Dave beats Q1 earnings estimates, raises 2025 outlook

Dave raised its outlook for 2025 revenue after posting greater-than-expected gains in the first quarter driven by its new fee structure and increased customer base.

The Los Angeles neobank expects full-year revenue at $460 million-$475 million, up from its previous guidance of $415 million-$435 million. The new forecast represents at least 33% growth from 2024. 

Founder and CEO Jason Wilk said Dave's improved outlook is based on the success of the CashAI underwriting model and increased confidence in new fees. In the fourth quarter of 2024, Dave shifted ExtraCash to a simplified 5% fee structure with a $5 minimum and $15 cap with no extra fees for instant transfers between ExtraCash and Dave Checking accounts. The transition was completed in February.

In the first quarter, Dave reported $108 million in revenue, up 47% from a year ago. That number exceeded expectations of analysts polled by S&P, who were looking for $93.6 million of revenue. 

Net income fell to $28.8 million, or $1.97 a share, from $34.2 million, or $2.60 a share, in the same period last year. S&P analysts had expected earnings per share of 76 cents.

"We knocked the cover off the ball in Q1," Wilk said. "Revenue grew at the fastest year-over-year pace since 2021 when our business was a fraction of its current size." 

Wilk said first-quarter earnings were "amplified by the early success of our new fee structure, which has enhanced monetization and conversion rates while maintaining strong member retention."

New members increased to 569,000 in the quarter and while customer acquisition costs increased by $2, they remained efficient at $18, the neobank said. The number of monthly transacting members increased 13% to 2.5 million, according to the company. 

Dave saw spending on its debit card increase 24% to $488 million over the quarter. Additionally, ExtraCash loan originations rose 46% to $1.5 billion in the quarter, a period that usually sees tempered demand, and the average 28-day delinquency rate improved by 33 basis points to 1.5%.

"These improvements contributed to another record quarter of non-GAAP variable margin, which reached 77%, nearly doubling over the past three years," Wilk said.

Founded in 2017, Dave grew through a focus on interest-free cash advances through its ExtraCash product. Dave uses an AI-based underwriting model it calls CashAI to determine interest-free cash advances of up to $500. The model uses metrics such as income, bank balances, spending patterns and customers' track record with the company to determine approval, instead of relying on a traditional credit score.

In March, Dave said it was switching its partner bank from Evolve Bank & Trust to Coastal Financial's Coastal Community Bank. Because Dave is a neobank, it does not hold a full banking license and has to rely on a partnership with an institutional bank as a sponsor. The company said customers' accounts would begin to switch over to Coastal in the second quarter.

Dave said in November it intended to "form a strategic partnership with a leading bank whose parent is publicly traded" but did not specify Coastal. The news came following a year of regulator scrutiny for Evolve, which had been a partner bank of Synapse, a Silicon Valley startup that went bankrupt in 2024.