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 31, 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. Following management's remarks, we'll open the call to answer your questions. 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. Except as required by law, the company undertakes no obligation to revise or update any forward-looking statements. 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 rules. You'll find reconciliation charge and other important information in the earnings press release in Form 8-K furnished to the SEC. I would now like to turn the call over to Dave's CEO, Mr. Jason Wilk. Please begin.

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 entered 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. This outperformance was driven by strength across all key areas of our business. Multi-transacting member, or MTM, growth remained 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. ARPU 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 as our extra cash portfolio scaled. 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 strong performance continues to underscore the scalability of our model, the value we provide to millions of Americans, and sets the stage what we believe will be another year of record performance in 2025. I also want to share the optimism we have regarding our transition to the new fee structure for ExtraCash. The new structure is a simple 5% fee on all ExtraCash transactions, with a $5 minimum and a $15 cap, with…

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 or delivering to members, while our disciplined approach to operations has driven meaningful operating leverage, further expanding profitability. 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 a $100.9 million, a 38% increase year-over-year. The strong performance was driven by 17% growth in MTMs, and 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 investments driving a 12% year-over-year increase in new members while maintaining our focus on MTM conversion and retention. The ARPU 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. We believe that our product roadmap across extra cash and Dave Card will continue to drive ARPU expansion this year. During the fourth quarter, our non-GAAP variable profit increase 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 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. Additionally, we benefited from ongoing optimization of payment processing…

[Operator Instructions]. And our first question will be coming from Joseph Vafi of Canaccord Genuity. Your line is open.

Terrific results, really impressive so if this will be an easy conference call for sure. Just on the pricing model and the changes there, maybe could we drill down a little bit more on what you learned? I know you said that it's helping to drive the size of your extra cash transactions and it's accretive to lifetime value, but maybe a little more detail on the pricing model and how it's affecting monetization? 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 a $5 minimum or $15 cap, we're now able to successfully monetize those customers as they stay longer on the book. 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 19th.

That's great, Jason. And then maybe secondly on customer at cost sales, marketing, it clearly has a solid ROI and it looks like you're going to incrementally increase it here this year. 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, look, I think what's great about 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, all the digital and social channels as well. We feel that we're gonna continue to invest in places where we see strong returns. And we're gonna 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.

Hey Joe, this is Kyle. Good morning and thanks for joining. I'll just weigh in on that, which is 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 overall lifetime value benefits. And that just gives us further confidence that even in an environment where CACs are up, we've increased lifetime value orders of magnitude greater than any increases in CAC that we might see to really sustain the returns at a very attractive level. And that's what we would expect to see kind of continue to play out in 2025.

And one moment for our next question. Our next question will be coming from Jacob Stephan of Lake Street Capital Markets. Your line is open.

Thank you, for taking my question. Just wanted to echo the congratulations on the quarter and all the progress you've made as well. 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?

Yes, 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 minimum $5, $15 cap. So far, we're still looking at the conversion results. It's not a step change improvement in conversion from EC to the Dave card, but it's not any materially worse either. So, we're happy to see that we've seen no impact to take rate and if anything gets positive on the take rate for extra cash with the new fee model. But not a catalyst of growth because we're not charging that fee anymore.

Okay. Got it. And then maybe to ask a broader sort of macro question, I guess, 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 lower tax refunds this year, but maybe you could kind of help us understand what you're seeing in your own book.

Yes, look, I think it's been very consistent and as you can see in the loss rates, we just had another fantastic year with cash AI with the 1.6% loss rate in Q4. 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 prices still up on things like eggs, gas, we tend to continue to see a strong environment for CAC.

Yes, just I'd say pretty consistent from the risk scores that we're seeing with our underwriting models relative to Q4 or prior periods. Not a lot’s changed for us. CAC like, as Jason mentioned, remains strong and like I said, our risk scores for our underwriting models are within very consistent ranges where we've seen them historically.

Okay. Understood. Good luck going forward guys, and congrats.

Our next question will be coming from Jeff Cantwell of Seaport Research. Your line is open, Jeff.

Thanks, very much. 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 company might be able to help us out and provide a little clarity on those. Given some of these plan changes and developments you guys have for product, et cetera in 2025. Can you help everyone out by discussing how you're thinking about each year's line items in terms of growth in the coming year? Thanks.

Hey, 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 real near-term opportunities on the ARPU side with the introduction of the new fee model. And as we talked about, we see 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. 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 I would say just given that the new we -- the upside that we've seen from the new fee model, there might be some sort of just near-term catalyst on the growth on the service-based revenue side as a result of that.

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 1 percentage range versus your volume. Maybe can you walk us through how we should be thinking about that line for the year? Thanks again.

Yeah. So, we haven't provided any specific guidance around the provision as a percentage of revenue per se, other than the fact that 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 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 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 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 absolute dollars moving forward.

I'll probably just squeeze one last one in. On your new partnership that you mentioned with Coastal Community Bank, you might just explain 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. I actually started talking about a new credit product at Dave. 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. 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. We're excited to move forward and get customers on board starting in Q2.

And one moment for our next question. Our next question will be coming from Harold Goetsch of B. Riley Securities. Your line is open, Harold.

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 Dave Card adoption amongst -- amongst your users? It's about 30% of your kind of total origination. Is that one way of thinking about it? Or is it very different?

I don't think we've really broken that out, Harold. I mean, I think we just tend to look at the transaction revenue 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 MTMs.

Okay.

Is that what you're getting at?

Yeah.

There's a lot of our debit users who obviously fund with external sources, payroll and things like that to drive the total debit spend volume in addition to the ExtraCash sort of cross-attached. So, there are multiple sources of funding there to drive card spend.

And then could you maybe now that the old pricing is kind of in years, like how many people were taking advantage of basically the free model waiting two or three days 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 kind of subscription.

I'll say the amount of people who tip was definitely the minority. And as that scaled up the -- on the retention curve, that tended to go down as people scaled on the platform. If you looked at people that also, we also had a free ACH lane out as well. So, if you wanted 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 those customers retained. 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 the member business trade-off value of the new fee model.

And 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 as you moved up from a $100 towards $500 limits per se. And so, the sort of spread didn't scale commensurate with the risk. 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.

And next question for you guys, this is probably maybe something you haven't thought about, because in 18 months your financial situation's very different, but on your current guidance and your current -- you guys are running ES that are like off the charts versus maybe what you even your growth rate is, you're going to be in your ROEs multiples of your growth rate. You are going to be throwing off so much cash, you don't what to do with it. So, what is the next step in evolution of your thoughts on capital allocation here? As you grow with these very high incremental margins and great returns?

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 and 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 a free cash flow out of the business. So, 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. As 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 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.

Okay. I have one follow-up. Can you maybe just maybe foreshadow what kind of other lending products you think would fit well that would be the next step or next evolution of maybe an offering 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. Like I say, without giving away too much, we know our customers aspire to have more duration of credit on the platform, not talking about two- or three-year type credit, but the fact is that ExtraCash, 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. And so that limits, that limits the types of purchases you're going to make using this type of cash. And so ExtraCash 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. 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.

Our next question will be coming from Gary Prestopino of Barrington. Your line is open, Gary.

Hey, Kyle, could you possibly for Q4 give us a breakdown of the service-based revenues between processing fees, tips, and subscriptions?

Gary, do you mind? That should be broken out here in the K for you later today.

Okay. All right. So, you're filing your K? You're filing your K today. That's fine.

Yes.

Okay. So, look, you basically said with the change in fee structure, there's been no change in funds deposited to the Dave Card. 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. Right. Look, it seems to me that's a pretty important part of the puzzle here. Although the extra cash does dwarf it. But the more money you get on those Dave Cards, if you're increasing the life of your card holder, 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. 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. Well, look, Gary, I'd say the last several years have very much been focused on the ExtraCash 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 of the natural synergy between ExtraCash and the Dave Card is very strong, but we do plan to make more investments in R&D this year on the Dave debit product because 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 just continue to drive more ways to fund that adoption.

That's good to hear. In terms of this new sponsor bank coastal, how do you handle or are most of your new account growth, is that going to be placed at Coastal versus Evolve?

That's correct. So, starting in Q2, we plan to onboard new customers and we plan to exclusively offer to 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 there'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.

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.

We'll continue to be with MasterCard, Gary.

But Gary, I think importantly though, they're integrated with Galileo, which is our sort of issue of processor. And so that does make the onboarding migration quite a bit easier for us.

Okay. That’s helpful. Thank you.

Thanks.

And I would now like to turn the call back to management for closing remarks.

Yes, thanks everyone for the time. Really appreciate it. Another strong quarter. We're feeling great about the company and appreciate your support.

And this concludes today's conference call. Thank you for participating. You may now disconnect.