DAVE's CAC Moves Up: Is Profitability Still in the Picture?

Core Insights - Dave Inc. (DAVE) has experienced a 13% year-over-year increase in customer acquisition cost (CAC) in Q1 2025, which rose to $19 in Q2 2025 due to strategic marketing refinements [1][8] - The company has shifted its strategy to focus on profitability by investing more in marketing to attract customers, resulting in a 27% increase in new members in Q2 2025 [2][8] - Financial performance has improved significantly, with revenue growth of 64% year-over-year in Q2 2025 and adjusted EBITDA soaring 236% to $50.9 million [3][8] Customer Acquisition Cost and Strategy - DAVE's approach to optimizing CAC involves a flexible spending strategy aimed at enhancing customer lifetime value rather than solely minimizing CAC [4] - The increase in CAC has led to a more robust user acquisition funnel, contributing to improved financial performance [4] Financial Performance - The company's top line grew by 47% year-over-year in Q1 and 64% in Q2 2025, with nearly three times year-over-year growth in the bottom line during Q2 [3][8] - DAVE's stock price has surged 459% over the past year, outperforming the industry average of 75.6% and the Zacks S&P 500 composite's 19.9% rise [5] Valuation Metrics - DAVE trades at a forward price-to-earnings ratio of 18.32X, which is lower than the industry average of 28.88X [9] - The Zacks Consensus Estimate for DAVE's earnings has increased by 11% and 5.7% for 2025 and 2026, respectively, over the past 60 days [12]