Financial Data and Key Metrics Changes - The company reported a net income of $5.2 million for Q3 2025, reflecting a $35 million year-over-year improvement [5] - The return on equity (ROE) was 5%, up 40 percentage points year-over-year [5] - Operating expenses were $91 million, down 11% year-over-year, marking the second lowest quarterly expense level since going public in 2019 [6][17] - Adjusted EPS increased sharply from $0.02 to $0.39 year-over-year [10][18] - Total revenue for Q3 was $239 million, a decline of $11 million or 5% year-over-year, primarily due to the absence of credit card revenue [15][16] Business Line Data and Key Metrics Changes - Q3 originations were $512 million, up 7% year-over-year, with 70% of originations going to returning members [9][11] - Secured personal loan originations increased by 22% year-over-year, and the secured portfolio grew 48% year-over-year to $209 million [11][41] - The annualized net charge-off rate was 11.8%, a modest improvement from 11.9% in the prior year [6][20] Market Data and Key Metrics Changes - The company continues to monitor key indicators such as inflation, unemployment, and fuel prices, which are impacting consumer behavior [12][33] - The 30-plus day delinquency rate improved year-over-year by 44 basis points to 4.7% [6][20] Company Strategy and Development Direction - The company is focused on three strategic priorities: improving credit outcomes, strengthening business economics, and identifying high-quality originations [8][29] - The company plans to maintain a conservative credit posture while decreasing average loan sizes to ensure affordability for consumers [32][34] - The secured personal loans segment is identified as a key pillar for growth moving into 2026 [41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year 2025 GAAP profitability and raised adjusted EPS guidance to a range of $1.30-$1.40 per share, reflecting strong year-over-year growth [13][29] - The company anticipates a slight increase in the annualized net charge-off rate to 12.1% for full-year 2025, expected to be temporary [12][26] - Management noted that consumer resilience remains despite macroeconomic pressures, with a focus on maintaining affordability in loan offerings [33][34] Other Important Information - The debt-to-equity ratio improved to 7.1 times, down from 8.7 times a year ago, with a target of 6 times [8][22] - The company executed ABS financings at weighted average yields below 6% and expanded warehouse financing capacity [8][24] Q&A Session Summary Question: Insights on consumer behavior beyond delinquencies and charge-offs - Management noted a focus on reducing average loan sizes to make payments more affordable, reflecting the complexity of consumers' financial lives [31][32] Question: Trends in repayments during Q3 - Repayment rates remained elevated, attributed to smaller loan sizes making them easier to pay off [35] Question: Details on operating expense reductions - Operating expenses were reduced across various line items, including sales and marketing, personnel, and general administrative costs [36] Question: Expectations for net charge-off rates - Management expects a temporary increase in net charge-off rates due to recent credit tightening, with confidence in a return to lower rates by mid-2026 [37][39] Question: Characteristics of secured personal loan customers - The secured portfolio has grown significantly, with dedicated marketing campaigns aimed at attracting customers interested in secured loans [40][41] Question: Timeline for achieving a 6:1 debt-to-equity ratio - Management indicated a positive trajectory towards the 6 times target but did not provide a specific timeline [42]

Financial Data and Key Metrics Changes - Revenue grew 63% year over year to $150.8 million, with adjusted EBITDA reaching $58.7 million, reflecting a 137% increase year over year [4][20] - Monthly transacting members (MTMs) increased by 17% to 2.77 million, while average revenue per user (ARPU) expanded by nearly 40% [4][21] - Non-GAAP gross profit rose 62% year over year to $104.2 million, with a non-GAAP gross margin of 69% [18][20] Business Line Data and Key Metrics Changes - Extra Cash origination grew 49% year over year, surpassing $2 billion for the first time, with a 20% increase in average origination size [9][10] - Total card spend increased by 25% year over year to $510 million, driven by growth in MTMs and card spend per active banking customer [10] - High-margin subscription revenue grew 57% year over year, with a new $3 monthly subscription fee for new members [10][18] Market Data and Key Metrics Changes - The 28-day delinquency rate improved by seven basis points sequentially to 2.33%, with further improvement to 2.19% in September [15][17] - The company reported a stable customer acquisition cost (CAC) of $19, with improvements in marketing efficiency [8][24] Company Strategy and Development Direction - The company is focused on maximizing gross profit dollars across the platform and enhancing credit performance through the rollout of Cache AI v5.5 [4][7] - Strategic growth pillars include efficient member acquisition, strengthening engagement through credit, and deepening monetization via Dave Cards [8][10] - The transition to Coastal Community Bank is expected to reduce funding obligations and lower the cost of capital, enhancing liquidity for strategic opportunities [20][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, citing strong performance across all aspects of the business and raising 2025 revenue and adjusted EBITDA guidance [4][21] - The company anticipates continued improvements in credit performance and expects the provision expense as a percentage of originations to improve in Q4 [18][20] Other Important Information - The company is in the process of transitioning to a new funding arrangement with Coastal Community Bank, expected to be completed by early 2026 [20][30] - The introduction of a new Buy Now, Pay Later product is in internal testing, with customer testing expected in Q1 [60] Q&A Session Summary Question: What is driving the improvement in delinquency rates with Cache AI v5.5? - Management highlighted the extensive data inputs in Cache AI v5.5, which has led to superior credit performance and better control over loss rates [23] Question: What consumer trends are being observed? - Management noted that consumer spending and income appear stable, with a consistent CAC of $19, indicating healthy business conditions [24] Question: What is the timeline for the transition to Coastal Community Bank? - The transition is expected to be completed by early 2026, with a full migration of funding arrangements targeted for the end of Q1 or early Q2 [30] Question: How does the company view its operating leverage and future growth? - Management expressed satisfaction with the current EBITDA margin and indicated plans for further investments to support growth [36] Question: What percentage of members are using the Dave Card? - Approximately 30% of total customers are sending Extra Cash to the Dave Card, which is seen as a way to drive incremental retention [58] Question: What is the expected impact of the new pricing model on revenue? - The new pricing model is anticipated to stabilize yields and enhance revenue growth, with improvements in unit economics [70]