Dave Inc.

Good morning, everyone, and thank you for participating in today's conference call to discuss Dave's financial results for the first quarter ended March 31st, 2024. Joining us today are Dave's CEO, Mr. Jason Wilk, and the company's CFO, Mr. Kyle Beeman. By now, everyone should have access to the first quarter 2024 earnings press release, which was issued earlier today. This 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 webcast replay on the company's website. Following management's remarks, we'll open the call to your questions. Certain comments made on this conference call and webcast are considered 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 these 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 filings with the SEC. Do not place undue reliance on 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 forward-looking statements. The company's presentation also includes certain non-GAAP financial measures, including adjusted EBITDA as supplemental measurements of performance of our business. All non-GAAP measurements have been reconciled to the most direct directly comparable gap measures in accordance with the SEC rules. You'll find reconciliation charts and other important information in the earnings press release form 8K furnished by the SEC. I would now like to turn the call over to Dave's CEO, Mr. Jason Wilk.

Please go ahead. Thank you, and good morning, everyone.

Dave's strong business performance from last year continued into 2024. as we exceeded our growth and profitability targets in the first quarter. Revenue grew by 25% year-over-year, our second consecutive quarter of accelerating revenue growth, and our operating expenses declined on a year-over-year basis for the fourth consecutive quarter as we continue to lean into the operating leverage inherent in our business model. As a result, we posted our second consecutive quarter of profitability, generating $13.2 million of adjusted EBITDA in the first quarter, representing a nearly $18 million improvement relative to Q1 of last year and a 32% improvement sequentially. As a result, we have raised our adjusted EBITDA guidance for 2024 to reflect these outstanding results as we further expand our multi-transacting member base beyond the 2.1 million member inflection point at which we achieved profitability in 4Q of last year. We are one of the pioneers in leveraging AI and machine learning techniques within financial services. Harnessing the power of AI is an additional source of operating leverage across the business with our internally developed cash AI underwriting engine and our AI-enabled chatbot called DaveGPG. Cash AI underwrites our members' cash flow data as we're able to detect income and spending patterns as well as employment signals at a granular level. Extra cash's short duration lends itself to cash flow underwriting, as we have originated nearly 100 million extra cash advances since inception with steadily improving loss rates. providing a tremendous opportunity for Cache AI's machine learning to continually optimize. We believe Cache AI's time-tested and data-rich ability to underwrite effectively through multiple economic cycles creates a powerful moat that continues to distinguish Dave from new and existing competitors. With Cache AI, we've demonstrated our ability to consistently grow origination volume while improving loss rates, further validating our ability to continue to scale while creating more opportunities for member value and improved monetization moving forward. Meanwhile, Dave GPT has helped us reduce member success-related costs while increasing member satisfaction and supporting member retention, which is a win-win for our members and for our cost structure. In the first quarter of 2024, we extended our live chat hours of operation based on the strong resolution rates we have been achieving with Dave GPT. This increased the mix of member contacts that we are handling through the highly cost-effective Dave GPT platform while contributing to a 14% sequential increase in our member success net promoter scores in the quarter. Overall, we are continuing to invest deeply in AI as part of our strategy to maximize efficiency, generate operating leverage, and further differentiate ourselves in the marketplace. With that said, I'd now like to provide more detail on the first quarter and our continued progress on Dave's growth strategy of acquiring new members efficiently, engaging them effectively with interest-free credit via Extra Cash, and deepening our relationship with them via DaveCard banking engagement. We continue to focus on acquiring members efficiently as one of our key competitive differentiators. We've made considerable progress strengthening new member conversion, as well as existing member retention and reactivation over the past year, which is translating into greater lifetime value of our members. Given that our CAC remained highly efficient in the first quarter at $16, which is consistent with the level we achieved in the year-ago period, the returns on our marketing investments are expanding alongside member lifetime value. Relative to the prior quarter, our CAC rose by $1 as a result of seasonally softer demand for extra cash as tax refunds often support the liquidity needs of our member base during the first quarter. Being an election year, we are keeping a watchful eye on potential election impact on our CAC, though we have not experienced any thus far. The member acquisition environment has remained very constructive thus far in Q2, and we remain optimistic about our ability to drive efficient member growth moving forward. That said, we will continue to exercise discipline as November approaches as we remain committed to our goal of ensuring our return hurdles are met with the marketing dollars we deploy. The second pillar of our growth strategy is driving greater MTM engagement through the Extra Cash product as a starting point for the member journey. Our monthly transacting member base continues to grow with MTMs up 14% year over year and 6% sequentially to a record 2.2 million. This growth was favorably impacted by the meaningful progress we've made strengthening member retention and reactivation, as well as the successful implementation of our next-generation subscription billing system, which has helped to enhance subscriber retention and is expected to enable us to expand subscription opportunities in the future. For the second consecutive quarter, we dispersed over $1 billion in extra cash advances to our members, increasing origination 32% year-over-year and 2% sequentially. This sustained growth, particularly during a seasonally softer quarter, is a testament to the strength of our proprietary cash AI underwriting model, which allows us to effectively underwrite more day members for higher extra cash revamped sizes while improving upon credit performance. Our 28-day delinquency rate remains significantly below Q1 2023 at 1.83%, a 77 basis point improvement year over year. This extends our track record of improving our already stellar credit performance, differentiating ourselves from incumbents, As mentioned on prior calls, we remain focused on investments in our cash AI underwriting model to expand credit access for our members as we aim to scale the member base while continuing to improve our ability to evaluate credit risk. Credit performance in the first quarter benefits from the additional liquidity which tax refunds provided to our members. As a result of that dynamic, we expect our 28-day delinquency rate to normalize through the rest of the year, consistent with historical patterns, though well below 2023 levels on a light quarter basis. attributable to the sustained improvements we've made to the risk management. Lastly, onto the third pillar of our guiding framework, deepening member relationships by driving top of wallet spending through our DaveCard offering. Our approach has been to leverage extra cash to drive cross-attach to the DaveCard by making the extra cash funds available more quickly and inexpensively if sent to the DaveCard. These products are naturally complementary, which we expect to more fully leverage going forward by making members' experiences on either product even better when they use both products. Our strategy is proving effective with cross-attach rates up approximately 10% on a year-over-year basis. This is an efficient way for us to drive trial with a deep card and an important step in building the trust required to win direct deposit relationships. Direct deposit relationships are notably impactful given the 5 to 6x transaction revenue ARPU increase we typically capture once a direct deposit relationship has been established. We're still in the early endings of winning direct deposit and top-of-the-wall spending behavior with our members, which is a strategic focus for us in 2024. Overall, our Dave card continues to gain traction with spending volume in the first quarter up 34% year-over-year and 7% sequentially to a record $394 million. Average transactions per MTM post a 15% year-over-year increase based on our continued focus on driving members to spend their extra cash on their Dave card, as well as improvements in extra cash engagement. This metric declined on a sequential basis due to the full quarter impact of Dave's new subscription billing system, which caused a higher proportion of subscriber-only MTMs who transact one time per month. We believe there is plenty of room to continue growing this metric as we begin capitalizing on the opportunity to incentivize direct deposit engagement. Pulling together the progress we've made across extra cash, DaveCard, and subscriptions, we recorded a 10% increase in ARPU and Q1 on a year-over-year basis due to improvements in both extra cash engagement and monetization, as well as growth in DaveCard ARPU. ARPU declined 5% sequentially in Q1 due to seasonally lower demand for extra cash during tax refund season, as well as a full quarter impact under the new subscription billing system, which increased the mix of subscriber-only MTMs who typically generate the lowest ARPU. To wrap things up before I pass it over to Kyle, our outlook remains very positive. Our strategy and value proposition are squarely aligned with the needs of target customers, and the macro backdrop remains supportive of our growth. Our team is executing well, and I'm proud of the great work that we're delivering. We remain focused on identifying and executing on product improvements to expand member ARPU and lifetime value, as well as continuing to grow our monthly transacting member base beyond the 2.1 million member inflection point at which we achieve profitability. We plan to do this while remaining disciplined with our costs and utilizing our world-class technology, including the use of AI to deliver substantial operating leverage. We look forward to further delivering value to our customers and shareholders as we solidify Dave as a superior banking solution for everyday Americans. With that, I will turn the call over to Kyle to take you through our financial results.