Hey, good morning, everyone. I'm Devin Ryan, head of financial technology research here at Citizens. Thank you so much for joining us and always look forward to this conversation with Dave. We have Jason Wilk, who is founder and CEO, and then Kyle Billman, who is the CFO of Dave. And I feel like every year we do this conversation, you guys have done it for four or five years and come right after earnings. And I feel like we get good earnings and then we get to talk about it. So same thing from last night, you had great earnings, and so we're going to get to that. But thank you both for joining me, first off. Great to see you. Yeah, thank you. Great to see you, as always. So maybe just for the audience, people that are less familiar with the story, Jason, can you just introduce the story of Dave and why he founded the company, and then just bring us to where we are today, and then we can get into some of the kind of current events.
Yeah, yeah, happy to. So first of all, taking a step back, the name stands for Dave versus Goliath. we were going up against all the major banks specifically targeted at their heavy overdraft fees that the banks were charging. I had a personal gripe going through high school and college paying $34 overdraft fees for paying for a cup of coffee or paying for gas or groceries and my account dips negative for a little bit. Had this great innovation back in 2015, this idea that if you could use people's cash flow data to better underwrite than for short term credit you could offer a vastly superior product to pay for things like gas and groceries and not charge you these predatory fees. And so that was really the way the company was born, was on the notion of giving Americans access to more affordable, transparent, short-term credit using cash flow underwriting. Since we launched, we also have our own checking and savings account that we launched back in 2021. But the thesis of the company really is using cash flow data as a differentiator to offer short-term credit products for Americans that are better than payday loans, overdraft fees, and subprime credit cards. and we are well on our journey to fulfilling that vision and did over half a billion of revenue in 2025 with 60% growth and the company had its best year in history. So excited to keep running this business and we have a lot of momentum and trajectory here.
Yeah, that's great. Yeah, I remember I think two years ago, it was March and you guys had just reported fourth quarter and that was kind of the inflection into profitability. The stock was up 80% and then ended up in 2024 it was the best performing financial services and fintech stock out there. Over 800%, I believe, and then had a great 2025 as well. So clearly a ton of momentum. Kyle, maybe just hit some of the high-level financial points and then take us through, you just reported earnings last night, some of the key points, both from earnings, but then I think everybody was waiting for the guide. We all figured that this would be kind of continued momentum in 2026. my view was it was even better than what people were hoping for. So maybe just hit us on a couple of the financial highlights from the quarter year and then talk a little bit about what the guidance implies.
Yeah, I mean, like I think it was another, you know, standout quarter, 60-plus percent top-line growth. We grew originations by 50%, about $2.2 billion in the quarter. Average originations per user continues to tick up. Well, the loss rates are coming down as well. our 28-day days past due credit metric was 1.89%, which is about a 12% improvement sequentially. So we're growing total originations, growing originations per user, and delinquency and loss rates continue to come down as we further innovate with CashAI, our proprietary underwriting system. So from a unit economics perspective, you know, things continue to improve. The health of So our growth is really, really strong. And all that sort of translated into a record EBITDA quarter for us. We had 73 million of EBITDA in Q4, and just executing very well. But I think the important takeaway from the guidance and the outlook is we put out what we're referring to as our baseline growth algorithm, which is 15% or call it mid-teens MTM growth and low double-digit ARPU growth and we think that's a sustainable trajectory for the company to deliver on over the next several years as we're serving a massive TAM. We're only 2.9 million monthly transacting members amongst a TAM that we think is 180 million Americans. So a ton of user growth potential. And then from a product expansion standpoint, still in the very early innings to deliver on that low double-digit ARPU growth underlying our growth algorithm. So we're feeling very confident just in the durability of the growth trajectory of the company. And I think the powerful thing from an earnings standpoint is, we talked about this all the way back in 2023, we hit this inflection point of 2.1 million monthly transacting members and the incremental growth of users beyond that. We just have tremendous flow through from that revenue expansion down to earnings. And we would expect that to continue to play out. And so I think just giving more clarity around the growth algorithm and our confidence and the durability of the growth should be the important takeaway for investors
moving forward. Yeah. I mean for context we only have 300 employees at the company so just incredibly efficient we think we can keep that efficiency we're gonna make some modest headcount additions this year but that's only in service of new products we can scale our extra cash and checking business with the existing team we have and keep compounding ARPU and and user go with the same team effectively. But you mentioned the guide and so I think we got it to about 700 million at the midpoint for 26 with roughly 300 million of EBITDA for the year. So really strong growth. It's like 25 to 28 percent growth at the top line. Not quite the 60 percent we grew last year but last year with the benefit of a significant fee change which increased prices for existing customers and it was it did not impact conversion or retention so it was huge win for the business but still expect the growth algorithm to continue to 26 and that's the guide we think is conservative but but solid yeah yeah
really I think impressive relative to what again we figured would be another good year but I think even even better when you think about the monthly transacting maybe 2.9 million out of this addressable market of 180 million is kind of the, maybe the total TAM, talk about continuing to, you know, you're guiding for mid-teens growth, the ability to continue to drive that at these CACs that are, you know, around $20, which is really incredible. Like, how are you bringing customers in for such a low price point? And then just the confidence in, like, is there a point where you hit saturate? I mean, $185 million is huge. That would take a very long time to get to. But just, are there points where that CAC has to structurally go up? or do you think you can grow for years ahead without much friction there?
Well, as we talked about, we're not solving for the lowest CAC. I mean, our goal is to continue to drive more LTV through ARPU expansion, which is going to come from underwriting enhancements, but also new products that we're developing as well. And so, you know, just expect our LTV to continue multiples of the CAC that we're generating. So 20 bucks is not what we're solving for. We could increase CAC significantly from here and still achieve the growth algorithm because the TAM is, again, so big. I'd say how we're driving that efficiency at the top of the funnel, though, is we've got a really great brand. Dave is an easy brand name to remember. It's a very friendly, approachable financial services name, dave.com. We've owned since the beginning of the company. And then we just do really well with our direct response messaging of, you can use Dave today to get up to $500 in your pocket, no credit check, no late fees, no interest. that message really resonates at the top of the funnel to drive people in the front door, and then when we deliver on that message and actually give you the money, that magical experience drives heavy word of mouth. And so since the beginning of the business, roughly a third of our acquisition comes from friends and family, not even paid referrals. So these are all free customers coming to us through word of mouth traffic, and we think that's another way we can have a lot of durability as we get into new features and just keep the CAC from going out of control.
Yeah. The advanced size has continued to move higher, so you guys have been able to do that with your underwriting models. Just talk about how you're doing that, how that's, I think, the average advance being over $200, like, that's a pretty big competitive advantage from my perspective because your peers aren't able to do that and somebody can't just enter the market and start giving away $200 with similar financial profiles. So talk about how you've been able to expand that and then where can that go? I know there's a lot of inputs into what the average advance is going to be but like is $200 plus can
you continue to grow that number yeah we think we can a big part of the underwriting improvements is one obviously continue to chip away at the AI models but also we're just keep lining to repeat customers too and so as you just have established repeat history with the business the more our book becomes just existing customers we can naturally bring them up the limit curve by virtue of just solid repayment performance and so when you combine those things, it's a lot of confidence, we can keep growing that 214 number higher from here. And then as we factor in new credit products, like our new pay-in-for solution, that's going to have a higher principal amount too. And so on a combined cumulative basis, we think we can certainly grow average originations per user from that perspective as well. Yeah.
And we touched on it a little bit, but cash AI is a very important piece of the equation when it comes to limits. we started investing in AI back in 2019 to power underwriting models. And I'd say one of the early innovators in the space as it relates to using AI for underwriting. And so we continue to see opportunities to improve our models. Back in September, we fully released our latest V5.5 cache AI underwriting model that supported both average origination size growth as well as lower loss rates, Sort of the, you know, compounding effect of both of those on our unit economics has been very powerful. We see the opportunity to add more features and more stronger signaling features for our V6 model that we're currently in development on that we expect to launch in the middle part of this year. And so we still think that there's a lot of upside to continue to improve on risk splitting within the portfolio and how that ultimately leads to this powerful flywheel for the business because the more compelling offers that we get, you know, that we can provide to customers, the more customer growth we achieve, that performance data then feeds back into the underwriting models and kind of creates this virtuous cycle that we believe creates a nice moat around the business because we have the strongest value prop in the market with the highest limits. And we can see that in our own data that we have roughly 2x the limits of our largest scaled competitors within the data set. And we can see based on the publicly disclosed data that our loss rates are just as good, if not better. And so, again, it kind of speaks to the flywheel effect that we've built around cache AI and how important that is for the durability of the competitive advantage that we have.
Obviously, you guys are early in thinking about artificial intelligence. Can we just more broadly how you're thinking about this has been a big topic of the last two days here and people trying to figure out who's getting disrupted and then who's going to actually leverage the technology and benefit? So I think cache AI is one thing where you guys have already been integrating. How do you think about the technology more broadly? Is there more you can do with AI across the business model over time? Is it going to drive opportunities? What gives you comfort that somehow agentic AI doesn't disrupt Dave? And I'm sure you guys are well aware of all the trends here. So I'd love to hear your thoughts on that.
We touched on this on our earnings call yesterday. But we think we're one of the big winners of AI. If you look at just our performance since back in 2019, rolling out our first AI models, cash AI has proven to be a superior way to underwrite consumers for short-term credit. We've taken our loss rates from purely a rules-based system of over 5% delinquency rate down to nearly 1% on a 120-day basis from the investments in AI plus cash flow-based underwriting. I think it's very difficult for a new entrant to come in and, you know, one, have the amount of customers it takes to run the models, but two, to have the balance sheet to absorb all the losses required to get your models to the point where we are today. And that's how Dave has become a clear winner in this single-pay credit market. Even these scaled competitors, the cash apps in the China's of the world, but their scaled user bases are only a fraction of the origination size per user, and those are major players. And so I think the ability for us to be disrupted by some agentic vibe coding solution is slim to none. And then when you think about just sort of the draconian state of AI disrupting the workforce and lowering wages across the board or leading to a lot more government-assisted income, you want to be in a product like Dave, which is small dollar, very short duration, high visibility. And so if you were to be invested in one credit asset class in the country during a downturn economy like that, or even in a good economy, I'd want to be in Dave.
Yeah, I mean, just the only thing I'd add to that is there's a lot of Fin and FinTech for our business, too. You know, there's custom integrations, there's the bank partnerships, there's the compliance, there's the payments. there's a lot of stuff under the hood that is hard to just replicate um you know without a lot of time and investment to get those things into a place that they work at scale in the way that they do for our business and a lot of that stuff again comes back to we've reduced our cost to such a state that we can pass along a lot of those benefits to our customers in the form of better limits and therefore a stronger value proposition and then on the credit side as jason mentioned And all this performance data that we have is the proprietary training data that we have for our AI models. That's hard, you know, it's hard to replicate that.
Yeah, I mean, one of the questions I get from investors is, in that kind of draconian scenario, maybe it's AI related or maybe it's some other macro shock where people are displaced or unemployment spikes. I think the question of how does Dave adapt to how they perform, and you kind of hit on it, Jason, but in that world, how do the models react? How quickly can they react? And then ultimately, my view is you guys are going to be one of the first back in the market to be extending extra cash when people probably need it most, and you can have that visibility with cash AI. But, like, talk about how the models adapt to that scenario and maybe why you're not concerned about, you know, an abrupt shift in the macroeconomic landscape.
Well, if you think about a traditional lender that's making a multi-year credit decision on an installment loan, Dave underwrites a customer for the next paycheck, right? And so we're looking at, I call it, eight-day duration for us to assess the efficacy of your paycheck, your cash flow data, and our AI is looking at how safe it is to lend to this customer. And so that's where I want to be as a credit investor in an economy that's ever-changing. You don't want to be making these long-term decisions. So I want to be in the shortest duration cycle possible with the most visibility. And Dave has access to the customer's bank account and income and spending pattern, so we know what's going on. Our underwriting models update every eight days. We see change or sort of cracks in the economy. We can pull back or increase originations based on what we're seeing. And so I just love where we sit from that perspective. And yeah, I mean, fully confident that we would be the winner in that type of market. I'd say, and I touched on this in the call yesterday, but maybe in a worst case scenario, you were to see average origination per user going down. But if you see this mass unemployment happen, income's not just going to go away. I mean, the government's going to step in. It's going to be unemployment income or some sort of universal basic income. And the needs for credit are not going to go away. But the type of credit these customers are going to be able to take is going to be the short-duration, small dollar that Dave is best suited to step in and take care of. We're not just going to see incomes evaporate, or we're going to have bigger problems on our hands than earnings multiples.
Yeah, and I'm sure even today you guys are doing advances to people that are on unemployment, but you still are able to capture that just as much.
Yeah, 100%. I mean, that's a great data point. We are already lending to SSI, unemployment, and any kind of government-assisted benefits because cash AI is analyzing any income. We don't care what your credit score is. We don't even look at your credit score. It's entirely based on our own proprietary algorithm to look at your cash flow and, again, use AI that's looking at all the billions of transaction data points to come up with a user risk score.
So I think you guys have made a compelling case that the addressable market for extra cash, that product itself still is massive relative to where you're at today, so there's still a great runway there, But you're now on the verge of rolling out a pay-in-for product, and that's kind of the next leg here of the credit spectrum for Dave. So talk a little bit about what this product is and then your right to win, because I'm not sure people fully understand. I think it's pretty compelling that you guys are going to have a right to win immediately, and it could be almost as big as you want it to be. So I'd love to hear you guys talk about that dynamic and kind of the trajectory and how quickly you'll take the governors off of how much you'll let it grow. Because there's obviously that's a balance, too. You want to get comfortable.
Yeah, so we're not giving away a lot of details on the product other than that it is a pay-in-for credit solution that gives our customers a little bit more duration than they have with extra cash right now. extra cash because the duration is so short tends to be used to bridge the gap between paychecks to go buy things like gas or groceries or sort of your non-discretionary expenses. But we do understand and listen to and talk to our customers a lot on their desire for more duration. And so we like the idea of moving into a pay in four, which is akin to sort of the buy now pay later duration. And we feel that's a far better solution than what our customers are out they're today using, which is sort of subprime credit cards, which makes our money when customers are delinquent on revolving high APRs and late fees. And we think that pay in four is a much better product for both investors and consumers in the sense that our goal is not to make money on compound interest or late fees. It's to make money on a simple monthly fee plus a transaction fee that puts us on the right side of the customers and does not put our customers in this debt cycle. You look at subprime credit cards, it's 110 billion of revolving interest and I think over 20 billion of credit card late fees. And so it's not a great product for consumers and especially in this uncertain macro economy. You don't want to be in the open line credit card business. You want to be in a closed end credit, a lot of visibility, a lot of certainty on when you're going to get paid back. And I think our right to win in that space helps us certainly expand more into the 180 million member team that we're we're going after yeah but i think just you know building upon that this is a core
capability unsecured credit is a core capability and competency of the company we've proven that with extra cash um and then we'll be leveraging that same core technology around underwriting and servicing and payments that we've built to kind of extend into this new customer use case it is a little bit more duration um so we're going to be you know mindful of you know transitioning and growing that product over time and the nice thing is that we have a lot of confidence in the trajectory of the core business so we don't need to rush it despite the fact that we think that this pay-in-for product is a really big financial opportunity for us so we're starting to test with you know real customers in the second quarter we're super excited about that the opportunity there we've gotten a lot of positive feedback in the research that we've done and other sort of market points of validation as well and think that this can be you know a really big growth lever for us in 2027 and beyond
yeah I mean if you just look at your existing customers you can see that many of them are using some type of product maybe buy now pay later I'm assuming you can see by even what they're buying with that you can use a lot of the same both customer learnings the data you have on customers that are already in the funnel and so it would seem that there's a huge addressable market within your business.
Yeah, I think the important thing is that we see that extra cash and these buy-now-pay-later products are complementary solutions. To Jason's point earlier, people are using extra cash for gas and groceries and things like that and buy-now-pay-later for more discretionary type purchases. So we're not worried about this cannibalization effect and that these two products can coexist with each other within the same ecosystem
and be very synergistic with one another yeah and then in scaling it it seems like a lot of same infrastructure is going to be utilized so there's not a lot of incremental expense direct expense by personnel or technology that needs to be built to deliver this product that's right yeah exactly I mean
same same issue a processor same bank partner I mean really it's a lot of the same parts that we can use and importantly cache AI is gonna be the underwriting engine behind it and just show another use case of how we can use the same modern technology to expand into different product sets yeah as we think about
i know you're saying kind of like more 2027 like is the expectation this could be material to 2027
um i'm sure the demands there yeah yeah it's not and we have no impact embedded in the guide for 2026 but i think there is a reasonable shot that we get some contribution from this product this year but we expect it to be a you know meaningful business for us in 2027. yeah um another element
I think it's interesting your business for for one that is associated with credit is huge cash generation capital light it's only getting more capital light with this migration uh that advances over to coastal community bank talk about you generating a lot of free cash flow that's going to keep growing here over the next year based on the guide like what are your plans with this is just your buyback stock you increase the buyback how should we think about capital return versus can you plow some of that back into internal growth as we're even you're so efficient like what are you going to do we're already doing that
yeah um oh yeah i think so we made the point on the on the call yesterday that if you look at the company's current cash balance plus the impact of the transition to our coastal funding facility which for context is a transition from a more on balance sheet structure with the warehouse where we're funding receivables ourselves to now a structure where the bank is going to fund, our partner bank is going to fund originations, we'll pay them access fee for the balance sheet usage that we have at the bank. That's going to free up a couple hundred million of cash, that transition, and then pair that with what we expect the free cash flow generation to be for the year. We're sitting here with a pretty meaningful portion of the market cap in our expected cash for 2026. And so as part of that, we increased our share repurchase authorization to $300 million. Yesterday, I would expect us to start executing against that authorization pretty aggressively here in the near term. And we love our business and we want to own more of it. So, yeah, we view buybacks as a great way to return capital to shareholders. And if done at prices, you know, at these levels can be a great way for value creation.
Just last question. We'll wrap up here. I want to get too far ahead of the roadmap, but obviously paying for is coming. Is there more as you think about kind of like where Dave is over the next three to five years? Like how many more legs of the stool can you add? What is obvious? And how do you think about the diversification strategy? strategy for what your customers need and want and how you can grow with them?
Look, I think anywhere we feel like we can meaningfully differentiate from FICO, where a customer needs access to short-term credit and cash flow based underwriting is a better outcome, I think we want to play in that that space in short-term credit. So I think expect more from us in the short-term credit product spectrum and I think the more we can do for our customers for more parts of their life, the better chance we have to start to win more of their direct deposit and primary banking relationship over time, which we already, again, offer Dave checking and savings to our members as well. And so I think there's going to be this flywheel that the more we do for you, the longer term the relationship can be. And if you look at the relationship with consumers and their, you know, traditional banks, like those lifetimes are like 13 plus years. And so if we can aspire for that kind of retention, the growth opportunity for the business is massive.
Well, I think we're at time, but Jason, Kyle, thank you. Congratulations on great 2025 and best wishes for a great 2026 thank you everyone thanks a lot