Summary of Chime Conference Call Company Overview - **Company**: Chime - **Industry**: Fintech and Digital Banking - **Target Market**: 200 million U.S. adults earning up to $100,000 annually, a segment often overlooked by traditional banks [5][6] Core Insights and Arguments - **Disruption in Banking**: Chime positions itself as a digital disruptor in payments and banking, focusing on financial progress for its members [5] - **Customer Engagement**: 97% of members report that Chime has helped them unlock financial progress, with active members transacting 55 times per month on average [5][10] - **Primary Account Relationships**: Chime has a high percentage of active members using it as their primary account, which drives engagement and profitability [8][9] - **Cost Structure Advantage**: Chime's cost to serve is estimated to be 1.3 to 1.5 times lower than that of incumbent banks, allowing for a transaction margin of nearly 70% [14][15] - **Brand Awareness**: Chime's brand awareness among its target demographic rivals that of the largest banks in America, with 8.7 million active members [16][17] Growth Metrics - **User Growth**: Active members grew by 23% year-over-year in Q2, with a reduction in tax by over 10% [20] - **Revenue Per Member**: Average revenue per active member (RPM) increased by 12% year-over-year in Q2 [20][55] - **Cohort Profitability**: Recent cohorts show a transaction profit customer acquisition cost (CAC) payback period of 5 to 6 quarters, compared to 7 quarters previously [21] Product Innovations - **MyPay**: Launched to provide members access to earned wages on demand, generating a revenue run rate of $300 million within a year [24] - **Loss Rate Management**: MyPay's loss rates improved from 1.6% to 1.4%, with a long-term target of 1% [28][27] - **Chime Enterprise**: A new initiative to offer Chime's products through employers, enhancing customer acquisition and engagement [40][41] Strategic Focus - **Payments-Driven Model**: Chime emphasizes a payments-driven business model rather than a lending-centric approach, focusing on monetizing through primary account relationships [36] - **Product Roadmap**: Plans to expand into investing and long-term savings products to meet evolving customer needs [77] - **AI Integration**: Chime is leveraging AI to enhance customer support, automating 72% of interactions and improving member satisfaction [80][81] Financial Outlook - **Adjusted EBITDA Margins**: Targeting a long-term adjusted EBITDA margin of 35%, with improvements expected as operational leverage increases [66][67] - **Transaction Margin Fluctuations**: Transaction margins are expected to fluctuate but are projected to improve as the business scales [60] Additional Insights - **Customer Retention**: Chime does not see significant customer graduation to other banks, indicating strong retention [76] - **Data Utilization**: Chime's proprietary technology stack allows for faster innovation and better data utilization for AI applications [71][82] This summary encapsulates the key points discussed during the conference call, highlighting Chime's strategic positioning, growth metrics, product innovations, and financial outlook.

Industry Overview - The Fintech industry has experienced significant growth in recent years, characterized by the emergence of companies that provide automated, consumer-friendly financial services at lower costs and with reduced labor overhead [1] Company Focus - Robinhood is highlighted as a key player in the Fintech sector, known for its innovative approach to financial services [1]

[Part I - Financial Information](index=6&type=section&id=Part%201-%20Financial%20Statements) [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Unaudited H1 2025 financials show strong revenue growth, a $910.4 million net loss primarily from IPO stock compensation, and a strengthened balance sheet [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet reflects a significant increase in cash and a shift to positive stockholders' equity following the IPO and preferred stock conversion Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Cash and cash equivalents | $868,284 | $337,697 | +157.1% | | Total current assets | $1,736,079 | $1,287,036 | +34.9% | | Total assets | $1,902,474 | $1,461,037 | +30.2% | | **Liabilities & Equity** | | | | | Total liabilities | $474,376 | $501,516 | -5.4% | | Redeemable convertible preferred stock | $0 | $2,890,121 | -100.0% | | Total stockholders' equity (deficit) | $1,428,098 | $(1,930,600) | Positive Swing | - Following the IPO in June 2025, all redeemable convertible preferred stock was converted to common stock, eliminating the **$2.89 billion liability** from the balance sheet[17](index=17&type=chunk)[25](index=25&type=chunk) - Total stockholders' equity shifted from a deficit of **$1.93 billion** to a positive equity of **$1.43 billion**, driven by the IPO proceeds and conversion of preferred stock[17](index=17&type=chunk)[25](index=25&type=chunk) [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The statements of operations show substantial revenue growth but a significant net loss in H1 2025, primarily due to a surge in operating expenses Statement of Operations Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | YoY Change | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | **$528,149** | **$384,214** | **+37.5%** | **$1,046,893** | **$776,186** | **+34.9%** | | Gross Profit | $461,029 | $333,710 | +38.2% | $919,355 | $678,235 | +35.5% | | Total Operating Expenses | $1,391,667 | $343,151 | +305.6% | $1,840,856 | $682,644 | +169.7% | | **Net Income (Loss)** | **$(923,376)** | **$385** | **N/A** | **$(910,437)** | **$16,288** | **N/A** | | Net Income (Loss) per Share | $(7.29) | $0.00 | N/A | $(9.44) | $0.00 | N/A | - The significant net loss in Q2 and H1 2025 was primarily driven by a massive increase in operating expenses, particularly **Technology and Development ($621.8M in Q2 2025 vs $75.4M in Q2 2024)** and **General and Administrative ($279.7M in Q2 2025 vs $41.6M in Q2 2024)**[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flows indicate a significant increase in cash from financing activities post-IPO, despite a decrease in operating cash flow Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | **$2,743** | **$70,837** | | Net Cash from Investing Activities | $79,126 | $(5,174) | | **Net Cash from Financing Activities** | **$449,930** | **$7** | | Net Increase in Cash | $531,799 | $65,670 | | Cash, end of period | $881,799 | $305,415 | - Financing activities provided **$449.9 million** in cash, primarily from **$772.6 million** in net IPO proceeds, partially offset by **$322.6 million** used for taxes paid related to net share settlement of restricted stock units (RSUs)[31](index=31&type=chunk) - Cash from operating activities decreased significantly to **$2.7 million** from **$70.8 million** YoY, despite a large non-cash stock-based compensation adjustment (**$918.8M**), due to the net loss and changes in working capital[31](index=31&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the IPO's $770.6 million net proceeds, significant stock-based compensation expense recognition, disaggregated revenue growth, and credit facility expansion - The company closed its IPO on June 13, 2025, receiving net proceeds of approximately **$770.6 million** after deducting underwriting discounts and offering expenses[37](index=37&type=chunk) - Upon the IPO, all redeemable convertible preferred stock was converted into common stock, and a multi-class stock structure (Class A, B, C) was established[38](index=38&type=chunk)[39](index=39&type=chunk) Disaggregated Revenue (in thousands) | Revenue Stream | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Payments revenue | $741,413 | $625,275 | +18.6% | | Platform-related revenue | $305,480 | $150,911 | +102.4% | | **Total revenue** | **$1,046,893** | **$776,186** | **+34.9%** | - In Q2 2025, the company recognized **$910.1 million** in stock-based compensation expense, a dramatic increase from **$6.4 million** in Q2 2024. This was triggered by the IPO satisfying the liquidity condition for RSUs and PSUs, leading to the recognition of cumulative expense[110](index=110&type=chunk) - On March 31, 2025, the company terminated its prior credit facility and entered into a new, larger **$475.0 million** senior secured revolving credit facility maturing in 2030[80](index=80&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses revenue growth driven by active members and purchase volume, explains the net loss by IPO-related stock compensation, and highlights strong post-IPO liquidity [Key Metrics and Non-GAAP Financial Measures](index=35&type=section&id=Key%20Metrics%20and%20Non-GAAP%20Financial%20Measures) Key operating metrics show growth in purchase volume and active members, alongside positive non-GAAP financial measures like Adjusted EBITDA Key Operating Metrics | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Purchase Volume (in millions) | $32,430 | $27,582 | +17.6% | | Active Members (in millions) | 8.7 | 7.1 | +22.5% | | ARPAM (annualized) | $245 | $218 | +12.4% | Non-GAAP Financial Measures (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Transaction Profit | $362,782 | $298,710 | $711,963 | $607,197 | | Transaction Margin | 69% | 78% | 68% | 78% | | Adjusted EBITDA | $16,003 | $3,095 | $41,094 | $18,536 | | Adjusted EBITDA Margin | 3% | 1% | 4% | 2% | [Results of Operations](index=42&type=section&id=Results%20of%20Operations) Results show strong revenue growth, particularly in platform-related revenue, offset by a surge in operating expenses due to IPO-related stock compensation - Total revenue increased **37% YoY** in Q2 2025, driven by a **19% increase** in payments revenue and a **113% increase** in platform-related revenue. The growth in platform-related revenue was primarily due to the full launch of the MyPay product in July 2024[182](index=182&type=chunk)[187](index=187&type=chunk) - Total operating expenses surged **306% YoY** in Q2 2025, primarily due to the recognition of stock-based compensation and related payroll tax of **$928.1 million** following the IPO[137](index=137&type=chunk)[191](index=191&type=chunk) - Transaction and risk losses increased **181% YoY** for Q2 2025, largely driven by the MyPay product, which contributed **$49.3 million** to the increase[192](index=192&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is strong, primarily from $868.3 million in cash and $770.6 million in IPO net proceeds, supplemented by a $475.0 million credit facility - As of June 30, 2025, principal sources of liquidity were **$868.3 million** in cash and cash equivalents and **$225.1 million** in marketable securities[198](index=198&type=chunk) - The company received net proceeds of approximately **$770.6 million** from its IPO in June 2025[198](index=198&type=chunk) - The company has access to a **$475.0 million** senior secured revolving credit facility, with **$443.6 million** in borrowing capacity remaining as of June 30, 2025[80](index=80&type=chunk)[199](index=199&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) Primary market risks are interest rate and foreign currency fluctuations, both deemed minimal for current assets and operations, but future variable-rate borrowings pose exposure - The company's primary market risks are interest rate changes and foreign currency fluctuations[218](index=218&type=chunk) - Interest rate risk on current cash and marketable securities is considered low due to their short-term nature. A hypothetical **100 basis point change** in interest rates would not have a material effect[219](index=219&type=chunk) - Foreign currency risk is not material as all revenue is earned in U.S. dollars, and operations in Canada are limited[221](index=221&type=chunk) [Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - Management concluded that as of the end of the quarter, the company's disclosure controls and procedures were **effective at a reasonable assurance level**[222](index=222&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[223](index=223&type=chunk) [Part II - Other Information](index=51&type=section&id=Part%20II%20-%20Other%20Information) [Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings.) The company is not currently subject to legal proceedings that would materially adversely affect its business, though it faces ordinary course legal and regulatory actions - The company is not currently subject to any legal proceedings that it believes would have a **material and adverse effect** on its business[225](index=225&type=chunk) [Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) Key risks include attracting members, dependence on bank partners, interchange fee changes, regulatory scrutiny, and concentrated co-founder voting power - The company's business is highly dependent on its ability to attract and retain **Active Members** and increase the revenue generated from them[228](index=228&type=chunk)[229](index=229&type=chunk) - Relationships with bank partners (The Bancorp Bank, N.A. and Stride Bank, N.A.) are crucial, as Chime is a technology company, not a bank. Loss of these partners could **severely impact operations**[228](index=228&type=chunk)[234](index=234&type=chunk) - A significant portion of revenue comes from interchange fees, which are subject to changes in rules, practices, and regulations (like the Durbin Amendment) that could **adversely affect the business**[228](index=228&type=chunk)[240](index=240&type=chunk) - The business is subject to a wide range of complex and evolving laws and regulations, with significant oversight from agencies like the CFPB, which could lead to **enforcement actions and fines**[231](index=231&type=chunk)[317](index=317&type=chunk) - The multi-class stock structure concentrates significant voting power with the company's **Co-Founders**, limiting the influence of Class A common stockholders[231](index=231&type=chunk)[387](index=387&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=102&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details include the grant of 7.2 million RSUs, exchange of 32.2 million Class A for Class B shares, and use of $770.6 million IPO proceeds for tax obligations - From April 1, 2025, to June 12, 2025, the company granted an aggregate of **7,213,334 RSUs** under its 2012 Equity Incentive Plan[414](index=414&type=chunk) - The company received net proceeds of approximately **$770.6 million** from its IPO, which were used to satisfy tax withholding and remittance obligations for equity award settlements[417](index=417&type=chunk)[419](index=419&type=chunk) [Other Information](index=103&type=section&id=Item%205.%20Other%20Information) No officers or directors adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the last fiscal quarter - No officers or directors adopted or terminated a Rule 10b5-1 trading plan during the last fiscal quarter[422](index=422&type=chunk)

Core Insights - Several companies are involved in IPOs in 2025, providing investors with diverse options for potential long-term returns [1][2] Company Summaries Firefly Aerospace (NASDAQ: FLY) - Firefly Aerospace raised $868 million in its IPO and saw shares surge by 56% on the first trading day [3] - The company has secured significant contracts with NASA and the U.S. Department of Defense, with a backlog exceeding $1.1 billion [3][4] - Firefly's Blue Ghost lunar lander successfully completed a mission, enhancing its visibility among public and private space clients [4] - As of the last market session, FLY was trading at $50.17, down over 16% [5] Chime Financial (NASDAQ: CHYM) - Chime Financial raised approximately $864 million in its IPO and is trading near its IPO price, indicating stability in a volatile market [7] - The stock was valued at $28.89, down 14% on the day and 22% since its public debut in June [7] - Chime has built a user base of over 22 million customers by offering fee-free banking services, appealing to a digitally native generation [9] - The company has maintained a lean business model, positioning itself well in the growing digital banking sector despite regulatory challenges [10]

Core Viewpoint - Chime Financial's stock experienced a significant drop following a strong earnings report, as investors took profits after a substantial increase post-IPO [1][2]. Financial Performance - In Q2, Chime reported a revenue increase of 37% to $528 million, with payments revenue growing by 19% and platform-related revenue soaring by 113% [3]. - The company recorded a net loss of $923 million, primarily due to a one-time stock-based compensation expense from its IPO; without this, Chime would have reported a profit of $5 million and an adjusted EBITDA of $16 million [4]. - Management provided a full-year revenue forecast for 2025 between $2.135 billion and $2.155 billion, along with adjusted EBITDA expectations of $84 million to $94 million, surpassing analyst estimates [5]. Market Reaction - Despite strong earnings, the stock's valuation remains high, trading at 5 times this year's revenue guidance and over 110 times this year's EBITDA guidance, indicating that while not excessively valued for a high-growth company, it is not considered cheap either [7]. - The earnings report is viewed as a strong start to Chime's public life, but the company will need to continue demonstrating its growth potential to maintain investor confidence [8].

Core Insights - Chime aims to become the largest provider of primary account relationships in the U.S. as stated by CEO Chris Britt during the company's first earnings call [1] - Analysts are focusing on Chime's user base expansion, member spending durability, and the impact of proposed bank data fees on its business model [2] Business Strategy - Chime is enhancing user experience by allowing newcomers to try services without immediate commitment, broadening access to features like Apple Pay and mobile check deposits [3] - The company is targeting improved activation and funding rates by offering introductory access to value propositions previously behind a direct deposit requirement [3] Financial Performance - Revenue increased by 37% year-over-year to $528 million for the quarter ending June 30, with payments revenue growing 19% to $366 million and platform-related revenue (including MyPay) climbing 113% to $162 million [8] - Active members rose by 23% to 8.7 million, and average revenue per active member (ARPAM) increased by 12% [8] Product Development - Chime's earned-wage access feature, MyPay, has reached a revenue run rate of approximately $300 million, with improved loss rates and tripled transaction margins quarter-over-quarter [5] - The company is also scaling Instant Loans and introducing "Chime Plus," a free tier offering higher savings rates and cash-back offers [8] Market Position - Chime claims to serve customers at about one-third the cost of large banks and one-fifth the cost of regional banks, leveraging its proprietary ledger and processing system to enhance unit costs [8] - The company maintains a strong brand presence with unaided brand awareness at 40%, comparable to major U.S. banks, and over half of new members are acquired through organic and referral channels [8] Future Outlook - Guidance for Q3 revenue is set between $525 million and $535 million, with full-year revenue projected at $2.135 billion to $2.155 billion, and an adjusted EBITDA margin of about 4% for 2025 [9]

Financial Data and Key Metrics Changes - In Q2, the company achieved revenue of $528 million, representing a 37% year-over-year growth and an adjusted EBITDA margin of 3%, an 18 percentage point increase over the last two years [21][22][23] - Payments revenue was $366 million, up 19% year-over-year, while platform revenue totaled $162 million, up 113% year-over-year [22] - Gross profit was $461 million, yielding an 87% gross margin, and transaction profit was $363 million, yielding a 69% transaction margin [22][23] Business Line Data and Key Metrics Changes - Active members grew by 23% year-over-year to 8.7 million, with the majority relying on Chime as their primary account relationship [8][18] - MyPay, a product enabling members to access earned wages on demand, reached a $300 million annual revenue run rate, with transaction margins tripling in Q2 [14][31] - Instant Loans, an installment loan product, showed early encouraging results with higher engagement and retention among members [16] Market Data and Key Metrics Changes - The company has less than 5% penetration in a market of nearly 200 million everyday Americans earning up to $100,000, indicating significant growth potential [8][9] - Purchase volume totaled $32 billion, up 18% year-over-year, with a focus on essential, non-discretionary spending [25] Company Strategy and Development Direction - The company aims to become the largest provider of primary account relationships in the U.S., focusing on a technology-driven, low-cost operating model [6][7] - Chime's strategy includes expanding funding options and making services more accessible to new members, enhancing engagement and retention [42][80] - The company is leveraging AI to improve member experiences and reduce costs, with a goal of automating support interactions [13][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, raising expectations for revenue and adjusted EBITDA for the second half of the year [21][36] - The company noted resilience in member spending and stable account balances, even in an uncertain macro environment [18][70] - Management highlighted the importance of member trust and satisfaction as key drivers of growth [10][19] Other Important Information - The company reported a strong balance sheet with $1.1 billion in unrestricted cash and marketable securities as of the end of Q2 [35] - The company plans to announce early enterprise partnerships for its Chime Workplace initiative, aimed at expanding its reach [16][61] Q&A Session Summary Question: Update on the strategy of widening the funnel and lifting restrictions - Management reported strong progress with a 23% year-over-year growth in active members and lower member acquisition costs [41][42] Question: Insights on MyPay's transaction margin and sustainability - Management highlighted impressive growth in MyPay, with transaction margins tripling and loss rates improving significantly [45][49] Question: Thoughts on the pace of improving MyPay loss rates - Management indicated that while loss rates are improving, the focus remains on providing a best-in-class member experience [54][56] Question: Update on Chime Workplace initiatives - Management expressed excitement about the Chime Workplace initiative, noting strong adoption and satisfaction among partners [60][61] Question: Spending trends and average spend per customer - Management acknowledged a slight decrease in average spend per active member but emphasized steady overall spending trends [64][70] Question: Impact of proposed bank fees on MyPay - Management stated that potential changes in bank fees would likely have negligible impact on Chime's business model [72][75]

Financial Data and Key Metrics Changes - In Q2 2025, the company achieved revenue of $528 million, representing a 37% year-over-year growth and an acceleration from Q1 [9][23] - Adjusted EBITDA margin rose to 3%, an 18 percentage point increase over the last two years [9][25] - Gross profit was $461 million, yielding an 87% gross margin [24] Business Line Data and Key Metrics Changes - Payments revenue reached $366 million, up 19% year-over-year, slightly ahead of purchase volume growth of 18% [24] - Platform revenue totaled $162 million, up 113% year-over-year, driven by strong MyPay performance [24] - MyPay has achieved a $300 million annual revenue run rate, with transaction margins tripling in Q2 [16][54] Market Data and Key Metrics Changes - Active members grew by 23% year-over-year to 8.7 million, with the majority using Chime as their primary account [9][30] - Purchase volume totaled $32 billion, up 18% year-over-year, indicating strong consumer engagement [28] Company Strategy and Development Direction - The company aims to become the largest provider of primary account relationships in the U.S., focusing on everyday consumers earning up to $100,000 [7][10] - Chime's strategy includes leveraging AI to enhance member experiences and reduce costs, with a focus on product innovation and maintaining a low-cost structure [8][14] - The introduction of Chime Plus aims to increase member engagement and retention by offering enhanced benefits [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of their business model, even in an uncertain macro environment, focusing on non-discretionary spending [20] - The company raised its expectations for revenue growth and adjusted EBITDA for the second half of 2025, reflecting strong business performance [23][39] - Management highlighted the importance of member trust and satisfaction as key drivers of growth [12][21] Other Important Information - The company reported a significant cost advantage, serving customers at one-third the cost of large banks [14] - The balance sheet remains strong, with $1.1 billion in unrestricted cash and marketable securities [38] Q&A Session Summary Question: Update on the strategy of widening the funnel and lifting restrictions - Management reported strong progress with a 23% year-over-year growth in active members and a 10% reduction in member acquisition costs, indicating successful top-of-funnel strategies [44][45] Question: Insights on MyPay's transaction margin and sustainability - Management noted that MyPay's transaction margin tripled in Q2, driven by improved loss rates and strong member engagement [48][54] Question: Thoughts on the pace of improving MyPay loss rates - Management indicated that while they aim for a 1% loss rate, the trajectory may not be linear, balancing member experience with risk management [58][60] Question: Update on Chime Workplace initiatives - Management expressed excitement about Chime Workplace, noting strong adoption and satisfaction among partners, with plans for future announcements [63][64] Question: Spending trends and average spend per customer - Management acknowledged a slight decrease in average spend per active member due to the addition of new members but emphasized overall steady spending trends [67][70] Question: Impact of proposed bank fees on MyPay - Management stated that potential changes in bank fees would have negligible impact on MyPay, as they maintain primary account relationships with their members [76][78]

Q2'25 Financial Performance - Chime achieved revenue of $528 million in Q2'25, representing a 37% year-over-year growth[17] - Gross profit reached $461 million with a gross margin of 87%[18] - Transaction profit was $363 million, yielding a transaction margin of 69%[18] - Adjusted EBITDA stood at $16 million, a 417% increase year-over-year, with a margin of 3%[18] Key Operating Metrics - Active Members grew to 87 million, a 23% increase year-over-year[17] - Purchase Volume increased to $324 billion, an 18% year-over-year growth[17] - Average Revenue Per Active Member (ARPAM) rose to $245, a 12% year-over-year increase[17] Future Outlook - The company projects Q3'25 revenue between $525 million and $535 million, indicating a year-over-year growth of 24% to 27%[35] - Full Year 2025 revenue is expected to be between $2135 billion and $2155 billion, a 28% to 29% year-over-year growth[35] - Adjusted EBITDA for Q3'25 is projected to be between $12 million and $17 million, with a margin of 2% to 3%[35] - The company anticipates an incremental adjusted EBITDA margin in the mid-40s or higher by Q4'25[10]

[Chime Q2 2025 Earnings Release](index=1&type=section&id=Chime%20Q2%202025%20Earnings%20Release) [Second Quarter 2025 Performance Highlights](index=1&type=section&id=Second%20Quarter%202025%20Performance%20Highlights) The company reported strong Q2 2025 results, driven by significant revenue growth and an increase in active members [Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) Revenue grew 37% YoY to $528 million, though a significant net loss was recorded due to post-IPO stock-based compensation Financial Performance | Financial Metric | Q2 2025 | YoY Growth | | :--- | :--- | :--- | | **Revenue** | **$528M** | **37%** | | - Payments Revenue | $366M | 19% | | - Platform-related Revenue | $162M | 113% | | **Gross Profit** | **$461M** | - | | Gross Margin | 87% | - | | **Net Loss** | **($923M)** | - | | Net Margin | (175)% | - | | **Adjusted EBITDA (non-GAAP)** | **$16M** | - | | Adjusted EBITDA Margin | 3% | - | - The significant increase in net loss to **$923 million** was primarily driven by **$928 million** of stock-based compensation expense and related payroll tax, which were elevated due to the company's initial public offering[6](index=6&type=chunk) [Business & Operational Highlights](index=1&type=section&id=Second%20Quarter%202025%20Business%20Highlights) Active members and purchase volume grew significantly, supported by product innovation, AI implementation, and the ChimeCore rollout Key Metrics | Key Metric | Q2 2025 | YoY Growth | | :--- | :--- | :--- | | **Active Members** | **8.7M** | **23%** | | **ARPAM** | **$245** | **12%** | | **Purchase Volume** | **$32.4B** | **18%** | - Key operational achievements in the quarter include **tripling the MyPay transaction margin**, expanding the product suite with **Instant Loans and Chime+**, launching a **GenAI voicebot**, and migrating new accounts to the proprietary **ChimeCore** payment processor[6](index=6&type=chunk) [Financial Outlook for 2025](index=1&type=section&id=Outlook) The company provided an optimistic outlook for Q3 and the full year 2025, projecting continued revenue growth and positive adjusted EBITDA Q3 2025 Outlook | Q3 2025 Outlook | Value | YoY Growth | | :--- | :--- | :--- | | **Revenue** | **$525M - $535M** | **24% - 27%** | | **Adjusted EBITDA** | **$12M - $17M** | - | | Adjusted EBITDA Margin | 2% - 3% | - | Full Year 2025 Outlook | Full Year 2025 Outlook | Value | YoY Growth | | :--- | :--- | :--- | | **Revenue** | **$2.135B - $2.155B** | **28% - 29%** | | **Adjusted EBITDA** | **$84M - $94M** | - | | Adjusted EBITDA Margin | 4% | - | - The company expects incremental adjusted EBITDA margin (non-GAAP) to return to **mid-40% or higher** by the fourth quarter of 2025[7](index=7&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) The financial statements detail the company's financial position, including a significant increase in assets post-IPO and a net loss driven by stock-based compensation [Condensed Consolidated Balance Sheets](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) Total assets grew to $1.90 billion as of June 30, 2025, primarily due to an increase in cash following the company's IPO | Balance Sheet Item (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | **$868,284** | **$337,697** | | **Total Assets** | **$1,902,474** | **$1,461,037** | | **Total Liabilities** | **$474,376** | **$501,516** | | **Total stockholders' equity (deficit)** | **$1,428,098** | **($1,930,600)** | [Condensed Consolidated Statements of Operations](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) The company reported revenue of $528.1 million for Q2 2025, but a net loss of $923.4 million resulted from high stock-based compensation expenses | Income Statement Item (in thousands) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Revenue** | **$528,149** | **$384,214** | | **Gross Profit** | **$461,029** | **$333,710** | | **Total operating expenses** | **$1,391,667** | **$343,151** | | - Stock-based compensation | $910,147 | $6,419 | | **Net income (loss)** | **($923,376)** | **$385** | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash from operating activities was $2.7 million for the first half of 2025, with financing activities providing $449.9 million from IPO proceeds | Cash Flow Item (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net cash from operating activities** | **$2,743** | **$70,837** | | **Net cash from investing activities** | **$79,126** | **($5,174)** | | **Net cash from financing activities** | **$449,930** | **$7** | | **Net increase in cash** | **$531,799** | **$65,670** | - Financing activities were primarily driven by **$772.6 million** in net proceeds from the issuance of common stock upon the initial public offering[33](index=33&type=chunk) [Non-GAAP Financial Measures & Key Metrics](index=3&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Key%20Metrics) This section defines key non-GAAP measures and operational metrics used by management and provides a reconciliation from GAAP net loss to non-GAAP adjusted EBITDA [Reconciliation of GAAP to Non-GAAP Results](index=10&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Results) The reconciliation bridges the Q2 2025 GAAP net loss of $(923.4) million to a positive adjusted EBITDA of $16.0 million, highlighting the impact of stock-based compensation | Reconciliation (in thousands) | Q2 2025 | | :--- | :--- | | **Net income (loss)** | **($923,376)** | | Stock-based compensation expense and related payroll tax | $928,062 | | Other adjustments | $11,317 | | **Adjusted EBITDA** | **$16,003** | [Definitions of Non-GAAP Measures and Key Metrics](index=4&type=section&id=Definitions%20of%20Non-GAAP%20Measures%20and%20Key%20Metrics) Key performance indicators are defined, including non-GAAP measures like Adjusted EBITDA and key operating metrics such as Active Members and Purchase Volume - **Adjusted EBITDA:** Defined as net income (loss) adjusted for items like depreciation, amortization, other income/expense, taxes, stock-based compensation, and other non-core operational expenses[19](index=19&type=chunk) - **Transaction Profit:** Defined as gross profit less transaction and risk losses[21](index=21&type=chunk) - **Active Members:** A member who has initiated a money movement transaction (e.g., card purchase, funding, ATM withdrawal) in the last calendar month of the period[25](index=25&type=chunk) - **Purchase Volume:** The total dollar value of member purchase transactions using Chime-branded cards, net of refunds[27](index=27&type=chunk) [Company Information and Disclosures](index=2&type=section&id=Company%20Information%20and%20Disclosures) This section provides corporate information, conference call details, and legally required forward-looking statement disclaimers - Chime will host a conference call to discuss its Q2 2025 results at 3:00 p.m. Pacific Time on the day of the release[8](index=8&type=chunk) - The release contains forward-looking statements regarding future financial performance, member growth, and business strategy, which are subject to substantial risks and uncertainties[12](index=12&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk)