# Dave Inc.: Form 10-Q for the period ended Mar 31, 2025

- Company: [Dave Inc.](/companies/dave.md) (CIK 1841408)
- Form: 10-Q
- Filed: 2025-05-08
- Accepted by EDGAR: May 8, 2025, 16:30 ET
- Period: 2025-03-31
- Accession: 0000950170-25-067073
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1841408/000095017025067073/dave-20250331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1841408/000095017025067073/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $108.0m | us-gaap:Revenues |
| Interest expense | 3 months, 2025-01-01 to 2025-03-31 | $1.8m | us-gaap:InterestExpense |
| Income tax | 3 months, 2025-01-01 to 2025-03-31 | $5.1m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | $28.8m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | $1.97 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | $2.19 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 14,646,526 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | $45.2m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2025-01-01 to 2025-03-31 | $37.0k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Share repurchases | 3 months, 2025-01-01 to 2025-03-31 | $6.9m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2025-03-31 | $47.0m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-31 | $298.8m | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $315.7m | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $34.8m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-31 | $116.2m | us-gaap:Liabilities |
| Long-term debt | at 2025-03-31 | $75.0m | us-gaap:LongTermDebtNoncurrent |
| Shareholders' equity | at 2025-03-31 | $199.5m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 50,680 characters.

*The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the notes related thereto which are included in Part I, Item 1. “Financial Statements” of this Quarterly Report on Form 10-Q. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Cautionary Note Regarding Forward-Looking Statements,” “Risk Factors” and elsewhere in our Annual Report on Form 10-K* for the year ended December 31, 2024 filed with the Securities and Exchange Commission (the “SEC”) on March 4, 2025 (the “Annual Report”) *and in “Cautionary Note Regarding Forward-Looking Statements,” Part II, Item 1A. “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q.*

### Company Overview

Dave was launched in 2017 to provide a faster, more transparent, and lower-cost alternative to traditional financial institutions, particularly for those living paycheck to paycheck. Inspired by the story of David vs. Goliath, we set out to challenge legacy banking by leveraging technology to expand financial access and improve consumer financial health. Through our mobile-first platform, we deliver innovative financial products designed to help underserved consumers manage their money more effectively. Our mission is to level the financial playing field by providing intuitive, transparent, and accessible solutions that empower our Members to navigate life’s financial challenges with confidence.

We have engineered a purpose-driven platform designed to deliver on our mission, making a significant impact across the stakeholder groups we serve. Since our inception, more than 17 million Members have signed up for the Dave app, with over 12 million having used at least one of our products. We have provided Members with more than $16 billion in ExtraCash, offering critical liquidity when they need it most. To further support our communities, we have donated approximately $23 million to charity and important causes since inception.

Customers value our products, as demonstrated by more than 700,000 App Store reviews with an average 4.8-star rating as of April 2025. Our business model is built on transparency and customer alignment and building relationships with our Members that drive positive outcomes for both them and our business.

At the core of our success is a world-class team dedicated to delivering on our mission. Dave has been recognized by Built In as a Best Place to Work for five consecutive years, reinforcing our commitment to both our Members and employees.

### Market Opportunity

The U.S. financial system has historically failed to address the needs of the millions of Americans who are living paycheck to paycheck. According to the Financial Health Network (“FHN”) in 2024, approximately 180 million Americans are classified as financially “coping” or “vulnerable” representing over 70% of the U.S. population, up from 66% in 2021. An April 2025 report by PYMNTS also found that 65% of U.S. consumers were living paycheck to paycheck, up from 58% a year earlier. This market includes both young and financially challenged individuals who have trouble managing cash flow, have minimal savings, regularly overdraft, and pay high fees for access to financial services. FHN research estimates there is approximately $38 billion of fees paid annually for access to basic checking services, including account maintenance fees, overdraft fees and ATM fees and that financially vulnerable and coping populations pay over $200 billion in annual fees and interest for short-term credit. We believe these insights are supported by a Dave study of our Members which reveals that traditional financial institutions charge consumers between $300-$400 of fees annually for access to basic checking services. We also believe these trends underscore a growing need for better financial solutions and illustrate the depth of our total addressable market (“TAM”), which we estimate to be approximately 180 million Americans that do not have access to affordable and effective banking solutions.

We believe that these high costs are the result of the cost structure of incumbents. With expensive brick-and-mortar bank branch networks, antiquated technology, large employee bases, and inefficient customer acquisition strategies, legacy institutions have significant costs to serve their customers, which drives the high price that customers have to pay for access to their services. By leveraging world-class technology and harnessing the power of data and artificial intelligence, we believe that we have dramatically reduced the costs to serve customers in this market. Through this structural advantage, we are able to provide increased access to banking and credit products at lower costs, resulting in a much stronger value proposition to our Members.

### Comparability of Financial Information

Our future results of operations and financial position may not be comparable to historical results as a result of the consummation of the Business Combination.

### Key Factors Affecting Operating Results

Our future operating results and cash flows are dependent upon a number of opportunities, challenges and other factors, including Member growth and activity, product expansion, competition, industry trends and general economic conditions.

Member Growth and Activity

We have made significant investments in our platform, and our business is dependent on continued Member growth, as well as our ability to offer new products and services and generate additional revenues from our existing Members using such additional products and services. Member growth and activity are critical to our ability to increase our scale, capture market share and earn an attractive return on our technology, product and marketing investments. Growth in Members and Member activity will depend heavily on our ability to continue to offer attractive products and services and the success of our marketing and Member acquisition efforts.

Product Expansion

We aim to develop and offer a best-in-class financial services platform with integrated products and services that improve the financial well-being of our Members. We have invested and continue to make significant investments in the development, improvement and marketing of our financial products and are focused on continual growth in the number of products we offer that are utilized by our Members.

Competition

We face competition from several financial services-oriented institutions. In our reportable segment, as well as in potential new lines of business, we may compete with more established institutions, some of which have more financial resources. We compete at multiple levels, including competition among other financial institutions and lenders in our ExtraCash business, competition for deposits in and debit card spending from our Dave Banking product from traditional banks and digital banking products and competition for subscribers to our personal financial management tools. Some of our competitors may at times seek to increase their market share by undercutting pricing terms prevalent in that market, which could adversely affect our market share for any of our products and services or require us to incur higher member acquisition costs

Concentration

We rely on agreements with Evolve, currently our only active bank partner, to provide ExtraCash and other deposit accounts, debit card services and other transaction services to us and our Members. See Part II, Item 1A. “Risk Factors” for additional information. Given the size and consistent growth of our Member base as well as how our product capabilities have been expanding, we recently announced an additional financial institution with which we will partner.

Industry Trends/General Economic Conditions

We expect economic cycles to affect our business, financial performance, and financial condition. Macroeconomic conditions, including, but not limited to, regulatory uncertainty, fluctuating interest rates, inflation, tariffs, unemployment rates, consumer sentiment and market volatility may impact consumer spending behavior and consumer demand for financial products. Although the Company’s business operations have not been materially impacted as of the date of this report, our business, financial condition, results of operations and prospects may be adversely affected due to the ongoing nature of these macroeconomic factors. Interest rates have remained elevated over the last two years, which has increased the costs of borrowing on our Debt Facility. Higher interest rates also often lead to higher payment obligations, which may reduce the ability of Members to repay their ExtraCash and, therefore, lead to increased delinquencies, write-offs and decreased recoveries. We also believe that higher interest rates may increase demand for ExtraCash as consumers seek additional sources of liquidity to help them fund higher costs of living. Additionally, higher levels of unemployment could adversely impact Members’ income levels and, hence, the ability of Members to repay, which could lead to deterioration in credit performance. We believe that our underwriting engine is well positioned to evaluate credit risk in a higher unemployment environment as it analyzes bank account transaction data to assess, nearly in real-time, changes in Members’ income, spending, savings, and employment status. We also believe that demand for ExtraCash may increase in periods of higher unemployment as consumers seek additional sources of liquidity to help them meet their financial obligations.

### Key Components of Statements of Operations

Basis of presentation

Currently, we conduct business through one operating segment which constitutes a single reportable segment. For more information about our basis of presentation, refer to Note 2 in the accompanying condensed consolidated financial statements of Dave included in this report.

Service based revenue, net

Service based revenue, net primarily consists of optional processing fees, optional tips, service fees and subscriptions charged to Members, net of processor-related costs associated with ExtraCash disbursements. Service based revenue, net also consists of lead generation fees from our Side Hustle advertising partners and revenue share from our surveys partner.

Transaction based revenue, net

Transaction based revenue, net primarily consists of interchange and ATM revenues from our Checking Product, net of interchange fees, ATM-related fees, and interest earned by Members, fees earned from funding and withdrawal-related transactions, and volume support from a certain co-branded agreement and deposit referral fees that are recognized at the point in time the transactions occur, as the performance obligations are satisfied and the variable consideration is not constrained.

Operating expenses

We classify our operating expenses into the following five categories:

#### Provision for Credit Losses

The provision for credit losses primarily consists of an allowance for expected credit losses at a level estimated to be adequate to absorb credit losses inherent in the outstanding ExtraCash receivables, inclusive of outstanding processing fees, service fees and tips along with outstanding amounts aged over 120 days or which become uncollectible based on information available to us during the period. We currently estimate the allowance balance required using historical loss and collections experience, and, if relevant, the nature and volume of the portfolio, economic conditions, and other factors such as collections trends and cash collections received subsequent to the balance sheet date. Changes to the allowance have a direct impact on the provision for credit losses in the condensed consolidated statement of operations. We consider ExtraCash receivables aged more than 120 days or which become uncollectible based on information available to us as impaired. All impaired ExtraCash receivables are deemed uncollectible and subsequently written off and are a direct reduction to the allowance for credit losses. Subsequent recoveries, if any, of ExtraCash receivables written-off are recorded as a reduction to ExtraCash receivables, resulting in a reduction to the allowance for credit losses and a corresponding reduction to the provision for credit losses in the condensed consolidated statements of operations when collected.

#### Processing and Servicing Costs

Processing and servicing costs consist of fees paid to our processing partners for the recovery of ExtraCash, optional processing fees, optional tips, service fees and subscriptions. These expenses also include costs paid for services to connect Members’ bank accounts to our application. Except for processing and servicing costs associated with ExtraCash originations which are recorded net against revenue, all other processing and service costs are expensed as incurred.

#### Advertising and Marketing

Advertising and marketing expenses consist primarily of fees we pay to our advertising and marketing platform partners. We incur advertising, marketing and production-related expenses for online, social media and television advertising and for partnerships and promotional advertising. Advertising and marketing expenses are expensed as incurred although they typically deliver a benefit over an extended period.

#### Compensation and Benefits

Compensation and benefits expenses represent the compensation, inclusive of stock-based compensation and benefits, that we provide to our employees and the payments we make to third-party contractors. While we have an in-house customer service function, we employ third-party contractors to conduct call center operations and manage routine customer service inquiries and support.

#### Other Operating Expenses

Other operating expenses consist primarily of technology and infrastructure (third-party Software as a Service or “SaaS”), commitments to charity, transaction based costs (program expenses, association fees, processor fees, losses from Member-disputed transactions, bank card fees and fraud), depreciation and amortization of property and equipment and intangible assets, legal fees, rent, certain sales tax related costs, office related expenses, public relations costs, professional services fees, travel and entertainment, and insurance. Costs associated with technology and infrastructure (third-party SaaS), depreciation and amortization of property and equipment and intangible assets, legal fees, rent, office related expenses, public relations costs, professional services fees, travel and entertainment, and insurance vary based upon our investment in infrastructure, business development, risk management and internal controls and are generally not correlated with our operating revenues or other transaction metrics.

Other (income) expenses

Other (income) expenses consist of interest income, interest expense, gain on extinguishment of debt, changes in fair value of earnout liabilities and changes in fair value of warrant liabilities.

Provision for income taxes

Provision for income taxes consists of the federal and state corporate income taxes accrued on income resulting from the sale of our services.

### Results of Operations

### Comparison of the three months ended March 31, 2025 and 2024

Operating revenues

*(in thousands, except for percentages)*

| Service based revenue, net | For the Three Months Ended March 31, 2025 | 2024 | Change $% 2025/2024 | 2025/2024 |
| --- | ---: | ---: | ---: | ---: |
| Processing and service fees, net | $83,448 | $44,596 | $38,852 | 87% |
| Tips | 7,496 | 14,910 | (7,414) | -50% |
| Subscriptions | 6,817 | 5,943 | 874 | 15% |
| Other | 90 | 113 | (23) | -20% |
| Transaction based revenue, net | 10,128 | 8,068 | 2,060 | 26% |
| **Total** | **$107,979** | **$73,630** | **$34,349** | 47% |

#### Service based revenue, net—

#### Processing and Service fees, net

Processing and service fees, net of processing and servicing costs associated with ExtraCash originations, totaled $83.4 million for the three months ended March 31, 2025, representing an increase of $38.9 million, or 87%, compared to $44.6 million for the three months ended March 31, 2024. The increase was primarily driven by an approximate 13% increase in average monthly transacting Members, an increase in total ExtraCash origination volume from approximately $1.05 billion to approximately $1.53 billion, and a rise in the average ExtraCash amounts that increased from $159 to $192 period over period. In addition, both the average processing and service fees, and percentage of Members who elected to expedite ExtraCash disbursements, increased modestly during the current period. We expect processing and service fees to continue to increase in line with growth in ExtraCash volume and Member engagement.

#### Tips

Tips totaled $7.5 million for the three months ended March 31, 2025, representing a decrease of $7.4 million, or 50%, compared to $14.9 million for the three months ended March 31, 2024. The decline was primarily due to the elimination of the Member tipping option in February 2025, which significantly reduced tip-related revenues for the quarter.

#### Subscriptions

Subscription revenue totaled $6.8 million for the three months ended March 31, 2025, an increase of $0.9 million, or 15%, compared to $5.9 million for the three months ended March 31, 2024. The increase was primarily attributable to the growth in the number of paying Members on our platform.

#### Transaction based revenue, net

Transaction based revenue, net, was $10.1 million for the three months ended March 31, 2025, an increase of $2.1 million, or 26%, compared to $8.1 million for the three months ended March 31, 2024. The increase was primarily driven by higher interchange revenue, resulting from the growth in Members engaging with our Checking Product, as well as increased card spend and transaction volume, which rose approximately 24% period over period. Additionally, transaction based revenue increased due to fees earned from higher Members' funding and withdrawal-related transactions. These increases were partially offset by a $0.1 million increase in interest due to Members.

Operating expenses

*(in thousands, except for percentages)*

|  | For the Three Months Ended March 31, 2025 | 2024 | Change $% 2025/2024 | 2025/2024 |
| --- | ---: | ---: | ---: | ---: |
| Provision for credit losses | $10,603 | $9,943 | $660 | 7% |
| Processing and servicing costs | 7,106 | 7,723 | (617) | -8% |
| Advertising and marketing | 10,315 | 9,097 | 1,218 | 13% |
| Compensation and benefits | 27,510 | 24,552 | 2,958 | 12% |
| Other operating expenses | 17,296 | 16,916 | 380 | 2% |
| **Total** | **$72,830** | **$68,231** | **$4,599** | 7% |

*Provision for credit losses—*The provision for credit losses totaled $10.6 million for the three months ended March 31, 2025, compared to $9.9 million for the three months ended March 31, 2024, representing an increase of $0.7 million, or 7%. This increase was primarily driven by an increase in provision expense of $0.3 million related to ExtraCash receivables aged over 120 days and those that have become uncollectible based on information available to us, in addition to an increase in provision expense of $0.4 million related to ExtraCash receivables aged 120 days and under.

The increase in provision expense of $0.3 million related to ExtraCash receivables aged over 120 days and those which have become uncollectible based on information available to us, period over period, was attributed to improved collections performance due primarily to underwriting modifications related to ExtraCash eligibility requirements, new Member conversion and risk detection, all despite increases in transacting Members, average ExtraCash amounts from $159 to $192 and total ExtraCash origination volume from $1,050 million to approximately $1,531 million for the three months ended March 31, 2024 and 2025, respectively. All impaired ExtraCash receivables deemed uncollectible are subsequently written-off and are a direct reduction to the allowance for credit losses.

Provision expense related to receivables aged 120 days and under increased by $0.4 million, primarily due to higher outstanding balances resulting from a 46% increase in ExtraCash origination volume, partially offset by improved collection performance. These dynamics resulted in an increase to the allowance for credit losses and corresponding increase in provision expense during the three months ended March 31, 2025 as compared to March 31, 2024. We expect continued volatility in ExtraCash receivables outstanding each period, as balances are directly influenced by the timing and volume of Member activity in the trailing 120-day period. Additionally, slight improvements in historical loss and collection rates contributed to a reduction in loss rate assumptions used in calculating the allowance for credit losses. Changes in these historical assumptions directly impact both the allowance and the provision for credit losses.

For additional details on the aging of ExtraCash receivables and a roll-forward of the allowance for credit losses, refer to the tables in Note 5 - ExtraCash Receivables, Net in the accompanying condensed consolidated financial statements.

*Processing and service costs—*Processing and servicing costs totaled $7.1 million for the three months ended March 31, 2025, compared to $7.7 million for the three months ended March 31, 2024. The decrease of $0.6 million, or 8%, was primarily driven by increases in ExtraCash origination volume from $1,050 million to approximately $1,531 million, offset by, continued technology enhancements made to our ExtraCash payments structure along with rebates and cost savings due to price reductions from our processors.

*Advertising and marketing—*Advertising and marketing expenses totaled $10.3 million for the three months ended March 31, 2025, compared to $9.1 million for the three months ended March 31, 2024. The increase of $1.2 million, or 13%, was primarily attributable to a more targeted spend approach for our advertising campaigns across digital and offline channels, with a particular focus on acquiring high-value new customers. We continue to prioritize channel and creative optimizations and ongoing improvements to our measurement and reporting infrastructure, both of which allow us to invest more intelligently across our marketing mix.

*Compensation and benefits—*Compensation and benefits expenses totaled $27.5 million for the three months ended March 31, 2025, compared to $24.6 million for the three months ended March 31, 2024. The increase of $2.9 million, or 12%, was primarily attributable to the following:

- an increase in stock-based compensation of $1.4 million, primarily due to the vesting of certain performance based restricted stock units during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, offset by a reduction in stock-based compensation expense related to stock options granted in prior years that have fully vested; and
- an increase in payroll related costs of $1.4 million, primarily due to increased compensation, employer related taxes and performance bonuses, offset by severance costs incurred during the three months ended March 31, 2024.

*Other operating expenses—*Other operating expenses totaled $17.3 million for the three months ended March 31, 2025, compared to $16.9 million for the three months ended March 31, 2024. The increase of $0.4 million, or 2%, was primarily attributable to the following:

- an increase in expenses related to our Checking Product of $0.6 million, primarily attributable to card processing fees, card fees and fraud related costs associated with the growth in Members and the number of transactions processed; and
- an increase in general corporate legal fees of $0.3 million; offset by
- a decrease in charitable contributions of $0.5 million due to the elimination of the Member tipping option during February 2025.

Other (income) expenses

*(in thousands, except for percentages)*

|  | For the Three Months Ended March 31, 2025 | 2024 | Change $% 2025/2024 | 2025/2024 |
| --- | ---: | ---: | ---: | ---: |
| Interest income | $(431) | $(1,495) | $1,064 | -71% |
| Interest expense | 1,758 | 2,217 | (459) | -21% |
| Gain on extinguishment of convertible debt | - | (33,442) | 33,442 | -100% |
| Changes in fair value of earnout liabilities | (398) | 196 | (594) | -303% |
| Changes in fair value of public and private warrant liabilities | 352 | 477 | (125) | -26% |
| **Total** | **$1,281** | **$(32,047)** | **$33,328** | -104% |

*Interest income—* Interest income totaled $0.4 million for the three months ended March 31, 2025, compared to $1.5 million for the three months ended March 31, 2024. The decrease of $1.1 million, or 71%, was primarily attributable to an average lower total balance of investments held during the quarter ended March 31, 2025 as compared to the quarter ended March 31, 2024.

*Interest expense—* Interest expense totaled $1.8 million for the three months ended March 31, 2025, compared to $2.2 million for the three months ended March 31, 2024. The decrease of $0.5 million, or 21%, was primarily attributable to a reduction of interest expense related to the repurchase of the convertible note with FTX Ventures Ltd. in January 2024.

*Changes in fair value of earnout liability—*Changes in fair value of earnout liabilities resulted in income of $0.4 million for the three months ended March 31, 2025, compared to an expense of $0.2 million for the three months ended March 31, 2024. This $0.6 million period-over-period change was primarily driven by a fair value adjustment related to the earnout shares liability, which is sensitive to fluctuations in our Class A common stock price. While our stock has generally appreciated over the last 12 months, a decline in our Class A common stock price during the first quarter of 2025 led to a remeasurement of the liability at a lower fair value, resulting in the recognition of income during the period.

*Changes in fair value of warrant liability—*Changes in the fair value of our warrant liability resulted in an expense of $0.4 million for the three months ended March 31, 2025, compared to an expense of $0.5 million for the same period in 2024. The $0.1 million year-over-year decrease in expense, or 26%, was primarily driven by fair value adjustments related to our public and private warrant liabilities, which are remeasured each period based on changes in our Class A common stock price. The warrant liability increased in value during the current quarter due to a rise in our Class A common stock price compared to the prior-year period, resulting in a non-cash expense recognized in the current period.

Provision for income taxes

*(in thousands, except for percentages)*

|  | For the Three Months Ended March 31, 2025 | 2024 | Change $% 2025/2024 | 2025/2024 |
| --- | ---: | ---: | ---: | ---: |
| Provision for income taxes | 5,056 | 3,203 | 1,853 | 58% |
| **Total** | **$5,056** | **$3,203** | **$1,853** | 58% |

Provision for income taxes for the three months ended March 31, 2025 increased by approximately $1.9 million, or 58%, compared to the three months ended March 31, 2024. The increase was primarily due to higher income reported for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

### Non-GAAP Financial Measures

In addition to our results determined in accordance with GAAP, we believe the following non-GAAP measure is useful in evaluating our operational performance. We use the following non-GAAP measure to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that the non-GAAP financial information may be helpful in assessing our operating performance and facilitates an alternative comparison among fiscal periods. The non-GAAP financial measure is not, and should not be viewed as, a substitute for GAAP reporting measures.

Adjusted EBITDA

“Adjusted EBITDA” is defined as net income adjusted for interest expense, net, provision for income taxes, depreciation and amortization, stock-based compensation and other discretionary items determined by management. Adjusted EBITDA is intended as a supplemental measure of our performance that is neither required by, nor presented in accordance with, GAAP. We believe that the use of Adjusted EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with those of comparable companies, which may present similar non-GAAP financial measures to investors. However, you should be aware that, when evaluating Adjusted EBITDA, we may incur future expenses similar to those excluded when calculating these measures. In addition, our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies, because not all companies calculate Adjusted EBITDA in the same fashion.

Because of these limitations, Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA on a supplemental basis. The reconciliation of net income to Adjusted EBITDA below should be reviewed, and no single financial measure should be relied upon to evaluate our business.

The following table reconciles net income to Adjusted EBITDA for the three months ended March 31, 2025 and 2024, respectively:

*(in thousands)*

|  | For the Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Net income | $28,812 | $34,243 |
| Interest expense, net | 1,327 | 722 |
| Provision for income taxes | 5,056 | 3,203 |
| Depreciation and amortization | 1,500 | 1,650 |
| Stock-based compensation | 7,517 | 6,130 |
| Gain on extinguishment of convertible debt | - | (33,442) |
| Changes in fair value of earnout liabilities | (398) | 196 |
| Changes in fair value of public and private warrant liabilities | 352 | 477 |
| **Adjusted EBITDA** | **$44,166** | **$13,179** |

### Liquidity and Capital Resources

In the past, we have financed our operations primarily from cash receipts from service and transaction based revenues, equity financings, borrowings under the Debt Facility, issuances of convertible notes and funds received as a result of the business combination. As of March 31, 2025 and December 31, 2024, our cash and cash equivalents, marketable securities, investments and restricted cash balance was $89.7 million and $91.9 million, respectively.

As an early-stage company, the expenses we have incurred since inception are consistent with our strategy and approach to capital allocation. Although we have recently begun to generate net income, we may incur net losses in the future in accordance with our operating plan as we continue to expand and improve upon our financial platform.

Our ability to access capital when needed is not assured and, if capital is not available to us when, and in the amounts needed, we could be required to delay, scale back or abandon some or all of our development programs and other operations, which could materially harm our business, prospects, financial condition and operating results.

We believe that our cash on hand should be sufficient to meet our working capital and capital expenditure requirements and fund our operations for a period of at least 12 months from the date of this report. We may raise additional capital through private or public equity or debt financings. The amount and timing of our future funding requirements, if any, will depend on many factors, including the pace and results of our product development efforts. No assurances can be provided that additional funding will be available at terms acceptable to us, if at all. If we are unable to raise additional capital, we may significantly curtail our operations, modify existing strategic plans and/or dispose of certain operations or assets.

Share Repurchase Authorization

In March 2025, our Board of Directors authorized a share repurchase program under which we may repurchase up to $50.0 million of our outstanding Class A common stock. The repurchases may be conducted through open market transactions, privately negotiated transactions, block trades, one or more Rule 10b5-1 trading plans or other means our management deems appropriate.

The program is part of our capital allocation strategy to return capital to shareholders and manage dilution from equity compensation. The timing, price, and volume of repurchases are subject to management’s discretion and depend on market conditions, legal requirements, and other factors. We may suspend or discontinue the program at any time without prior notice. The program has no expiration date.

As of March 31, 2025, we had repurchased 81,370 Class A common shares for an aggregate cost of $6.9 million, leaving $43.1 million available under the current authorization. These repurchases were funded using general corporate funds and classified as treasury stock.

For further information on repurchases during the quarter, refer to the table under Part II, Item 2. “Unregistered Sales of Equity Securities and Use of Proceeds” and Note 19, Treasury Shares in the notes to our condensed consolidated financial statements.

### Material Cash Requirements

In the normal course of business, we enter into various agreements with our vendors that may subject us to minimum annual requirements. While our contractual commitments will have an impact on our future liquidity, we believe that we will be able to adequately fulfill these obligations through cash generated from operations and from our existing cash balances. We do not have any “off-balance sheet arrangements,” as defined by the SEC regulations.

Although we have fully implemented our remote employee workforce strategy in the U.S., we have not closed our leased office locations. We are required to continue making our contractual payments until our operating leases are formally terminated or expire. Our remaining leases have terms of approximately 0.8 to 3.6 years as of March 31, 2025, and we had a total lease liability of $0.5 million. See Note 12, Leases in the notes to our condensed consolidated financial statements for additional information regarding our lease liabilities as of March 31, 2025.

In the near term, we expect to continue to generate ExtraCash relying primarily on our balance sheet cash and Debt Facility, as needed. Interest payments on term loan borrowings under the Debt Facility are required to be made on a monthly basis. At March 31, 2025, $75.0 million of term loans under the Debt Facility were outstanding. See Note 10, Debt Facility in the notes to our condensed consolidated financial statements in this report.

We also had certain contractual payment obligations for interest owed under the $100.0 million Note we issued and sold pursuant to the Note Purchase Agreement entered into with FTX Ventures Ltd. Interest payments relating to the Note were required to be made or added to the outstanding principal on a semi-annual basis. On January 29, 2024, we repurchased the $105.5 million outstanding balance of the Note for $71.0 million. For more information on the Note Purchase Agreement with FTX Ventures Ltd., see Note 8, Convertible Note Payable.

In addition, we have recorded accruals related to certain legal contingencies as of March 31, 2025. These accruals reflect management’s best estimate of probable and reasonably estimable losses arising from ongoing legal proceedings. While we do not expect these matters to result in cash payments that would materially impair our liquidity, they represent a known use of cash in future periods and are reviewed and adjusted as developments warrant. See Note 11, Commitments and Contingencies in the notes to our condensed consolidated financial statements, for further detail on these matters.

We may use cash to acquire businesses and technologies. The nature of these transactions, however, makes it difficult to predict the amount and timing of such cash requirements.

### Cash Flows Summary

*(in thousands)*

| Total cash provided by (used in): | For the Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Operating activities | $45,247 | $18,344 |
| Investing activities | (28,057) | 66,125 |
| Financing activities | (19,906) | (70,476) |
| **Net (decrease) increase in cash and cash equivalents and restricted cash** | **$(2,716)** | **$13,993** |

Cash Flows From Operating Activities

During the three months ended March 31, 2025, net cash provided by operating activities increased compared to the three months ended March 31, 2024 due to increases in operating revenues and a reduction in various operating expenses across the organization. Net cash provided by operating activities for the three months ended March 31, 2025 included net income of $28.8 million, and excluding non-cash impacts, included an increase in ExtraCash receivables, service based revenue of $3.3 million and a decrease in accounts payable of $0.5 million. These changes were offset by an increase in accrued expenses of $0.2 million and an increase in other non-current liabilities of $0.3 million.

During the three months ended March 31, 2024, net cash provided by operating activities increased compared to the three months ended March 31, 2023 due to increases in operating revenues, offset primarily by increases in compensation and other operating expenses to support the growth of the business. Net cash provided by operating activities for the three months ended March 31, 2024 included net income of $34.2 million, and excluding non-cash impacts, included increase in accounts payable of $2.7 million and an increase in other current liabilities of $2.7 million. These changes were offset primarily by an increase in prepaid expenses and other current assets of $5.6 million, a decrease in a legal settlement accrual of $2.6 million, a decrease in accrued expenses of $1.9 million, and an increase in ExtraCash receivables, service based revenue of $0.5 million.

Cash Flows From Investing Activities

During the three months ended March 31, 2025, net cash provided by investing activities was $28.1 million. This included the sale and maturity of investments of $37.3 million, offset by purchases of investments of $37.9 million, net ExtraCash originations and collections of $26.1 million and payments related to internally developed software costs and property and equipment of $1.4 million.

During the three months ended March 31, 2024, net cash provided by investing activities was $66.1 million. This included the sale and maturity of investments of $90.3 million and sale of marketable securities of $59.0 million, offset by purchases of marketable securities of $59.2 million, purchases of investments of $20.9 million, net disbursements and collections of ExtraCash of $1.6 million, and payments related to internally developed software costs of $1.6 million.

Cash Flows From Financing Activities

During the three months ended March 31, 2025, net cash used in financing activities was $19.9 million, which consisted of the $13.3 million for payment for shares withheld related to net share settlements and $6.9 million related to repurchases of Class A Common Stock, offset by $0.3 million for proceeds received for stock option exercises.

During the three months ended March 31, 2024, net cash used in financing activities was $70.5 million, which consisted of the $71.0 million paydown of the FTX Ventures Ltd. convertible note, offset by $0.5 million received for stock option exercises.

### Critical Accounting Estimates

Our condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements, as well as the reported revenues and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Our critical accounting estimates and assumptions are evaluated on an ongoing basis, including those related to the following:

(i) Allowance for credit losses; and

(ii) Income taxes.

Actual results may differ from these estimates under different assumptions or conditions. We believe that the accounting estimates discussed below are critical to understanding our historical and future performance, as these estimates relate to the more significant areas involving management’s judgments and estimates. For further details, please refer to Note 2 in our accompanying condensed consolidated financial statements for the three month ended March 31, 2025 and 2024 included in this Form 10-Q.

While our significant accounting estimates are described in the notes to our condensed consolidated financial statements, we believe that the following accounting estimates require a greater degree of judgment and complexity and are the most critical to understanding our financial condition and historical and future results of operations.

Allowance for Credit Losses

ExtraCash receivables from contracts with Members as of the balance sheet dates are recorded at their original receivable amounts reduced by an allowance for expected credit losses. We pool our ExtraCash receivables, all of which are short-term in nature and arise from contracts with Members, based on shared risk characteristics to assess their risk of loss, even when that risk is remote. We use an aging method and historical loss rates as a basis for estimating the percentage of current and delinquent ExtraCash receivables balances that will result in credit losses. We consider whether the conditions at the measurement date and reasonable and supportable forecasts about future conditions warrant an adjustment to our historical loss experience. In assessing such adjustments, we primarily evaluate current economic conditions, expectations of near-term economic trends and changes in customer payment terms and collection trends. For the measurement dates presented herein, given our methods of collecting funds, and that we have not observed meaningful changes in our customers’ payment behavior, we determined that our historical loss rates remained most indicative of our lifetime expected losses. We immediately recognize an allowance for expected credit losses upon the origination of the ExtraCash receivable. Adjustments to the allowance each period for changes in the estimate of lifetime expected credit losses are recognized in operating expenses—provision for credit losses in the consolidated statements of operations.

When we determine that an ExtraCash receivable is not collectible, the uncollectible amount is written-off as a reduction to both the allowance and the gross asset balance. Subsequent recoveries are recorded when received and are recorded as a recovery of the allowance for expected credit losses. Any change in circumstances related to a specific ExtraCash receivable may result in an additional allowance for expected credit losses being recognized in the period in which the change occurs.

Income Taxes

We follow ASC 740, Income Taxes (“ASC 740”), which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the condensed consolidated financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the period in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more-likely-than-not that the asset will not be realized.

The effective tax rate used for interim periods is the estimated annual effective tax rate, based on the current estimate of full year results, except that those taxes related to specific discrete events, if any, are recorded in the interim period in which they occur. The annual effective tax rate is based upon several significant estimates and judgments, including our estimated annual pre-tax income in each tax jurisdiction in which it operates, and the development of tax planning strategies during the year. In addition, our tax expense can be impacted by changes in tax rates or laws and other factors that cannot be predicted with certainty. As such, there can be significant volatility in interim tax provisions.

ASC 740 provides that a tax benefit from an uncertain tax position may be recognized when it is more-likely-than-not that the position will be sustained in a court of last resort, based on the technical merits. If more-likely-than-not, the amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized upon examination, including compromise settlements. For tax positions not meeting the more-likely-than-not threshold, no tax benefit is recorded. We have estimated $2.2 million and $2.0 million of uncertain tax positions as of March 31, 2025 and December 31, 2024, respectively, related to state income taxes and federal and state R&D tax credits.

Our policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense within the statement of operations.

We are subject to income tax in jurisdictions in which we operate, including the United States. For U.S. income tax purposes, we are taxed as a Subchapter C corporation.

We recognize deferred taxes for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes. We recorded a valuation allowance against our deferred tax assets, net of certain deferred tax liabilities, at March 31, 2025 and December 31, 2024. Based upon management’s assessment of all available evidence, we have concluded that it is more-likely-than-not that the deferred tax assets, net of certain deferred tax liabilities, will not be realized.

### Emerging Growth Company Status

We are an “emerging growth company” as defined in Section 2(a) of the Securities Act of 1933, as amended, and have elected to take advantage of the benefits of the extended transition period for new or revised financial accounting standards. We expect to remain an emerging growth company until December 31, 2025 and to continue to take advantage of the benefits of the extended transition period, although we may decide to early adopt such new or revised accounting standards to the extent permitted by such standards. We expect to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and non-public companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. This may make it difficult or impossible to compare our financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions because of the potential differences in accounting standards used. See Note 2 of our accompanying condensed consolidated financial statements included in this report for the recent accounting pronouncements adopted and the recent accounting pronouncements not yet adopted for the three months ended March 31, 2025 and 2024.

In addition, we intend to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act for emerging growth companies. Subject to certain conditions set forth in the JOBS Act, if we intend to rely on such exemptions, we are not required to, among other things: (a) provide an auditor’s attestation report on our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; (b) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd- Frank Wall Street Reform and Consumer Protection Act; (c) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the condensed consolidated financial statements (auditor discussion and analysis); and (d) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive Officer’s compensation to median employee compensation.

We will remain an emerging growth company under the JOBS Act until the earliest of (1) the last day of the fiscal year (a) following March 4, 2026, (b) in which we have total annual gross revenue of at least $1.235 billion, (c) in which we are deemed to be a “large accelerated filer” under the rules of the SEC, which means the market value of our common equity that is held by non-affiliates exceeds $700.0 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the previous three years.

### Recently Issued Accounting Standards

Refer to Note 2, “Significant Accounting Policies,” of our condensed consolidated financial statements included in this report for a discussion of the impact of recent accounting pronouncements.

## Market risk

As filed, 143 characters.

Not required until after the first fiscal year end in which Item 305(c) of Regulation S-K is applicable for former smaller reporting companies.

## Controls and procedures

As filed, 888 characters.

### Evaluation of Disclosure Controls and Procedures

Our management has evaluated, with the participation of the Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2025.

### Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 1,587 characters.

As of the date of this Form 10-Q, there have been no material changes to the risk factors disclosed in in our Annual Report for the year ended December 31, 2024 filed with the SEC on March 4, 2025, other than as noted below. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.

***We cannot guarantee that our share repurchase program will be fully consummated or that it will enhance long-term stockholder value.***

Although our Board of Directors has authorized a share repurchase program, the program does not obligate us to repurchase any specific dollar amount or to acquire any specific number of shares of our common stock. The timing, manner, price and amount of any repurchases are determined at the discretion of our management, depending on market conditions and other factors. We cannot guarantee that the program will be fully consummated or that it will enhance long-term stockholder value, and it may not prove to be the best use of our cash. The program could affect the trading price of our stock and increase volatility, and any announcement of a termination of this program may result in a decrease in the trading price of our stock. In addition, any repurchase under this program will reduce our cash reserves.

Filed May 8, 2025.
Source: SEC EDGAR, the filing index for accession 0000950170-25-067073. Last ingested by Listed: Nov 6, 2026, 18:02 ET. No prices; not investment advice.