Dave (NASDAQ: DAVE) lifts Q2 revenue as net income declines
Dave Inc. reported total operating revenues, net of $170,793 thousand for the three months ended June 30, 2026, up from $131,757 thousand a year earlier. Service based revenue, net was the largest contributor at $160,047 thousand, while transaction based revenue, net was $10,746 thousand. Quarterly net income was $6,687 thousand, down from $9,040 thousand, as income tax expense and fair-value changes in warrant and earnout liabilities weighed on results.
For the six months ended June 30, 2026, total operating revenues, net were $329,207 thousand and net income was $64,623 thousand, compared with $239,736 thousand and $37,852 thousand for the prior-year period. Cash and cash equivalents were $209,613 thousand at June 30, 2026, while member receivables, net were $232,220 thousand. Financing activity included $192,695 thousand of net proceeds from convertible notes, $17,364 thousand for capped calls, and repurchases of 992,232 Class A shares at a cost of $207,420 thousand. Dave also began limited testing of Dave Flex in April 2026; related receivables, allowance and fee revenue were immaterial.
Positive
- $329,207 thousand six-month revenue, up from $239,736 thousand
- $64,623 thousand six-month net income, up from $37,852 thousand
Negative
- $6,687 thousand quarterly net income, down from $9,040 thousand
- $55,404 thousand six-month credit-loss provision, up from $35,898 thousand
Key Figures
Key Terms
variable interest entity financial
allowance for credit losses financial
financial guarantee financial
purchased financial assets with credit deterioration financial
Capped Call Transactions financial
available-for-sale financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
What were DAVE's Q2 2026 revenue and net income?
How did DAVE's first-half 2026 results compare with 2025?
How much cash and member receivables did DAVE have at June 30, 2026?
What financing and repurchase activity did DAVE report in 2026?
What changed with DAVE's ExtraCash arrangement with Coastal?
What is Dave Flex and was it material for DAVE in Q2 2026?
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
(Mark One)
For the quarterly period ended
OR
For the transition period from to _______
Commission file number:
DAVE INC.
(Exact Name of Registrant as Specified in Its Charter)
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(State or other jurisdiction of |
(I.R.S. Employer |
(Address of principal executive offices) |
Zip Code |
Registrant's telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class |
Trading Symbol(s) |
Name of Each Exchange on Which Registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period than the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
☒ |
Accelerated filer |
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Non-accelerated filer |
☐ |
Smaller reporting company |
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Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ☐ NO
As of July 27, 2026, there were 12,757,710 shares of Class A common stock, $0.0001 par value, issued and
DAVE INC.
TABLE OF CONTENTS
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Page |
PART I. |
FINANCIAL INFORMATION |
3 |
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Item 1. |
Financial Statements (Unaudited) |
3 |
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Condensed Consolidated Balance Sheets |
3 |
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Condensed Consolidated Balance Sheets, Continued |
5 |
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Condensed Consolidated Statements of Operations |
6 |
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Condensed Consolidated Statements of Comprehensive Income |
7 |
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Condensed Consolidated Statement of Stockholders’ Equity |
8 |
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Condensed Consolidated Statements of Cash Flows |
10 |
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Notes to Condensed Consolidated Financial Statements |
11 |
Item 2. |
Management's Discussion and Analysis of Financial Condition and Results of Operations |
44 |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
60 |
Item 4. |
Controls and Procedures |
61 |
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PART II. |
OTHER INFORMATION |
62 |
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Item 1. |
Legal Proceedings |
62 |
Item 1A. |
Risk Factors |
62 |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
63 |
Item 3. |
Defaults Upon Senior Securities |
63 |
Item 4. |
Mine Safety Disclosures |
63 |
Item 5. |
Other Information |
63 |
Item 6. |
Exhibits |
64 |
Signatures |
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65 |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Form 10-Q” or this “report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements contained in this report other than statements of historical fact, including statements regarding our future results of operations, financial position, market size and opportunity, our business strategy and plans, the factors affecting our performance and our objectives for future operations are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “should,” “would,” “can,” “expect,” “project,” “outlook,” “forecast,” “objective,” “plan,” “potential,” “seek,” “grow,” “target,” “if” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in the section titled “Risk Factors” set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission (the “SEC”) on March 2, 2026 (the “Annual Report”), as further updated in Part II, Item 1A "Risk Factors" of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 and this Form 10-Q and in our other filings with the SEC. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this report may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Forward-looking statements contained in this report involve a number of judgments, risks and uncertainties, including, without limitation, risks related to:
We caution you that the foregoing list of judgments, risks and uncertainties that may cause actual results to differ materially from those in the forward-looking statements may not be complete. You should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Except as required by law, we do not intend to update any of these forward-looking statements after the date of this report or to conform these statements to actual results or revised expectations.
You should read this report with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect.
This report contains estimates, projections and other information concerning our industry, our business and the markets for our products. We obtained the industry, market and similar data set forth in this report from our own internal estimates and research and from industry research, publications, surveys and studies conducted by third parties, including governmental agencies. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties, and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. While we believe that the data we use from third parties are reliable, we have not separately verified these data. You are cautioned not to give undue weight to any such information, projections and estimates.
As used in this report, the “Company,” “Dave,” “we,” “us,” “our” and similar terms refer to Dave Inc. (f/k/a VPC Impact Acquisition Holdings III, Inc.) and its consolidated subsidiaries, unless otherwise noted or the context otherwise requires.
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
Dave Inc.
Condensed Consolidated Balance Sheets
(in thousands; except share data)
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As of June 30, 2026 |
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As of December 31, 2025 |
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(unaudited) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
$ |
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$ |
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Member receivables, net of allowance for credit losses of $ |
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Investments |
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Prepaid income taxes |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Lease right-of-use assets (related-party of $ |
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Intangible assets, net |
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Restricted cash |
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Deferred tax assets, net |
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Other non-current assets |
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Total assets |
$ |
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$ |
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Liabilities, and stockholders’ equity |
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Current liabilities: |
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Accounts payable |
$ |
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$ |
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Accrued expenses |
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Debt facility, current |
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Lease liabilities, short-term (related-party of $ |
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Legal settlement accrual |
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Income taxes payable |
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Other current liabilities |
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Total current liabilities |
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Lease liabilities, long-term (related-party of $ |
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Convertible notes, net of discount and issuance costs |
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Warrant and earnout liabilities |
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Other non-current liabilities |
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Total liabilities |
$ |
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$ |
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Commitments and contingencies (Note 11) |
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Stockholders’ equity: |
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Preferred stock, par value per share $ |
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Class A common stock, par value per share $ |
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Class V common stock, par value per share $ |
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Additional paid-in capital |
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Treasury shares, at cost (Class A common stock, |
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( |
) |
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( |
) |
Accumulated other comprehensive income |
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Retained earnings |
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Total stockholders’ equity |
$ |
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$ |
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Total liabilities, and stockholders’ equity |
$ |
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$ |
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||
See accompanying notes to the condensed consolidated financial statements.
Dave Inc.
Condensed Consolidated Balance Sheets, Continued
(in thousands)
(unaudited)
The following table presents the assets and liabilities of a consolidated variable interest entity (“VIE”), which are included in the condensed consolidated balance sheets above. The assets in the table below may only be used to settle obligations of consolidated VIEs and are in excess of those obligations. All intercompany accounts have been eliminated.
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As of June 30, 2026 |
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As of December 31, 2025 |
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Assets |
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Cash and cash equivalents |
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$ |
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$ |
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Investments |
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Member receivables, net of allowance for credit losses |
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Debt facility commitment fee, current |
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Total assets |
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$ |
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$ |
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Liabilities |
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Accounts payable |
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$ |
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$ |
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Debt facility, current |
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Total liabilities |
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$ |
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$ |
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||
See accompanying notes to the condensed consolidated financial statements.
Dave Inc.
Condensed Consolidated Statements of Operations
(in thousands; except per share data)
(unaudited)
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For The Three Months Ended |
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For The Six Months Ended |
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June 30, 2026 |
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June 30, 2025 |
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June 30, 2026 |
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June 30, 2025 |
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Operating revenues: |
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Service based revenue, net |
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$ |
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$ |
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$ |
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$ |
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Transaction based revenue, net |
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Total operating revenues, net |
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Operating expenses: |
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Provision for credit losses |
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Processing and servicing costs |
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Financial network and transaction costs |
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Advertising and activation costs |
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Compensation and benefits |
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Technology and infrastructure |
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Other operating expenses |
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Total operating expenses |
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Other (income) expenses: |
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Interest income |
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( |
) |
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( |
) |
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( |
) |
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( |
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Interest expense |
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Changes in fair value of earnout liabilities |
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Changes in fair value of public and private warrant liabilities |
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Total other (income) expense, net |
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Net income before provision for income taxes |
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Provision for income taxes |
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Net income |
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$ |
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$ |
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$ |
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$ |
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Net income per share: |
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Basic |
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$ |
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$ |
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$ |
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$ |
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Diluted |
|
$ |
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$ |
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$ |
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$ |
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Weighted-average shares used to compute net income per share |
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Basic |
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Diluted |
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See accompanying notes to the condensed consolidated financial statements.
Dave Inc.
Condensed Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)
|
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For The Three Months Ended |
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For The Six Months Ended |
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|||||||||
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June 30, 2026 |
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June 30, 2025 |
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June 30, 2026 |
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June 30, 2025 |
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||||
Net income |
|
$ |
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$ |
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$ |
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$ |
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Other comprehensive gain (loss): |
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Unrealized gain (loss) on available-for-sale securities, net of tax |
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( |
) |
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( |
) |
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( |
) |
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Comprehensive income |
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$ |
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$ |
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$ |
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$ |
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||||
See accompanying notes to the condensed consolidated financial statements.
Dave Inc.
Condensed Consolidated Statement of Stockholders’ Equity
(in thousands, except share data)
(unaudited)
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Common stock |
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Class A |
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Class V |
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Additional paid-in capital |
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Treasury shares |
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Accumulated other comprehensive income |
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Retained earnings |
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Total stockholders’ equity |
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Shares |
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Amount |
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Shares |
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Amount |
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Balance at April 1, 2026 |
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$ |
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$ |
- |
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$ |
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$ |
( |
) |
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$ |
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$ |
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$ |
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|||||||
Issuance of Class A common stock in connection with stock plans |
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- |
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- |
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- |
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- |
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- |
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- |
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Repurchase of Class A common stock |
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( |
) |
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- |
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- |
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- |
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- |
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( |
) |
|
|
- |
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|
- |
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( |
) |
Stock-based compensation |
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- |
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|
- |
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- |
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- |
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- |
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- |
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- |
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Unrealized gain on available-for-sale securities |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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||
Net income |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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||
Balance at June 30, 2026 |
|
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|
$ |
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|
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|
$ |
- |
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$ |
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$ |
( |
) |
|
$ |
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$ |
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$ |
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Common stock |
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Class A |
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Class V |
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Additional paid-in capital |
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Treasury shares |
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Accumulated other comprehensive income |
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Accumulated deficit |
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Total stockholders’ equity |
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|||||||||||||||
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Shares |
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Amount |
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Shares |
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Amount |
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Balance at April 1, 2025 |
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|
$ |
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|
|
|
|
$ |
- |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
Issuance of Class A common stock in connection with stock plans |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
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|
- |
|
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|
- |
|
|
- |
|
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||||
Conversion of Class V common stock to Class A common stock |
|
|
|
|
- |
|
|
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( |
) |
|
|
- |
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|
|
- |
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- |
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|
|
- |
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- |
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||
Stock-based compensation |
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- |
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|
|
- |
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|
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- |
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- |
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|
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- |
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- |
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- |
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|
|||
Unrealized loss on available-for-sale securities |
|
- |
|
|
|
- |
|
|
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- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
- |
|
|
|
( |
) |
|
Net income |
|
- |
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|
|
- |
|
|
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- |
|
|
|
- |
|
|
|
- |
|
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- |
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- |
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|
|
|
|
|
||
Balance at June 30, 2025 |
|
|
|
$ |
|
|
|
|
|
$ |
- |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Common stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Class A |
|
|
Class V |
|
|
Additional paid-in capital |
|
|
Treasury shares |
|
|
Accumulated other comprehensive income |
|
|
Retained earnings |
|
|
Total stockholders’ equity |
|
|||||||||||||||
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
|
|
|
|
|||||||||||||||||||
Balance at January 1, 2026 |
|
|
|
$ |
|
|
|
|
|
$ |
- |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Issuance of Class A common stock in connection with stock plans |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
$ |
|
|
|
|
||||
Shares withheld related to net share settlement |
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
Repurchase of Class A common stock |
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
Stock-based compensation |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
||
Purchases of capped calls |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
Unrealized loss on available-for-sale securities |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
Net income |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
||
Balance at June 30, 2026 |
|
|
|
$ |
|
|
|
|
|
$ |
- |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Common stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Class A |
|
|
Class V |
|
|
Additional paid-in capital |
|
|
Treasury shares |
|
|
Accumulated other comprehensive income |
|
|
Accumulated deficit |
|
|
Total stockholders’ equity |
|
|||||||||||||||
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
|
|
|
|
|||||||||||||||||||
Balance at January 1, 2025 |
|
|
|
$ |
|
|
|
|
|
$ |
- |
|
|
$ |
|
|
$ |
- |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
Issuance of Class A common stock in connection with stock plans |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|||
Shares withheld related to net share settlement |
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
Repurchase of Class A common stock |
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
Conversion of Class V common stock to Class A common stock |
|
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Stock-based compensation |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
||
Unrealized loss on available-for-sale securities |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
Net income |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
||
Balance at June 30, 2025 |
|
|
|
$ |
|
|
|
|
|
$ |
- |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
See accompanying notes to the condensed consolidated financial statements.
Dave Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
|
|
For The Six Months Ended |
|
|||||
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||
Operating activities |
|
|
|
|
|
|
||
Net income |
|
$ |
|
|
$ |
|
||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Provision for credit losses |
|
|
|
|
|
|
||
Changes in fair value of earnout liabilities |
|
|
|
|
|
|
||
Changes in fair value of public and private warrant liabilities |
|
|
|
|
|
|
||
Stock-based compensation |
|
|
|
|
|
|
||
Non-cash interest expense from the convertible notes |
|
|
|
|
|
|
||
Deferred income taxes |
|
|
( |
) |
|
|
|
|
Non-cash lease expense |
|
|
|
|
|
( |
) |
|
Changes in fair value of marketable securities and investments |
|
|
|
|
|
|
||
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Member receivables, service based revenue |
|
|
( |
) |
|
|
( |
) |
Prepaid income taxes |
|
|
( |
) |
|
|
|
|
Prepaid expenses and other current assets |
|
|
( |
) |
|
|
( |
) |
Accounts payable |
|
|
( |
) |
|
|
|
|
Accrued expenses |
|
|
|
|
|
|
||
Income taxes payable |
|
|
( |
) |
|
|
|
|
Legal settlement accrual |
|
|
|
|
|
|
||
Other current liabilities |
|
|
|
|
|
( |
) |
|
Other non-current liabilities |
|
|
|
|
|
|
||
Other non-current assets |
|
|
( |
) |
|
|
( |
) |
Net cash provided by operating activities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Investing activities |
|
|
|
|
|
|
||
Payments for internally developed software costs |
|
|
( |
) |
|
|
( |
) |
Purchase of property and equipment |
|
|
( |
) |
|
|
( |
) |
Net originations, purchases and collections of Member receivables |
|
|
|
|
|
( |
) |
|
Purchase of investments |
|
|
( |
) |
|
|
( |
) |
Sale and maturity of investments |
|
|
|
|
|
|
||
Purchase of marketable securities |
|
|
|
|
|
( |
) |
|
Net cash provided by (used in) investing activities |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
||
Financing activities |
|
|
|
|
|
|
||
Repurchases of Class A common stock |
|
|
( |
) |
|
|
( |
) |
Proceeds from issuance of common stock for stock option exercises |
|
|
|
|
|
|
||
Proceeds from issuance of convertible notes, net |
|
|
|
|
|
|
||
Purchase of capped calls |
|
|
( |
) |
|
|
|
|
Payment of taxes for shares withheld related to net share settlement |
|
|
( |
) |
|
|
( |
) |
Net cash used in financing activities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Net increase in cash and cash equivalents and restricted cash |
|
|
|
|
|
|
||
Cash and cash equivalents and restricted cash, beginning of the period |
|
|
|
|
|
|
||
Cash and cash equivalents and restricted cash, end of the period |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Supplemental disclosure of non-cash investing and financing activities: |
|
|
|
|
|
|
||
Property and equipment purchases in accounts payable and accrued liabilities |
|
$ |
|
|
$ |
|
||
Operating lease right of use assets recognized |
|
$ |
|
|
$ |
|
||
Operating lease liabilities recognized |
|
$ |
|
|
$ |
|
||
Accrued excise taxes for repurchases of Class A common stock |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Supplemental disclosure of cash paid for: |
|
|
|
|
|
|
||
Income taxes |
|
$ |
|
|
$ |
|
||
Interest |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
The following table provides a reconciliation of cash and cash equivalents, and restricted cash reported within the condensed consolidated balance sheets with the same as shown in the condensed consolidated statement of cash flows |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Restricted cash |
|
$ |
|
|
$ |
|
||
Total cash, cash equivalents, and restricted cash, end of the period |
|
$ |
|
|
$ |
|
||
See accompanying notes to the condensed consolidated financial statements.
Note 1 Organization and Nature of Business
Organization
Dave Inc. (the "Company") is a Delaware corporation founded in 2017. The Company is a neobank providing a mobile-first financial services platform designed to help Americans manage their money more effectively. The Company serves Members underserved by traditional financial institutions, offering short-term liquidity, fee-free banking, and financial management tools.
Nature of Business
The Company generates revenue through four primary business activities: (1) ExtraCash, a short-term credit product; (2) Dave Checking, a digital banking account; (3) Dave Flex, a short-term installment credit card product (in early member testing); and (4) subscription-based personal financial management tools.
ExtraCash: ExtraCash provides Members with up to $
In February 2025, the Company completed the transition to a simplified fee structure, replacing the prior optional tip and express fee model with a mandatory overdraft service fee equal to the greater of $
Dave Checking: Dave Checking is a digital demand deposit account offered through bank partners with no account minimums, no monthly fees, and FDIC pass-through insurance. Members can open a Dave Checking account in minutes through our mobile application, add funds, and begin spending using a virtual or physical Dave branded Mastercard debit card (the "Dave Debit Card"). The Dave Debit Card can be used for everyday purchases as well as no-fee withdrawals at over
In April 2026, the Company began a limited test of Dave Flex, a Mastercard-branded general purpose credit card, with a pay-in-four installment credit feature issued through Coastal Community Bank ("Coastal"), with a small group of existing Members. Purchases made during a purchase period are repaid in up to four substantially equal installments due every two weeks, generally aligned with Member paycheck dates, with no compound interest, no late fees, and no credit check. As with ExtraCash, Dave Flex is underwritten by CashAI based on checking account cash flow data rather than FICO scores or credit bureau data, and unlike many buy-now-pay-later products, it may be used across merchants without a separate application for each purchase. Dave Flex remains in an early testing phase, and the related receivables, allowance, and fee revenue were immaterial for the three and six months ended June 30, 2026.
Personal Financial Management: The Company offers a suite of personal financial management tools through a monthly membership, including automated budgeting, savings goals with round-up functionality, and an income opportunity service to help with supplemental work. In June 2025, the Company increased the monthly membership fee from $
Note 2 Significant Accounting Policies
Basis of Presentation
These condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
During the second quarter of 2025, the Company revised the presentation of certain items within its condensed consolidated statement of operations. Certain prior period amounts have been reclassified to conform to the current period presentation. These changes have been applied retrospectively to all periods presented and did not impact previously reported net income or earnings per share.
Specifically:
Principles of Consolidation
The condensed consolidated financial statements include the accounts of the Company and a variable interest entity (“VIE”). All intercompany transactions and balances have been eliminated upon consolidation.
In accordance with the provisions of Accounting Standards Codification (“ASC”) 810, Consolidation, the Company consolidates any VIE of which the Company is the primary beneficiary. The typical condition for a controlling financial interest ownership is holding a majority of the voting interests of an entity; however, a controlling financial interest may also exist in entities, such as VIEs, through arrangements that do not involve controlling voting interests. ASC 810 requires a variable interest holder to consolidate a VIE if that party has the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company does not consolidate a VIE in which it has a majority ownership interest when it is not considered the primary beneficiary. The Company evaluates its relationships with its VIEs on an ongoing basis to help ensure that the Company continues to be the primary beneficiary. The Company is considered the primary beneficiary of Dave OD Funding I, LLC (“Dave OD”), as it has the power over the activities that most significantly impact the economic performance of Dave OD and has the obligation to absorb expected losses and the right to receive expected benefits that could be significant, in accordance with accounting guidance. As a result, the Company consolidated Dave OD and all intercompany accounts have been eliminated. The carrying value of Dave OD’s assets and liabilities, after elimination of any intercompany transactions and balances are shown in the condensed consolidated balance sheets. The assets of Dave OD are restricted and may only be used to settle obligations of Dave OD.
Use of Estimates
The preparation of these condensed consolidated financial statements requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements, as well as the reported revenues and expenses incurred during the reporting periods. The Company's estimates are based on its historical experience and various other factors that the Company believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. The Company's critical accounting estimates and assumptions are evaluated on an ongoing basis, including those related to the:
(i) Allowance for credit losses (including, beginning June 1, 2026, the off-balance-sheet credit loss liability associated with guaranteed ExtraCash receivables held by Coastal); and
(ii) Income taxes.
The allowance for credit losses estimate also includes expected credit losses on purchased Dave Flex receivables. Because Dave Flex is a new installment product with limited program-specific history, the related estimate involves a higher degree of estimation uncertainty, including the use of an interim methodology and loss-rate assumptions derived by reference to the ExtraCash portfolio. Dave Flex receivables and the related allowance were immaterial as of June 30, 2026.
Actual results may differ from these estimates under different assumptions or conditions.
Revenue Recognition
Below is detail of operating revenues (in thousands):
|
|
For the Three Months Ended |
|
|
For The Six Months Ended |
|
||||||||||
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||||
Service based revenue, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Processing and overdraft service fees, net |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Tips |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Subscriptions |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Transaction based revenue, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interchange revenue, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
ATM revenue, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total operating revenues, net |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Service Based Revenue, Net
Service based revenue, net primarily consists of processing and overdraft service fees, and subscriptions charged to Members, net of processor costs associated with ExtraCash originations; optional tips, which the Company discontinued in February 2025, are described under "Tips" below.
The Company offers ExtraCash through its bank partners. Prior to June 1, 2026, ExtraCash receivables from both bank partners were originated by the bank partner and acquired and held by the Company within one business day of origination, and were accounted for as financing receivables under ASC 310, Receivables ("ASC 310"), recorded at par value, which approximates fair value given their short-term nature.
Beginning June 1, 2026, under the amended Program Agreement with Coastal, ExtraCash receivables originated and retained by Coastal are currently acquired by the Company after they become past due, and the Company provides a financial guarantee under ASC 460, Guarantees ("ASC 460"), and is contractually obligated to purchase from Coastal, at par, any ExtraCash receivable that remains outstanding more than
The Company also earns installment and monthly participation fees on Dave Flex, an installment-based credit card product launched in April 2026, which are recognized within service based revenue, net and were immaterial relative to the Company's ExtraCash-related revenue for the three and six months ended June 30, 2026.
Processing and Overdraft Service Fees, Net
Processing and overdraft service fees apply in connection with a Member's use of ExtraCash. The Company's fee model, rolled out to all Members in February 2025, is a mandatory overdraft service fee. For accounting purposes, these fees are treated as non-refundable loan origination fees and are recognized under the effective interest method over the average expected contractual term of the related ExtraCash transactions.
Beginning June 1, 2026, for ExtraCash receivables originated and retained by Coastal, the same fee represents, for accounting purposes, the guarantee premium under the financial guarantee arrangement (ASC 460) rather than a fee on a receivable accounted for under ASC 310, and is recognized within service based revenue, net over the guarantee period (see Note 5, Member Receivables, Net). Because the guarantee period approximates the expected term of the related receivables, the pattern and timing of income recognition are substantially the same as under the effective interest method described above.
Costs the Company incurs to originate ExtraCash are treated, for accounting purposes, as direct origination costs. For ExtraCash receivables originated and held by the Company under ASC 310, these costs are deferred and netted against ExtraCash-related income under the effective interest method over the average expected contractual term of the related ExtraCash transactions. For ExtraCash receivables originated and retained by Coastal under the financial guarantee arrangement (ASC 460), the Company does not recognize an originated receivable against which to defer such costs; accordingly, those origination costs are expensed as incurred. Direct
origination costs recognized as a reduction of ExtraCash-related income were $
Tips
Through February 2025, the Company permitted, but did not require, Members receiving ExtraCash to leave a discretionary tip. For accounting purposes, tips were treated as an adjustment of yield to ExtraCash and recognized over the average expected contractual term of the related receivables. The Company eliminated optional tips in February 2025, and
Subscriptions and Other
The Company accounts for subscriptions in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, the Company must identify the contract with a Member, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract and recognize revenue when (or as) the Company satisfies the performance obligations. For revenue sources that are within the scope of Topic 606, the Company fully satisfies its performance obligations and recognizes revenue in the period it is earned as services are rendered. Transaction prices are typically fixed, charged on a periodic basis or based on activity. Because performance obligations are satisfied as services are rendered and the transaction prices are fixed, there is little judgment involved in applying ASC 606 that significantly affects the determination of the amount and timing of revenue from contracts with the Company’s Members.
Subscription fees are received on a monthly basis from Members who subscribe to the Company’s application. The Company continually fulfills its obligation to each Member over the subscription term. The series of distinct services represents a single performance obligation that is satisfied over time. The Company recognizes revenue ratably as the Member receives and consumes the benefits of the platform throughout the monthly contract period.
Price concessions granted to Members who have insufficient funds when subscription fees are due and not collected are forms of variable consideration under the Company’s contracts with Members. For price concessions, the Company has elected, as an accounting policy, to account for price concessions for the month at the end of the reporting month based on the actual amounts collected from Members.
Other service based revenue consists of lead generation fees from the Company’s Side Hustle advertising partners and revenue share from the Company's Surveys partner.
Transaction Based Revenue, Net
Transaction based revenue, net primarily consists of interchange and ATM revenues from the Company’s Checking Product, net of certain interchange and ATM-related fees, fees earned from funding and withdrawal-related transactions of Members' funds, volume support from a certain co-branded agreement, dormant account fees, fees earned related to the Rewards Product for Members who make debit card spending transactions at participating merchants and deposit referrals and are recognized at the point in time the transactions occur, as the performance obligations are satisfied and the variable consideration is not constrained. The Company earns interchange fees from Members spend on Dave-branded debit cards, which are reduced by interchange-related costs payable to fulfillment partners. Interchange revenue is remitted by merchants and represents a percentage of the underlying transaction value processed through a payment network. ATM fees earned from Members' usage of out-of-network ATMs reduced by related ATM transaction costs during the three and six months ended June 30, 2026 were $
Processing and Servicing Costs
Processing and servicing costs consist of amounts paid to third-party processors for the recovery of ExtraCash, tips, processing fees, overdraft service fees and subscriptions. These expenses also include fees paid for services to connect Members' bank accounts to the
Company's application. Except for processing and servicing costs associated with ExtraCash originations, which are recorded net against processing and overdraft service based revenue, all other processing and servicing costs are expensed as incurred.
Financial Network and Transaction Costs
Financial network and transaction costs consist of program management fees, card network association fees, payment processing costs, losses related to Member-disputed transactions, bank card fees and fraud-related losses. All other financial network and transaction costs are expensed as incurred.
Cash and Cash Equivalents
The Company classifies all highly liquid instruments with an original maturity of three months or less as cash equivalents.
Restricted Cash
Restricted cash primarily represents cash held at financial institutions that is pledged as collateral for specific accounts that may become overdrawn.
Investments
Investments consist of government securities and are classified as “available-for-sale” as the sale of such securities may be required prior to maturity to implement the Company’s strategies. The fair value of investments is determined by quoted prices in active markets with unrealized gains and losses, net of tax (other than credit related impairment) reported as a separate component of other comprehensive income. For securities with unrealized losses, any credit related portion of the loss is recognized in earnings. If it is more likely than not that the Company will be unable or does not intend to hold the security to recovery of the non-credit related unrealized loss, the loss is recognized in earnings. Realized gains and losses are determined using the specific identification method and recognized in the condensed consolidated statements of comprehensive income. Any related amounts recorded in accumulated other comprehensive income are reclassified to earnings (on a pre-tax basis).
Member Receivables
Member receivables primarily include ExtraCash and Dave Flex receivables, inclusive of processing and overdraft service fees, net of certain direct origination costs and an allowance for credit losses. ExtraCash receivables originated by a bank partner and held by the Company are accounted for as financing receivables under ASC 310, Receivables ("ASC 310"). Beginning June 1, 2026, ExtraCash receivables the Company purchases from Coastal under the amended Program Agreement with Coastal are accounted for as purchases of financial assets under ASC 860, Transfers and Servicing ("ASC 860"). Dave Flex receivables are described below.
Member receivables are not interest-bearing. For receivables accounted for under ASC 310, the Company recognizes these Member receivables at the origination amount and does not use discounting techniques to determine the present value of originations due to their short-term nature. Receivables accounted for under ASC 860 consist of the ExtraCash receivables the Company purchases from Coastal under the guarantee arrangement; the Company records these purchased receivables at par upon purchase and establishes the allowance for credit losses by transferring the related off-balance-sheet guarantee credit-loss liability, with no incremental provision recognized on the purchase date.
The Company does not provide modifications to ExtraCash and does not charge late fees.
In April 2026, the Company began offering Dave Flex, an installment-based credit card product under which Members repay eligible purchases in four equal payments. Coastal originates Dave Flex receivables, and the Company purchases them within three business days of origination and accounts for them as purchases of financial assets under ASC 860. Dave Flex receivables are recognized on the Company's condensed consolidated balance sheet when purchased, are presented within Member receivables, and are not subject to the off-balance sheet Coastal financial-guarantee arrangement that became effective June 1, 2026, described below.
Dave Flex receivables are recorded at their purchase amount, which approximates fair value at acquisition, and each transaction is repaid by the Member in four equal installments. The Company earns an installment fee of
Allowance for Credit Losses
Member receivables from contracts with Members as of the balance sheet dates are recorded at their original origination or purchased amounts, inclusive of outstanding processing fees, overdraft service fees and tips, and reduced by an allowance for credit losses. The Company pools its ExtraCash receivables, all of which are short-term (average term of approximately
from contracts with Members, based on shared risk characteristics to assess their risk of loss, even when that risk is remote. The Company uses an aging method and historical loss rates as a basis for estimating the percentage of current and delinquent ExtraCash receivables balances that will result in credit losses to derive the allowance for credit losses. The Company considers whether the conditions at the measurement date and reasonable and supportable forecasts about future conditions warrant an adjustment to its historical loss experience. In assessing such adjustments, the Company primarily evaluates current economic conditions, expectations of near-term economic trends and changes in customer payment terms, collection trends and cash collections subsequent to the balance sheet date. For the measurement dates presented herein, given its methods of collecting funds, and that the Company has not observed meaningful changes in its customers' payment behavior, it determined that its historical loss rates remain most indicative of its lifetime expected losses. The Company immediately recognizes an allowance for credit losses at the time of ExtraCash origination. Adjustments to the allowance each period for changes in the estimate of lifetime expected credit losses are recognized in operating expenses—provision for credit losses in the condensed consolidated statements of operations.
When the Company determines that an ExtraCash receivable is not collectible, or after
ExtraCash is originated by the Company's bank partners, and ExtraCash reflected on the Company's condensed consolidated balance sheet is reserved under the methodology described above. Effective June 1, 2026, under the amended Program Agreement with Coastal, Coastal originates and retains legal ownership of ExtraCash receivables. Under this arrangement, the Company guarantees the credit performance of the Coastal-originated ExtraCash receivables and is obligated to purchase from Coastal, at par, any receivable that remains outstanding more than
The contingent obligation is an off-balance-sheet credit exposure measured under the same current expected credit loss ("CECL") methodology described above, applying the Company's existing loss-rate curves, by aging bucket, to the Coastal-held ExtraCash receivables outstanding at each reporting date, including the contractual minimum balance Coastal maintains, with changes recognized in provision for credit losses. On purchase, the Company records the receivables at par, establishes an allowance for credit losses, and transfers the related off-balance-sheet liability to that allowance.
The Company purchases ExtraCash receivables from Coastal after they have become past due; the receivables are therefore delinquent at the time of purchase and are accounted for as purchased financial assets with credit deterioration ("PCD"). Because the Company already carries the expected credit loss on these receivables as the off-balance-sheet guarantee credit-loss liability and purchases at par, it effectively acquires the receivables at fair value and no non-credit discount is recognized on the purchase date. The Company establishes the allowance by transferring the related off-balance-sheet guarantee credit-loss liability to the on-balance-sheet allowance for credit losses.
Dave Flex
The Company estimates expected credit losses on Dave Flex receivables based on the delinquency status of each individual Dave Flex installments; a Member's default on any installment is treated as a negative credit indicator for that Member's other outstanding Dave Flex loans. The Company expects to develop and transition to a Dave Flex-specific model as sufficient loss history accumulates.
Internally Developed Software
Internally developed software is capitalized when preliminary development efforts are successfully completed, management has authorized and committed project funding, it is probable that the project will be completed, and the software will be used as intended. Capitalized costs consist of salaries and other compensation costs for employees incurred for time spent on upgrades and enhancements to add functionality to the software and fees paid to third-party consultants who are directly involved in development efforts. These capitalized costs are included on the condensed consolidated balance sheets as intangible assets, net. Other costs are expensed as incurred and included within other operating expenses in the condensed consolidated statements of operations.
Capitalized costs for the three and six months ended June 30, 2026 were $
Amortization of internally developed software commences when the software is ready for its intended use (i.e., after all substantial testing is complete). Internally developed software is amortized over its estimated useful life of
The Company’s accounting policy is to perform annual reviews of capitalized internally developed software projects to determine whether any impairment indicators are present as of December 31, or whenever a change in circumstances suggests an impairment indicator is present. If any impairment indicators are present, the Company will perform a recoverability test by comparing the sum of the estimated undiscounted cash flows attributed to the asset group to their carrying value. If the undiscounted cash flows expected to result from the remaining use of the asset (i.e., cash flows when testing recoverability) are less than the asset group’s carrying value, the Company will determine the fair value of the asset group and recognize an impairment loss as the amount by which the carrying value of the asset group exceeds its fair value. If based on the results of the recoverability test, no impairment is indicated as the remaining undiscounted cash flows exceed the carrying value of the software asset group, the carrying value of the asset group as of the assessment date is deemed fully recoverable. In addition, the Company evaluates the remaining useful life of an intangible asset that is being amortized each reporting period to determine whether events and circumstances warrant a revision to the remaining period of amortization. If the estimate of an intangible asset’s remaining useful life is changed, the remaining carrying value of the intangible asset shall be amortized prospectively over that revised remaining useful life.
Property and Equipment
Impairment of Long-Lived Assets
The Company assesses the impairment of long-lived assets, primarily property and equipment and amortizable intangible assets, whenever events or changes in business circumstances indicate that carrying amounts of the assets may not be fully recoverable. If the sum of the expected undiscounted future cash flows from an asset is less than the carrying amount of the asset, the Company estimates the fair value of the assets. The Company measures the loss as the amount by which the carrying amount exceeds its fair value calculated using the present value of estimated net future cash flows.
Fair Value of Financial Instruments
ASC 820, Fair Value Measurement (“ASC 820”), provides a single definition of fair value and a common framework for measuring fair value as well as disclosure requirements for fair value measurements used in the condensed consolidated financial statements. Under ASC 820, fair value is determined based upon the exit price that would be received by a company to sell an asset or paid by a company to transfer a liability in an orderly transaction between market participants, exclusive of any transaction costs. Fair value measurements are determined by either the principal market or the most advantageous market. The principal market is the market with the greatest level of activity and volume for the asset or liability. Absent a principal market to measure fair value, the Company uses the most advantageous market, which is the market from which the Company would receive the highest selling price for the asset or pay the lowest price to settle the liability, after considering transaction costs. However, when using the most advantageous market, transaction costs are only considered to determine which market is the most advantageous and these costs are then excluded when applying a fair value measurement. ASC 820 creates a three-level hierarchy to prioritize the inputs used in the valuation techniques to derive fair values. The basis for fair value measurements for each level within the hierarchy is described below, with Level 1 having the highest priority and Level 3 having the lowest.
Level 1—Quoted prices in active markets for identical assets or liabilities.
Level 2—Observable inputs other than Level 1 quoted prices, such as quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active for identical or similar assets and liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3—Valuations are based on inputs that are unobservable and significant to the overall fair value measurement of the assets or liabilities. Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.
Concentration of Risk
Financial instruments, which potentially subject the Company to concentrations of credit risk, principally consist of cash and cash equivalents, restricted cash, Member receivables, and accounts receivable. The Company’s cash and cash equivalents and restricted cash in excess of the FDIC insured limits were $
We rely on agreements with Evolve Bank & Trust, our primary bank partner, and Coastal Community Bank to provide ExtraCash and other deposit accounts, debit card services and other transaction services to us and our Members.
Effective June 1, 2026, the Company also maintains a deposit account at Coastal in Coastal’s name (the "Cash Collateral Account"), classified as a deposit asset within prepaid expenses and other current assets (see Note 4, Prepaid Expenses and Other Current Assets), which exposes the Company to concentration of credit risk with respect to Coastal.
No Member individually exceeded 10% or more of the Company’s Member receivables balance as of June 30, 2026 and December 31, 2025.
Leases
ASC 842, Leases (“ASC 842”) requires lessees to recognize most leases on the condensed consolidated balance sheet with a corresponding right-of-use asset. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of fixed lease payments over the lease term. Leases are classified as financing or operating which will drive the expense recognition pattern. Lease payments on short-term leases are recognized as expense on a straight-line basis over the lease term. At the time of a lease abandonment, the operating lease right-of-use asset is derecognized, while the corresponding lease liability is evaluated by the Company based on any remaining contractual obligations as of the lease abandonment date.
The Company leases office space under two separate leases, both of which are considered operating leases. Options to extend or terminate a lease are considered as part of calculating the lease term to the extent that the option is reasonably certain of exercise. The leases do not include the options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term. Covenants imposed by the leases include letters of credit required to be obtained by the lessee.
The incremental borrowing rate (“IBR”) represents the rate of interest the Company would expect to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. When determinable, the Company uses the rate implicit in the lease to determine the present value of lease payments. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments.
Derivative Financial Instruments and Embedded Features
The Company evaluates financial instruments and contracts for embedded features that require separate accounting as derivatives under ASC 815-15. An embedded feature is separated from its host contract and accounted for as a derivative instrument when (i) the economic characteristics and risks of the embedded feature are not clearly and closely related to those of the host contract, (ii) the hybrid instrument is not remeasured at fair value through earnings, and (iii) the embedded feature, if freestanding, would meet the definition of a derivative under ASC 815-10.
Embedded derivatives requiring bifurcation are initially measured at fair value and subsequently remeasured at fair value at each reporting date, with changes in fair value recognized in earnings. The Company evaluates equity-linked contracts, including conversion features and capped call transactions, under ASC 815-40 to determine whether they qualify for the scope exception from derivative accounting. Contracts that are indexed to the Company's own stock and meet the criteria for equity classification are recorded in stockholders' equity at fair value upon issuance and are not remeasured in subsequent periods unless the equity classification criteria cease to be met.
See Note 8, Convertible Notes for further details on the Company's derivative and equity-linked instruments.
Stock-Based Compensation
Stock Option Awards:
ASC 718, Compensation-Stock Compensation (“ASC 718”), requires the estimate of the fair value of all stock-based payments to employees, including grants of stock options, to be recognized in the statement of operations over the requisite service period. Under ASC 718, employee option grants are generally valued at the grant date and those valuations do not change once they have been established. The fair value of each option award is estimated on the grant date using the Black-Scholes Option Pricing Model. As
allowed by ASC 718, the Company’s estimate of expected volatility is based on its peer company average volatilities, including industry, stage of life cycle, size, and financial leverage. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant valuation. The Company recognizes forfeitures as they occur. Subsequent modifications to outstanding awards result in incremental cost if the fair value is increased as a result of the modification.
Restricted Stock Unit Awards:
Restricted stock units (“RSUs”) are valued on the grant date. The fair value of the RSUs that vest based solely on a service condition is equal to the estimated fair value of the Company’s Class A common stock on the grant date. This compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. For RSUs that contain both a market condition and a service condition, market volatility and other factors are taken into consideration in determining the grant date fair value and the related compensation expense is recognized on a straight-line basis over the requisite service period of each separately vesting tranche, regardless of whether the market condition is satisfied, provided that the requisite service has been provided. These costs are a component of stock-based compensation expense, presented within compensation and benefits in the condensed consolidated statements of operations. The Company recognizes forfeitures as they occur.
Performance-Based Restricted Stock Unit Awards:
The Company grants performance-based RSUs subject to the attainment of defined performance conditions, market conditions, or a combination thereof, and continued employment through specified vesting dates. Performance conditions include specific adjusted EBITDA targets and share price targets, and the actual number of shares earned may range from
Advertising and Activation Costs
Advertising costs are expensed as incurred. Advertising costs consist primarily of expenses related to digital marketing, paid social media, influencer partnerships, content marketing and referral programs. Advertising costs for the three and six months ended June 30, 2026, were $
Income Taxes
The Company follows ASC 740, Income Taxes (“ASC 740”), which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the condensed consolidated financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the condensed consolidated financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more-likely-than-not that the asset will not be realized.
The effective tax rate used for interim periods is the estimated annual effective tax rate, based on the current estimate of full year results, except that those taxes related to specific discrete events, if any, are recorded in the interim period in which they occur. The annual effective tax rate is based upon several significant estimates and judgments, including the Company's estimated annual pre-tax income in each tax jurisdiction in which it operates, and the development of tax planning strategies during the year. In addition, the Company's tax expense can be impacted by changes in tax rates or laws and other factors that cannot be predicted with certainty. As such, there can be significant volatility in interim tax provisions.
The following table presents the relationship between provision for income taxes and net income before provision for income taxes (in thousands):
|
|
For the Three Months Ended |
|
|
For the Six Months Ended |
|
||||||||||
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||||
Net income before provision for income taxes |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Provision for income taxes |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Effective income tax rate |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
The provision for income tax expense recorded during the three and six months ended June 30, 2026 and 2025, primarily relates to federal and state taxes on earnings, partially offset by favorable discrete stock-based compensation deductions and increased by unfavorable discrete nondeductible losses related to changes in the fair value of warrant liabilities and earnout liabilities in each period.
ASC 740 provides that a tax benefit from an uncertain tax position may be recognized when it is more-likely-than-not that the position will be sustained in a court of last resort, based on the technical merits. If more-likely-than-not, the amount recognized is the largest amount of tax benefit that is greater than
The Company’s policy is to recognize interest expense and penalties accrued on any unrecognized tax benefits as a component of income tax expense within the condensed consolidated statement of operations. The Company recognized insignificant amounts of interest expense as a component of income tax expense within the condensed consolidated statement of operations during the three and six months ended June 30, 2026 and 2025. Additionally, income tax-related accrued interest was insignificant as of June 30, 2026 and December 31, 2025.
Segment Information
The Company determines its operating segment based on how its chief operating decision makers manage operations, make operating decisions, and evaluate operating performance. The Company has determined that the Chief Operating Decision Maker (“CODM”) is a joint role shared by the Chief Executive Officer and Chief Financial Officer. Based upon the way the CODM reviews financial information and makes operating decisions and considering that the CODM reviews financial information on a consolidated basis for purposes of allocating resources and evaluating financial performance, the operations of the Company constitute a single operating segment and reportable segment. Refer to Note 18, Segment Information in the accompanying notes to the condensed consolidated financial statements for further details.
Net Income Per Share Attributable to Stockholders
The Company computes net income per share utilizing the two-class method for participating securities. The rights, including the liquidation and dividend rights, of the holders of the Class A common stock, par value $
Basic net income attributable to holders of Common Stock per share is calculated by dividing net income attributable to holders of Common Stock by the weighted-average number of shares outstanding.
The Company applies the if-converted method prescribed by ASU 2020-06 to determine the dilutive effect, if any, of the 2031 Notes on diluted earnings per share, and does so regardless of whether the contingent conversion triggers described in Note 8, Convertible Notes, have been met.
Because the 2031 Notes are non-interest bearing, no interest expense is added back to the numerator. Because the principal amount is required to be settled in cash in all circumstances, with only the conversion value in excess of the principal (the "conversion premium") settleable in cash, shares, or a combination at the Company's election, the denominator is increased only by the incremental shares necessary to settle the conversion premium, determined using the average market price of the Company's Class A common stock during the period. Applied to an instrument with a cash-settled principal and net-share-settled premium, the if-converted method produces a dilutive effect substantially consistent with the result that would be obtained under the treasury stock method.
For the three months ended June 30, 2026, the average market price per share of the Company's Class A common stock did not exceed the initial conversion price per share. Accordingly, the conversion premium was zero and no incremental shares related to the 2031 Notes were included in the diluted earnings per share computation. The maximum number of shares issuable upon conversion of the
2031 Notes, including potential adjustments under the make-whole fundamental change provisions, is reflected in the table of potentially dilutive securities excluded from the diluted EPS computation above.
The following table sets forth the computation of the Company’s basic and diluted net income per share attributable to holders of common stock (in thousands, except share data):
|
|
For The Three Months Ended |
|
|
For The Six Months Ended |
|
||||||||
|
|
June 30, 2026 |
|
June 30, 2025 |
|
|
June 30, 2026 |
|
June 30, 2025 |
|
||||
Numerator |
|
|
|
|
|
|
|
|
|
|
||||
Net income attributed to common stockholders—basic and diluted |
|
$ |
|
$ |
|
|
$ |
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
Denominator |
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average shares of common stock—basic |
|
|
|
|
|
|
|
|
|
|
||||
Dilutive effect of stock options |
|
|
|
|
|
|
|
|
|
|
||||
Dilutive effect of RSUs |
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average shares of common stock—diluted |
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
Net income per share |
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
|
$ |
|
|
$ |
|
$ |
|
||||
Diluted |
|
$ |
|
$ |
|
|
$ |
|
$ |
|
||||
The following potentially dilutive shares were excluded from the computation of diluted net income per share for the periods presented because including them would have been antidilutive:
|
|
For The Three Months Ended |
|
|
For The Six Months Ended |
|
||||||||
|
|
June 30, 2026 |
|
June 30, 2025 |
|
|
June 30, 2026 |
|
June 30, 2025 |
|
||||
Equity incentive awards |
|
|
|
|
|
|
|
|
|
|
||||
Convertible notes¹ |
|
|
|
|
- |
|
|
|
|
|
- |
|
||
Capped call² |
|
|
|
|
- |
|
|
|
|
|
- |
|
||
Total |
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
¹
²
In addition to the amounts in the table above, the Company excluded
Capped Call Transactions
The Capped Call Transactions are expected to reduce the potential economic dilution to the Company's Class A common stock upon conversion of the 2031 Notes when the market price of the Company's Class A common stock is between the initial conversion price of approximately $
Convertible Notes
The Company applies the if-converted method to calculate the potential dilutive effect of the 2031 Notes on diluted earnings per share. Because the 2031 Notes are non-interest bearing and the principal amount must be settled in cash upon conversion, no interest expense is added back to the numerator. Only the conversion premium (the excess of conversion value over the principal amount) is reflected in the denominator, calculated based on the incremental shares needed to settle the premium using the average market price of the Company's Class A common stock during the period.
The Company considers the potential dilutive effect of the 2031 Notes in its diluted earnings per share calculation regardless of whether the contingent market price conversion triggers have been met, as the 2031 Notes are contingently convertible instruments with a market price trigger.
During the three months ended June 30, 2026, the average market price of the Company's Class A common stock did not exceed the initial conversion price of the 2031 Notes. As a result, the conversion premium was zero and no incremental shares related to the 2031 Notes were included in the diluted earnings per share calculation for the period. The maximum number of shares potentially issuable upon conversion of the 2031 Notes, including potential adjustments under the make-whole fundamental change provisions, is reflected in the table of potentially dilutive securities excluded from the diluted EPS computation above.
Recent Accounting Pronouncements
Recently Issued Accounting Pronouncements Not Yet Adopted:
In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income (Topic 220): Disaggregation of Income Statement Expenses, and in January 2025, the FASB issued ASU No. 2025-01, Clarifying the Effective Date. Together, these amendments require entities to disclose, for each relevant income statement expense caption, the amounts of inventory purchases, employee compensation, and depreciation and intangible asset amortization, as well as total selling expenses and the entity’s definition of selling expenses. For public business entities, the amendments are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted and application permitted on a prospective or retrospective basis. The Company does not expect the adoption of this guidance to have a material impact on its condensed consolidated financial position, results of operations or cash flows; it expects the impact to be limited to additional disclosures, principally the disaggregation of employee compensation and depreciation and amortization within relevant expense captions, as the Company does not hold inventory.
In May 2025, the FASB issued ASU 2025-04, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer. The amendments clarify the accounting for share-based payment awards issued to customers, including revising the definition of a performance condition, narrowing the scope of awards accounted for under Topic 718 versus Topic 606, and providing guidance on measuring and presenting the effects of such awards. The guidance is effective for public business entities for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years, with early adoption permitted and transition allowed on a modified retrospective or retrospective basis. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial position, results of operations or cash flows and is evaluating the impact on its revenue and share-based compensation-related disclosures, including any share-based consideration arrangements with customers.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which eliminates references to traditional software development stages, clarifies the capitalization threshold for internal-use software costs, and supersedes Subtopic 350-50 by incorporating website development cost guidance into Subtopic 350-40. The amendments require capitalization of internal-use software costs once management authorizes funding and it is probable that the project will be completed and placed into service for its intended use, provided there is no significant development uncertainty, and they align disclosure requirements for capitalized and amortized software costs with those in ASC 360-10. ASU 2025-06 is effective for annual and interim periods beginning after December 15, 2027, with early adoption permitted, and may be applied on a prospective, modified retrospective or retrospective basis. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial position, results of operations or cash flows, but is evaluating the impact on its accounting policies, financial statements and related disclosures for capitalized internal-use software costs.
In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract. The amendments add a scope exception removing certain non-exchange-traded contracts whose underlying is based on operations or activities specific to one of the parties from derivative accounting under Topic 815, and clarify that an entity applies Topic 606 to share-based noncash consideration received from a customer until its right to that consideration becomes unconditional. For public business entities, the amendments are effective for annual reporting periods beginning after December 15, 2026, and interim periods within those annual periods, with early adoption permitted. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial position, results of operations, cash flows or related disclosures.
On November 12, 2025, the FASB issued ASU 2025-08, Financial Instruments—Credit Losses (Topic 326): Purchased Loans, which expands the population of purchased financial assets subject to the gross-up approach under ASC 326 to include "purchased seasoned loans." The ASU defines purchased seasoned loans as non-PCD loans (other than credit cards) that are either (i) acquired in a business combination or (ii) acquired more than 90 days after origination, in an asset acquisition or upon consolidation of a variable interest entity that is not a business, by a transferee that was not involved in the loans' origination. Under the gross-up approach, an acquirer adds expected credit losses to the purchase price to establish the initial amortized cost basis and does not recognize a provision for credit loss expense at acquisition, consistent with the treatment of purchased financial assets with credit deterioration. The amendments are effective for annual reporting periods beginning after December 15, 2026, including interim periods within those annual periods, are applied prospectively, and permit early adoption. The Company does not currently expect the adoption of this guidance to have a material impact on its condensed consolidated financial statements.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies when interim reporting guidance applies, improves navigability of interim disclosure requirements, and consolidates interim disclosure requirements from other Topics into Topic 270. The amendments do not change the fundamental nature of interim reporting or expand or reduce current interim disclosure requirements. For public business entities, the amendments are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted and application permitted on a prospective or retrospective basis. The Company is evaluating the impact of this guidance on its interim financial statement disclosures.
In December 2025, the FASB issued ASU 2025-12, Codification Improvements, which makes 33 targeted amendments across GAAP to clarify, correct, and improve the Codification without changing core principles. The amendments address items such as removing obsolete glossary entries, fixing illustrative errors, clarifying EPS dilution guidance, refining credit-loss guidance, and updating various cross-references. For all entities, the amendments are effective for annual reporting periods beginning after December 15, 2026, and interim periods within those annual reporting periods, with early adoption permitted on an issue-by-issue basis and transition permitted on a prospective or retrospective basis. The Company is evaluating the impact of this guidance, including whether the amendments refining credit-loss guidance affect its CECL methodology, on its condensed consolidated financial statements and disclosures.
Recently Adopted Accounting Pronouncements:
In November 2024, the FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments, which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as induced conversions rather than extinguishments. The amendments are effective for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years, and may be applied on either a prospective or retrospective basis, with early adoption permitted. The Company
In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which introduces a practical expedient permitting entities to assume that current economic conditions at the balance sheet date will remain unchanged over the remaining life of current accounts receivable and current contract assets arising from revenue transactions within the scope of ASC 606. The Company
Note 3 Investments
Below is a summary of investments, which are measured at fair value as of June 30, 2026 (in thousands):
|
|
Cost |
|
|
Gross Unrealized Gains |
|
|
Gross Unrealized Losses |
|
|
Fair Value |
|
||||
Government securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Below is a summary of investments, which are measured at fair value as of December 31, 2025 (in thousands):
|
|
Cost |
|
|
Gross Unrealized Gains |
|
|
Gross Unrealized Losses |
|
|
Fair Value |
|
|
||||
Government securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
There were
As of June 30, 2026, the contractual maturities of available-for-sale investment securities were as follows (in thousands):
|
|
Amortized Cost |
|
|
Fair Value |
|
||
Due in one year or less |
|
$ |
|
|
$ |
|
||
Due after one year through five years |
|
$ |
|
|
$ |
|
||
Total |
|
$ |
|
|
$ |
|
||
Note 4 Prepaid Expenses and Other Current Assets
The Company’s prepaid expenses and other current assets consisted of the following (in thousands):
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
Partner receivables |
|
|
|
|
|
|
||
Prepaid expenses |
|
|
|
|
|
|
||
Rebate receivables |
|
|
|
|
|
|
||
Bank partner deposits |
|
|
|
|
|
|
||
Card inventory & postage deposit |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
Partner receivables represent amounts due from strategic partners for contractual reimbursements and credits earned under partnership agreements, primarily related to the Company's checking product. These receivables increased $
Prepaid expenses primarily consist of prepaid software subscriptions, insurance premiums, marketing commitments, and professional services, which are amortized to expense over the period benefited, generally 12 months or less. The Company evaluates prepaid expenses for realizability on a quarterly basis.
Rebate receivables represent volume-based rebates and credits earned from technology vendors and service providers.
Note 5 Member Receivables, Net
Member receivables, net, consist of outstanding ExtraCash and Dave Flex receivables, inclusive of processing fees and overdraft service fees, less an allowance for credit losses.
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
Member receivables, net |
|
$ |
|
|
$ |
|
||
Guarantee obligation receivable, net |
|
|
|
|
|
|
||
Total Member receivables, net |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Guaranteed ExtraCash Receivables and Off-Balance-Sheet Credit Exposure
Effective June 1, 2026, ExtraCash receivable principal originated and retained by Coastal is not recorded on the Company's condensed
consolidated balance sheet until purchased by the Company. The Company does, however, record a guarantee obligation receivable representing accrued service-based fees owed by Members on Coastal-held ExtraCash advances. As of June 30, 2026, the Company recognized a guarantee obligation receivable of approximately $
The roll-forward of the guarantee liability and credit loss liability from June 1, 2026 to June 30, 2026 is as follows (in thousands):
|
Guarantee Liability |
|
|
Credit loss liability |
|
||
Balance at June 1, 2026 |
$ |
|
|
$ |
|
||
Additions |
|
|
|
|
|
||
Released to income / remeasurement |
|
( |
) |
|
|
|
|
Balance at June 30, 2026 |
$ |
|
|
$ |
|
||
The Cash Collateral Account maintained at Coastal was approximately $
During the period from June 1, 2026 to June 30, 2026, the Company purchased ExtraCash receivables from Coastal accounted for as purchased financial assets with credit deterioration.
|
PCD |
|
|
ExtraCash receivables purchased at par |
$ |
|
|
Credit loss liability for ExtraCash receivables purchased |
|
( |
) |
Amortized cost basis at acquisition |
$ |
|
|
Below is a detail of Member receivables, net, inclusive of Coastal-held ExtraCash receivables and Dave Flex receivables, as of June 30, 2026 (in thousands):
Days From Origination |
|
Gross Member Receivables |
|
|
Allowance for Credit Losses |
|
|
Member Receivables, Net |
|
|||
1-10 |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
11-30 |
|
|
|
|
|
( |
) |
|
|
|
||
31-60 |
|
|
|
|
|
( |
) |
|
|
|
||
61-90 |
|
|
|
|
|
( |
) |
|
|
|
||
91-120 |
|
|
|
|
|
( |
) |
|
|
|
||
Total Gross of Coastal-Held Member Receivables |
|
|
|
|
|
( |
) |
|
|
|
||
Less Coastal-Held Member Receivables |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Total Net of Coastal-Held Member Receivables |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
The approximate $
Below is a detail of Member receivables, net as of December 31, 2025 (in thousands):
Days From Origination |
|
Gross Member Receivables |
|
|
Allowance for Credit Losses |
|
|
Member Receivables, Net |
|
|||
1-10 |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
11-30 |
|
|
|
|
|
( |
) |
|
|
|
||
31-60 |
|
|
|
|
|
( |
) |
|
|
|
||
61-90 |
|
|
|
|
|
( |
) |
|
|
|
||
91-120 |
|
|
|
|
|
( |
) |
|
|
|
||
Total |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
The roll-forward of the allowance for credit losses is as follows (in thousands):
Opening allowance balance at January 1, 2026 |
|
|
|
$ |
|
|
Plus: provision for credit losses |
|
|
|
|
|
|
Plus: amounts recovered |
|
|
|
|
|
|
Less: amounts written-off |
|
|
|
|
( |
) |
Less: off-balance sheet allowance (included in other current liabilities) |
|
|
|
|
( |
) |
Ending allowance balance at June 30, 2026 |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Opening allowance balance at January 1, 2025 |
|
|
|
$ |
|
|
Plus: provision for credit losses |
|
|
|
|
|
|
Plus: amounts recovered |
|
|
|
|
|
|
Less: amounts written-off |
|
|
|
|
( |
) |
Ending allowance balance at June 30, 2025 |
|
|
|
$ |
|
|
The provision for credit losses for the six months ended June 30, 2026 increased compared to the six months ended June 30, 2025, primarily due to ExtraCash origination volume growth to approximately $
Dave Flex Receivables, Net
Dave Flex receivables, net, represent purchased Dave Flex installment receivables, inclusive of deferred fees, less an allowance for credit losses, and are included in Member receivables, net on the Company's condensed consolidated balance sheet. As of June 30, 2026, gross Dave Flex receivables, the related allowance, and Dave Flex receivables, net, were immaterial. The Company will present an aging table and allowance roll-forward once Dave Flex balances warrant separate tabular disclosure.
Note 6 Intangible Assets, Net
The Company’s intangible assets, net consisted of the following (in thousands):
|
|
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||||||||||||||||||
|
|
Weighted Average Useful Lives |
|
Gross Carrying Value |
|
|
Accumulated Amortization |
|
|
Net Book Value |
|
|
Gross Carrying Value |
|
|
Accumulated Amortization |
|
|
Net Book Value |
|
||||||
Internally developed software |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||||
Domain name |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||||
Intangible assets, net |
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
The future estimated amortization expense as of June 30, 2026, were as follows (in thousands):
|
|
|
|
IDS |
|
|
Domain |
|
||
2026 (remaining) |
|
|
|
$ |
|
|
$ |
|
||
2027 |
|
|
|
|
|
|
|
|
||
2028 |
|
|
|
|
|
|
|
|
||
2029 |
|
|
|
|
|
|
|
|
||
Thereafter |
|
|
|
|
|
|
|
|
||
Total future amortization |
|
|
|
$ |
|
|
$ |
|
||
Amortization expense for the three and six months ended June 30, 2026 was $
Note 7 Accrued Expenses and Other Current Liabilities
Accrued Expenses
The Company’s accrued expenses consisted of the following (in thousands):
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
Accrued professional and program fees |
|
$ |
|
|
$ |
|
||
Accrued compensation |
|
|
|
|
|
|
||
Sales taxes payable |
|
|
|
|
|
|
||
Accrued charitable contributions |
|
|
|
|
|
|
||
Accrued negative account balances |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
Accrued professional and program fees consist primarily of amounts owed to third party service providers, including legal, accounting, consulting, and program-related vendors. Accrued compensation consists primarily of accrued salaries, wages, payroll taxes, bonuses, and employee benefits earned but not yet paid.
Other Current Liabilities
The Company’s other current liabilities consisted of the following (in thousands):
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
Deferred transaction costs |
|
$ |
|
|
$ |
|
||
Forward commitment liability |
|
|
|
|
|
|
||
Excise tax liability on stock repurchases |
|
|
|
|
|
|
||
Guarantee liability |
|
|
|
|
|
|
||
Credit loss liability |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
Deferred transaction costs include transaction costs associated with the transactions consummated on January 5, 2022 as contemplated by that certain Agreement and Plan of Merger, dated as of June 7, 2021 among VPC Impact Acquisition Holdings III, Inc. (“VPCC”), Dave Inc., a Delaware corporation and other entities (the “Business Combination"). These transaction costs were also capitalized and included within additional paid-in capital in the condensed consolidated balance sheets. Forward commitment liability represents the Company's obligation to purchase ExtraCash receivables originated under a bank partner arrangement that have not yet been purchased by the Company as of the balance sheet date. The stand-ready guarantee obligation and credit loss liabilities relates to ExtraCash receivables originated and retained by Coastal. See Note 5, Member Receivables, Net, for additional information.
Note 8 Convertible Notes
On March 9, 2026, the Company completed a private offering of $
The net proceeds from the offering were approximately $
Conversion Rights
The 2031 Notes are convertible into shares of the Company’s Class A common stock based on an initial conversion rate of
On or after January 1, 2031, holders may convert at any time until the close of business on the second scheduled trading day immediately preceding the maturity date.
Make-Whole Fundamental Change
The conversion rate may be increased for holders converting in connection with certain circumstances described in the indenture.
Settlement upon Conversion
Upon conversion, the Company will pay cash up to the aggregate principal amount of the notes being converted and pay or deliver, as applicable, cash, shares of the Company’s Class A common stock, or a combination thereof, at the Company’s election, in respect of the remainder, if any, of the conversion obligation in excess of the aggregate principal amount. The conversion value in excess of the principal amount will be calculated based on the sum of the daily volume-weighted average prices during a
Optional Redemption
The Company may redeem the 2031 Notes, in whole or in part, for cash on or after April 6, 2029 and prior to the 41st scheduled trading day immediately preceding the maturity date, at a cash redemption price equal to
Special Interest
The 2031 Notes do not bear regular interest. Special interest may accrue from time to time in certain circumstances as described in the indenture.
In accordance with ASC 470-20, as amended by ASU 2020-06, the Company accounts for the 2031 Notes as a single liability measured at amortized cost. No separate equity component was recognized. The embedded conversion feature was not bifurcated because it met the scope exception under ASC 815-10-15-74(a) as indexed to the Company’s own stock and equity-classified under ASC 815-40. The embedded special interest feature, while meeting the definition of a derivative requiring bifurcation, was assigned an insignificant fair value at inception due to the remote likelihood of the triggering event, and the Company will reassess the fair value at each reporting date.
The 2031 Notes were issued on March 9, 2026 in a private offering to qualified institutional buyers under Rule 144A. The estimated fair value of the 2031 Notes was approximately $
As of June 30, 2026, none of the conditions permitting early conversion of the 2031 Notes had been met. The Sale Price Condition cannot first be evaluated until after the calendar quarter ending June 30, 2026. Accordingly, the 2031 Notes were classified as long-term debt.
The effective interest rate on the 2031 Notes is approximately
The carrying amount of the 2031 Notes as of June 30, 2026, were as follows (in thousands):
|
Principal |
|
|
Unamortized Debt Discount and Issuance Costs |
|
|
Net Carrying |
|
|||
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
Total |
$ |
|
|
$ |
( |
) |
|
$ |
|
||
|
|
|
|
|
|
|
|
|
|||
Capped Call Transactions
In connection with the pricing of the 2031 Notes on March 4, 2026, and in connection with the exercise of the initial purchasers’ option to purchase additional notes on March 5, 2026, the Company entered into privately negotiated capped call transactions (the "Capped Call Transactions") with four financial institutions at a total cost of approximately $
The Capped Call Transactions have an initial strike price of approximately $
The Capped Call Transactions are separate transactions entered into by the Company with each of the option counterparties and are not part of the terms of the 2031 Notes. Holders of the 2031 Notes do not have any rights with respect to the Capped Call Transactions. The Company determined that the Capped Call Transactions meet the criteria for equity classification under ASC 815-40 as they are (i) indexed to the Company’s own stock under the two-step indexation analysis in ASC 815-40-15 and (ii) meet the equity classification conditions in ASC 815-40-25. Accordingly, the Capped Call Transactions were recorded as a reduction to additional paid-in capital and are not remeasured on a recurring basis.
The issuance costs allocated between the 2031 Notes and the Capped Call Transactions as of June 30, 2026, were as follows (in thousands):
|
Allocated to |
|
|
Allocated to |
|
||
Total issuance costs incurred |
$ |
|
|
$ |
|
||
Less: accumulated amortization through June 30, 2026 |
|
( |
) |
|
|
|
|
Unamortized issuance costs, June 30, 2026 |
$ |
|
|
$ |
|
||
Issuance costs were allocated between the 2031 Notes and the Capped Call Transactions based on the relative fair value method. Issuance costs allocated to the 2031 Notes are presented as a direct deduction from the carrying amount of the notes and amortized as interest expense using the effective interest method. Issuance costs allocated to the Capped Call Transactions are recorded as a reduction to additional paid-in capital.
Note 9 Warrant Liabilities
As of June 30, 2026, there were
The Company filed a registration statement covering the shares of Class A Common Stock issuable upon exercise of the Public Warrants and the Private Warrants. If the Company’s shares of Class A Common Stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, it will not be required to file or maintain in effect a registration statement, and in the event the Company does not so elect, it will use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
The Public Warrants and Private Warrants have an original exercise price of $
Redemption of Public Warrants when the price per share of Class A Common Stock equals or exceeds $
Once the Public Warrants become exercisable, the Company may redeem the outstanding Public Warrants for cash:
The Company will not redeem the Public Warrants as described above unless an effective registration statement under the Securities Act covering the Class A Common Stock issuable upon exercise of the warrants is effective and a current prospectus relating to those shares of Class A Common Stock is available throughout the 30-day redemption period.
Redemption of Public Warrants for when the price per share of Class A Common Stock equals or exceeds $
Once the Public Warrants become exercisable, the Company may redeem the outstanding Public Warrants:
If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of Class A Common Stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the Public Warrants will not be adjusted for issuance of Class A Common Stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants.
The Private Warrants are identical to the Public Warrants, except that the Private Placement Warrants will be non-redeemable so long as they are held by VPC Impact Acquisition Holdings Sponsor III, LLC, which was the sponsor of VPCC and an affiliate of certain of VPCC’s officers and directors prior to the Business Combination, (the “Sponsor”) or its permitted transferees. If the Private Warrants are held by someone other than the Sponsor or its permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
Contemporaneously with the execution of the Debt Facility, the Company issued warrants to the various lenders (the “Lenders”) associated with Victory Park Management, LLC as consideration for entering into the Debt Facility, representing a loan commitment fee. The warrants vest and become exercisable based on the Company’s aggregated draw on the Debt Facility in incremental $
Immediately prior to the close of the Business Combination, all, or
Note 10 Debt Facility
In January 2021, Dave OD Funding I, LLC (“Borrower”) entered into a delayed draw senior secured loan facility (the “Debt Facility”) with Victory Park Management, LLC (“Agent”), and allowed the Borrower to draw up to $
On September 13, 2023, the Company executed a Third Amendment to the Debt Facility with the existing lenders. The Third Amendment, among other things, (i) increased the total commitment from $
minimum liquidity requirement from $
The Debt Facility requires mandatory prepayments of outstanding borrowings in certain circumstances, including (i)
On October 18, 2024, the Company executed the Fourth Amendment to the Debt Facility with the existing Lenders to expand the Company's borrowing capacity. The amendment also updates interest rates to the sum of the base rate plus
As of June 30, 2026 and December 31, 2025, the Company had $
Note 11 Commitments and Contingencies
From time to time, the Company is subject to various legal proceedings and claims, either asserted or unasserted, that arise in the ordinary course of business. Other than as described below, management does not believe that any of these proceedings or claims will have a significant adverse effect on the Company’s business, financial condition, results of operations, or cash flows. However, legal proceedings and claims are subject to many factors that are difficult to predict, so there can be no assurance that, in the event of a material unfavorable result in one or more claims, the Company will not incur material costs.
1. United States of America v. Dave, Inc. and Jason Wilk (filed December 30, 2024 in the United States District Court for the Central District of California)
In January 2023, the Company received a Civil Investigative Demand from the Federal Trade Commission (the “FTC”) staff seeking information in connection with the sale, offering, advertising, marketing or other promotion of cash advance products and online financial services. In response, the Company cooperated with the FTC staff while seeking to engage constructively with the FTC to resolve this matter.
On August 21, 2024, the FTC staff sent the Company a proposed consent order and draft complaint, alleging that the Company had violated Section 5(a) of the Federal Trade Commission Act ("FTC Act") which prohibits "unfair or deceptive acts or practices in or affecting commerce" and certain provisions of the Restore Online Shoppers’ Confidence Act related to the Company’s platform and offering of the ExtraCash Product (the “Complaint”), and advising that it would recommend the filing of a Complaint if the Company did not settle the FTC’s claims. The Company engaged in good faith negotiations with the FTC staff to settle the claims but these negotiations were unsuccessful, and on November 5, 2024, the FTC filed the Complaint in the United States District Court for the Central District of California against the Company. The Complaint sought a permanent injunction, monetary relief for an unspecified amount and “other relief as the court determines to be just and proper.” The FTC then referred the case to the Department of Justice (the “DOJ”), and on December 30, 2024, the DOJ filed an amended civil complaint in the United States District Court for the Central District of California, naming the Company and our Chief Executive Officer, Jason Wilk as defendants (the "Amended Complaint"). The Amended Complaint alleges that Dave violated Section 5(a) of the FTC Act as well as the Restore Online Shoppers' Confidence Act. The DOJ is seeking injunctive relief, civil penalties, monetary relief and other relief. On February 28, 2025, the Company filed a motion to dismiss the DOJ’s Amended Complaint. On April 7, 2025, the DOJ filed an opposition to the Company's motion to dismiss and on April 21, 2025 the Company filed its reply in support of the Company's motion to dismiss. The hearing on the Company's motion to dismiss was held on June 30, 2025. On September 12, 2025, the Court denied the Company's motion to dismiss. On October 10, 2025, the Company answered the Amended Complaint.
2. Michael Russell et al. v. Dave, Inc. and Evolve Bank & Trust (filed April 1, 2025 in the Superior Court of California for Los Angeles County, California)
On April 1, 2025, a putative class action was filed by Michael Russell and other named plaintiffs (the "Russell Plaintiffs") against the Company in the Superior Court of California for Los Angeles County, California, alleging that the Company’s practices violate the Military Lending Act (“MLA”) and Truth in Lending Act (“TILA”). The Russell Plaintiffs are seeking injunctive relief, civil penalties, monetary relief and other relief. On May 5, 2025, the Company removed the case to the United States District Court for the Central District of California. On June 11, 2025, the Company filed a motion to dismiss or to compel arbitration. On July 2, 2025, rather than oppose the motion, the Russell Plaintiffs filed an amended complaint (the “Russell Amended Complaint”) which added a claim under the Georgia Payday Loan Act. On July 29, 2025, the Company renewed its motion to dismiss or to compel arbitration. The hearing on the Company's motion to dismiss or to compel arbitration was held on December 8, 2025. On December 12, 2025, the Court denied the Company's motion to dismiss as well as its motion to compel arbitration. On December 26, 2025, the Company filed a notice of appeal with the Ninth Circuit Court of Appeals, and the District Court stayed the proceedings pending the outcome of the appeal. On April 13, 2026, the Company filed its brief with the Ninth Circuit Court of Appeals.
3. Mayor and City Council of Baltimore v. Dave, Inc. (filed December 30, 2025 in the Circuit Court for Baltimore City, Maryland)
On December 30, 2025, the Mayor and City Council of Baltimore (“City of Baltimore”) filed a complaint against the Company in the Circuit Court for Baltimore City, Maryland, alleging violations of the Baltimore City Consumer Protection Ordinance through unfair and deceptive trade practices related to the Company’s ExtraCash product. The City of Baltimore is seeking injunctive relief, civil penalties, monetary relief and other relief. On January 29, 2026, the Company removed the action to the United States District Court for the District of Maryland. On March 2, 2026, the City of Baltimore filed a motion to remand, which is fully briefed as of April 22, 2026.
Litigation Accrual
The Company records an accrual for a loss contingency when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. As of June 30, 2026, the Company has recorded an aggregate accrual for legal contingencies that are probable and reasonably estimable of $
Note 12 Leases
The Company leases office space in Los Angeles, California under two arrangements with PCJW Properties LLC ("PCJW"), an entity controlled by the Company's founders (including the Company's CEO). The first is a sublease extended in November 2023 for five additional years ending
All leases were classified as operating and operating lease expenses are presented within other operating expenses in the condensed consolidated statements of operations. The Company does not have any finance leases or sublease arrangements where the Company is the sublessor.
|
|
For the Six Months Ended |
|
|||||
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||
Operating lease cost |
|
$ |
|
|
$ |
|
||
Total lease cost |
|
$ |
|
|
$ |
|
||
|
|
For the Six Months Ended |
|
|||||
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||
Other information: |
|
|
|
|
|
|
||
Cash paid for operating leases |
|
$ |
|
|
$ |
|
||
Weighted-average remaining lease term - operating lease |
|
|
|
|
|
|
||
Weighted-average discount rate - operating lease |
|
|
% |
|
|
% |
||
The future minimum lease payments as of June 30, 2026, were as follows (in thousands):
Year |
|
Related-Party Commitment |
|
|
2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
Total minimum lease payments |
|
$ |
|
|
Less: imputed interest |
|
$ |
( |
) |
Total lease liabilities |
|
$ |
|
|
Note 13 Fair Value of Financial Instruments
The following are the major categories of assets and liabilities measured at fair value on a recurring basis as of June 30, 2026 and December 31, 2025, using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3) (in thousands):
June 30, 2026 |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Assets |
|
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|
|
|
|
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|
|
|
|
||||
Investments |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
||
Total assets |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|||
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Warrant liabilities - public warrants |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
Warrant liabilities - private warrants |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
||
Earnout liabilities |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
||
Total liabilities |
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
December 31, 2025 |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investments |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Total assets |
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Warrant liabilities - public warrants |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
Warrant liabilities - private warrants |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Earnout liabilities |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Total liabilities |
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|||
The Company had
The Company also has financial instruments not measured at fair value on a recurring basis. The Company has evaluated cash (Level 1), restricted cash (Level 1), accounts payable (Level 2), accrued expenses (Level 2), and Member receivables (Level 3) and believes the carrying value approximates fair value due to the short-term nature of these balances. The fair value of the debt facility (Level 2) approximates its respective carrying values. See Note 8, Convertible Notes for further information on the 2031 Notes.
Investments:
The following describes the valuation techniques used by the Company to measure the fair value of investments held as of June 30, 2026 and December 31, 2025.
U.S. Government Securities
The fair value of U.S. government securities is estimated by independent pricing services who use computerized valuation formulas to calculate current values. U.S. government securities are categorized in Level 1 of the fair value hierarchy.
Public Warrants:
As discussed further in Note 9, Warrant Liabilities, in January 2022, upon completion of the Business Combination, public warrants were automatically converted to warrants to purchase Common Stock of the Company. These public warrants met the definition of a derivative under ASC 815, and due to the terms of the warrants, were required to be liability classified. This warrant liability was initially recorded as a liability at fair value, with the offsetting entry recorded as a non-cash expense within the statement of operations. The derivative liability was subsequently recorded at fair value at each reporting period, with changes in fair value reflected in earnings. The loss related to the change in fair value of the public warrant liability for the three and six months ended June 30, 2026 was ($
A roll-forward of the Level 1 public warrant liability is as follows (in thousands):
Opening value at January 1, 2025 |
|
|
|
|
|
$ |
|
|
Change in fair value during the period |
|
|
|
|
|
|
|
|
Ending value at December 31, 2025 |
|
|
|
|
|
|
|
|
Change in fair value during the period |
|
|
|
|
|
|
|
|
Ending value at June 30, 2026 |
|
|
|
|
|
$ |
|
Private Warrants:
As discussed further in Note 9, Warrant Liabilities, in January 2022, upon completion of the Business Combination, private warrants were automatically converted to warrants to purchase Common Stock of the Company. These private warrants met the definition of a derivative under ASC 815, and due to the terms of the warrants, were required to be liability classified. This warrant liability was initially recorded as a liability at fair value, with the offsetting entry recorded as a non-cash expense within the condensed consolidated statement of operations. The derivative liability was subsequently recorded at fair value at each reporting period, with changes in fair value reflected in earnings. The loss related to the change in fair value of the private warrant liability for the three and six months ended June 30, 2026 was ($
A roll-forward of the Level 3 private warrant liability is as follows (in thousands):
Opening value at January 1, 2025 |
|
|
|
|
|
$ |
|
|
Change in fair value during the period |
|
|
|
|
|
|
|
|
Ending value at December 31, 2025 |
|
|
|
|
|
|
|
|
Change in fair value during the period |
|
|
|
|
|
|
|
|
Ending value at June 30, 2026 |
|
|
|
|
|
$ |
|
The Company used a Black-Scholes option pricing model to determine the fair value of the private warrant liability.
Exercise price |
|
|
|
|
|
$ |
|
|
Expected volatility |
|
|
|
|
|
|
% |
|
Risk-free interest rate |
|
|
|
|
|
|
% |
|
Remaining term |
|
|
|
|
|
|
|
|
Dividend yield |
|
|
|
|
|
|
% |
Earnout Shares Liability:
As part of the recapitalization and business combination in January 2022,
A roll-forward of the Level 3 Founder Holder Earnout Shares liability is as follows (in thousands):
Opening value at January 1, 2025 |
|
|
|
|
|
$ |
|
|
Change in fair value during the period |
|
|
|
|
|
|
|
|
Ending value at December 31, 2025 |
|
|
|
|
|
|
|
|
Change in fair value during the period |
|
|
|
|
|
|
|
|
Ending value at June 30, 2026 |
|
|
|
|
|
$ |
|
The Company used a Monte Carlo Simulation Method to determine the fair value of the Founder Holder Earnout Shares liability.
Exercise price |
|
|
|
|
|
$ |
|
|
Expected volatility |
|
|
|
|
|
|
% |
|
Risk-free interest rate |
|
|
|
|
|
|
% |
|
Remaining term |
|
|
|
|
|
|
|
|
Dividend yield |
|
|
|
|
|
|
% |
|
Convertible Notes
The 2031 Notes are carried at amortized cost, net of unamortized debt discount and issuance costs, and are not remeasured at fair value on a recurring basis. The 2031 Notes were issued on March 9, 2026 in a private offering to qualified institutional buyers under Rule 144A. The estimated fair value of the 2031 Notes was approximately $
As of December 31, 2025, the Company did
There were
Note 14 Stockholders’ Equity
Preferred Stock
As of June 30, 2026,
Pursuant to the terms of the Company’s amended and restated certificate of incorporation, shares of preferred stock may be issued from time to time in one or more series. The Company’s Board of Directors is authorized to fix the voting rights, if any, designations, powers and preferences, the relative, participating, optional or other special rights, and any qualifications, limitations and restrictions thereof, applicable to the shares of each series of preferred stock. The Company’s Board of Directors is able to, without stockholder approval, issue preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the common stock and could have anti-takeover effects. The ability of the Company’s Board of Directors to issue preferred stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control or the removal of existing management.
Class A and Class V Common Stock
The Company’s Board of Directors has authorized two classes of common stock, Class A Common Stock and Class V Common Stock. The Company had authorized
Net Share Settlement of RSU Tax Withholding
The Company’s 2021 Equity Incentive Plan (the “2021 Plan”) expressly authorizes share withholding (net settlement) to satisfy tax obligations related to equity awards. In a net share settlement, the Company withholds a portion of the shares that would otherwise be delivered to the employee upon vesting, in an amount sufficient to cover the employee’s minimum statutory tax withholding requirements, and remits the equivalent value in cash to the tax authorities.
During the quarter ended March 31, 2026, the Company satisfied employee tax withholding obligations upon the vesting of restricted stock units using a net share settlement method. Accordingly, the Company used approximately $
During the quarter ended March 31, 2025, the Company satisfied employee tax withholding obligations upon the vesting of restricted stock units using a net share settlement method. Accordingly, the Company used approximately $
Capped Call Transactions
In connection with the pricing of the 2031 Notes on March 4, 2026, and in connection with the exercise of the initial purchasers’ option to purchase additional notes on March 5, 2026, the Company entered into privately negotiated capped call transactions (the "Capped Call Transactions") with four financial institution counterparties. The Capped Call Transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the 2031 Notes, approximately
The Capped Call Transactions are intended to reduce the potential dilution to the Company's Class A common stock upon any conversion of the 2031 Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of the converted Notes, in the event that the market price per share of the Company's Class A common stock, as measured under the terms of the Capped Call Transactions, is greater than the strike price, with such reduction and/or offset subject to the cap price. The Capped Call Transactions are separate transactions from the 2031 Notes and are not part of the terms of the 2031 Notes. Holders of the 2031 Notes do not have any rights with respect to the Capped Call Transactions.
The Company determined that the Capped Call Transactions are indexed to the Company's own Class A common stock and qualify for equity classification under ASC 815-40. Accordingly, the cost of the Capped Call Transactions was recorded as a reduction to additional paid-in capital. The Capped Call Transactions will not be remeasured at fair value in subsequent reporting periods. During the first quarter of 2026, the Company recorded a total reduction to additional paid-in capital of approximately $
In connection with the offering of the 2031 Notes, the Company repurchased
Note 15 Stock-Based Compensation
In 2017, the Company’s Board of Directors adopted the Dave Inc. 2017 Stock Plan (the “2017 Plan”). The 2017 Plan authorized the award of stock options, restricted stock, and restricted stock units. On January 4, 2022, the stockholders of the Company approved the 2021 Plan. The 2021 Plan was previously approved, subject to stockholder approval, by the Company’s Board of Directors on January 4, 2022. Upon the consummation of the Business Combination with VPCC, the 2017 Plan was terminated and replaced by the 2021 Plan. The maximum term of stock options granted under the 2021 Plan is
The Company recognized $
Stock Options:
Management has valued stock options at their date of grant utilizing the Black-Scholes option pricing model. The fair value of the underlying shares was estimated by using a number of inputs, including recent arm’s length transactions involving the sale of the Company’s common stock.
Expected term—The expected term represents the period of time that options are expected to be outstanding. As the Company does not have sufficient historical exercise behavior, it determines the expected life assumption using the simplified method, which is an average of the contractual term of the option and its vesting period.
Risk free interest rate—The risk-free interest rate is based on the implied yield available on U.S. Treasury issues with an equivalent term approximating the expected life of the options depending on the date of the grant and expected life of the options.
Expected dividend yield—The Company bases the expected dividend yield assumption on the fact that it has never paid cash dividends and has no present intention to pay cash dividends.
Expected volatility—Due to the Company’s limited operating history and lack of company-specific historical or implied volatility, the expected volatility assumption is based on historical volatilities of a peer group of similar companies whose share prices are publicly available. The Company identified a group of peer companies and considered their historical stock prices. In identifying peer companies, the Company considered the industry, stage of life cycle, size, and financial leverage of such other entities.
Activity with respect to stock options is summarized as follows:
|
|
Shares |
|
|
Weighted-Average |
|
|
Weighted- |
|
|
Aggregate |
|
||||
Options outstanding, January 1, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Exercised |
|
|
( |
) |
|
$ |
|
|
|
|
|
|
|
|||
Options outstanding, June 30, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Nonvested options, June 30, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Vested and exercisable, June 30, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
At June 30, 2026, total estimated unrecognized stock-based compensation cost related to unvested stock options prior to that date was $
On March 3, 2021, the Company granted the Chief Executive Officer stock options to purchase up to
The following table presents the key inputs and assumptions used to value the options granted to the Chief Executive Officer on the grant date:
Remaining term |
|
|
||
Risk-free interest rate |
|
|
% |
|
Expected dividend yield |
|
|
% |
|
Expected volatility |
|
|
% |
|
Restricted Stock Units:
Activity with respect to RSUs is summarized as follows:
|
|
Shares |
|
|
Weighted-Average |
|
||
Outstanding shares at January 1, 2026 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
$ |
|
||
Vested and Released |
|
|
( |
) |
|
$ |
|
|
Forfeited |
|
|
( |
) |
|
$ |
|
|
Outstanding shares at June 30, 2026 |
|
|
|
|
$ |
|
||
At June 30, 2026, total estimated unrecognized stock-based compensation cost related to nonvested RSUs was approximately $
Performance-Based Restricted Stock Units:
The Company grants performance-based RSUs to certain executives and employees as part of its long-term incentive plan. These awards are subject to performance conditions, such as specific adjusted EBITDA and share price targets, market conditions based on relative total shareholder return metrics measured against a designated benchmark index, or a combination thereof, in each case
subject to continued employment through specified vesting dates. The actual number of shares earned may range from
For performance-based RSUs granted in the first quarter of 2026, the Company added an additional modifier for a market-based vesting conditions subject to a three-year relative total shareholder return metrics measured against a designated benchmark index. The performance-based RSUs subject to the market-based vesting condition are valued using a Monte Carlo simulation. Compensation cost is recognized when the Company concludes it is probable that the performance conditions will be satisfied, regardless of whether the market condition is achieved, over the requisite service period, provided that the requisite service has been provided.
Activity with respect to Performance-Based RSUs is summarized as follows:
|
|
Shares |
|
|
Weighted-Average |
|
||
Outstanding shares at January 1, 2026 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
$ |
|
||
Outstanding shares at June 30, 2026 |
|
|
|
|
$ |
|
||
At June 30, 2026, total estimated unrecognized stock-based compensation cost related to nonvested performance-based RSUs was approximately $
Note 16 Related-Party Transactions
Leasing Arrangements
During the three and six months ended June 30, 2026, the Company paid $
The following is a schedule of future minimum rental payments as of June 30, 2026 under Company’s sublease for the properties located in Los Angeles, California, signed with PCJW (in thousands):
Year |
|
Related-Party Commitment |
|
|
2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
Total minimum lease payments |
|
$ |
|
|
Less: imputed interest |
|
$ |
( |
) |
Total lease liabilities |
|
$ |
|
|
The related-party components of the lease right-of-use assets, lease liabilities, short-term, and lease liabilities, long-term are presented as part of the right-of-use asset and lease liability on the condensed consolidated balance sheets.
Debt Facility
Brendan Carroll, a Senior Partner at Victory Park Capital Advisors, LLC ("VPC"), joined the board of directors of the Company upon closing of the Business Combination. Interest expense related to the Debt Facility totaled $
Legal Services
The law firm of Mitchell Sandler PLLC, of which the Company's former director Andrea Mitchell is a partner, provided legal services to the Company, which totaled $
$
Note 17 401(k) Savings Plan
The Company maintains a 401(k) savings plan for the benefit of its employees. Employees can defer up to
Note 18 Segment Information
In accordance with ASC 280, Segment Reporting, the operations of the Company constitute a single operating and reportable segment. This conclusion reflects the manner in which the Chief Operating Decision Maker ("CODM"), a joint responsibility, shared by the Chief Executive Officer and Chief Financial Officer, reviews financial information and makes operating decisions. The determination of the reportable segment is based on the nature of the Company’s products and services, as well as the financial performance, on a consolidated entity-wide basis, that are regularly reviewed by the CODM to guide resource allocation and assess performance.
The Company’s operations, all of which are located in the United States, collectively support this single-segment structure. The Company's products and services, including ExtraCash, Dave Flex, and its other banking and card products, are managed and evaluated on a consolidated basis within this single segment. The launch of Dave Flex in April 2026 and the amended Coastal ExtraCash arrangement effective June 1, 2026 did not change this conclusion; the CODM does not review discrete financial results by product and continues to allocate resources based on consolidated performance. No Member individually contributed to
For further information regarding the Company’s products, services, and the accounting policies applied to its reportable segment, refer to Note 2, Significant Accounting Policies.
The segment assets and liabilities reviewed by the CODM are those reported on the Company’s consolidated balance sheets, with particular focus on available liquidity, including cash, cash equivalents, investments, restricted cash, and Member receivables, offset by current liabilities and outstanding debt.
The following table presents selected financial information with respect to the Company’s single operating and reportable segment for the three and six months ended June 30, 2026 and 2025, respectively:
Dave Inc. |
|
|||||||||||||||
|
|
For The Three Months Ended |
|
|
For The Six Months Ended |
|
||||||||||
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||||
Operating revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Service based revenue, net |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Transaction based revenue, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total operating revenues, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Provision for credit losses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Processing and servicing costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Financial network and transaction costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Advertising and activation costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Employee salaries and bonuses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Capitalized compensation costs |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Stock-based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Temporary labor and contractors |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other compensation, benefits and payroll taxes |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Technology and infrastructure |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other (income) expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest income |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Changes in fair value of earnout liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Changes in fair value of public and private warrant liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total other (income) expense, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income before provision for income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Provision for income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Other operating expenses primarily include legal fees and settlements, depreciation and amortization of property and equipment and internally developed software, charitable contributions, travel and entertainment, office and occupancy costs, insurance, sales tax and other taxes, computer expenses, licenses and fees, dues and subscriptions, the balance sheet capacity fees, and other general and administrative costs. These costs generally reflect our investments in infrastructure, business development, risk management, and administrative operations, and may vary period to period based on operational needs and strategic initiatives.
Significant noncash items that impact net income include provision for credit losses (see Note 5, Member Receivables, Net), stock-based compensation (see Note 15, Stock-Based Compensation), depreciation and amortization expense (see Note 6, Intangible Assets, Net and Note 8, Convertible Notes), changes in fair value of earnout liabilities, and changes in fair value of public and private warrant liabilities (see Note 13, Fair Value of Financial Instruments).
Note 19 Treasury Shares
During 2025, the Company repurchased
On February 27, 2026, the Board of Directors authorized a new share repurchase program of up to $
available at replacement. Repurchases may be made through open market or privately negotiated transactions, block trades, accelerated share repurchases, or Rule 10b5-1 plans, at management's discretion. The Repurchase Program does not obligate the Company to repurchase any shares, has no expiration date, and may be suspended or discontinued at any time.
During the six months ended June 30, 2026, the Company repurchased
All repurchased shares are recorded as treasury shares at cost within stockholders' equity.
Note 20 Subsequent Events
Subsequent events are events or transactions that occur after the condensed consolidated balance sheet date, but before the condensed consolidated financial statements are available to be issued. The Company recognizes in the condensed consolidated financial statements the effects of all subsequent events that provide additional evidence about conditions that existed at the date of the condensed consolidated balance sheet, including the estimates inherent in the process of preparing the condensed consolidated financial statements. The Company’s condensed consolidated financial statements do not recognize subsequent events that provide evidence about conditions that did not exist at the date of the condensed consolidated balance sheet but arose after the condensed consolidated balance sheet date and before the condensed consolidated financial statements were available to be issued.
The Company evaluated events and transactions occurring subsequent to June 30, 2026 through the date the condensed consolidated financial statements were filed with the SEC. Based on this review, management determined that no subsequent events occurred that require adjustment to or disclosure in these condensed consolidated financial statements.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of Dave’s financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the notes related thereto which are included in Part I, Item 1. “Financial Statements” of this Quarterly Report on Form 10-Q. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Cautionary Note Regarding Forward-Looking Statements,” “Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission (the “SEC”) on March 2, 2026 (the “Annual Report”), our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 and this Quarterly Report on Form 10-Q.
Company Overview
Dave was founded in 2017 to provide a faster, more transparent, and lower-cost alternative to traditional financial institutions for Americans living paycheck to paycheck. Through our mobile-first platform, we deliver innovative financial products designed to help underserved consumers manage their money more effectively. Our mission is to level the financial playing field by providing intuitive, transparent, and accessible solutions that empower our Members to navigate life's financial challenges with confidence.
Since inception, over 21 million Members have signed up for the Dave app, with over 15 million having used at least one of our products. We have provided Members with nearly $27 billion in ExtraCash, offering critical liquidity when they need it most, and have donated over $25 million to charity and important causes.
Customers value our products, as demonstrated by more than 850,000 App Store reviews with an average 4.8-star rating. Dave has earned multiple Best Place to Work recognitions from Built In over the past several years, reflecting our ongoing investment in becoming an exceptional workplace.
Market Opportunity
According to the Financial Health Network in 2025, approximately 185 million Americans, representing 69% of the U.S. population, are classified as financially "coping" or "vulnerable," up from 66% in 2021. According to PYMNTS in 2025, 67% of U.S. consumers were living paycheck to paycheck, up from 57% in 2021. The financially vulnerable and coping populations pay approximately $35 billion annually in basic checking fees and over $225 billion in annual fees and interest for short-term credit, according to FHN research. We estimate our total addressable market to be approximately 185 million Americans who do not have access to affordable and effective banking solutions.
We believe these high costs reflect the cost structure of incumbents. Legacy institutions with brick-and-mortar networks, antiquated technology, and inefficient customer acquisition strategies have significant costs to serve, which they pass on to customers. By leveraging technology and AI, we have dramatically reduced our cost to serve, enabling us to provide banking and credit products at lower costs with a stronger value proposition.
Key Factors Affecting Operating Results
Our future operating results and cash flows depend on Member growth and activity, product expansion, competition, industry trends, and general economic conditions.
Member Acquisition and Engagement
Revenue growth depends on efficiently acquiring new Members and driving product cross-sell. During the three months ended June 30, 2026, customer acquisition costs remained approximately flat compared to the three months ended June 30, 2025 at approximately $19, while payback periods improved to under four months. We direct acquisition spend toward the highest-return opportunities, managing customer acquisition cost and payback periods to preserve efficient unit economics as we scale.
ARPU expansion is primarily driven by ExtraCash volume and the adoption of Dave Checking by Members, and ARPU continued to expand year-over-year in the second quarter of 2026. Dave Debit Card actives generate approximately 1.7 times the monthly ARPU relative to non-card users and 11 times the average monthly transaction volume, indicating materially higher engagement and lifetime value. Dave Debit Card spend was $530 million in the second quarter of 2026, a 7% increase year-over-year. Our mid-2025 subscription fee increase from $1 to $3 for new members improved customer lifetime value without materially affecting conversion or retention. Subscription revenue grew 87% during the three months ended June 30, 2026, over the three months ended June 30, 2025.
Credit Performance
ExtraCash profitability depends on approving creditworthy Members while maintaining disciplined delinquency and write-off rates. In September 2025, we deployed CashAI v5.5, which nearly doubles the feature set of prior versions. Thus far, results demonstrate improved risk ranking, higher average approval amounts, and lower delinquency rates. CashAI has leveraged insights from over 215 million ExtraCash originations, a proprietary cash flow dataset that we believe provides a structural advantage in real-time credit decisioning. The short average term of ExtraCash (approximately 12 days) creates rapid feedback loops, enabling iterative model refinement. Late in the second quarter of 2026, we began deploying CashAI v6.0, our latest underwriting model, which remains in the early stages of rollout and continues to scale across ExtraCash originations.
Economic conditions, particularly unemployment and consumer spending, materially influence Members' settlement capacity. Our real-time underwriting continuously evaluates transaction-level data to detect changes in income, spending, and employment. However, severe economic deterioration could materially increase delinquencies and write-offs despite model refinements.
Funding and Interest Rate Sensitivity
Member receivables funding costs are a material operating expense. Our variable-rate Debt Facility exposes us to interest rate risk, and elevated rates have increased borrowing costs, reducing ExtraCash unit economics.
During the first quarter of 2025, we entered into the Program Agreement with Coastal under which Coastal issues and maintains deposit accounts and sponsors access to debit and ACH networks. As of the fourth quarter of 2025, all new Members are being onboarded to Coastal, and we expect the transition of existing Members to be substantially finalized by the end of 2026. Effective June 1, 2026, under the amended Program Agreement with Coastal, ExtraCash receivables are originated and retained on Coastal's balance sheet, reducing our direct funding obligations for those receivables and we hold a commitment to purchase, and provide a financial guarantee with respect to, those receivables. Coastal earns a fee equal to a variable rate based on the federal funds rate plus a margin on both ExtraCash and Dave Flex receivables balances while such receivables remain on its balance sheet, and we maintain a deposit account at Coastal in Coastal's name (the "Cash Collateral Account") to secure our credit and fraud loss obligations.
Higher interest rates create dual impacts: increased funding costs reduce gross margins, while elevated rates may increase Member demand for supplemental liquidity but simultaneously reduce settlement capacity. We actively manage funding costs through bank partner relationships and debt facility negotiations.
Competition
We compete with traditional banks and credit unions; digital banking providers such as Varo Bank and Chime; short-term credit and earned wage access providers such as Earnin, MoneyLion, and Brigit; and broader fintech platforms such as Affirm, Klarna, Cash App, Venmo, Upstart, and LendingClub. Many competitors possess greater financial resources, longer operating histories, and larger customer bases.
We believe we compete effectively based on: our differentiated value proposition of providing up to $500 in short-term credit (in the form of discretionary overdraft through a bank partner) with no interest, late fees, or credit check; proprietary underwriting technology through CashAI; strong customer satisfaction reflected in our App Store rating; an integrated product ecosystem driving higher engagement and lifetime value; and structural cost advantages through efficient, technology-driven operations.
Competitive pressures could increase marketing spend or reduce competitive positioning. Our long-term success depends on continued product differentiation and technological leadership. See "Item 1. Business" and "Item 1A. Risk Factors" included in our Annual Report for additional information.
Macroeconomic Conditions
Our business is sensitive to macroeconomic conditions. Interest rate changes directly impact funding costs and Members' settlement capacity. Unemployment affects Members' ability to repay ExtraCash. Consumer spending patterns and inflation influence cash flow and credit demand.
Our real-time underwriting adapts to changing conditions through continuous transaction-level analysis. However, severe macroeconomic deterioration, including recession, significant unemployment increases, or persistent inflation, could materially impact our business, financial condition, and results of operations.
Our business is subject to moderate seasonal trends, with ExtraCash demand and Dave Checking transaction volumes generally correlating to consumer spending cycles, including increased activity during the holiday season and around tax refund periods. These seasonal patterns may result in fluctuations in our quarterly and annual results of operations.
Recent and proposed changes in U.S. trade policy, including tariffs and related measures, together with associated legal and regulatory developments, may contribute to higher consumer prices and inflationary pressure. While we do not import goods and have no direct tariff exposure, such conditions could reduce our Members’ discretionary income and ability to repay ExtraCash advances, which could increase our provision for credit losses and affect demand for our products. We continue to monitor these developments; as of June 30, 2026, we had not identified a material direct impact on our results of operations or financial condition from these factors.
Regulatory Environment
We operate in a complex and evolving regulatory environment. Regulatory developments and increased supervisory scrutiny of bank-fintech partnerships could result in changes to our product structures, increased compliance costs, or new operational requirements. We continue to monitor these developments. See "Item 1. Business—Regulatory Environment" and "Item 1A. Risk Factors" for additional discussion.
Recent Developments
Effective June 1, 2026, the amended Program Agreement with Coastal Community Bank ("Coastal") became effective, under which Coastal originates and retains ExtraCash receivables on its balance sheet and we hold a commitment to purchase, and provide a financial guarantee with respect to, those receivables. See Note 2, Significant Accounting Policies and Note 5, Member Receivables, Net to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information.
Late in the second quarter of 2026, we began deploying CashAI v6.0, the latest generation of our proprietary cash-flow underwriting engine. The model is in the early stages of deployment and continues to scale across ExtraCash originations. See "Credit Performance."
Key Components of Statements of Operations
Basis of Presentation
Currently, we conduct business through one operating segment which constitutes a single reportable segment. For more information about our basis of presentation, refer to Note 2, Significant Accounting Policies and Note 18, Segment Information, in our accompanying condensed consolidated financial statements included in this report.
Operating Revenues
Service based revenue, net
Service based revenue, net primarily consists of overdraft service fees and subscriptions charged to Members, net of processor-related costs associated with ExtraCash disbursements, and also includes lead generation fees from our Side Hustle advertising partners and revenue share from our Surveys partner. Prior to February 2025, service based revenue, net also included optional tips and optional processing fees, which we discontinued in February 2025. The Company also earns installment and monthly participation fees on Dave Flex, which were immaterial for the periods presented.
Transaction based revenue, net
Transaction based revenue, net primarily consists of interchange and ATM revenues from our Checking Product, net of interchange fees, ATM-related fees and interest earned by Members. Also included in transaction based revenue are fees earned from funding and withdrawal-related transactions, maintenance fees on inactive accounts, volume support from a certain co-branded agreement and deposit referral fees that are recognized at the point in time the transactions occur, as the performance obligations are satisfied and the variable consideration is not constrained.
Operating Expenses
We classify our operating expenses into the following seven categories:
Provision for credit losses
The provision for credit losses primarily consists of an allowance for credit losses at a level estimated to be adequate to absorb credit losses inherent in the outstanding ExtraCash receivables, inclusive of outstanding processing and overdraft service fees and tips, along with outstanding amounts aged over 120 days or which become uncollectible based on information available to us during the period. We currently estimate the allowance balance required using historical loss and collections experience, and, if relevant, the nature and volume of the portfolio, economic conditions, and other factors such as collections trends and cash collections received subsequent to the balance sheet date. Changes to the allowance have a direct impact on the provision for credit losses in the condensed consolidated statement of operations. We consider ExtraCash receivables aged more than 120 days or which become uncollectible based on information available to us as impaired. All impaired ExtraCash receivables are deemed uncollectible and subsequently written-off and are a direct reduction to the allowance for credit losses. Subsequent recoveries, if any, of ExtraCash receivables written-off are recorded as a reduction to the provision for credit losses in the condensed consolidated statements of operations when collected. The
provision for credit losses also reflects expected credit losses on purchased Dave Flex receivables and, beginning June 1, 2026, changes in the off-balance-sheet credit-loss liability for guaranteed ExtraCash receivables held by Coastal.
Processing and servicing costs
Processing and servicing costs consist of fees paid to our processing partners for the recovery of ExtraCash, and, in periods prior to February 2025, optional processing fees and optional tips, overdraft service fees and subscriptions. These expenses also include costs paid for services to connect Members' bank accounts to our application. Except for processing and servicing costs associated with ExtraCash originations which are recorded net against revenue, all other processing and servicing costs are expensed as incurred.
Financial network and transaction costs
Financial network and transaction costs primarily consist of program management fees, card network association fees, payment processing costs, losses related to Member-disputed transactions, bank card fees and fraud-related losses.
Advertising and activation costs
Advertising and activation expenses primarily consist of fees paid to our advertising and marketing platform partners for online, social media, and television campaigns, as well as promotional partnerships. These expenses also include activation-related costs, such as third-party fees (e.g., Plaid) incurred to onboard new Members to our platform. Advertising and activation costs are expensed as incurred, even though they may provide benefits over an extended period.
Compensation and benefits
Compensation and benefits expenses represent the compensation, inclusive of stock-based compensation and benefits, that we provide to our employees and the payments we make to third-party contractors. While we have an in-house customer service function, we employ third-party contractors to conduct call center operations and manage routine customer service inquiries and support.
Technology and infrastructure
Technology and infrastructure costs are associated with third-party Software-as-a-Service (“SaaS”) solutions, including cloud-based platforms that support the development, maintenance, scalability, and security of our products and internal systems.
Other Operating Expenses
Other operating expenses primarily include legal fees and settlements, depreciation and amortization of property and equipment and internally developed software, charitable contributions, travel and entertainment, office and occupancy costs, insurance, sales tax and other taxes, computer expenses, licenses and fees, dues and subscriptions, balance sheet capacity fees, and other general and administrative costs. These costs generally reflect our investments in infrastructure, business development, risk management, and administrative operations, and may vary period to period based on operational needs and strategic initiatives.
Other (Income) Expenses
Other (income) expenses consist of interest income, interest expense, changes in fair value of earnout liabilities and changes in fair value of warrant liabilities.
Provision for Income Taxes
Provision for income taxes reflects federal and state income taxes and changes in our valuation allowance against deferred tax assets.
Results of Operations
Comparison of the three months ended June 30, 2026 and 2025
Operating revenues
|
|
For the Three Months Ended |
|
|
Change |
|
||||||||||
(in thousands, except for percentages) |
|
June 30, |
|
|
$ |
|
|
% |
|
|||||||
|
|
2026 |
|
|
2025 |
|
|
2026/2025 |
|
|
2026/2025 |
|
||||
Service based revenue, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Processing and overdraft service fees, net |
|
$ |
144,931 |
|
|
$ |
113,464 |
|
|
$ |
31,467 |
|
|
|
28 |
% |
Subscriptions |
|
|
15,071 |
|
|
|
8,053 |
|
|
|
7,018 |
|
|
|
87 |
% |
Other |
|
|
45 |
|
|
|
76 |
|
|
|
(31 |
) |
|
|
-41 |
% |
Transaction based revenue, net |
|
|
10,746 |
|
|
|
10,164 |
|
|
|
582 |
|
|
|
6 |
% |
Total |
|
$ |
170,793 |
|
|
$ |
131,757 |
|
|
$ |
39,036 |
|
|
|
30 |
% |
Service based revenue, net—
Processing and Overdraft Service fees, net
Processing and overdraft service fees, net of processing and servicing costs associated with ExtraCash originations, totaled $144.9 million for the three months ended June 30, 2026, representing an increase of $31.5 million, or 28%, compared to $113.5 million for the three months ended June 30, 2025. The increase was primarily driven by an approximate 17% increase in average monthly transacting Members, an increase in total ExtraCash origination volume from approximately $1.8 billion to approximately $2.3 billion, a rise in the average ExtraCash amounts that increased from $206 to $215 period over period, the changes to our fee structure implemented in February 2025, and the removal of the maximum overdraft service fee (the "fee cap") for certain Member cohorts during the second quarter of 2026. Average processing and overdraft service fees also increased slightly period over period, in part reflecting the fee cap removal. We expect processing and overdraft service fees to continue to increase in line with growth in ExtraCash volume and Member engagement.
Subscriptions
Subscription revenue totaled $15.1 million for the three months ended June 30, 2026, an increase of $7.0 million, or 87%, compared to $8.1 million for the three months ended June 30, 2025. The increase was primarily attributable to growth in the number of paying Members on our platform, as well as the increase in the monthly subscription fee for new Members implemented in June 2025.
Transaction based revenue, net
Transaction based revenue, net, was $10.7 million for the three months ended June 30, 2026, an increase of $0.6 million, or 6%, compared to $10.2 million for the three months ended June 30, 2025. The increase was primarily driven by higher fees earned from Members' funding and withdrawal-related transactions, maintenance fees on inactive accounts, and volume incentives from our card network partners. Net interchange revenue was relatively flat period over period, as growth in Members engaging with our Checking Product and an approximately 7% increase in card spend and transaction volume was substantially offset by related interchange costs. These increases were partially offset by a decrease in ATM revenue due to lower ATM transaction volume and decrease in deposit referral fees.
Operating expenses
|
|
For the Three Months Ended |
|
|
Change |
|
||||||||||
(in thousands, except for percentages) |
|
June 30, |
|
|
$ |
|
|
% |
|
|||||||
|
|
2026 |
|
|
2025 |
|
|
2026/2025 |
|
|
2026/2025 |
|
||||
Provision for credit losses |
|
$ |
28,818 |
|
|
$ |
25,295 |
|
|
$ |
3,523 |
|
|
|
14 |
% |
Processing and servicing costs |
|
|
10,299 |
|
|
|
7,170 |
|
|
|
3,129 |
|
|
|
44 |
% |
Financial network and transaction costs |
|
|
7,967 |
|
|
|
7,227 |
|
|
|
740 |
|
|
|
10 |
% |
Advertising and activation costs |
|
|
20,358 |
|
|
|
15,456 |
|
|
|
4,902 |
|
|
|
32 |
% |
Compensation and benefits |
|
|
35,739 |
|
|
|
26,430 |
|
|
|
9,309 |
|
|
|
35 |
% |
Technology and infrastructure |
|
|
3,851 |
|
|
|
2,894 |
|
|
|
957 |
|
|
|
33 |
% |
Other operating expenses |
|
|
11,520 |
|
|
|
6,203 |
|
|
|
5,317 |
|
|
|
86 |
% |
Total |
|
$ |
118,552 |
|
|
$ |
90,675 |
|
|
$ |
27,877 |
|
|
|
31 |
% |
Provision for credit losses—The provision for credit losses was $28.8 million for the three months ended June 30, 2026, compared to $25.3 million for the three months ended June 30, 2025, resulting in an increase of $3.5 million, or 14%. The increase was primarily driven by growth in ExtraCash origination volume and continued expansion of our Member base. Underlying credit performance and historical loss rates remained relatively stable period over period, supported by our CashAI underwriting engine, including the September 2025 deployment of CashAI v5.5 and the initial deployment of CashAI v6.0 late in the second quarter of 2026. Because the allowance for credit losses is estimated by applying historical loss rates, by aging bucket, to the balances of ExtraCash receivables outstanding at the period-end measurement date, and provision expense represents the change in that allowance during the period, the provision is a function of origination volume, the level and aging of receivables outstanding at period end, historical loss rates, and the timing of originations and collections, including the calendar day on which the period ends, given the short average term of approximately 12 days. Accordingly, the increase reflects volume growth and these balance and timing factors rather than a deterioration in credit quality. Beginning June 1, 2026, the provision reflects expected credit losses on both the Company's on-balance-sheet ExtraCash receivables and the guaranteed ExtraCash receivables held by Coastal, which the Company reserves for under the same CECL methodology and loss rates as its on-balance-sheet receivables (see Note 5, Member Receivables, Net).
The period-over-period increase was comprised of two principal drivers. The provision for ExtraCash receivables aged over 120 days and those deemed uncollectible increased by $9.1 million, driven by higher receivable volumes and loss timing consistent with a growing Member base and maturing Member receivables portfolio. Provision expense for ExtraCash receivables aged 120 days and under decreased by $5.6 million, reflecting a lower allowance on these balances at period end. Because provision expense represents the change in the allowance for credit losses during the period, and these receivables are short-term with an average term of approximately 12 days, the provision on the 120-days-and-under buckets moves with the balances outstanding at each period end and the timing of originations and collections around the balance sheet date. The decrease reflects this balance and timing effect rather than a change in underlying credit performance or loss rates, which remained relatively stable, and occurred even as full-period origination volume grew. In aggregate, these drivers reflect the impact of portfolio expansion, including an approximate 17% increase in average transacting Members, an increase in average ExtraCash advance amounts from $206 to $215, and growth in total ExtraCash origination volume from approximately $1.8 billion to $2.3 billion for the three months ended June 30, 2025 and 2026, respectively.
Management regularly updates ExtraCash eligibility requirements, new Member conversion processes, and risk detection capabilities to align with expected loss emergence patterns and to respond to economic conditions and seasonal shifts in Member activity. Under the CECL model, management estimates lifetime expected credit losses based on historical experience, current conditions, and reasonable and supportable forecasts. Our CECL methodology pools ExtraCash receivables based on shared risk characteristics, such as vintage and payment behavior, and applies historical loss rates adjusted for observed and forecasted economic trends, including anticipated seasonal effects.
The outstanding balance of ExtraCash receivables is subject to variability based on seasonal differences in Member activity across the trailing 120-day measurement period. Additionally, the calendar day on which a period ends can materially affect provision expense due to intra-week fluctuations in outstanding balances. This inherent timing effect, together with the seasonal pattern of origination and loss emergence, contributes to variability in our period-end provision for credit losses.
Historical loss rates utilized in our allowance for credit losses for the period ended June 30, 2026 remained relatively stable compared to the prior period, reflecting expected shifts in overall collections performance. These loss rates may be influenced by the timing of collections activity relative to period-end measurement dates and the composition of aged receivables outstanding at any given reporting date. Changes in these historical loss rates directly affect both the allowance for credit losses and the corresponding provision for credit losses. All uncollectible ExtraCash receivables are written-off against the allowance for credit losses, reducing the allowance accordingly.
For additional details regarding the aging composition of ExtraCash receivables and a complete roll-forward analysis of the allowance for credit losses, refer to the detailed tables presented in Note 5, Member Receivables, Net in the accompanying consolidated financial statements.
Processing and servicing costs—Processing and servicing costs totaled $10.3 million for the three months ended June 30, 2026, compared to $7.2 million for the three months ended June 30, 2025. The increase of $3.1 million, or 44%, was primarily driven by cost increases from ExtraCash origination volume from approximately $1.8 billion to $2.3 billion for the three months ended June 30, 2026 and 2025, respectively.
Financial network and transaction costs—Financial network and transaction costs totaled $8.0 million for the three months ended June 30, 2026, compared to $7.2 million for the three months ended June 30, 2025. The increase of $0.8 million, or 10%, was primarily driven by increases in debit card network fees and debit card processing costs due to a 7% increase in transaction volume period over period, partially offset by decreases in ATM network fees.
Advertising and activation costs —Advertising and activation costs totaled $20.4 million for the three months ended June 30, 2026, compared to $15.5 million for the three months ended June 30, 2025. The increase of $4.9 million, or 32%, was primarily driven by
our continued investment in Member acquisition and engagement, with spend refined to capitalize on seasonal trends and high-return opportunities. During the three months ended June 30, 2026, we increased new Member acquisition year-over-year while holding customer acquisition costs flat, at approximately $19. Payback periods also improved to under four months, reflecting our focus on directing acquisition spend toward the highest return opportunities.
Compensation and benefits—Compensation and benefits expenses totaled $35.7 million for the three months ended June 30, 2026, compared to $26.4 million for the three months ended June 30, 2025. The increase of $9.3 million, or 35%, was primarily attributable to the following:
Technology and infrastructure—Technology and infrastructure expenses totaled $3.9 million for the three months ended June 30, 2026, compared to $2.9 million for the three months ended June 30, 2025. The increase of $1.0 million, or 33%, was primarily driven by continued investment in the reliability, security, and scalability of our systems. Management remains focused on balancing operational efficiency with infrastructure resilience, directing technology-related spend toward initiatives that support business growth, cybersecurity, and the evolving needs of our Members.
Other operating expenses—Other operating expenses totaled $11.5 million for the three months ended June 30, 2026, compared to $6.2 million for the three months ended June 30, 2025. The increase of $5.3 million, or 86%, was primarily attributable to the following:
Other (income) expenses
|
|
For the Three Months Ended |
|
|
Change |
|
||||||||||
(in thousands, except for percentages) |
|
June 30, |
|
|
$ |
|
|
% |
|
|||||||
|
|
2026 |
|
|
2025 |
|
|
2026/2025 |
|
|
2026/2025 |
|
||||
Interest income |
|
$ |
(1,328 |
) |
|
$ |
(588 |
) |
|
$ |
(740 |
) |
|
|
126 |
% |
Interest expense |
|
|
2,020 |
|
|
|
1,777 |
|
|
|
243 |
|
|
|
14 |
% |
Changes in fair value of earnout liabilities |
|
|
11,242 |
|
|
|
7,894 |
|
|
|
3,348 |
|
|
|
42 |
% |
Changes in fair value of public and private warrant liabilities |
|
|
25,636 |
|
|
|
20,491 |
|
|
|
5,145 |
|
|
|
25 |
% |
Total |
|
$ |
37,570 |
|
|
$ |
29,574 |
|
|
$ |
7,996 |
|
|
|
27 |
% |
Interest income—Interest income totaled $1.3 million for the three months ended June 30, 2026, compared to $0.6 million for the three months ended June 30, 2025. The increase of $0.7 million, or 126%, was primarily driven by higher average cash balances held in interest-bearing accounts, partially offset by an overall decline in interest rates period over period.
Interest expense—Interest expense totaled $2.0 million for the three months ended June 30, 2026, compared to $1.8 million for the three months ended June 30, 2025. The increase of $0.2 million, or 14%, was primarily driven by the amortization of deferred debt issuance costs for the convertible notes issued in March 2026.
Changes in fair value of earnout liabilities—Changes in fair value of the earnout liabilities resulted in a loss of ($11.2) million for the three months ended June 30, 2026, compared to a loss of ($7.9) million for the three months ended June 30, 2025, an increase of $3.3 million, or 42%. The earnout shares liabilities are remeasured each period based on our Class A common stock price. Appreciation in
the stock price during the quarter increased the fair value of the earnout liabilities and resulted in a loss, which was higher than the loss recognized in the prior year period.
Changes in fair value of warrant liabilities—Changes in the fair value of warrant liabilities resulted in a loss of ($25.6) million for the three months ended June 30, 2026, compared to a loss of ($20.5) million for the three months ended June 30, 2025, an increase of $5.1 million, or 25%. These liabilities are remeasured each period based on the DAVEW warrant price and our Class A common stock price. Appreciation in these prices during the period increased the fair value of the warrant liabilities and resulted in a loss, which was lower than the loss recognized in the prior year period.
Provision for income taxes
|
|
For the Three Months Ended |
|
Change |
||||
(in thousands, except for percentages) |
|
June 30, |
|
$ |
|
% |
||
|
|
2026 |
|
2025 |
|
2026/2025 |
|
2026/2025 |
Provision for income taxes |
|
7,984 |
|
2,468 |
|
5,516 |
|
224% |
Total |
|
$7,984 |
|
$2,468 |
|
$5,516 |
|
224% |
Provision for income taxes for the three months ended June 30, 2026 increased by approximately $5.5 million, or 224%, compared to the three months ended June 30, 2025. The increase was primarily due to higher taxable income reported for the three months ended June 30, 2026, compared to the three months ended June 30, 2025.
Results of Operations
Comparison of the six months ended June 30, 2026 and 2025
Operating revenues
|
|
For the Six Months Ended |
|
|
Change |
|
||||||||||
(in thousands, except for percentages) |
|
June 30, |
|
|
$ |
|
|
% |
|
|||||||
|
|
2026 |
|
|
2025 |
|
|
2026/2025 |
|
|
2026/2025 |
|
||||
Service based revenue, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Processing and overdraft service fees, net |
|
$ |
278,519 |
|
|
$ |
196,912 |
|
|
$ |
81,607 |
|
|
|
41 |
% |
Tips |
|
|
- |
|
|
|
7,496 |
|
|
|
(7,496 |
) |
|
|
-100 |
% |
Subscriptions |
|
|
29,016 |
|
|
|
14,870 |
|
|
|
14,146 |
|
|
|
95 |
% |
Other |
|
|
99 |
|
|
|
166 |
|
|
|
(67 |
) |
|
|
-40 |
% |
Transaction based revenue, net |
|
|
21,573 |
|
|
|
20,292 |
|
|
|
1,281 |
|
|
|
6 |
% |
Total |
|
$ |
329,207 |
|
|
$ |
239,736 |
|
|
$ |
89,471 |
|
|
|
37 |
% |
Service based revenue, net—
Processing and Overdraft Service fees, net
Processing and overdraft service fees, net of processing and servicing costs associated with ExtraCash originations, totaled $278.5 million for the six months ended June 30, 2026, an increase of $81.6 million, or 41%, compared to $196.9 million for the six months ended June 30, 2025. The increase was primarily driven by an approximately 18% increase in average monthly transacting Members, growth in total ExtraCash origination volume from approximately $3.3 billion to approximately $4.4 billion, a rise in the average ExtraCash amount from $199 to $213 period over period, the changes to our fee structure implemented in February 2025, and the removal of the maximum overdraft service fee (the "fee cap") for certain Member cohorts during the second quarter of 2026. Average processing and overdraft service fees also increased modestly during the current period, in part reflecting the fee cap removal. We expect processing and overdraft service fees to continue to increase in line with growth in ExtraCash volume and Member engagement.
Tips
Tips decreased $7.5 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 due to the elimination of the Member tipping option in February 2025.
Subscriptions
Subscription revenue totaled $29.0 million for the six months ended June 30, 2026, an increase of $14.1 million, or 95%, compared to $14.9 million for the six months ended June 30, 2025. The increase was primarily attributable to the growth in the number of paying Members on our platform, in addition to subscription fee increases for new Members that took place during June 2025.
Transaction based revenue, net
Transaction based revenue, net, was $21.6 million for the six months ended June 30, 2026, an increase of $1.3 million, or 6%, compared to $20.3 million for the six months ended June 30, 2025. The increase was primarily driven by higher fees earned from Members' funding and withdrawal-related transactions, maintenance fees on inactive accounts, and volume incentives from our card network partners. Net interchange revenue increased modestly period over period, as growth in Members engaging with our Checking Product and an approximately 8% increase in card spend and transaction volume was largely offset by related interchange costs. These increases were partially offset by a decrease in ATM revenue due to temporarily reduced fee rates and a slight increase in interest paid to Members.
Operating expenses
|
|
For the Six Months Ended |
|
|
Change |
|
||||||||||
(in thousands, except for percentages) |
|
June 30, |
|
|
$ |
|
|
% |
|
|||||||
|
|
2026 |
|
|
2025 |
|
|
2026/2025 |
|
|
2026/2025 |
|
||||
Provision for credit losses |
|
$ |
55,404 |
|
|
$ |
35,898 |
|
|
$ |
19,506 |
|
|
|
54 |
% |
Processing and servicing costs |
|
|
19,859 |
|
|
|
14,157 |
|
|
|
5,702 |
|
|
|
40 |
% |
Financial network and transaction costs |
|
|
15,719 |
|
|
|
14,266 |
|
|
|
1,453 |
|
|
|
10 |
% |
Advertising and activation costs |
|
|
34,618 |
|
|
|
27,386 |
|
|
|
7,232 |
|
|
|
26 |
% |
Compensation and benefits |
|
|
63,329 |
|
|
|
53,681 |
|
|
|
9,648 |
|
|
|
18 |
% |
Technology and infrastructure |
|
|
7,246 |
|
|
|
5,620 |
|
|
|
1,626 |
|
|
|
29 |
% |
Other operating expenses |
|
|
21,225 |
|
|
|
12,497 |
|
|
|
8,728 |
|
|
|
70 |
% |
Total |
|
$ |
217,400 |
|
|
$ |
163,505 |
|
|
$ |
53,895 |
|
|
|
33 |
% |
Provision for credit losses—The provision for credit losses was $55.4 million for the six months ended June 30, 2026, compared to $35.9 million for the six months ended June 30, 2025, an increase of $19.5 million, or 54%. The increase was primarily driven by growth in ExtraCash origination volume and continued expansion of our Member base, together with the timing of provision recognition across periods, including the timing of provision recognized in the comparative prior-year periods. Because the allowance for credit losses is derived by applying historical loss rates, by aging bucket, to receivables outstanding at each period-end measurement date, and provision expense is the change in that allowance during the period, the provision moves with origination volume, the level and aging of receivables outstanding, historical loss rates, and origination and collection timing on this short-duration portfolio, which has an average term of approximately 12 days. Underlying credit performance and loss rates remained relatively stable over the period, supported by ongoing enhancements to our CashAI underwriting engine, including the initial deployment of CashAI v6.0 late in the second quarter of 2026, and the increase reflects portfolio growth and these timing factors rather than a deterioration in credit quality. Beginning June 1, 2026, the provision also captures expected credit losses on guaranteed ExtraCash receivables held by Coastal, which we reserve for using the same CECL methodology and loss rates as our on-balance-sheet receivables (see Note 5, Member Receivables, Net).
The period-over-period increase was comprised of two principal drivers. The provision for ExtraCash receivables aged over 120 days and those deemed uncollectible increased by $22.0 million, driven by higher receivable volumes and loss timing consistent with a growing Member base and maturing receivables portfolio. Provision expense for ExtraCash receivables aged 120 days and under decreased by $2.5 million, primarily reflecting lower period-end balances in these short-dated buckets and the timing of originations and collections around the balance sheet date, consistent with the dynamic described above for the three months ended June 30, 2026, and not a change in underlying credit performance. In aggregate, these drivers reflect the impact of portfolio expansion, including an 18% increase in average transacting Members, an increase in average ExtraCash advance amounts from $199 to $213, and growth in total ExtraCash origination volume from approximately $3.3 billion to $4.4 billion for the six months ended June 30, 2025 and 2026, respectively.
Our CECL methodology, the effects of seasonality and of the period-end calendar day on the timing of provision recognition, and the relative stability of our historical loss rates are consistent with the discussion above under "Provision for credit losses" for the three months ended June 30, 2026. For the aging composition of ExtraCash receivables and a roll-forward of the allowance for credit losses, see Note 5, Member Receivables, Net, to the accompanying condensed consolidated financial statements.
Processing and service costs—Processing and servicing costs totaled $19.9 million for the six months ended June 30, 2026, compared to $14.2 million for the six months ended June 30, 2025. The increase of $5.7 million, or 40%, was primarily driven by cost increases from ExtraCash origination volume from approximately $3.3 billion to $4.4 billion for the six months ended June 30, 2026 and 2025, respectively.
Financial network and transaction costs—Financial network and transaction costs totaled $15.7 million for the six months ended June 30, 2026, compared to $14.3 million for the six months ended June 30, 2025. The increase of $1.4 million, or 10%, was primarily driven by increases in debit card network fees and debit card processing costs due to an 8% increase in transaction volume period over period, partially offset by decreases in ATM network fees.
Advertising and activation costs —Advertising and activation costs totaled $34.6 million for the six months ended June 30, 2026, compared to $27.4 million for the six months ended June 30, 2025. The increase of $7.2 million, or 26%, was primarily driven by our continued investment in Member acquisition and engagement, with spend refined to capitalize on seasonal trends and high-return opportunities. For the six months ended June 30, 2026, customer acquisition costs increased to approximately $19 while payback periods improved to under four months.
Compensation and benefits—Compensation and benefits expenses totaled $63.3 million for the six months ended June 30, 2026, compared to $53.7 million for the six months ended June 30, 2025. The increase of $9.6 million, or 18%, was primarily attributable to the following:
Technology and infrastructure—Technology and infrastructure expenses totaled $7.2 million for the six months ended June 30, 2026, compared to $5.6 million for the six months ended June 30, 2025. The increase of $1.6 million, or 29%, was primarily driven by continued investment in the reliability, security, and scalability of our systems. Management remains focused on balancing operational efficiency with infrastructure resilience, directing technology-related spend toward initiatives that support business growth, cybersecurity, and the evolving needs of our Members.
Other operating expenses—Other operating expenses totaled $21.2 million for the six months ended June 30, 2026, compared to $12.5 million for the six months ended June 30, 2025. The increase of $8.7 million, or 70%, was primarily attributable to the following:
Other (income) expenses
|
|
For the Six Months Ended |
|
|
Change |
|
||||||||||
(in thousands, except for percentages) |
|
June 30, |
|
|
$ |
|
|
% |
|
|||||||
|
|
2026 |
|
|
2025 |
|
|
2026/2025 |
|
|
2026/2025 |
|
||||
Interest income |
|
$ |
(2,152 |
) |
|
$ |
(1,019 |
) |
|
$ |
(1,133 |
) |
|
|
111 |
% |
Interest expense |
|
|
3,749 |
|
|
|
3,535 |
|
|
|
214 |
|
|
|
6 |
% |
Changes in fair value of earnout liabilities |
|
|
8,052 |
|
|
|
7,496 |
|
|
|
556 |
|
|
|
7 |
% |
Changes in fair value of public and private warrant liabilities |
|
|
17,327 |
|
|
|
20,843 |
|
|
|
(3,516 |
) |
|
|
-17 |
% |
Total |
|
$ |
26,976 |
|
|
$ |
30,855 |
|
|
$ |
(3,879 |
) |
|
|
-13 |
% |
Interest income—Interest income totaled $2.2 million for the six months ended June 30, 2026, compared to $1.0 million for six months ended June 30, 2025. The increase of $1.1 million, or 111%, was primarily driven by higher average cash balances held in interest-bearing accounts, partially offset by an overall decline in interest rates period over period.
Interest expense—Interest expense totaled $3.7 million for six months ended June 30, 2026, compared to $3.5 million for the six months ended June 30, 2025. The increase of $0.2 million, or 6%, was primarily driven by the amortization of deferred issuance costs for convertible notes issued in March 2026.
Changes in fair value of earnout liabilities—Changes in fair value of earnout liabilities resulted in a loss of ($8.1) million for the six months ended June 30, 2026, compared to a loss of ($7.5) million for the six months ended June 30, 2025, an increase of $0.6 million, or 7%. The earnout shares liabilities are remeasured each period based on our Class A common stock price. Appreciation in the stock price during the period increased the fair value of the earnout liability and resulted in a loss, which was higher than the loss recognized in the prior year period.
Changes in fair value of warrant liabilities—Changes in the fair value of our public and private warrant liabilities resulted in a loss of ($17.3) million for the six months ended June 30, 2026, compared to a loss of ($20.8) million for the six months ended June 30, 2025, a decrease of $3.5 million, or 17%. These liabilities are remeasured each period based on the DAVEW warrant price and our Class A common stock price. Appreciation in these prices during the period increased the fair value of the warrant liabilities and resulted in a loss, which was lower than the loss recognized in the prior-year period.
Provision for income taxes
|
|
For the Six Months Ended |
|
|
Change |
|
||||||||||
(in thousands, except for percentages) |
|
June 30, |
|
|
$ |
|
|
% |
|
|||||||
|
|
2026 |
|
|
2025 |
|
|
2026/2025 |
|
|
2026/2025 |
|
||||
Provision for income taxes |
|
$ |
20,208 |
|
|
$ |
7,524 |
|
|
$ |
12,684 |
|
|
|
169 |
% |
Total |
|
$ |
20,208 |
|
|
$ |
7,524 |
|
|
$ |
12,684 |
|
|
|
169 |
% |
Provision for income taxes for the six months ended June 30, 2026 increased by approximately $12.7 million, or 169%, compared to the six months ended June 30, 2025. The increase was primarily due to higher taxable income reported for the six months ended June 30, 2026, compared to the six months ended June 30, 2025.
Non-GAAP Financial Measures
In addition to our results determined in accordance with GAAP, we believe the following non-GAAP measure is useful in evaluating our operational performance. We use the following non-GAAP measure to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that the non-GAAP financial information may be helpful in assessing our operating performance and facilitates an alternative comparison among fiscal periods. The non-GAAP financial measure is not, and should not be viewed as, a substitute for GAAP reporting measures.
Adjusted EBITDA
"Adjusted EBITDA" is defined as net income adjusted for interest income and/or expense and funding costs, provision for income taxes, depreciation and amortization, stock-based compensation, other strategic financing and transactional expenses, legal settlement expenses, and litigation expenses related to the FTC/DOJ matter, changes in fair value of earnout liabilities, changes in fair value of public and private warrant liabilities, and other discretionary or non-recurring items determined by management.
Beginning in the second quarter of 2026, we updated our definition of Adjusted EBITDA to exclude funding costs, other strategic financing and transactional expenses and litigation expenses related to the FTC/DOJ matter. Prior periods have not been recast because the effect of these items on such periods was immaterial.
Adjusted EBITDA is intended as a supplemental measure of our performance that is neither required by, nor presented in accordance with, GAAP. We believe that the use of Adjusted EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with those of comparable companies, which may present similar non-GAAP financial measures to investors. However, you should be aware that when evaluating Adjusted EBITDA, we may incur future expenses similar to those excluded when calculating this measure. In addition, our presentation of this measure should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies, because not all companies calculate Adjusted EBITDA in the same fashion.
Because of these limitations, Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA on a supplemental basis. You should review the reconciliation of net income to Adjusted EBITDA below, and no single financial measure should be relied upon to evaluate our business.
The following table reconciles net income to Adjusted EBITDA for the three and six months ended June 30, 2026 and 2025:
|
|
For the Three Months Ended |
|
|||||
(in thousands) |
|
June 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Net income |
|
$ |
6,687 |
|
|
$ |
9,040 |
|
Interest expense, net and funding costs |
|
|
1,240 |
|
|
|
1,189 |
|
Provision for income taxes |
|
|
7,984 |
|
|
|
2,468 |
|
Depreciation and amortization |
|
|
2,008 |
|
|
|
1,582 |
|
Stock-based compensation |
|
|
16,349 |
|
|
|
8,285 |
|
Legal settlement and litigation expenses |
|
|
4,026 |
|
|
|
- |
|
Other strategic financing and transactional expenses |
|
|
345 |
|
|
|
- |
|
Changes in fair value of earnout liabilities |
|
|
11,242 |
|
|
|
7,894 |
|
Changes in fair value of public and private warrant liabilities |
|
|
25,636 |
|
|
|
20,491 |
|
Adjusted EBITDA |
|
$ |
75,517 |
|
|
$ |
50,949 |
|
|
|
For the Six Months Ended |
|
|||||
(in thousands) |
|
June 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Net income |
|
$ |
64,623 |
|
|
$ |
37,852 |
|
Interest expense, net and funding costs |
|
|
2,145 |
|
|
|
2,516 |
|
Provision for income taxes |
|
|
20,208 |
|
|
|
7,524 |
|
Depreciation and amortization |
|
|
3,593 |
|
|
|
3,082 |
|
Stock-based compensation |
|
|
23,451 |
|
|
|
15,802 |
|
Legal settlement and litigation expenses |
|
|
5,093 |
|
|
|
- |
|
Other strategic financing and transactional expenses |
|
|
345 |
|
|
|
- |
|
Changes in fair value of earnout liabilities |
|
|
8,052 |
|
|
|
7,496 |
|
Changes in fair value of public and private warrant liabilities |
|
|
17,327 |
|
|
|
20,843 |
|
Adjusted EBITDA |
|
$ |
144,837 |
|
|
$ |
95,115 |
|
Liquidity and Capital Resources
We have historically financed our operations through cash generated from operations, equity financings, borrowings under our credit facility, and proceeds from the Business Combination. In March 2026, we completed the private offering of the 2031 Notes, which significantly increased our available liquidity. Throughout 2025 and the six months ended June 30, 2026, we achieved consistent profitability and positive operating cash flow, which has strengthened our liquidity position and reduced our reliance on external financing.
As of June 30, 2026, our cash and cash equivalents, investments, and restricted cash totaled $254.4 million, compared to $123.2 million as of December 31, 2025. The increase was primarily driven by net proceeds received from the 2031 Notes offering, cash generated from operations, and reduced on-balance-sheet funding of ExtraCash receivables following the June 1, 2026 commencement of the amended Program Agreement with Coastal, partially offset by $205.9 million used in share repurchases, $17.3 million used to purchase capped call transactions, and $7.4 million in debt issuance costs.
Sources and Uses of Cash
Our primary sources of liquidity include:
In addition, effective June 1, 2026, the amended Program Agreement with Coastal reduces our direct funding of ExtraCash originations, as Coastal funds and retains newly originated ExtraCash receivables until we purchase them.
Our primary uses of cash include:
Debt Facility
We maintain a credit facility (the "Debt Facility") with Victory Park Management, LLC ("VPC" or "Agent"). As of June 30, 2026, $75.0 million of term loans under the Debt Facility were outstanding, and we were in compliance with all covenants under the Debt Facility. Interest payments on term loan borrowings are required on a monthly basis. See Note 10, Debt Facility, in the notes to our condensed consolidated financial statements for additional information regarding the terms of the Debt Facility.
The Debt Facility matures in December 2026, at which time the full $75.0 million outstanding principal balance will become due. No principal repayments have been made since inception of the facility. We are evaluating our alternatives with respect to the Debt Facility, which may include refinancing, extending the maturity, repaying the balance in full from available cash and operating cash flows, or a combination thereof. Based on our current liquidity position and cash flow generation, we believe we will have sufficient resources to satisfy the obligation at maturity; however, there can be no assurance that refinancing or replacement financing, if pursued, will be available on acceptable terms or at all.
Convertible Notes
In March 2026, we completed a private offering of $200.0 million aggregate principal amount of 0% Convertible Senior Notes due 2031 (the "2031 Notes"), including the full exercise of the initial purchasers' option to purchase an additional $25.0 million of 2031 Notes. We received net proceeds of approximately $193.4 million after deducting initial purchasers' discounts and before deducting offering expenses. We used approximately $17.4 million of the net proceeds to fund the cost of capped call transactions entered into concurrently with the 2031 Notes offering, which are designed to reduce potential dilution to our Class A common stock upon conversion of the 2031 Notes, and approximately $70.5 million to repurchase 334,600 shares of our Class A common stock in privately negotiated transactions. The remaining net proceeds have been invested in U.S. Treasury money market funds and are expected to be used for general corporate purposes, including additional share repurchases under our Repurchase Program.
The 2031 Notes do not bear regular interest and mature on April 1, 2031, unless earlier repurchased, redeemed, or converted. We may redeem the 2031 Notes, in whole or in part, for cash on or after April 6, 2029, subject to certain stock price and liquidity conditions. Upon conversion, we are required to settle the principal amount in cash and may elect to settle any excess conversion value in cash, shares of our Class A common stock, or a combination thereof. Holders may require us to repurchase their notes for cash upon the occurrence of a fundamental change. As of June 30, 2026, none of the conditions permitting early conversion of the 2031 Notes had been met, and accordingly, the 2031 Notes were classified as long-term debt on our condensed consolidated balance sheet. See Note 8, Convertible Notes, for additional information.
Share Repurchase Program
In March 2025, our Board of Directors authorized a share repurchase program of up to $50.0 million (the "March 2025 Repurchase Plan"). In August 2025, the Board authorized a share repurchase program of up to $125.0 million, which replaced the March 2025 Repurchase Plan (the "August 2025 Repurchase Plan"). On February 27, 2026, the Board authorized a new share repurchase program of up to $300.0 million (the "Repurchase Program"), which replaced the August 2025 Repurchase Plan. Approximately $113.2 million remained available under the August 2025 Repurchase Plan at the time of its replacement.
During 2025, we repurchased 274,490 shares of Class A common stock for $43.7 million, inclusive of transaction costs, under the repurchase programs then in effect. See Note 21, Treasury Shares, in our Annual Report on Form 10-K for the year ended December 31, 2025.
During the six months ended June 30, 2026, we repurchased an aggregate of 992,232 shares of our Class A common stock for
approximately $205.9 million under the Repurchase Program. This included 912,622 shares repurchased during the three months ended March 31, 2026, for approximately $186.7 million (consisting of 334,600 shares in privately negotiated transactions in connection with the 2031 Notes offering for approximately $70.5 million and 578,022 shares in open market transactions for approximately $116.2 million), and 79,610 shares repurchased during the three months ended June 30, 2026 for approximately $19.1 million. As of June 30, 2026, approximately $94.1 million remained available for future repurchases under the Repurchase Program. The timing and amount of future repurchases, if any, will depend on market conditions, share price, legal requirements, and other factors. See Note 19, Treasury Shares, for additional information.
Assessment of Liquidity
We believe that our existing cash and cash equivalents, investments and restricted cash, together with cash generated from operations and borrowings available under our Debt Facility, will be sufficient to meet our working capital requirements, capital expenditure needs, share repurchases, debt service obligations, and other liquidity requirements for at least twelve months from the date of this Quarterly Report on Form 10-Q and for the foreseeable future.
The amount and timing of any future funding requirements will depend on many factors, including operating performance, growth initiatives, capital markets conditions, and our share repurchase activity. We may from time to time seek to raise additional capital through equity or debt financings. There can be no assurance that additional financing, if pursued, will be available on terms acceptable to us, or at all.
Material Cash Requirements
The following summarizes our material cash requirements as of June 30, 2026:
ExtraCash
We fund ExtraCash originations primarily through operating cash flow and, as needed, borrowings under the Debt Facility. Effective June 1, 2026, ExtraCash receivables are originated and retained on Coastal's balance sheet as Members migrate to Coastal, reducing our direct funding obligations for those receivables. We are required to fund a Cash Collateral Account at Coastal monthly, in an amount tied to the expected credit losses on Coastal-held receivables, which represents a recurring use of cash. See "Bank Partners" in Item 1 of our Annual Report for additional information.
Contractual Obligations
In the normal course of business, we enter into agreements with vendors and service providers that may include minimum purchase commitments or other payment obligations. We believe we will be able to fulfill these obligations through cash generated from operations and existing cash balances.
Debt Obligations
As of June 30, 2026, we had $75.0 million of term loans outstanding under the Debt Facility, which matures in December 2026. Interest payments are due monthly at a variable rate. See Note 10, Debt Facility, for additional information regarding repayment terms and maturities, and refer to “Liquidity and Capital Resources — Debt Facility” above for a discussion of our alternatives with respect to the maturity of the Debt Facility.
Coastal Balance Sheet Capacity Fee
Under the amended Program Agreement with Coastal, we pay Coastal a balance sheet capacity fee for the use of its balance sheet to fund ExtraCash and Dave Flex receivables it holds, calculated on a variable-rate basis. This fee, together with the funding of the Cash Collateral Account described above, represents a recurring use of cash that varies with origination volume and the balances Coastal holds. See Note 2, Significant Accounting Policies and Note 5, Member Receivables, Net to the condensed consolidated financial statements for additional information.
Convertible Notes
As of June 30, 2026, we had $200.0 million aggregate principal amount of 2031 Notes outstanding, with a net carrying amount of $193.1 million. The 2031 Notes do not bear regular interest, and accordingly, we have no scheduled cash interest payment obligations under the 2031 Notes. The full principal balance of $200.0 million is due at maturity on April 1, 2031, unless the notes are earlier converted, redeemed, or repurchased.
Holders of the 2031 Notes may require us to repurchase all or a portion of their notes for cash upon the occurrence of a fundamental change, at a repurchase price equal to 100% of the principal amount, plus any accrued and unpaid interest. In addition, the 2031 Notes may become convertible prior to maturity upon satisfaction of certain market price or other conditions, in which case we would be
required to settle the principal amount in cash and may elect to settle any excess conversion value in cash, shares of our Class A common stock, or a combination thereof. As of June 30, 2026, none of the conditions permitting early conversion had been met. See Note 8, Convertible Notes, for additional information.
Operating Lease Obligations
As of June 30, 2026, we had future minimum lease payments of approximately $0.3 million under our operating lease arrangements, all of which relate to related-party leases with PCJW Properties LLC. See Note 12, Leases, for additional information.
Off-Balance Sheet Arrangements
Effective June 1, 2026, under the amended Program Agreement with Coastal, ExtraCash receivables are originated and retained on Coastal's balance sheet, and we hold a commitment to purchase, and a financial guarantee with respect to, those receivables. As of June 30, 2026, Coastal held approximately $93.0 million of ExtraCash receivables for which we bear economic credit risk and which are not recorded on our condensed consolidated balance sheet, and which are subject to a contractual minimum balance of $75.0 million. Our maximum exposure to loss on these receivables is limited to their outstanding balance, against which we maintain a Cash Collateral Account of $0.7 million recorded as a deposit asset within prepaid expenses and other current assets (see Note 4, Prepaid Expenses and Other Current Assets), as the account is owned by Coastal and our interest represents a recoverable deposit rather than cash restricted by a contractual pledge. We have recognized a stand-ready guarantee liability and an off-balance-sheet credit loss liability in respect of this exposure. See Note 2, Significant Accounting Policies and Note 5, Member Receivables, Net to the accompanying condensed consolidated financial statements included in this report.
As described in "Item 1. Business — Bank Partners" of our Annual Report, under our Program Agreement with Coastal, we expect that a portion of ExtraCash receivables will be originated and retained on Coastal's balance sheet as existing Members migrate to Coastal, which we anticipate will be substantially finalized by the end of 2026. We will continue to evaluate and disclose the nature and impact of this arrangement as the transition progresses.
Additionally, we may use cash to acquire businesses and technologies. The nature of these potential transactions, however, makes it difficult to predict the amount and timing of such cash requirements.
Cash Flows Summary
(in thousands) |
|
For The Six Months Ended |
|
|||||
Total cash provided by (used in): |
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||
Operating activities |
|
$ |
150,407 |
|
|
$ |
113,484 |
|
Investing activities |
|
|
17,278 |
|
|
|
(81,845 |
) |
Financing activities |
|
|
(38,595 |
) |
|
|
(19,488 |
) |
Net increase in cash and cash equivalents and restricted cash |
|
$ |
129,090 |
|
|
$ |
12,151 |
|
|
|
|
|
|
|
|
||
Cash Flows From Operating Activities
During the six months ended June 30, 2026, net cash provided by operating activities was $150.4 million, an increase of $36.9 million compared to $113.5 million for the six months ended June 30, 2025, primarily due to increases in operating revenues. Net cash provided by operating activities included net income of $64.6 million, adjusted for significant noncash items including provision for credit losses of $55.4 million, stock-based compensation of $23.5 million, changes in fair value of public and private warrant liabilities of $17.3 million, changes in fair value of earnout liabilities of $8.1 million, and depreciation and amortization of $3.7 million. Changes in operating assets and liabilities decreased cash by $22.3 million, primarily driven by an increase in prepaid income taxes of $10.5 million, a decrease in income taxes payable of $1.7 million, an increase in Member receivables, service-based revenue of $10.1 million, an increase in prepaid expenses and other current assets of $5.8 million, and a decrease in accounts payable of $1.3 million, partially offset by an increase in accrued expenses of $4.1 million, an increase in legal settlement accrual of $1.9 million, an increase in other current liabilities of $0.2 million and an increase in non-current liabilities of $0.7 million.
During the six months ended June 30, 2025, net cash provided by operating activities increased due primarily to increases in operating revenues and a reduction in various operating expenses across the organization. Net cash provided by operating activities for the six months ended June 30, 2025 included net income of $37.9 million, and excluding non-cash impacts, included an increase in Member receivables, service based revenue of $7.9 million and an increase in prepaid expenses and other current assets of $1.7 million. These changes were offset by an increase in accounts payable of $1.0 million, an increase in other non-current liabilities of $0.6 million and an increase in accrued expenses of $0.5 million.
Cash Flows From Investing Activities
During the six months ended June 30, 2026, net cash provided by investing activities was $17.3 million, primarily consisting of $45.1 million from the sale and maturity of investments, $23.8 million in net ExtraCash originations and collections, partially offset by $47.4 million in purchases of investments, $4.0 million in payments for internally developed software costs, and $0.2 million in purchases of property and equipment.
During the six months ended June 30, 2025, net cash used in investing activities was $81.8 million. This included the sale and maturity of investments of $108.1 million, offset by purchases of investments of $108.8 million, net ExtraCash originations and collections of $77.8 million, and payments related to internally developed software costs of $3.1 million.
Cash Flows From Financing Activities
During the six months ended June 30, 2026, net cash used in financing activities was $38.6 million, primarily consisting of $205.9 million in repurchases of Class A common stock, $17.4 million for the purchase of capped calls, and $8.2 million for the payment of taxes related to net share settlements of equity awards, partially offset by $192.7 million in net proceeds from the issuance of convertible notes.
During the six months ended June 30, 2025, net cash used in financing activities was $19.5 million, which consisted of the $13.3 million for payment for shares withheld related to net share settlements and $6.9 million related to repurchases of Class A common stock, offset by $0.7 million for proceeds received for stock option exercises.
Critical Accounting Estimates
Our condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. Their preparation requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses during the reporting periods. Our estimates are based on our historical experience and other factors we believe are reasonable under the circumstances, and actual results may differ under different assumptions or conditions. We consider the following accounting estimates to require the greatest degree of judgment and complexity and to be the most critical to understanding our financial condition and results of operations:
(i) Allowance for credit losses; (including, beginning June 1, 2026, the off-balance-sheet credit loss liability associated with guaranteed ExtraCash receivables held by Coastal); and
(ii) Income taxes.
Refer to Note 2, Significant Accounting Policies in the accompanying condensed consolidated financial statements for a description of our significant accounting policies.
Allowance for Credit Losses
ExtraCash receivables from contracts with Members are recorded at their original receivable amounts, reduced by an allowance for credit losses. We pool our ExtraCash receivables, all of which are short-term and arise from contracts with Members, based on shared risk characteristics to assess their risk of loss, even when that risk is remote. We use an aging method and historical loss rates to estimate the percentage of current and delinquent ExtraCash receivables balances that will result in credit losses, and we consider whether current conditions and reasonable and supportable forecasts warrant an adjustment to our historical loss experience, primarily evaluating current economic conditions, expectations of near-term economic trends, and changes in customer payment and collection trends. For the measurement dates presented, given our methods of collecting funds and the absence of meaningful changes in our customers' payment behavior, we determined that our historical loss rates remained most indicative of our lifetime expected losses. We recognize an allowance for credit losses upon origination of the ExtraCash receivable, and recognize period changes in the estimate within the provision for credit losses in the condensed consolidated statements of operations.
When we determine that ExtraCash receivables are not collectible, the uncollectible amounts are written-off as a reduction to both the allowance and the gross asset balance. Subsequent recoveries are recorded as a recovery of the allowance when received.
Effective June 1, 2026, our allowance estimate also encompasses the off-balance-sheet expected credit loss liability for guaranteed ExtraCash receivables held by Coastal, measured under the same CECL loss-rate methodology applied to our on-balance-sheet receivables. Our estimate also includes expected credit losses on purchased Dave Flex receivables; because Dave Flex is a new installment product with limited loss history, this estimate involves a higher degree of estimation uncertainty, including the use of an interim methodology and loss-rate assumptions derived from our ExtraCash experience. Dave Flex receivables and the related fee revenue were immaterial for the three and six months ended June 30, 2026.
Income Taxes
We follow ASC 740, Income Taxes (“ASC 740”), which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the condensed consolidated financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax basis of assets and
liabilities using enacted tax rates in effect for the period in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more-likely-than-not that the asset will not be realized.
The effective tax rate used for interim periods is the estimated annual effective tax rate, based on the current estimate of full year results, except that those taxes related to specific discrete events, if any, are recorded in the interim period in which they occur. The annual effective tax rate is based upon several significant estimates and judgments, including our estimated annual pre-tax income in each tax jurisdiction in which it operates, and the development of tax planning strategies during the year. In addition, our tax expense can be impacted by changes in tax rates or laws and other factors that cannot be predicted with certainty. As such, there can be significant volatility in interim tax provisions.
ASC 740 provides that a tax benefit from an uncertain tax position may be recognized when it is more-likely-than-not that the position will be sustained in a court of last resort, based on the technical merits. If more-likely-than-not, the amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized upon examination, including compromise settlements. For tax positions not meeting the more-likely-than-not threshold, no tax benefit is recorded. We have estimated $3.7 million and $3.3 million of uncertain tax positions as of June 30, 2026 and December 31, 2025, respectively, related to state income taxes and federal and state research and development tax credits.
Our policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense within the statement of operations.
We are subject to income tax in jurisdictions in which we operate, including the United States. For U.S. income tax purposes, we are taxed as a Subchapter C corporation.
We recognize deferred taxes for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes. We regularly assess the need for a valuation allowance against its deferred tax assets each quarter. In making that assessment, we consider both positive and negative evidence in the various jurisdictions in which it operates related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more likely than not that some or all of the deferred tax assets will not be realized. We maintained a valuation allowance against our deferred tax assets, net of deferred tax liabilities, at June 30, 2025. Based upon management’s assessment of all available evidence at June 30, 2025, we concluded that it was more-likely-than-not that the deferred tax assets, net of deferred tax liabilities, will not be realized. As of December 31, 2025, based on all available positive and negative evidence, having demonstrated sustained profitability, which is objective and verifiable, and taking into account anticipated future earnings, we concluded that it is more likely than not that its U.S. federal and state deferred tax assets will be realizable. As such, we released $58.7 million of our valuation allowance associated with the U.S. federal and state deferred tax assets during the year ended December 31, 2025. As of June 30, 2026, there is no valuation allowance against our deferred tax assets, net of deferred tax liabilities. We will continue to monitor the need for a valuation allowance against our deferred tax assets on a quarterly basis.
On June 27, 2025, California enacted legislation requiring financial institutions to utilize a single sales factor apportionment method, effective for tax years beginning in 2025. The new law decreased our California apportioned income and state income tax expense beginning in 2025 and was reflected in our condensed consolidated financial statements for the period ended June 30, 2026.
On July 4, 2025, new U.S. tax legislation H.R.1, known as the One Big Beautiful Bill Act ("OBBBA"), was enacted. The OBBBA introduces significant amendments to corporate taxation, including the modification of research and development (R&D) expense capitalization, additional limitations on interest expense deductions, and provisions for accelerated depreciation of fixed assets. During the third quarter of 2025, we completed our assessment of the OBBBA and elected to accelerate the amortization of our previously capitalized and unamortized U.S. research and development costs over a one-year period as permitted under the new legislation. As a result of the election, there was a corresponding decrease to our deferred tax assets and income tax payable in 2025 resulting from the restoration of full expensing of U.S. research and experimentation expenditures. We also do not expect any ongoing material impact to our effective tax rate as a result of the OBBBA.
Recently Issued Accounting Standards
Refer to Note 2, Significant Accounting Policies of our condensed consolidated financial statements included in this report for a discussion of the impact of recent accounting pronouncements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are exposed to market risk primarily through interest rate fluctuations on our Debt Facility, a delayed draw senior secured loan facility with total commitments of $150.0 million maturing in December 2026. The Debt Facility bears interest at a base rate plus 5.00% per annum, where the base rate is the greater of SOFR for a three-month tenor plus 3.00% or a contractual floor. As of June 30, 2026 and December 31, 2025, we had $75.0 million outstanding under the Debt Facility at an effective interest rate of approximately 8.9% and 9.0%, respectively. See Note 10, Debt Facility, in the notes to our condensed consolidated financial statements for additional information.
Because our variable-rate exposure is limited to the $75.0 million drawn on the facility, the impact of interest rate fluctuations on our results of operations is not significant. A hypothetical 200 basis point increase in SOFR would increase our remaining annual interest expense by approximately $0.7 million based on period-end balances, subject to the contractual base rate floor.
We do not use derivative instruments to hedge interest rate risk. Over time, our Program Agreement with Coastal is expected to reduce our reliance on the Debt Facility as ExtraCash receivables transition to an off-balance-sheet structure, although we will become indirectly exposed to a federal funds rate–based variable rate retained by Coastal. We also earn interest on the Cash Collateral Account at a rate equal to the greater of the effective federal funds rate less 0.30% or zero, creating additional exposure to changes in the federal funds rate. Because the amended arrangement commenced on June 1, 2026, the impact of these exposures on our results of operations for the period was not significant. We do not have material exposure to foreign currency exchange rate or commodity price risk.
ExtraCash receivables are short-duration assets with an average term of approximately 12 days, so their fair value is not materially sensitive to changes in market interest rates. However, macroeconomic conditions, including the interest rate environment, can affect our Members' ability to repay ExtraCash advances. Our allowance for credit losses was $40.9 million and $37.6 million as of June 30, 2026, and December 31, 2025, respectively. We manage credit risk through CashAI, our proprietary AI-powered underwriting engine, most recently upgraded with CashAI v6.0, deployed beginning late in the second quarter of 2026. See Note 5, Member Receivables, Net, in the notes to our condensed consolidated financial statements for additional discussion.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2026.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II —OTHER INFORMATION
Item 1. Legal Proceedings.
For a description of our material pending legal proceedings, please see Note 11, Commitments and Contingencies to the condensed consolidated financial statements included elsewhere in this report.
From time to time, we may become involved in other legal proceedings, including arbitrations, arising in the ordinary course of business. We are not currently a party to any other such litigation or legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business. However, in light of the uncertainties involved in such matters, including the fact that some legal proceedings are at preliminary stages or seek an indeterminate amount of damages, penalties or fines, it is possible that future outcomes of legal proceedings could have a material impact on our results of operations. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, negative publicity and reputational harm and other factors.
Item 1A. Risk Factors.
As of the date of this Form 10-Q, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 2, 2026, other than as noted below and in Part II, Item 1A “Risk Factors” of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.
If we were found to be operating without having obtained necessary state or local licenses, it could adversely affect our business, results of operations, financial condition, and future prospects.
Certain states have adopted laws regulating and requiring licensing, registration, notice filing, or other approval by parties that engage in certain activities regarding consumer finance transactions. For example, several states, including California, Kansas, Missouri, Nevada, South Carolina, and Wisconsin, have adopted regulatory and licensing requirements specific to “earned wage access” products (collectively, “State Earned Wage Access Laws”). The Connecticut Department of Labor also issued guidance regarding earned wage access products, stating that the products may implicate state wage statutes and fees for the products that are passed to the employees must be approved by the Commissioner of Labor. The State Earned Wage Access Laws have exemptions for bank-issued products such as ExtraCash, but it is possible that the relevant states’ regulatory authorities may not agree with the Company’s interpretation of these exemptions.
In addition, certain states have adopted laws regulating and requiring licensing by parties that engage in certain activity regarding consumer finance transactions, including facilitating and assisting such transactions in certain circumstances. These laws also may contain restrictions on the charging of certain fees or have usury limits for loans originated under those laws. The application of some consumer finance licensing and related usury or fee restriction laws to Dave is uncertain, evolving and unsettled. If we were found to be in violation of one or more of the licensure, usury or State Earned Wage Access Laws, we could be subject to fines, damages, injunctive relief, and other penalties or consequences. For example, in November 2024, the Washington, D.C. attorney general filed a complaint against the earned wage access provider EarnIn, alleging that its product is a loan, that fees for instant access to funds are misrepresented to consumers and not properly disclosed, and that the interest rate associated with the fees for instant access to funds exceeds the Washington, D.C. usury cap. Also, in April, 2025, the Office of the Attorney General of the State of New York filed a civil action in the Supreme Court of the State of New York, County of New York, against MoneyLion Inc. The complaint alleges, among other things, that MoneyLion’s earned wage access product violates New York’s civil and criminal usury laws.
We have also received inquiries from state regulatory agencies regarding requirements to obtain licenses from or register with those states, including in states where we have determined that we are not required to obtain such a license or be registered with the state, and we expect to continue to receive such inquiries. The application of certain consumer financial licensing laws to our platform and the related activities it performs is not always clear, and regulatory agencies may not agree with our determinations on the applicability of such laws to us. In addition, state licensing requirements may evolve over time, including, in particular, recent trends in legislation seeking to impose licensing requirements and regulation of parties engaged in the business of offering “earned wage access” products to consumers. For example, in 2023, the banking regulators in Connecticut and Maryland issued guidance (and in the case of Maryland, a regulatory change) (collectively, “State Regulatory Changes”) indicating that traditional “earned wage access” products would, under certain circumstances, be considered small loans under the state lending laws, and that optional fees and tips, which the Company previously received in connection with ExtraCash, would be finance charges for purposes of calculating the interest rate under the state’s applicable usury limit under certain circumstances. These State Regulatory Changes would subject those covered by them to licensure and limitations or prohibitions on certain charges. Although we do not believe that ExtraCash is covered by the State Regulatory Changes, there may be uncertainty regarding the application of the State Regulatory Changes to our business.
We have received an inquiry from the Connecticut banking regulator relating to licensing and the State Regulatory Changes, our relationship with our bank partner, and other issues relating to earned wage access and related products we offer in Connecticut. We have also received an inquiry from the Maryland banking regulator regarding licensure and the State Regulatory Changes. In addition, we have received a subpoena from the Maryland Attorney General requesting information regarding any earned wage access and related products that we offer in the state of Maryland, including information relating to marketing practices, fees, our bank partnership, and other issues. We have also received a subpoena from the New York State Department of Financial Services for documents and information relating to products and services offered in the state of New York since 2021, including marketing materials, applications, consumer communications, terms and conditions, and fees. These inquiries and investigations are ongoing, and although we believe that our practices and products offered at all times in Connecticut, Maryland and New York have been in compliance with applicable law, the defense or resolution of these matters could involve significant monetary costs or penalties and have a significant impact on our financial results and operations.
We have had recent communications with the California Department of Financial Protection and Innovation (“DFPI”) which reflect that the DFPI believes that the Company is a “covered person” subject to the California Consumer Financial Protection Law (“CCFPL”) and that the DFPI intends to supervise us, in relation to the activities we engage in related to the offering of financial products and services, in the immediate future. The DFPI’s supervision of us would enable it, among other things, to conduct comprehensive and rigorous examinations and to request reports, in each case, to assess our compliance with consumer financial protection laws, which in turn may result in matters requiring attention, as well as potentially a referral for investigation and enforcement action, which may result in civil monetary penalties and limits on our activities or functions, among other relief. The DFPI, through its enforcement authority, could increase our compliance costs, potentially hinder our ability to respond to market changes, impose requirements to alter products and services that would make them less attractive to consumers and impair our ability to offer products and services profitably.
If we were found to be in violation of applicable state licensing, fee restrictions, usury or other requirements by a court or a state, federal, or local enforcement agency, or agree to resolve such concerns by voluntary agreement, we could be subject to or agree to pay fines, damages, injunctive relief (including required modification or discontinuation of our business in certain areas), criminal penalties, and other penalties or consequences, and the ExtraCash receivables facilitated through our platform could be rendered void in whole or in part, any of which could have an adverse effect on our business, results of operations, and financial condition.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Purchases of Equity Securities
Period |
(a) Total Number of Class A Shares Purchased |
|
|
(b) Average Price Paid per Class A Share |
|
|
(c) Total Number of Class A Shares Purchased as Part of Publicly Announced Plans or Programs |
|
|
(d) Maximum Dollar Value of Class A Shares that May Yet Be Purchased Under the Plans or Program (in millions)* |
|
||||
April 1 – April 30, 2026 |
|
- |
|
|
$ |
- |
|
|
|
- |
|
|
$ |
113.3 |
|
May 1 – May 31, 2026 |
|
60,103 |
|
|
$ |
238.78 |
|
|
|
60,103 |
|
|
$ |
98.9 |
|
June 1 – June 30, 2026 |
|
19,507 |
|
|
$ |
245.08 |
|
|
|
19,507 |
|
|
$ |
94.1 |
|
Total |
|
79,610 |
|
|
|
|
|
|
79,610 |
|
|
|
|
||
* Refer to “Liquidity and Capital Resources — Share Repurchase Program” for additional information regarding our authorized share repurchase program.
Item 3. Defaults Upon Senior Securities.
None
Item 4. Mine Safety Disclosures.
None
Item 5. Other Information
Insider Trading Arrangements
During the three months ended June 30, 2026, none of our directors or officers (as defined in Rule 16a-1 under the Exchange Act)
On
On
Item 6. Exhibits
Exhibit |
Description |
|
|
10.1+† |
Seventh Amendment to Service Agreement, dated April 29, 2026, by and between Dave Operating LLC and Galileo Financial Technologies, LLC. |
|
|
31.1 |
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002 |
|
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31.2 |
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002 |
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32.1** |
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002 |
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101.INS |
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document. |
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101.SCH |
Inline XBRL Taxonomy Extension Schema Document With Embedded Linkbase Documents. |
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104 |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
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** Furnished and not filed.
+ Certain identified information has been redacted in accordance with Regulation S-K Item 601(b)(2)(ii) or 601(b)(10)(iv), as applicable.
† The schedules or similar attachments to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Company agrees to furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon its request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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Dated: August 5, 2026 |
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Dave Inc. |
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By: |
/s/ Jason Wilk |
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Jason Wilk |
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Title: Chief Executive Officer |
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Dated: August 5, 2026 |
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Dave Inc. |
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By: |
/s/ Kyle Beilman |
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Kyle Beilman |
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Title: Chief Financial Officer and Chief Operating Officer |