Dave (DAVE) Q2 EPS Jumps 211%

Dave (DAVE -17.89%), a digital finance platform focused on providing banking and credit solutions to financially vulnerable Americans, released its second quarter fiscal 2025 earnings on August 6, 2025. The company reported Non-GAAP earnings of $3.14 per diluted share for Q2 2025, significantly higher than the $1.43 analysts expected (non-GAAP). GAAP revenue for Q2 2025 was $131.7 million, outpacing the $113.16 million GAAP estimate. Revenue growth accelerated for the third consecutive quarter to the fastest rate in over five years, with raised guidance reflecting management's confidence in further gains. The quarter stood out for substantial improvements in profitability, as Dave reported both GAAP and non-GAAP profitability gains, strong user engagement, and momentum across Dave’s core products and services.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Understanding Dave’s Business and Priorities

Dave offers banking tools and small-dollar lending products for Americans who manage tight budgets or live paycheck to paycheck. The company aims to serve individuals often overlooked by traditional banks by providing services such as ExtraCash, an advance product, and a no-fee checking account with financial management features.

The business centers on user acquisition and deepening engagement with its financial ecosystem. Dave’s success relies on expanding its reach within its target market, driving average revenue per user through product adoption, and using technology to underwrite risk efficiently. A focus on regulatory compliance and establishing strong banking partnerships also supports its strategy.

Quarterly Highlights: User Growth, Product Engagement, and Financial Performance

The quarter brought substantial expansion in both the user base and engagement metrics. Dave added 722,000 new members in Q2 2025, up from 569,000 in Q1 2025, while keeping average customer acquisition cost relatively low at $19. The platform’s monthly transacting members rose 16% year over year to 2.6 million, reflecting strong uptake in its core credit and banking products.

ExtraCash, Dave’s flagship advance product, experienced 51% growth in originations to $1.8 billion. The majority of advance dollars went to repeat users, with 97–98% of originations coming from existing customers in any given period. Management highlighted the depth of the relationship, citing that a typical repeat user transacted with ExtraCash 20 to 30 times over their tenure. The 28-day delinquency rate, which measures the share of loans not repaid within that period, increased to 2.40% from 2.03% a year ago

Engagement extended beyond lending into spending with the Dave Debit Card, which saw transaction volume grow 27% year over year to $493 million. The move to a new flat mandatory fee structure for ExtraCash replaced variable tips and instant transfer charges, delivering more predictable revenue and supporting increases in average revenue per user. The company noted this transition delivered a full-quarter benefit.

On financials, Dave grew its non-GAAP gross profit 78% year-over-year, supported by a 70% non-GAAP gross margin—up 5 percentage points year over year. Adjusted EBITDA rose to $50.9 million, a 236% jump in adjusted EBITDA from a year earlier. Net income (GAAP) climbed to $9.1 million, with non-operating line items introducing some volatility due to changes in the value of warrants and earnout liabilities. The company also strengthened its liquidity, with total cash, cash equivalents, marketable securities, investments, and restricted cash increasing by $15 million, ending the period with $104.7 million in cash, cash equivalents, marketable securities, investments, and restricted cash.

Technological advantages played an important role in Dave's performance. Its proprietary CashAI system analyzes customers' bank transactions to determine creditworthiness in real-time without relying on standard credit scores. This approach allows Dave to efficiently manage risk and scale originations while offering its services to more users. Management also underscored improvements in capital efficiency, noting the period required just four months of non-GAAP gross profit to recover customer acquisition costs, down from approximately 5 months a year ago.

The quarter included major strategic moves, such as a partnership deepening with Coastal Community Bank. This transition is expected to allow Dave to begin moving more of its ExtraCash receivables off its balance sheet by early 2026, a change expected to boost liquidity and reduce funding burdens. On the regulatory front, the company’s ongoing litigation with the Department of Justice remains unresolved, though management characterized its legal position as strong.

Looking Ahead: Guidance and Investor Watchpoints

Dave raised its full-year FY2025 guidance on both revenue and Adjusted EBITDA, now targeting $505–$515 million in GAAP operating revenue and $180–$190 million in Adjusted EBITDA. These new targets represent anticipated year-over-year growth of 46–48% for GAAP revenue and 108–120% year-over-year growth for Adjusted EBITDA (non-GAAP). Management attributes the increased outlook to the success of the new fee model, robust engagement trends, and increased operating leverage.

Investors should note several risk areas cited by management. Delinquency rates, while still low, have moved up to 2.40% from 2.03% a year ago and could affect provision and credit costs if the trend continues. Non-GAAP gross margins, though higher year over year, dipped sequentially and may remain at current levels as credit patterns normalize. The ongoing DOJ lawsuit remains unresolved and could impact future expense or strategic options. Dave’s heavy reliance on repeat customers for growth also presents a business concentration risk if engagement trends change. Management expects any tangible impact from new product launches to come in 2026 or later.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.