Digital banking platform Dave (NASDAQ: DAVE) reported Q3 CY2025 results beating Wall Street’s revenue expectations, with sales up 63% year on year to $150.8 million. The company’s full-year revenue guidance of $545.5 million at the midpoint came in 6.5% above analysts’ estimates. Its non-GAAP profit of $4.24 per share was 81% above analysts’ consensus estimates.

Is now the time to buy DAVE? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Dave’s third quarter saw revenue growth and profitability metrics that exceeded Wall Street expectations, but the market response was negative. Management attributed the quarter’s results to a combination of strategic pricing model changes and the rollout of enhancements to its CashAI underwriting platform. CEO Jason Wilk emphasized the impact of switching from an optional to a mandatory fee structure, leading to higher net monetization per transaction and improved member lifetime value. Wilk also highlighted record performance in net credit revenue and the successful deployment of CashAI v5.5, which contributed to better conversion and credit outcomes.

Looking forward, management’s outlook is shaped by ongoing improvements in credit performance and the ramp-up of subscription revenue under the new fee structure. Dave plans to roll out new products, including a buy now, pay later (BNPL) offering, and further expand its partnership with Coastal Community Bank, which is expected to reduce funding obligations and free up capital. CFO and COO Kyle Beilman stated, “All aspects of our growth strategy are performing exceptionally well,” while Wilk noted that product innovation and enhancements to AI-driven underwriting will be central to sustaining growth.

Key Insights from Management’s Remarks

Management pointed to the successful execution of a new pricing model and advances in AI-driven underwriting as primary drivers of the quarter’s performance, while also detailing progress in member acquisition and engagement.

• Mandatory fee model impact: The transition to a mandatory fee structure for new members significantly increased credit revenue retention and allowed for higher customer approval limits, improving portfolio spreads and member lifetime value.
• CashAI v5.5 rollout: The deployment of CashAI v5.5, Dave’s updated underwriting engine, incorporated more than 200 additional data features, resulting in higher approval rates, increased average origination size, and improved credit performance.
• Member acquisition efficiency: Dave maintained stable customer acquisition costs (CAC) at $19 per new member, while CAC per new monthly transacting member (MTM) declined due to improved conversion, shortening the gross profit payback period to under four months.
• ExtraCash and Dave Card synergy: ExtraCash originations grew 49% year-over-year, with average origination size increasing and 30% of customers sending ExtraCash to the Dave Card, supporting both credit and card spend growth. Total card spend climbed 25% year-over-year.
• Subscription revenue expansion: The rollout of a $3 monthly subscription fee for new members in late Q2 accelerated high-margin subscription revenue growth (up 57% year-over-year), with management expecting this to become a greater profit contributor as more members adopt the new pricing.

Drivers of Future Performance

Dave’s future performance will depend on continued product innovation, credit underwriting improvements, and the successful execution of new banking partnerships.

• AI-driven credit enhancements: Management expects further improvements in net monetization per transaction and credit outcomes from ongoing CashAI updates, which underpin higher approval rates and expanded origination sizes.
• Product pipeline and BNPL launch: The upcoming launch of a buy now, pay later product, leveraging Dave’s proprietary cash flow data and AI underwriting, is seen as a significant growth opportunity, especially given that about 60% of current members already use BNPL services elsewhere.
• Bank partnership and funding shift: The full migration to Coastal Community Bank as the primary banking partner will move receivables off Dave’s balance sheet, reducing funding obligations, lowering capital costs, and increasing capital available for strategic initiatives; this transition is expected to be completed in early 2026.

Catalysts in Upcoming Quarters

In the coming quarters, we will focus on (1) tracking the rollout and customer adoption of Dave’s BNPL product, (2) monitoring the transition of banking and receivables to Coastal Community Bank for its impact on funding and liquidity, and (3) observing the continued growth in subscription revenue under the new pricing model. Execution on AI-driven credit enhancements and new member engagement strategies will also be important markers.

Dave currently trades at $231, down from $239.92 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).

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