Dave Inc. (the “Company”) (Nasdaq: DAVE, DAVEW), one of the leading
U.S. neobanks, today reported its financial results for the first
quarter ended March 31, 2023.
“We made significant progress on our path to profitability, as
reflected by another quarter of improved variable margin, Adjusted
EBITDA and net loss,” said Jason Wilk, Founder and Chief Executive
Officer of Dave. “Q1 revenue was in-line with our expectations as
demand for ExtraCash is typically softest in the first quarter due
to tax refunds. As a result, we moderated marketing investment,
which, in combination with the sequential variable margin
expansion, allowed us to more than halve our Adjusted EBITDA loss
for the second consecutive quarter. Our outlook remains positive,
and we look forward to delivering on our 2023 revenue and
profitability targets supported by normalized seasonal demand,
increased marketing investment and ongoing product enhancements in
the quarters ahead.”
Quarterly Financial Highlights ($ in millions
unless otherwise noted)
|
1Q22 |
2Q22 |
3Q22 |
4Q22 |
1Q23 |
GAAP Operating Revenues, Net% Change vs. prior
year period |
|
$42.624% |
|
|
$45.823% |
|
|
$56.841% |
|
|
$59.645% |
|
|
$58.938% |
|
Non-GAAP Operating Revenues*% Change vs. prior
year period |
|
$43.723% |
|
|
$47.022% |
|
|
$58.641% |
|
|
$61.846% |
|
|
$60.639% |
|
Non-GAAP Variable Profit Margin* |
|
41% |
|
|
39% |
|
|
42% |
|
|
41% |
|
|
56% |
|
GAAP Net Loss |
|
($32.8) |
|
|
($27.1) |
|
|
($47.5) |
|
|
($21.5) |
|
|
($14.0) |
|
Adjusted EBITDA (Loss)* |
|
($18.3) |
|
|
($28.5) |
|
|
($28.5) |
|
|
($11.8) |
|
|
($4.5) |
|
*See reconciliation of the non-GAAP measures at the end of the
press release.
First Quarter 2023 Operating
Highlights (vs. Q1
2022)
- Added 587,000 New Members while reducing customer acquisition
cost by ~39%.
- Monthly Transacting Members (“MTMs”) increased 34% to 2.0
million. Transactions per MTM increased 19% to 5.4.
- ExtraCash originations increased 46% to $798 million, while the
28-Day delinquency rate improved 67 basis points to 2.60%.
- Dave Debit Card spend increased 62% to $295 million compared to
$182 million.
- For a full review of the Company’s KPIs, please refer to the
Company’s Q1 2023 Earnings Presentation which can be found
here.
Liquidity Summary
The Company had $196 million of cash and cash equivalents,
marketable securities, short-term investments and restricted cash
as of March 31, 2023. This compares to $193 million at December 31,
2022. This increase in available liquidity was driven by the
operating performance of the business, including greater ExtraCash
settlements associated with strong credit performance and the
seasonally-driven reduction of ExtraCash originations. The Company
did not increase utilization of its debt facility in the
quarter.
2023 Financial Outlook
For fiscal year 2023, the Company continues to expect the
following:
- Non-GAAP operating revenue between $235 million - $260 million,
reflecting annual growth of 11% - 23%;
- Non-GAAP variable margin to expand to 43% - 47%, representing
approximately 200 bps - 600 bps improvement from 2022; and
- Adjusted EBITDA (Loss) between ($50) million - ($35) million,
improving approximately 43% - 60% from 2022.
Dave CFO Kyle Beilman commented: “We are on track to achieve our
revenue, variable margin and Adjusted EBITDA guidance in 2023. We
plan to prudently scale marketing investments over the coming two
quarters to accelerate growth, which, in combination with
normalized variable margin, will increase Adjusted EBITDA losses in
those two periods. With the expected additional scale from those
marketing investments, in conjunction with the improvements we’ve
achieved on our unit economics to date, we’re well positioned to
achieve our target of turning Adjusted EBITDA profitable in 2024.
We continue to believe we have ample liquidity to deliver on our
growth plan without the need to raise equity capital.”
Conference Call
The Company will host a conference call at 4:30 p.m. Eastern
time on Tuesday, May 9, 2023, to discuss the results for its first
quarter ended March 31, 2023.
Dave management will host the conference call, followed by a
question-and-answer period. The conference call details are as
follows:
Date: Tuesday, May 9, 2023Time: 4:30 p.m. Eastern timeDial-in
number: (800) 715-9871Live webcast registration link: here
The conference call will also be available for replay in
the Events section of the Company’s website, along with the
transcript, at https://investors.dave.com.
If you have any difficulty registering for or connecting to the
conference call, please contact Elevate IR at
DAVE@elevate-ir.com.
About DaveDave (NASDAQ: 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, ExtraCash™
Account, provides up to $500 of short term, interest free overdraft
advances to members within minutes of joining. To learn more,
visit: www.dave.com
Forward-Looking Statements
This press release includes forward-looking statements, which
are subject to the “safe harbor” provisions of the U.S. Private
Securities Litigation Reform Act of 1995. These statements may be
identified by words such as “feel,” “believes,” “expects,”
“estimates,” “projects,” “intends,” “should,” “is to be,” or the
negative of such terms, or other comparable terminology and
include, among other things, the quotations of our Chief Executive
Officer and Chief Financial Officer relating to Dave’s future
performance and growth, fiscal year 2023 guidance, expected timing
of meeting Adjusted EBITDA profitability, plans for marketing spend
and other statements about future events. Such forward-looking
statements are not guarantees of future performance and are subject
to risks and uncertainties, which could cause actual results to
differ materially from the forward-looking statements contained
herein due to many factors, including, but not limited to: the
ability of Dave to compete in its highly competitive industry; the
ability of Dave to keep pace with the rapid technological
developments in its industry and the larger financial services
industry; the ability of Dave to manage its growth as a public
company; disruptions to Dave’s operations as a result of becoming a
public company; the ability of Dave to remediate material
weaknesses in Dave’s internal controls over financial reporting and
maintain an effective system of internal control over financial
reporting; the ability of Dave to protect intellectual property and
trade secrets; changes in applicable laws or regulations and
extensive and evolving government regulations that impact
operations and business; the ability to attract or maintain a
qualified workforce; level of product service failures that could
lead Dave members to use competitors’ services; investigations,
claims, disputes, enforcement actions, litigation and/or other
regulatory or legal proceedings; the possibility that Dave may be
adversely affected by other economic, business, and/or competitive
factors; and those factors discussed in Dave’s Annual Report on
Form 10-K filed with the Securities and Exchange Commission (the
“SEC”) on March 13, 2023 and subsequent Quarterly Reports on Form
10-Q under the heading “Risk Factors,” filed with the SEC and other
reports and documents Dave files from time to time with the SEC.
Any forward-looking statements speak only as of the date on which
they are made, and Dave undertakes no obligation to update any
forward-looking statement to reflect events or circumstances after
the date of this press release.
Non-GAAP Financial Information
This press release contains references to Adjusted EBITDA,
non-GAAP operating revenues, non-GAAP variable operating expenses,
non-GAAP variable profit and non-GAAP variable profit margin of
Dave, which are adjusted from results based on generally accepted
accounting principles in the United States (“GAAP”) and exclude
certain expenses, gains and losses. The Company defines and
calculates Adjusted EBITDA as net loss attributable to Dave before
the impact of interest income or expense, provision/(benefit) for
income taxes, depreciation and amortization, and adjusted to
exclude legal settlement and litigation expenses, other
non-recurring strategic financing and transaction expenses,
stock-based compensation expense, and certain other non-core items.
The Company defines and calculates non-GAAP operating revenues as
operating revenues, net excluding direct loan origination costs,
ATM fees, and interchange fees. The Company defines and calculates
non-GAAP variable operating expenses as operating expenses
excluding non-variable operating expenses. The Company defines
non-variable operating expenses as all advertising and marketing
operating expenses, compensation and benefits operating expenses,
and certain operating expenses (legal, rent,
technology/infrastructure, depreciation, amortization, charitable
contributions, other operating expenses, upfront Member account
activation costs and upfront Dave Banking expenses). The Company
defines and calculates non-GAAP variable profit as non-GAAP
operating revenues excluding non-GAAP operating expenses. The
Company defines and calculates non-GAAP variable profit margin as
non-GAAP variable profit as a percent of non-GAAP operating
revenues.
These non-GAAP financial measures may be helpful to the user in
assessing our operating performance and facilitates an alternative
comparison among fiscal periods. The Company’s management team uses
these non-GAAP financial measures in assessing performance, as well
as in planning and forecasting future periods. These non-GAAP
financial measures are not computed according to GAAP and the
methods the Company uses to compute them may differ from the
methods used by other companies. Non-GAAP financial measures are
supplemental, should not be considered a substitute for financial
information presented in accordance with GAAP and should be read
only in conjunction with our consolidated financial statements
prepared in accordance with GAAP.
Refer to the section further below for a reconciliation of these
non-GAAP financial measures to their most directly comparable GAAP
measures for the three months ended March 31, 2023 and 2022.
Certain Other Terms
Dave defines Net New Members as the number of new Members who
join the Dave platform in a given period by connecting an existing
bank account to the Dave service or by opening a new Dave Banking
account, net of the number of accounts deleted by Members or closed
by the Company in the same period. Total Members is defined as the
number of unique Members that have either connected an existing
bank account to the Dave service or have opened a Dave Banking
account, less the number of accounts deleted by Members or closed
by Dave, as measured at the end of a period. The number of Monthly
Transacting Members represents the unique number of Members who
have made a funding, spending, ExtraCash or subscription
transaction within a particular month, measured as the average over
a given period. Transactions Per Monthly Transacting Member
measures the average number of transactions initiated per Monthly
Transacting Member in each month, measured as the average over a
given period.
Investor Relations Contact
Sean Mansouri, CFAElevate IRDAVE@elevate-ir.com
Media Contact
Kira Sarkisianpress@dave.com
|
DAVE INC. |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(in millions) |
(unaudited) |
|
|
|
|
|
|
|
For the Three Months Ended March 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
Operating revenues: |
|
|
|
|
Service based revenue, net |
|
$ |
52.6 |
|
|
$ |
39.3 |
|
Transaction based revenue, net |
|
|
6.3 |
|
|
|
3.3 |
|
Total operating revenues, net |
|
|
58.9 |
|
|
|
42.6 |
|
Operating expenses: |
|
|
|
|
Provision for unrecoverable advances |
|
|
12.0 |
|
|
|
13.8 |
|
Processing and servicing costs |
|
|
7.1 |
|
|
|
6.5 |
|
Advertising and marketing |
|
|
9.4 |
|
|
|
12.2 |
|
Compensation and benefits |
|
|
24.4 |
|
|
|
17.9 |
|
Other operating expenses |
|
|
18.5 |
|
|
|
14.8 |
|
Total operating expenses |
|
|
71.4 |
|
|
|
65.2 |
|
Other expenses (income): |
|
|
|
|
Interest expense, net |
|
|
1.6 |
|
|
|
1.5 |
|
Other strategic financing and transactional expenses |
|
|
— |
|
|
|
1.0 |
|
Changes in fair value of earnout liabilities |
|
|
— |
|
|
|
(2.0 |
) |
Changes in fair value of derivative asset on loans to
stockholders |
|
|
— |
|
|
|
5.6 |
|
Changes in fair value of public and private warrant
liabilities |
|
|
(0.1 |
) |
|
|
4.1 |
|
Total other expenses |
|
|
1.5 |
|
|
|
10.2 |
|
Net loss before provision for income taxes |
|
|
(14.0 |
) |
|
|
(32.8 |
) |
Provision for income taxes |
|
|
— |
|
|
|
— |
|
Net loss |
|
$ |
(14.0 |
) |
|
$ |
(32.8 |
) |
|
|
|
|
|
|
|
|
|
|
DAVE INC. |
RECONCILIATION OF OPERATING REVENUES, NET TO NON-GAAP
OPERATING REVENUES |
(in millions) |
(unaudited) |
|
|
|
|
|
For the Three Months Ended March 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
Operating revenues, net |
|
$ |
58.9 |
|
|
$ |
42.6 |
|
ExtraCash origination and ATM-related costs |
|
|
1.7 |
|
|
|
1.1 |
|
Non-GAAP operating revenues |
|
$ |
60.6 |
|
|
$ |
43.7 |
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING
EXPENSES |
(in millions) |
(unaudited) |
|
|
|
|
|
For the Three Months Ended March 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
Operating expenses |
|
$ |
71.4 |
|
|
$ |
65.2 |
|
Non-variable operating expenses |
|
|
(44.8 |
) |
|
|
(39.3 |
) |
Non-GAAP variable operating expenses |
|
$ |
26.6 |
|
|
$ |
25.9 |
|
|
|
|
|
|
|
|
|
|
|
CALCULATION OF NON-GAAP VARIABLE PROFIT |
(in millions) |
(unaudited) |
|
|
|
|
|
For the Three Months Ended March 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
Non-GAAP operating revenues |
|
$ |
60.6 |
|
|
$ |
43.7 |
|
Non-GAAP variable operating expenses |
|
|
(26.6 |
) |
|
|
(25.9 |
) |
Non-GAAP variable profit |
|
$ |
34.0 |
|
|
$ |
17.8 |
|
Non-GAAP variable profit margin |
|
|
56 |
% |
|
|
41 |
% |
|
|
|
|
|
|
|
|
|
|
DAVE INC. |
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA |
(in millions) |
(unaudited) |
|
|
|
|
|
For the Three Months Ended March 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
Net loss |
|
$ |
(14.0 |
) |
|
$ |
(32.8 |
) |
Interest expense, net |
|
|
1.6 |
|
|
|
1.5 |
|
Provision for income taxes |
|
|
— |
|
|
|
— |
|
Depreciation and amortization |
|
|
1.2 |
|
|
|
1.1 |
|
Stock-based compensation |
|
|
6.8 |
|
|
|
3.2 |
|
Other strategic financing and transactional expenses |
|
|
— |
|
|
|
1.0 |
|
Changes in fair value of earnout liabilities |
|
|
— |
|
|
|
(2.0 |
) |
Changes in fair value of derivative asset on loans to
stockholders |
|
|
— |
|
|
|
5.6 |
|
Changes in fair value of public and private warrant
liabilities |
|
|
(0.1 |
) |
|
|
4.1 |
|
Adjusted EBITDA |
|
$ |
(4.5 |
) |
|
$ |
(18.3 |
) |
|
|
|
|
|
|
|
|
|
|
DAVE INC. |
LIQUIDITY AND CAPITAL RESOURCES |
(in millions) |
(unaudited) |
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
Cash, cash equivalents and restricted cash |
|
$ |
52.5 |
|
|
$ |
23.7 |
|
Marketable securities |
|
|
34.4 |
|
|
|
0.3 |
|
Short-term investments |
|
|
108.8 |
|
|
|
168.8 |
|
Working capital |
|
|
265.3 |
|
|
|
272.2 |
|
Total stockholders’ equity |
|
|
100.1 |
|
|
|
106.6 |
|
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