Chime Financial, Inc. Second Quarter 2026 Earnings Conference Call

Good afternoon, and welcome to Chime Financial, Inc.'s second quarter 2026 earnings conference call. Following the speakers' remarks, we will open the lines for questions. As a reminder, this conference call is being recorded, and a replay of this call will be available on our Investor Relations website for a reasonable period of time after the call. I'd now like to turn the call over to Peter Stabler, Vice President of Investor Relations. Thank you. You may begin.

Good afternoon, everyone, and thank you for joining us for CHIME's second quarter 2026 Earnings Conference Call. Joining me today are Chris Britt, our co-founder and CEO, and Matt Newcomb, our CFO. Mark Troughton, our president, will participate in the Q&A session. As a reminder, we will disclose non-GAAP financial measures on this call. Definitions and reconciliations between our GAAP and non-GAAP results can be found in our earnings release and earnings presentation posted on our IR website at investors.chime.com. We will also make forward-looking statements on this call, including statements about our business, future outlook, and goals. Such statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those described. Many of these risks and uncertainties are described in our SEC filings, including our Form 10-Q filed on May 7, 2026. Forward-looking statements represent our beliefs and assumptions only as of the date such statements are made. We disclaim any obligation to update any forward- looking statements except as required by law. I'll now hand the call over to Chris.

Thanks, Peter, and thank you all for joining us today. Q2 was an exceptionally strong quarter without performance across key areas of our business. Active members grew 20 percent and revenue increased 27 percent on a year-over-year basis. We accelerated growth of both card purchase volume and payment revenue, and our enterprise team signed on a top U.S. employer for our QIIME workplace solution. Our strong momentum is translating to the bottom line, with adjusted EBITDA margin expanding to 15% for the quarter, up 12 points year over year. We also posted our second consecutive quarter of GAAP net income. Our results illustrate that QIIME is emerging as the clear market leader and brand of choice for banking mainstream America. We continue to take share of primary accounts from large legacy banks while deepening relationships with our over 10 million active members. The momentum from recent product launches and our ambitious product roadmap gives us confidence in our ability to achieve our vision to be the market leader in primary bank accounts in the U.S., enabling financial progress for millions of Americans who are frustrated with incumbent bank brands. Our new QIIME Prime membership tier was a big contributor to success this quarter. Launched in early April, QIIME Prime membership is available to any member making $3,000 or more of qualifying direct deposits per month. With 5% cashback rewards in the category of their choice, a 3.75% savings API, higher MyPay limits, automatic qualification for an instant loan, credit building, and lifestyle perks like priority pass lounge access, we believe QIIME Prime offers one of the most rewarding ways for mainstream America to manage their everyday spending. The core premise of Chime Prime is to provide even more value to members who engage with us deeply and to broaden our appeal to an even wider range of consumer segments. Four months in, it's clear that that strategy is working. Once again, our fastest-growing segment is among consumers with more than $75,000 in annual income. At the same time, the percentage of new direct positors that reach Chime Prime status is higher than ever. QIIME Prime is encouraging members to expand their relationship with us, with more members than ever making QIIME their primary financial partner. And because Prime members spend more, have higher product attach rates, and are more likely to adopt our QIIME card, they generate substantially higher RPAM, more than double the average QIIME member. Looking ahead, we'll continue to add new features to make QIIME Prime even more compelling. For example, later this quarter, we plan to roll out a revolving, unsecured line of credit in beta, offering a new, flexible liquidity product for Prime members with larger liquidity needs. Overall, we're thrilled with QIIME Prime's early momentum and expected to become a sustained driver of our expansion into higher-earning consumer segments. Turning to recent product news, last month, we announced the launch of QIIME Invest, marking an important evolution for us from spending and savings towards helping our member build long-term wealth. While there are plenty of investment apps out there, what differentiates Chime Invest is its seamless integration into the banking app that millions of Americans rely on for their everyday money management. Almost 40% of Americans don't have any equity ownership, so we're eager to play a role in helping more consumers participate in the upside of our country's economic growth. We can not only help our members get started, but unlike standalone investment apps, we can create a more consistent habit of investing when a paycheck arrives in your QIIME account. QIIME Invest includes managed portfolios created by a registered investment advisor and free self-directed investing that enables members to choose individual equities and ETFs. We're also excited to support Trump accounts pending rollover guidance from the Treasury, and we congratulate them on their successful launch last month. With nearly 80% of members already using our high-yield savings product, we're confident that we can drive adoption and consistent usage of QIIME Invest early in our members' financial journey. We believe this will give QIIME members a better shot at long-term wealth creation because, of course, time in the market matters more than timing the market. Like QIIME Prime, we expect QIIME Invest to play an important role in attracting and retaining a broader segment of consumers to our expanding portfolio of products. Now transitioning to QIIME Enterprise. I'm proud to report some exciting wins for the team. Earlier this week, we announced that Allied Universal, one of the largest employers in the U.S. with approximately 320,000 North American-based employees, has signed on to offer QIIME Workplace, our employee financial wellness suite featuring MyPay at Work. This partnership represents a transformative win and demonstrates that our workplace value proposition can attract the largest employers in the country. We also recently signed a national retailer with about 35,000 employees, and we'll have more to share in the coming weeks when we launch that partnership. With this growing momentum and strong pipeline, we expect QIIME enterprise to become a meaningful contributor to member growth in 2027. Turning to our liquidity products, where we continue to see great performance, MyPay transaction profit grew 3x year-over-year, driven by strong origination volumes of $4.5 billion for the quarter and a sequential improvement in loss rate. And we're particularly excited about the performance of Instant Loans, our low-cost and flexible installment loan product. Originations grew nearly 70% quarter over quarter to $300 million with strong loss rate performance seen across our cohorts, particularly among repeat borrowers. Based on the momentum we're seeing, we expect instant loans to exit Q3 with an annualized revenue run rate of more than $100 million. Our instant loan product has the highest NPS across our product offerings and is the foundation of a new lending platform for us. Looking ahead, we see enormous growth potential in expanded loan eligibility, limits, and duration as we extend our lending footprint into higher income segments with larger liquidity needs. At the core of our competitive advantage is our success in developing primary account relationships. These recurring direct deposits drive more precise underwriting and an advantaged loan repayment position. The significant scale of our spending and lending platform puts us in a strong position to report on the financial health of mainstream American consumers. While geopolitical uncertainties drive headlines, as with recent quarters, we continue to see strong evidence of a healthy consumer. Adjusted for inflation, direct depositor income, account balances, and discretionary and non-discretionary spending continue to grow, and we see no signs of stress across the performance of our liquidity products. on ai we continue to scale jade our ai financial partner to more members who are using it to understand what's happening with their money and help them make better decisions for example last week jade flagged that my food delivery spend was running above my normal pattern and asked if i wanted to set a limit i accepted and now jade tells me when i'm on pace to exceed it while no single transaction is going to change your life we all know that smart money moves compound over time and collectively lead to financial progress. AI will continue to make financial advice more widely available than ever and increasingly free. But what I'm most excited about with Jade is the AI-driven personalized advice and actions that can only take place from within your primary bank account. We'll be sharing more on Jade soon. To sum up, Q2 is another strong quarter. Our results and raised full-year outlook reflect the momentum in our business and the strength of our strategy. We recently announced an internal reorganization that will reduce our workforce by approximately 10%. While these decisions are incredibly difficult, they will create a flatter and faster organization. We continue to see that smaller teams with fewer layers that use AI are shipping faster and getting even more work done. them. AI also continues to drive outsized efficiency gains as we see in our cost to serve. In our roadshow, we highlighted our 3 to 5x cost to serve advantage relative to incumbents. And if you look at where we landed Q2, we've now reduced our cost to serve by an average of 10% for each of the last four years. This is a reflection of our digital first model enhanced further by AI. We're still early in our journey to become the leader in primary accounts for everyday Americans. The opportunity ahead is significant, and we believe that we're well-positioned to win. I'll now turn it over to Matt to cover our financial results and updated outlook.

Thanks, Chris. Q2 was one of our strongest quarters yet as a public company, showcasing the impacts for investments we've made in prior quarters across member acquisition, brand, product innovation, and technology. QIIME Prime is the latest result of these investments, which in Q2 helped us accelerate revenue growth, accelerate actives growth, including direct depositor growth, accelerate volume growth, and accelerate RPAM growth. Meanwhile, we are also demonstrating the structural operating leverage in our model. In Q2, we grew adjusted EBITDA margin 12 percentage points year-over-year to 15%, with 60% incremental margin and delivered our second consecutive quarter of positive GAAP EPS. As we've shown quarter after quarter, ours is a business model with strong long-term earnings power and now near-term profits. We expect these strong results to continue and are raising our guidance for the year, which I'll touch on in a minute. In Q2, we drove strong results across multiple dimensions of growth, active members, RPAM, and transaction profit. Starting with active members, we continue to demonstrate that QIIME is the leader in new checking account openings in the U.S., and in Q2, accelerated active member growth to 20% year-over-year. As a reminder, we have a seasonal business. In particular, tax refund-related activity drives a pull forward of member acquisition and re-engagement into Q1, resulting in seasonally higher quarter-over-quarter net ads each Q1 and lower net ads each Q2. This Q2, we added approximately 200,000 net new active members quarter-over-quarter, twice as many as we added last Q2, and 1.7 million over the last 12 months, or most ever. We ended June with 10.4 million total active members. This accelerating momentum was due to a number of factors. but I'll highlight two. First, Chime Prime, which brings together the best of Chime into a new membership tier, is clearly resonating across our member base, particularly higher earners. As Chris noted, in Q2, we added more members depositing at least $3,000 per month than ever before. We've also seen higher retention rates for existing direct depositors since Prime's launch. Second is the continued positive impact from our early engagement initiatives. such as enabling instant funding and mobile check deposits for new members, which make it easy to get started with QIIME. These initiatives are helping us draw in more members to QIIME and have improved our payback periods to five to six quarters. But the real power is in the combination. We've made it easier than ever to get started with QIIME, and now with QIIME Prime, we are clearly showing our members that the more they do with QIIME, the more they get from QIIME. The result in Q2 was accelerating direct depositor growth, with particular strength in late-stage direct deposit conversions, which hit a record high in the quarter. With this momentum, we now expect to add 1.8 million net new active members in 2026, our largest cohort ever, and well above our original goal of 1.4 million for the year. Second is RPAM. Our direct deposit relationships give us a high-quality, deeply engaged member base and drive strong and sticky RPAM. In Q2, we accelerated RPAM growth to 6% year-over-year, reaching $260 in the quarter. Notably, in Q2, we accelerated RPAM growth while also accelerating active member growth, driving both stronger quantity and quality concurrently. In particular, we saw strength with QIIME Prime members, who to date have over twice the RPAM of our average active member. QIIME Prime improves both conversion to and retention of direct deposit relationships, drives greater wallet share, and helps generate more payments in platform revenue, even net of rewards costs. On the payment side, QIIME Prime helped us accelerate purchase and OIT volume growth to 20% year-over-year in Q2. While we are a nominal payments business, which benefits from some degree of inflation, the acceleration in transaction volumes did not just come from higher gasoline prices, like many others have reported. Ours is much more broad-based. Year-over-year growth in purchase and OIT volumes, excluding gasoline sales, also accelerated to 19%. Chime Prime is also driving Chime Card adoption, which earns higher interchange rates. with credit mix now 27% of total purchase volume. Fueling this growth, we saw an incredibly strong member response to Prime's 5% cashback category of choice rewards offering. This strong engagement, particularly in the gas category, resulted in modestly higher contra-revenue rewards costs than we anticipated in Q2, but we expect those costs to settle lower going forward. In fact, so far in Q3, payments revenue net take rates are pacing to grow two basis points year over year. More broadly, we're excited about cashback rewards as another lever to maximize growth in transaction profit dollars. We're very pleased with the impact right out of the gate. In Q2, we effectively traded one basis point of take rates for five points of volume growth acceleration, which accelerated payments and OIT revenue growth to 21% in the quarter. But we think there is still much more to go. We remain very excited about the multi-year opportunity to expand take rates, net of rewards costs, as we continue to shift more volume to credit. Chime Prime also drives platform revenue, which grew 48% year-over-year in Q2. As Chris noted, Prime members are pre-qualified for instant loans, our 3-12-month installment loan product. This helped fuel origination volume growth up nearly 70% quarter-over-quarter to $300 million in Q2. And we continue to see cohorted loss rates perform very well, with substantially lower loss rates for repeat borrowers. In addition, we continue to drive strong MyPay results, with $4.5 billion of origination volumes in Q2 at loss rates of 90 basis points. All in all, we more than tripled MyPay transaction profit dollars year-over-year to $73 million in Q2. We've also started testing higher MyPay limits, yet another lever to grow transaction profit dollars, and expect to roll these out in the coming months. Finally, I'm excited to announce a new $500 million warehouse facility with Goldman Sachs to fund the continued growth of our liquidity products. This facility is a testament to the strong progress we've already made scaling our liquidity products at low loss rates. The third dimension of growth is transaction profit. Our low-cost operating model has enabled us to offer what we believe is the most compelling breadth of services for mainstream consumers, which, as of Q2, we delivered at 73% transaction margin. Transaction Transaction margin grew four percentage points year-over-year, driven by strong loss rate performance. Along with the growth in actives in RPAM, overall transaction profit grew 36% year-over-year in Q2. Importantly, this isn't flash-in-the-pan growth. We believe this is durable growth, underpinned by cohorts of deeply engaged, long-lasting primary account relationships. Across our cohorts, we see over 100% dollar-based transaction profit retention, net of churn. Our cohorts nearly triple in RPAM as they mature, as members attach to more products over time. And strengthened further by Prime, LTV to CAX are now up to 9x. These attractive unit economics are what drive the structural operating leverage in our business. Strong margin expansion concurrent with meaningful investments in growth. Non-GAAP OPEX as a percent of revenue fell by eight percentage points year-over-year with operating leverage across all OPEX categories. Q2 adjusted EBITDA margin of 15% was up 12 percentage points year-over-year with incremental margins of 60%. We delivered $102 million of adjusted EBITDA and $28 million of net income, our second consecutive quarter of positive GAAP EPS. Turning to our guidance, in the third quarter, we expect revenue between $680 and $690 million, resulting in year-over-year revenue growth between 25 and 27 percent. We expect adjusted EBITDA between 105 and 110 million, an adjusted EBITDA margin of between 15% and 16%. For the full year, we expect revenue between $2.725 and $2.745 billion, resulting in year-over-year revenue growth between 25% and 26%. And we expect full-year adjusted EBITDA of between $465 and $475 million, and an adjusted EBITDA margin of 17%. We now expect an incremental adjusted EBITDA margin north of 60% for 2026. Note that our outlook includes the impact of our recent restructuring announcement. While we will reinvest a portion of payroll savings, this restructuring will also drive further operating leverage, particularly as we head into 2027 when we expect to keep payroll costs flat relative to 2026. Specifically, in Q326, we expect to recognize approximately $16 to $20 million of net cash restructuring charges, partially offset by a reversal of approximately $9 to $12 million in non-cash stock-based compensation expense for an expected impact to net income of $6 to $9 million. Before we open it up for questions, I'd like to say a few personal words. After a decade at Chime, I've decided it's the right time to step down as CFO and spend more time with my family, now a family of five. It has been the opportunity and privilege of my career to have helped build this company from some of its earliest days, and there's so much more ahead. I make this transition when Chime's opportunity is as big as it's ever been, at a moment when the business has incredible momentum, a strong foundation for continued growth, and an extraordinarily talented team carrying it forward. I'll be working closely with Chris, Mark, and the broader team over the coming months to ensure a smooth handoff. Chris and Ryan, thank you for your trust. And to all my Chimer colleagues, thank you for your partnership, your dedication to this great company, and for making Chime such a special place to build.

I want to thank you, Matt, for your leadership over the past 10 years. Matt has really been central to Chime's success and a close friend and partner to me since the very early days. He's worked tirelessly to build and scale Chime for a decade and has now decided to take a well-deserved break. While he will support us through the search for our next CFO in the transition, this will be his last earnings call, and I want to take the opportunity to thank him for everything you've done for us. We've kicked off an executive search, and our president, Mark Troughton, who many of you know, will be president and interim CFO until we find a permanent CFO replacement. With that, we'll open it up to Q&A.

Thank you. If you would like to ask a question, press star 1 on your keypad. To leave the queue at any time, press star 2. We do ask that you limit yourself to one question and one follow-up question and may rejoin the queue if time permitting. Again, that's star 1 to ask a question. And our first question comes from Tian Sin Wang with J.P. Morgan. Please go ahead.

Thanks a lot. All the best to you, Matt. You're definitely going to be missed. And thanks for all the help over the years. In terms of the question, let's think about what to ask. Maybe I'll ask if it's okay on the reorg and the reduction in force. It's not easy, Chris. I know you mentioned that. Curious why now? What outcomes are you solving for? it sounds like product velocity, more opportunity to invest, and you'll give some back as well in the form of earnings. But maybe just if you can help organize that for us, that would be great to start. Thank you.

Yeah, thanks, Tenjin. I appreciate it. I think, as you can see from these results we just reported, we are truly taking this action from a position of strength. and the way we thought about it is we want to make sure that we are well positioned for this next chapter of growth and I think we always need to be willing to evolve the organization and be willing to make changes to stay lean, to be flatter and to be more effective. We're seeing it inside of our company today that smaller teams move faster than ever using AI and all the superpowers that that can provide small, tight-knit teams. We know that we can do even more than ever with lean organizations. And it also, you know, when you have these smaller teams and fewer layers, it allows us to, you know, fight bureaucracy that naturally happens when companies start to grow. So we like, you know, smaller teams, fewer layers, more accountability, And like Matt indicated, while there will be certainly some OPEX savings here, we're also going to reinvest some of the savings for the next leg of growth.

Yeah, thanks, Chris. Just to add to that, there will be some reinvestment, but this is another driver of operating leverage going forward. And I would say particularly so as we head into 2027, when we expect to keep payroll costs flat relative to 2026.

Yes, that was clear. Thanks for going through that. Just my quick follow-up then. It sounds like the health of the consumer is quite good across your base. Looks like the spend proactive is improving. Can we infer from that that there's stronger spending power in the base? Is that mix? Is that a switch in the product that's being utilized here? Just maybe any other color you can add on the health of the consumer. Thanks.

Yeah, I'll take that. You know, I think similar to what you're seeing across the board from other companies, other, you know, banking platforms that are reporting is that while consumers are saying that they feel cautious, what we're seeing is actually a different story. we're seeing broad growth in spend across the board, across segment types. So, you know, overall spending is up. Discretionary spending is up in things like entertainment and food delivery and online shopping. Savings balances are up for sure. And while it is true that we see faster growth among the higher income segments inside of the portfolio of Chime members, there's no question that the growth is really broad based. So, you know, the stories of the consumer demise, you know, I'm four or five quarters in now, we hear it over and over, but we continue to see a very healthy consumer this quarter once again. And again, we have, we enjoy these primary account relationships. And if and when we ever saw a bump in behavior, you know, uptick in unemployment, we'd be the first ones to see it, and we just don't see it. So I would just say resilient and strong consumer spend and health across the board is the behavior we're seeing for sure.

Thank you. Our next question comes from James Vissette with Morgan Stanley. Please go ahead.

Thanks so much. Wanted to ask, I'll put both my questions together because I they're probably related um comments around attracting uh users that are income above 75 000 a year um etc seem pretty important and just wondering you know if there are particular products that you can attribute to that kind of attraction and i guess related to that i interested to hear that you're going to start trialing uh at least a revolving credit product um just more details on that and how we should think about that type of product's potential contribution to growth, et cetera? Thanks.

Thanks for the question, James. Yeah, you know, I think it's the combination of products that are continuing to drive just broader interest in Chime, including among higher income segments. You know, obviously the Chime Prime product with 5% cash back and 3.75% APY, and a whole host of perks like priority pass, lounge access. This is a really powerful combination of services, especially when you include some of the liquidity products we have there, guaranteed access to our instant loan product. And now, most recently, with our launch of investments and Chime Invest and all the services available through there, we just continue to see that we are growing at the fastest clip among the 75K plus income segment once again. So we feel really good about that. And I think you can see it in the results. You see that these higher income consumers now have more motivation to put more deposits into Chime. We're seeing more consumers, more of our new direct depositors than ever on an absolute basis are now qualifying for this $3,000 deposit plus tier that you get with Chime Prime benefits. So I think you should expect to continue to see more products and services that appeal to a broader segment of consumers, including higher income consumers. And maybe Mark, you want to talk about the line of credit?

Yeah, sure. Thanks, Chris. James, I think on the line of credit, we've said for some time that there is a huge opportunity in our member base for low-cost, high-quality lending products. And the focus of line of credit is to meet the needs of these higher-income members, in particular those that are looking for a more flexible type of liquidity. A significant portion of our member base actually prefers a revolving facility to a reducing balance installment-type loan. And line of credit is going to offer these members the convenience of having that line of credit attached to their check-in account, where it'll be always on, and where they can access it just with a swipe of the card. So, you know, just to reiterate, line of credit is a Chime Prime product. It'll only be available to members that direct deposit more than $3,000 a month. And again, we're doing exactly what we've done with SparkMe and MyPay and Instant Loans, and we're going to leverage that privileged account data and that position at the top of the repayment stack to drive longer relationships and better transaction profit margins.

Thank you. Our next question comes from Darren Peller with Wolf Research. Please go ahead.

All right. Hey, guys, thanks. You know, I want to touch on my paper a moment again just because it continues to show strength, but you've talked about a few different levers. I know over the past few quarters, one of them being flexing loss rates up slightly just with higher limits, lower eligibility requirements. We saw loss rates decline again, and I saw, I think, 0.9%, obviously a good sign. But has your view changed at all on having more flexible limits? How should we think about the potential upside for MyPay from here going forward?

Yeah, that's a great question. I'll pick that one up. MyPay had another fantastic quarter. The originations were up 15% year over year. We had revenue up 47% year over year. Loss rates came in again below 1%. The result of that was the transaction profit margin of 64% and a tripling of our transaction profit year over year. So we feel really good about that, as you've indicated. As you look forward, we definitely see more opportunity on MyPay. And as an example, we've actually just rolled out access to higher limits on MyPay, up to $1,000. Literally, that happened this week. And these higher limits will provide our members even greater access to the liquidity they need. And in turn, it'll drive greater monetization for time. Our focus is on optimizing for transaction profit rather than loss rates. So you will likely see a slight increase in my pay loss rates for Q3 and Q4. But that'll be much more than compensated for by increases in higher transaction profit. I also think it's worth reminding everyone that, you know, MyPay still operates at a price level that is a half-hour competitive. I think it's just important to keep that in mind because I think it demonstrates the power of our low-cost model and our privileged direct deposit relationships.

Yeah, that's really fair. All right, just one quick follow-up. Just on the enterprise side, it was great to see the announcement there of a large partner. So maybe just a quick update on any attach or adoption trends with early partners and, you know, what the pipeline looks like going forward there. And I also just want to reiterate and thank Matt for everything. Matt, you've been a huge help, so good luck to you, and thanks.

Let me start by just saying how proud I am of the enterprise team and the great progress that they've been making and really excited about the pipeline we have. Why don't you cover this one, Mark?

Yeah, sure. You know, the progress this quarter was great. We've been saying for some time that, you know, the child workplace offering is a broader employee wellness offering. It is fee-free to both employers and employees, and we think it's much stronger than some of these expensive Point Solution earned wage access products. And I think you've seen that this quarter. You know, what you see here is a resonating yes from the market, and we're really excited about Allied and the second retailer whose details we'll be sharing once we actually roll it out. You know, the pipeline is strong. It continues to grow. We expect to have some more exciting announcements on enterprise in the coming months. You know, as it relates to the future, we don't expect enterprise to be a meaningful contributor to member growth in 26, but we do see it being a meaningful contributor to direct to positive growth in 27. We're not giving specific guidance related to sort of adoption and conversion at this point, but we will certainly be including the impact of enterprise in our overall member growth guidance for 27.

Thank you. Our next question will come from Will Nance with Goldman Sachs. Please go ahead.

Guys, thank you for taking the question. First of all, Matt, it's been a pleasure working with you. It sounds like you've got your hands full at home, but you're leaving some big shoes to fill. Second, congrats on all the great business developments. Congrats on that credit line in particular. I was hoping you could talk a little bit about some of the trends that you're seeing in customer acquisition and direct deposit attach. J.P. Morgan said on their earnings call this past quarter, they added 1.7 million checking accounts last year. You're basically guiding to that same number as the largest bank in the country. So how are you thinking about the momentum there, the sustainability of customer acquisition? And then more importantly, on direct deposit attach, you also threw out a stat. I think it was late stage direct deposit conversion. Maybe just help unpack that and talk about the quality of the account growth that you're adding. Thanks for taking the question.

Thanks, Will, and appreciate the kind words there. So we are seeing a ton of momentum on the member growth side. Just as a quick reminder, as you will recall, our business has seasonality. We always see a much more muted quarter-to-quarter growth in actives from Q1 to Q2, and that's just due to tax refund-related activity. So the best way to look at our member growth is year over year. And we did have a strong showing on that front in Q2. We accelerated member growth to 20% year over year. We added twice as many active members in the quarter than we did in the quarter last year. And it is a record number of actives we've added now over the last 12 months, 1.7 million. You know, I think what's driving this at a high level are a lot of the similar themes we've talked about. the strong unaided brand awareness our leading nps score the chime message continues to broad broadly resonate i think strengthened even further recently with chime prime and we also are just continuing to see the benefit of the early engagement initiatives that we've discussed uh previously but i think you know one of the things we're trying to emphasize is that it's it really is not just the quantity of new member growth it's also the quality uh as well uh again And driven by Chime Prime, we added the highest ever number of members making 3,000 or more in deposits. And as I mentioned, we're also seeing retention benefits from Chime Prime adoption as well. And all this comes with really strong ROI, transaction profit payback periods of five to six quarters, LTV to CACs of 9x in our recent cohorts. And it's this momentum that's giving us the confidence to raise our full-year active number net ad target to 1.8 million, which would be our largest cohort ever and is well ahead of our original goal for 1.4 million for the year. So we're seeing great, great progress across the board. You know, the direct depositor progress in particular has been great to see. It's not just folks that are, you know, coming to us and choosing direct deposit right out of the gate. But now at Chime Prime, you know, maybe they've tried us out for a few months. Now we've given them even more reason to deepen their relationship and choose us a good direct deposit relationship. So great progress really across the board.

That's great. And then if I could just ask a follow-up on Chime Prime, I was wondering if you could talk through some of the learnings in the wake of the launch. And as you think about the customers that have accessed that membership tier, are you seeing it come more from wallet share expansion within the base? What's the mix of kind of net new versus wallet share expansion? And then, you know, how are you thinking about kind of marketing to the existing customer base to drive that wallet share expansion and ultimately drive that credit mix higher over time as we look forward? Thank you. Nice job today.

Thanks. I'll take that. You know, I think the results are really twofold. Among our existing member base, we are absolutely seeing, you know, real excitement and lots of adoption. And we can actually see that the, portion of our member base that are not only signing up for this, but actually adding more deposits into their accounts. And that's driving additional engagement and spend. But we're also really excited about, we feel like we're still at the very early days of having QIIME Prime really be a key formula in the top of the funnel growth formula. But the results have been awesome. We're seeing more people than ever depositing their first deposit more than $3,000. And you should expect to see this be a really key part of our value proposition going forward. And we are not going to stop. We are going to keep adding additional features to this membership tier that are going to make Chime even more broadly appealing. And things like, now that we're rolling out Chime Invest with managed portfolios, if you're a more novice investor, to offer free or direct equity purchases all inside of the app where you get your direct deposit. We really see ourselves just continuing to round out this complete financial services app to serve all of your needs, including for people that are at higher income levels. So really excited about what the future holds on this front.

Thank you. Our next question will come from Sanjay Sakrani with KBW. please go ahead.

Thank you, and congratulations, Matt. It was good to see the loss rate declining in the second quarter. Obviously, as you guys indicated, the consumer is doing pretty well. May I ask, like, does that help give you sort of ammunition to expand the credit box? I know you guys talked about expanding the MyPay credit lines, but as we think about growth going forward, does that enable you to do more, and maybe what are some of the learnings as a result of all of this.

Yeah, thanks, Sanjay. I think, you know, what you should see from this, that we are continuing to optimize our credit models. And part of the play here is we continue to identify new pockets of activity. And a good example there is this new launch of $1,000 MyPay limits. essentially what we're doing there is we've identified broad pockets of people that we believe can handle that $1,000, and so we're extending more to them. So that's the sort of repeat approach you have on MyPay. You know, on instant loans, the same thing. We continue to see our overall loss rates actually come down. It's a little bit masked this quarter because we had a big bump in originations of first-time instant loans, and those first-time borrowers have a significantly higher loss rate than our repeat borrowers who are 50% lower. So, we're seeing really improvement in loss rates and our underwriting capability across the board.

Thank you.

And just my follow-up is that I think Matt talked about moderating rewards costs in the second half. Can you guys talk about what's driving that? is that sort of an intentional move or is it a mix of redemptions? Just want to make sure I understand the dynamics there. Thank you.

Yeah, I'll take that one, Sanjay. So, yeah, rewards costs, just maybe to briefly summarize up front here, rewards costs were modestly higher than we expected in Q2. That being said, the impact that we've seen from Prime has, you know, far outweighed the slightly higher rewards costs already. And those rewards costs are already coming down in Q3. But let me give you a little bit more detail on this. As I mentioned, we've seen really awesome response to this incredible collection of benefits that Prime provides. That has helped us accelerate direct depositor growth. It has captured more market share. And as Chris mentioned, we're appealing to a broader segment of the market, including higher earners. And that really is a key driver behind the transaction volume growth, active growth, and RPAM growth, the acceleration that we've seen. I think not surprisingly, the 5% cashback offer in the category of your choice has been a real top draw. And that was particularly true in the gas category, following all the appreciation we've seen in gas prices recently. And so that's really, I think, a big driver of what drove rewards costs modestly higher. And as a result, take rates slightly lower than we anticipated. But we do believe that that's a one-off. As I mentioned, we are already seeing overall rewards cost ease here in Q3. Based off of July results, we expect two dips of year-over-year expansion in overall payments revenue blended take rates for Q3. And so I think, you know, just maybe stepping back more strategically here, the take rate expansion opportunity remains just a huge uplift opportunity for us as we continue to shift more volume to credit. We're really excited about this as a multi-year tailwind for the business, and we're continuing to make great progress on that front. Credit mix reached 27% in Q2, up from 23% in Q1, and we see a lot of growth ahead. Our newest cohorts continue to adopt ChimeCard at high rates and have about 50% credit mix for those.

Thank you. Our next question will come from Adam Frisch with Evercore. Please go ahead.

Thanks, guys. And, Matt, congrats on your choice. It goes fast, so I hope you enjoy it. You raised the full-year revenue midpoint by about $60 million, And EBITDA by roughly 47 against the second quarter beat of 32 and 27, respectively. So it seems like there's real incremental confidence in the back half beyond the flow Some of that is a result of the rift, as you just explained a few minutes ago. But where else from your broad array of growth and operating leverage do you feel most comfortable And I have a quick follow-up.

Yeah, look, I think the big highlight to emphasize here is this acceleration in volume growth. Prime being a big factor behind that. That has really inflected, frankly, in Q2. And we're continuing to see really strong momentum here in the back half of the year. And so I think that's probably a number one driver I would point out about the raise for the back half and the flow through to the rest of the P&L. The second is just continued momentum on our liquidity products. I think Mark went through that as well, but that's true across MyPay as well as Instant Lens.

Okay, cool. And, you know, I couldn't get through a Q&A without asking about enterprise, but still early days. Great to see 27 will see some benefits, new member ads. So, what are the early takes, observations, et cetera, that you're seeing with some of your early partners. Thank you.

Hey, Adam, I'll pick that one up. I think, you know, we continue to see strong adoption. And maybe even more than that, what we are finding is that the usage and the monetization of the direct depositors that we're acquiring through enterprise actually We outperform what we see in our consumer channel. So the monetization there is looking very strong.

Thank you. Our next question will come from Andrew Jeffrey with William Blair. Please go ahead.

Hi, I appreciate the question, and congrats, Matt. I wanted to ask about Prime in particular, which seems to really be gaining momentum. Can you elaborate on how much Prime is a lever for sort of upgrades from existing members who increase the direct positive limits, for example, versus a new member origination vehicle that attracts higher income users? I wonder how much sort of you think about each of those contributors from Prime.

Thanks for the question. It's really both. We are definitely seeing a strong uptick in existing members who elect to give us even more of their direct deposits. So they now have more reason to do that, and all those reasons will just continue to get better and better. But I think the much larger opportunity, of course, is over time the opportunity to expose this to many more consumers who maybe considered Chime before but weren't quite ready to engage. And like Matt indicated earlier, we really feel good about the decisions we made and we talked about over the prior quarters around allowing members, new members to chime, to engage with us in a more significant way before getting direct deposit. Right now you can fund the accounts, you can move money to friends, you can get access to a range of services before you direct deposit. But now we have more reasons than ever for people when that life change happens, when the job switch happens, or they just get fed up with that one more fee from the incumbent bank, they're ready to make the switch. And there's a there's a reason to give us their their full direct deposit. it. So like I said, I think we are, and our marketing and growth team, you know, would acknowledge this as well. It's still very early days of having Chime Prime be sort of the hero value prop to come into a Chime relationship. So we think there's just a ton of runway ahead of us for that. And so I'm probably most excited about that opportunity because inevitably, you know, more and more of the existing member base will continue to come over to this product because it's just got such an incredibly powerful set of benefits.

Good stuff. I appreciate it. And just as a follow-up, I appreciate the extent to which improving MyPay credit performance has driven transaction profit growth in the first half and margin for that matter. As we look to the second half and you lap some of those powerful gains, how do we think about transaction profit and perhaps the contribution from loan marks?

Yeah, I'll pick that one up. You know, as we said, we still see, yes, we are lapping some MyPay stuff, but the reality is we still see a lot more opportunity on MyPay. As we've indicated, you know, we're testing this new $1,000 MyPay. We've actually rolled it out this week. So we expect more goodness from MyPay here in Q3 and Q4. I think that's probably the way to think about this. At the same time, as we've indicated, you'll probably see a slight uptick in the MyPay loss rates in Q3 and Q4 as well. But we still think there's a lot of opportunity in MyPay.

Thank you. Our next question will come from Alex Markraff with KeyBank Capital Markets. Please go ahead.

Hey, Chris, Matt. Thanks for the questions. Matt, it's been a pleasure. Maybe two for me, first, starting on Chime Invest. Just sort of curious, Chris, on the product vision. I know it's early, but just sort of thinking about the evolution of the offering and scope versus what we're seeing at launch. It's a big category of the sort of wealth management bucket. So just be curious on the evolution there. And then any indication of account flows that you could share that could help us think about, how members are allocating these sort of invest dollars today and have a quick follow-up afterwards. Thanks.

Yeah, I'll take that. I'm so excited about expanding our platform beyond just checking accounts and savings and some of the short-duration lending products that we are obviously very well known for. We now have this opportunity to help our members build long-term wealth. And when we did surveys among our member base, it's 60 or 70 percent are already active investors, but more than half of them, more than half of everyone surveyed said that they would like to open up an investment account with Chime. So and we already have, you know, almost 80 percent of our members using us for savings. And increasingly, a lot of consumers, you know, think of their brokerage account as a way to do savings. So we obviously need to be there for them. The interest among our existing member base is incredibly strong. And I, and like I said, in the, in the prepared remarks, you know, the magic here is going to be this seamless integration that consumers will have with the bank account and the place that you get your direct deposit. Because when you have that, you can seamlessly move money in a more consistent way, you know, and set up that habit, hopefully at a really, really early age, which is, as an aside, why we're so excited about Trump accounts, and we'll support them when the rollovers are clearer. But yeah, we decided to make it really simple, really integrated. You can start with a dollar if you want. If you're less sophisticated, we've got managed portfolios for you, depending on your risk tolerance and other considerations. And if you'd rather buy individual securities, you can do that too. In terms of our expectations, we see this as an opportunity to provide existing members more reasons to engage with us for the long term and deepen engagement and drive more wallet share. And we also just think that this is another key product alongside Prime and Instant Loans and all these other products that will accelerate our expansion into these higher income and higher LTV member segments. And we already see that, right? The Prime members that we have are demonstrating our PAMs that are 2X, the rest of our broader member base. So we're really excited about this and feel like it's just a natural extension. We're not endeavoring to create, you know, a day trading app or something like that. But we do think that obviously getting exposure to the market at an early age is key to building long-term wealth creation. So, of course, we have to be in this area.

That's great. Thank you. Maybe just one more, just kind of coming back to some comments from last quarter on sales and marketing. i think there were there were some comments on you know spending a bit more around prime just looking on a dollar basis kind of splattish but also seeing the benefit from from prime this quarter and the strong that adds just sort of curious is there anything that that really positively surprised and as we think about that those comments from last quarter on the incremental spend um anything to think about kind of in second half here on that front yeah this is uh matt alex So, you know, as we indicated in prior quarters, you know, we expected to have a marketing push around major product launches.

We've done that historically, for example, with MyPay when that first rolled out. And, you know, we've also done that here with Chime Prime and expect to continue to push this as we work to integrate this further into the top of funnel, like Chris mentioned. And so I think that's sort of the overall trajectory, you know, fairly similar to how we had previously guided.

Thank you. Our next question will come from Joseph Buffy with Canaccord. Please go ahead.

Hey, guys. Good afternoon. And I'll add my congrats and we'll miss you, Matt. It's been a pleasure learning the Chime model and having you walk us through it in detail. Appreciate it a lot. Um, maybe, maybe just kind of, we, you know, we just, uh, focus on enterprise a little bit and, you know, the large win here with Allied. Could we, um, you know, maybe unpack that win, you know, the sales cycle there, um, you know, the, you know, the, the, the implications for your pipeline, you know, seeing a very large employer like this, um, sign on, um, any other color, you know, that this may add to the momentum in signing more customers even this year? And then I'll have a quick follow-up.

Yeah, sure. I'll pick that one up. You know, signing someone like Allied involves a lot of different sort of demand generation tactics that we employ within the enterprise channel, And those include outbound, inbound marketing, sales calls, and obviously sort of responding to RFPs. And these things typically, particularly for a large employer like that, these things can run anywhere between 6 to 12 months. And so, you know, I'm not going to go into too many specifics on Allied itself. But I think the sales cycles in these B2B deals are long. Once you get to the sales cycle, of course, you still have to implement and then drive adoption. Now, the good news about these sales cycles is that once you're in there, they are self-generating. And you essentially have a captive audience with a really high switching cost. And so the thing that makes them hard to achieve is also the thing that actually gives them real longevity. And over time, we believe will result in significantly more efficient CACs on real high-value direct deposit customers.

Great. Thanks for that. And then maybe just – I may have missed it, but the revenue model around Chime Invest, some comments there versus being a retention tool. and, you know, revenue versus retention and how you're seeing it strategically, thanks.

You want to take it, Tara? Yeah, ChimeInvest is obviously a great new add to the platform. You should think about this primarily as an engagement driver as opposed to a direct revenue generator here in the short term in any sort of substantial or super material way. So, you know, as Chris mentioned, we're excited to really add this whole new category of benefit for our members directly integrated with the place that they manage their money each day.

Thank you. This does conclude the question and answer portion of today's call, and I'd like to turn it back over to Chris Britt for any closing remarks.

Thanks. I just want to congratulate the team on an awesome quarter, and I think the performance demonstrates that the future is bright here. And we're just getting started. So looking forward to seeing you all out on the road soon. Thank you.

Thank you, ladies and gentlemen. This brings us to the end of today's meeting. We appreciate your time and participation, and you may now disconnect.