Dave Inc./DE Q1 FY2024 earnings call

Key Points - Jason Wilk highlighted that Dave exceeded growth and profitability targets in Q1, with revenue up 25% YOY and operating expenses down for the fourth consecutive quarter. - Leveraged AI with CashAI underwriting engine and DaveGPT chatbot, which helped reduce costs and increase member satisfaction. - Focused on acquiring members efficiently, with CAC at $16 in Q1. ExtraCash originations grew 32% YOY, and Dave Card spending continued to increase. - ARPU increased 10% YOY but declined 5% QOQ due to seasonality and new subscription billing system.### Kyle Beilman's Comments - Q1 revenue growth driven by MTM growth and ARPU increase. - Variable profit margin expanded due to optimization of CashAI and vendor stack efficiency. - Provision for credit losses decreased, processing and servicing costs improved, and marketing expenses declined. - Balance sheet remained strong with ample liquidity, and net receivables decreased sequentially.

Revenue in Q1 was $73.6 million, up 25% year-over-year. The monthly transacting member (MTM) base grew 14% year-over-year to 2.2 million. ARPU increased 10% year-over-year in Q1 but declined 5% sequentially. Non-GAAP variable profit in Q1 increased 47% to $49.9 million, representing a 68% margin relative to GAAP revenue. ExtraCash originations were over $1 billion for the second consecutive quarter, with Dave Card spending in Q1 up 34% year-over-year and 7% sequentially to a record $394 million. Adjusted EBITDA for Q1 was $13.2 million.

• Full year 2024 revenue is expected to range between $305 million and $325 million, representing 18%-25% growth vs 2023. - Adjusted EBITDA guidance raised to $30 million to $40 million, a $40 million to $50 million improvement vs 2023. - Expect adjusted EBITDA to remain positive quarterly, though growth may not be linear.

• Potential election impact on CAC, though not experienced yet. - Seasonality effects on ExtraCash demand. - Macro uncertainties that could affect business performance.

Q: How did originations perform despite seasonal dynamics?

A: Jason Wilk said it was a mix of Dave-specific efforts like optimizing CashAI and higher average advances, and a tougher macro backdrop with other credit products tightening. Kyle Beilman added it was more about reengagement of existing members than macro changes.

Q: What's the outlook for average ExtraCash advance size?

A: Jason Wilk stated it should keep growing as retention improves and CashAI engine is optimized. Kyle Beilman mentioned it's accretive to monetization as origination size increases.

Q: Details on subscriber model changes?

A: Jason Wilk said there was no change to price ($1), but they're testing new price points in $3-$5 range with a new billing platform. Kyle Beilman noted increase in subscriber-only MTMs due to new billing system.

Q: Recurring ExtraCash metric?

A: Kyle Beilman said existing customer repeat originations in a given month/quarter are in excess of 95%.

Q: Marketing spend outlook?

A: Kyle Beilman said they expect to ramp marketing spend throughout the year, with most coming from top-of-funnel channels, and returns are solid with sub-6 month gross-profit-based payback periods.