Dave Inc.

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Dave's financial results for the fourth quarter and full year ended December 31st, 2022. Joining us today are Dave's CEO, Mr. Jason Wilk, and the company's CFO, Mr. Kyle Bileman. By now, everyone should have access to the fourth quarter and full year 2022 earnings press release, which was issued today earlier at approximately 4.05 p.m. Eastern Time. The release is available in the investor relations section of Dave's website at investors.dave.com. In addition, this call will also be available for a webcast replay on the company's website. Following management's remarks, we'll open the call for your questions. Certain comments made on this conference call and webcast are considered to be forward-looking statements under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain known and unknown risks and uncertainties. as well as assumptions that could cause actual results to differ materially from those reflected in the forward-looking statements. These forward-looking statements are also subject to other risks and uncertainties that are described from time to time in the company's violence with the SEC. Do not place undue reliance on any forward-looking statements which are being made only as of the date of this call. Except as required by law, the company undertakes no obligation to revise or publicly release the results of any revision to any sort of follow-looking statements. The company's presentation also includes certain non-GAAP financial measures, including adjusted EBITDA as supplemental measures of performance of our business. All non-GAAP measures have been reconciled to the most directly comparable GAAP measures and according to the SEC rules. You'll find reconciliation charts and other important information in the earnings press release and Form 8K furnished to the SEC. I would now like to turn the call over to Dave's CEO, Mr. Jason Wolfe.

Thank you, and good afternoon, everyone.

I'm incredibly proud of our team as we made great headway in our first year as a public company, growing to nearly 2 million monthly transacting members. We also grew revenue by nearly 34%, with Dave Card transaction revenue growing by 88%. As we exited the year, our profitability trends also dramatically improved as our adjusted EBITDA loss more than half, from $29 million in Q3 to $12 million in Q4 while we maintain ample liquidity to reach profitability. Before we get into the details of the quarter, I'd like to provide a brief overview of our business for those less familiar with our story. Dave is one of the leading U.S. neobanks and a pioneer in financial services, using disruptive technology to provide best-in-class banking services to millions of members at a fraction of the cost compared to incumbents. The anchor of our banking value proposition, extra cash, provides up to $500 of short-term interest-free advances to members within minutes of joining. The speed of value, access, and pricing of extra cash compared to traditional overdraft sets us apart from incumbents and is a key to our strategy of efficiently acquiring Transacting Dave debit card members. Now to dive a little deeper into the quarter and our progress against our strategy to be the superior banking product for everyday Americans. Our first area of focus is to acquire banking customers efficiently at scale by marketing top of mind liquidity pain points for hardworking Americans. Dave's low cost banking services with DaveCard combined with extra cash remains a key differentiator to driving efficient customer acquisition. We added nearly 550,000 net new members in the fourth quarter while reducing our customer acquisition costs by 31% compared to the prior quarter. This improvement in customer acquisition costs is supported by ongoing initiatives to optimize our channel mix and creative strategies across marketing platforms and enhanced measurement and reporting infrastructure that we believe is allowing us to deploy marketing dollars more efficiently. Not only has CAC come down by nearly a third, but we've also been able to acquire higher quality members. Our Q4 cohorts are delivering among the highest RPU retention and margins that we've ever seen from new members. Our second focus area is to engage customers by delighting them with same-day access of up to $500 of extra cash using our AI-driven underwriting. Extra cash experienced a steady increase in origination volume throughout 2022, with record volume of $801 million in Q4, a near 80% increase from the year-ago quarter. Despite the strong growth, our Extra Cash advanced net receivables portfolio totaled just $104 million as of quarter end, underscoring the high velocity and capital efficient nature of the product. In the current economic environment, we believe there are significant sector tailwinds which will benefit demand for Extra Cash. With personal balance sheets coming under pressure due to inflation and rising costs, combined with other credit providers cutting back on risk, consumers are more likely to seek short-term liquidity solutions such as Extra Cash to bridge their financial gaps. This supply and demand dynamic leaves us optimistic about our growth prospects, and we believe that we're uniquely positioned to service this demand based on our differentiated underwriting capabilities. Since inception, we have dispersed over 65 million advances to members, which has provided us with the unique ability to refine and retrain our underwriting models based on a massive proprietary data set. We continuously retrain and optimize our AI-based underwriting models to maximize our portfolio economics. As such, we continue to demonstrate our differentiated risk management capability with our 28-day delinquency rate declining by approximately 50 basis points quarter over quarter to 3.58%. Notably, this is a 62 basis points improvement than pre-pandemic levels when compared to the fourth quarter of 2019. We anticipate continued improvements in delinquency performance in the first quarter which is our seasonally strongest given the repayment support tax refunds provide our members. Our underwriting is differentiated in that our AI is primarily using bank account transaction data. The data we receive allows us to detect nearly in real-time changes in income, cash flow, spending, and savings patterns, as well as employment status, which we use as a leading indicator to underwrite and automatically settle with our members. By contrast, FICO-based underwriting creates predicates credit decisions on bureau data, which are lagging indicators of customer risk with no insight into when customers can afford to make a payment. We believe the combination gives a structural advantage in a stressed economic environment. In terms of extra cash product structure, its short average duration of one to two weeks provides a distinct advantage in allowing it to make updates to our underwriting models significantly faster than traditional credit products with longer durations. we're able to adjust our underwriting on a continuous basis and observe the impact on our portfolio within days and weeks of origination. This contrasts with longer-tenured credit products where it can take years to meaningfully adjust the pricing and underwriting in the underlying portfolios to reflect consumer credit market conditions. Overall, extra cash provides superior value over traditional overdraft and other short-term credit products for everyday consumers in terms of speed, cost, and access. In addition, the real-time insights into the financial profiles of our members, combined with the short duration and limited balance sheet requirements, allows us to generate significant risk-adjusted returns on the advances we provide that are consistently improving with our continued investments in AI. Our final focus area is to create deeper payments relationships with our members by accelerating adoption of our Dave debit card. We are ultimately working towards becoming a primary destination for our members to deposit their paychecks putting Dave at the center of their financial lives. We are making meaningful progress towards this objective with card engagement reaching record levels in Q4. Extra cash has been established as a significant driver of initial card usage. As a result, member engagement has continued to improve with average transactions per monthly transacting member for the fourth quarter growing to 5.2x and Dave card spending volume increasing 34% quarter over quarter and over 50% year over year. We anticipate these positive trends to continue with ongoing product development focused on capturing this opportunity in 2023. The business benefits of Dave card engagement are clear to us. Active Dave card members and direct depositors generate more robust transaction activity in Arbu, have better retention characteristics, and generate substantially more lifetime value relative to a typical non-transacting Dave member. As I mentioned earlier, 2022 was Dave's first full year as a public company. And I'm proud of what we accomplished. We made significant progress enhancing our banking suite to bring more value to our members. We reached record scale with monthly transacting members approaching nearly 2 million by the end of the year. And we improved our unit economics, drove marketing efficiencies, and expanded margins to continue pairing adjusted EBITDA losses as we exited the year, all of which will set us up for a strong 2023. Looking ahead to this year, we remain focused on increasing the utility and value of our date card business, further supported by enhancements to extra cash. We expect these priorities to expand the value we deliver to our members, further improve our unit economics and cross-attach rates, solidifying our path to profitability in 2024, in line with the target we established more than one year ago. With that, I will turn the call over to Kyle to take you through our financial results.