are really roughly fishing within their pool of direct deposit users of which to cross-sell this solution to.

Speaker #1: So either way, it just shows the size of the market. But importantly, our go-to-market is also very different in the sense that you can access credit just by linking a bank account and we view the friction associated with our competition, which largely requires a direct deposit to Dave as far less friction, which leads to better speed to value, more referrals, a third of our acquisitions still comes via friends and family.

Speaker #1: So we just feel very good about where we sit in the stack, and our ability to acquire, whereas our competitors are really roughly fishing within their pool of direct deposit users, of which to cross-sell this solution to.

Speaker #1: And even with that, we still see a lot of their customers using our product in addition, too. So not worried about competition. And I think the more we can continue to lean into things like V6—these are hard problems to solve.

Kyle Beilman: Even with that, we still see a lot of their customers using our product in addition, too. Not worried about competition, I think the more we can continue to lean into things like v6. These are hard problems to solve and much harder to solve with external bank accounts versus requiring a direct deposit.

Speaker #1: And it's much harder to solve with external bank accounts versus requiring a direct deposit.

Speaker #9: Okay. Got it. I appreciate the insight. Thanks, guys.

Jacob Stephan: Okay. Got it. I appreciate the insight. Thanks, guys.

Operator: Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.

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