Chime Financial Aktie

All right. I think we've started. Thanks, everyone, for joining. My name is Tien-Tsin Huang. I follow the payments and IT services sector at JPM. I'm super excited to have the Chime team here, Chris Britt, Co-Founder, CEO of Chime. And I was thinking, Chris, I think we met maybe, what, 18 years ago.

Something like that. It's been a long time.

It was my guess. And to sort of see where you've landed here and here to tell the Chime story, it means a lot to me, and it's really fun to follow the name and grateful for you to be here.

And I appreciate you. I remember in the early days with Chime before we were -- anyone wanted to meet us or take any time. I remember you having us at a conference to share our story, I think, before we probably had more than a few thousand members. So it's been a great ride, and I appreciate all the support you've given us over the years.

Well, you're always very mission-driven, and I think we'll get into that for sure. But you were so mission-driven, and I felt like your background coming from Visa, from Green Dot that you could really have some impact.

And so maybe let's start with that, if that's all right, Chris. Just thinking about Chime, now that you're public and the problem that you're trying to solve. I love to hear that story from you, Chris, about the founding of the company. Talk to us about that. What problem you're trying to solve?

Well, Chime and our mission is very personal to me, obviously. I grew up outside of the Bronx, in an apartment near my parents, graduated from college, and I saw firsthand the struggles that regular everyday Americans have in making ends meet and oftentimes living paycheck to paycheck.

And when I looked at the opportunity in the financial services category after having worked at Visa and Green Dot and a variety of Internet and technology companies, I just saw an incredible opportunity to create a financial services company and really a brand and a promise that authentically helps people make progress in their lives, and I'm incredibly proud of the progress that we've made on that front.

We've -- we're now over 10 million monthly actives. The majority of them rely on Chime as their primary bank account. This is not the unbanked, sometimes we get categorized as such. Our members come to us from BofA, Wells Fargo, other big banks, relationships that maybe they're not happy with because they feel like they're getting fee'd to death. And I'm really proud of the impact that we're having. People don't like Chime, they love Chime and they come to us for a range of reasons.

I don't think there is a single sort of silver bullet reason, but a lot of it comes down to avoiding fees, getting access to short-term liquidity, building their credit and just sort of like making progress in their financial lives and feeling like they've got someone on their side that really wants to help them get ahead, and that's been core to our mission since the founding of the company.

Yes. So you've been very mission-driven, and you've built it the right way over time. And I think, again, you've learned a lot from your own personal and your professional experiences. But investors are always asking me, Chris, right? You're going after a very competitive market. Yes, big TAM. We've got competitors in the large banks, right, the mid-tier banks, the neo banks. You've got foreign neo banks that are perhaps coming into the U.S. and could make a big splash, we'll see. How do you view the landscape? And how are you going to differentiate, and again, stick to your mission, but fend off all this competition that's coming?

Well, I think there's a variety of attributes that this company has that really helps to set us apart and positions us well for this next chapter, which inevitably -- there's always competition, and there will always be more competition. The core group of companies that we compete with today are the incumbent banks, right? That's where most of the primary account relationships, the direct deposit relationships in our country reside. And we have a superior offering than the incumbents, particularly for the everyday consumer that we serve.

We have a set of products that clearly resonate around giving access to short-term liquidity, underwritten by direct deposits, offering a -- not just a suite of products that really work well, but because we're a technology company that operates on our own tech stack and doesn't rely on physical distribution, we have, by far, the lowest cost structure. That allows us to deliver the lowest cost products in all areas of financial services to our members. And so that will allow us to continue to scale.

And I think in this AI era that we're entering in, I think that, that gap that we have in terms of the product set, the technology and cost advantage relative to incumbents, that gap is only going to widen. So I think we're very well positioned relative to the incumbent banks. They are obviously -- these are huge companies so we don't take them for granted and very well run companies.

I just think they focus more on large corporate clients and really large, almost think about whales on the consumer side as well. But if you're someone that makes $50,000, $60,000, $70,000 a year, you're probably not that well served by the incumbent banks. As it relates to potential new entrants into the market, we have a lot of respect for some of these international players that have figured out ways to attack this -- attack with -- the marketplace with a range of products. Some of those products, I think, are a little bit different than what might resonate here in the United States.

But I think one of the things that is also underestimated is the fact that we have a brand now that is truly mainstream and trusted. If you think about on an unaided basis, when you ask consumers in America that make up to $100,000 a year, which is about 70% of our country, and you ask what brands come to mind when you think of online banking unaided, we -- Chime trails only Bank of America and Chase. So we have an established brand. We've got an incredible suite of products, and we're going to continue to add more and more products to make our services that more -- that much more appealing, including, for example, the Chime Prime offering that we launched this past quarter.

Yes. No, I do want to dig into some of the products and some of the vision that you have. But just maybe going back to the results and sort of maybe a disconnect in the appreciation of what you've built, you guys had a record quarter, right, from a member-add standpoint. It was above our expectations, very high incremental margins, which is important is that we're balancing growth and profits and then you hit GAAP profitability, too, right, I think, Chris, but yet the stock reacted negatively, which we were surprised by. So I'd love to hear your reaction. I'm sure you've been talking to investors. What do you think the market might be missing in your mind?

Well, you're right, Tien-Tsin. I appreciate you highlighting the fact that we did have a strong quarter. We increased our top line 25% year-over-year. We had over 700,000 net new adds. We made great progress on transaction profit, up 40%, over 40% year-over-year. Our whole suite of products is really humming, and we continue to see greater and greater engagement among our member base, who, like I said, really use Chime as their primary everyday bank account, over 50 transactions a month on average across the entire 10 million-plus member base now.

And like you said, also a maturing of the company, right? We're now actually GAAP profitable, over $50 million of net income last quarter. So I think we're really on our way. As it relates to where there might be a disconnect with the investors, I think there is something to be said around the state of the consumer. And I think there's just general trepidation about when the shoe is going to drop. And I feel like we've now had 4 quarters in a row where we've beat and raised results that I'm really proud of the team on. But inevitably, there's that narrative of like, well, when are things going to go sideways for the everyday consumer. And we've said consistently 4 quarters in a row that we actually see a very healthy consumer in terms of transaction activity.

I remind you all that most of Chime's business is a spending-based business model. It's a transaction based. That's about 2/3 of our revenue. And most of that transaction activity is on nondiscretionary spend. So we continue to see very healthy consumer spending trends. It's up. We're seeing spend on nondiscretionary as well. So we're seeing double-digit increases in entertainment and streaming services. And even at the Costcos and Amazons of the world, we see a very healthy consumer base. We see savings balances up quite nicely and balances in the checking accounts. But despite all that, we continue to get questions about what's going to happen with the consumer, what's going to happen with the consumer.

So we see an everyday consumer that is essentially close to full employment. I think there's a lot of narrative around AI taking everyone's jobs. Obviously, I think that's probably been -- there's been probably a more direct hit on the sort of knowledge worker, Silicon Valley type of, I guess, sort of middle management, if you will, that there's been some optimization on, but it hasn't really hit the core everyday consumer that we serve. But inevitably, we're getting a lot of -- that tends to be a lot of the questions.

I think all we can do is continue to just put points on the board, right? We showed another quarter of our MyPay earned wage access product, which allows people to get access to their paycheck on-demand for free or for a small fee if they want to get it instantly. We've had a second quarter of 1% loss rate on that product. And again, it's because the way that we do our credit and lending is different than traditional lenders. It's underwritten by recurring direct deposits. And we have this privileged position at the top of the repayment stack that allow us to manage this business really, really well. And I imagine that there's some amount of -- just questioning on what happens with that business in a more challenging economic environment.

And -- in the past, when we've seen more challenging economic environments, we often say like this is a business that's good in good times and it actually can be great in more challenging times. Because again, during more challenging times, people go to the best products at the lowest cost that they know are reliable and will be there even when they run into more stressful situations. So I think we're very well positioned for a downturn if that were to happen. But again, we -- as we shared on the call, we're actually continuing to see from a behavioral perspective, a very healthy consumer.

Yes. No, the resiliency has been there. I know there's a lot of talk about K-shape and everything else, but I think the resiliency is definitely there. Just to stay on that, just to round it out, you do have signals that you can see, right, in terms of the state of the consumer. I think you've talked about looking at unemployment filings and payments that you might see. So you have very good line of sight, correct, Chris?

Yes. We're different than other fintechs. We own the primary account relationship with the majority of our members. If there is a challenge, if there's a bump in the night and people start losing jobs, we absolutely will see it in unemployment benefits hitting our accounts. It happened during COVID. It happened during other periods of time that were more challenging from an economic perspective. So we have the best and probably earliest reads on what's happening with the everyday sort of mainstream consumer.

And what's important is that if we were to see that, the way that we operate our lending and credit business, it's incredibly short term in nature. We turned this paper over in 7 to 14 days. So if we ever see a more challenging environment afoot, we can always just adjust the dials. It's much, much different than traditional lenders that have much longer duration lending products.

Now, we do have some longer duration lending products. But the ones that we do, it's for a much smaller segment of our member base that we can underwrite based on being with us for many, many years and steady employment trends and so forth. So that part of our book is performing incredibly well also.

All right. Good. So I know you're building up a lot of goodwill with consumers. I know we've talked about that for a bit in the past. Just thinking about the products now. We'll build up to Prime, but we've been interested in and excited about this Chime Card opportunity. So -- for those that are less familiar, talk about why now in terms of launching that, how it compares to some of your other carded products? How do you see that evolving?

Yes. Maybe just to talk about the evolution of our products. When we started this company, the vision was always to create the lowest cost checking account, core bank account. We didn't want to do a prepaid card. We didn't want to create a product that felt second-class. We wanted a true alternative to Wells Fargo and BofA. So it started with an FDIC-insured checking account. We're not a bank. We partner with 2 banks that hold those deposits in FDIC-insured accounts for each of the individual consumers, and then, we create this experience. It's really easy to use and low cost and helps them in the areas that matter most.

So we really created our first hit in providing early access to your direct deposits, so giving access to your pay 2 days early, all wrapped around a bank account experience that was fee -- free, so no fees on the account and the ability to get access to your wages 2 days early. Also build your credit was a big hit for us as well. So you could take all or part of your deposit, put it into a separate account that secured a line of credit. So that was our secured credit product that we called Credit Builder. That was a big hit for a number of years.

Of course, we have high-yield savings and other core financial products as well. But I'd say that the Chime Card is really the next evolution of our Credit Builder Card, where we took that basic construct of a secured credit card, which people really appreciated because a lot of consumers in America just have an aversion towards unsecured credit. And so this product allows people to have an actual credit card, but not get themselves into trouble because they're only able to spend what they've set aside. So we took a version of that product and sort of rebranded it without the credit building focus of it all and started to evolve into more of a rewards-based product.

And so we have -- last year, we launched a tier called Chime Plus, where if you use this Chime secured credit card, then you were a Chime Plus member, meaning you had at least a few hundred dollars of direct deposit, then we'd give you 1.5% cash back on a rotating basis. And the emphasis on that product has been really a great tailwind for our business because if you think about the way that we monetize the relationship, it's primarily through payments revenue. And when we make the shift from debit spend into secured credit spend, that leads to a better experience for our members because they're getting rewards, and it's a better experience for Chime and our shareholders because we earn more revenue from secured card interchange rates.

So as you -- thanks for going through that history. So as you're evolving, you're pushing more of these products, right, that with rewards, it starts to resemble more of the types of cards that probably investors are familiar with, right? And I know you're introducing some of these membership programs as well, Chime Prime. So the question I'm -- I get asked a lot, and I'm asking you here is, is this TAM expanding? Is this an opportunity for you to go -- move upmarket a little bit and go after maybe some higher income spenders? Walk me through the logic in moving into this membership model?

Yes. I mean, Chime is a very mainstream brand today. So we have already -- even before the launch of these new product initiatives and tiers over the past year or so, we already appeal to consumers that made above $75,000, above $100,000. It wasn't the core of our focus. We've sort of articulated that our core is people that make up to about $100,000. But absolutely, with the launch of these new tiers, we continue to see the fastest growth among our members that make over $75,000 a year, but maybe aren't as interested in an unsecured credit card that depending on who you get it from, it's anywhere from $500 to $800 a year for one of these really heavy reward, unsecured credit product.

So -- we try not to draw direct comparisons. We're not really competing with the Sapphire card or the Robinhood Gold card or one of these things. We're competing with checking accounts. And the checking account offerings that the incumbent banks have are just not that great. They're not rewarding. I think -- we fielded some survey in the last couple of months that showed like despite the fact that close to 70% of everyday consumers' deposits go into the checking accounts, only like 25% or 30% of consumers feel like they're getting reasonably rewarded for that business. So that's the opportunity that we're trying to attack. We're not trying to do a head-to-head battle with Amex or Chase Sapphire or something like that. This is a better alternative to a checking account that actually rewards consumers that give us more of their deposits because that inevitably leads to more spend, which is what sort of makes our world go around.

Got you. We're in a safe place by the way, neutral site, so you can talk about Chase Sapphire, no problem. Okay. No, thanks for going through that. So we talked about Prime...

No. I didn't talk about Prime.

Well, yes, let me touch on Prime. I think just ask specifically, maybe just to move the conversation along, what have you learned so far from a Prime perspective as you go forward? I've been seeing some of the ads. What's happening? Yes.

Yes. We just launched a big campaign with John Cena, America's champ from the World Wrestling, and he's been awesome and really fun. This is the next evolution of our tiers. So Chime Prime is now if you do $3,000 of direct deposit, which isn't a huge hurdle and we've got a ton of our members already doing that, if you do that, then you get 5% cash back in the category of your choice. This is a real powerful offering. I mean, it is something that I would encourage everyone in the audience here to maybe consider. If you spend $1,000 a month on your fuel purchases, you pick the fuel category, you get $50 cash back in your Chime account. So this has a real meaningful impact.

And absolutely, we're already seeing it have an impact at the top of the funnel and allowing our member -- allowing us, we believe, to appeal to even more members, including the people in that $75,000-plus segment. We only launched Chime Prime on April 1 or 2. So there really hasn't been that much time to see it evolve yet, but we're already seeing higher signals of direct deposit intent, meaning like people right out of the gate coming in and going through the funnel to get direct deposit. We're seeing, again, in a very short period of time, higher levels of retention.

And the top of the funnel has been a really exciting sort of progress in terms of we now have close to 60% of all people who are joining Chime for the first are signing up for the Chime Card, which you need the Chime Card to get the benefit of cash back if you qualify for the top tier. So we're seeing 60% of people signing up for that. And of those people that sign up, they do about 70% of their spend on the Chime Card rather than -- the Chime secured card as opposed to the China debit card. So all in all, we're seeing at the top of the funnel about 50% of new member spend is on the secured credit card.

And just for context, if you go back to September of last year and you look at our total spend, we got 16% of our spend was on secured credit and the rest on debit. Last quarter, we announced that we got close to 25% in terms of that share. So we're really excited about that continued progress. And this is really going to be a tailwind for our business for years to come when you think about the impact at the top of the funnel that I just mentioned with 50% of spend on credit.

And then also, of course, we keep chipping away at the core installed member base to encourage them to consider switching to the Chime Card with the Plus or Prime tier because you get even more from your relationship with Chime. So we're seeing existing members move over and giving us signals that they -- it's giving them more reasons to stay with Chime for life.

Yes. No, it's a smart strategy, I feel like. It's always this push-pull debate, but it feels like a lot of what you're doing here is very organic in terms of how you're rolling it out. Okay. Good. So let's do -- let's focus on -- just to be efficient, let's do the liquidity stuff. You mentioned how quickly MyPay has grown. You're already at your target loss rates, so things are performing as you expected from a performance standpoint on the loan front. You're now rolling out instant loans, right? And so what's the vision here? What should we be expecting as you're pushing more of these liquidity products at this point in the cycle?

I think you should think of Chime as everything that all of the product offerings are all in the spirit of trying to develop even deeper relationships with our members. Because when you look at our cohorts and how they age over time, the year after year, and we put this in the supplementals, but you'll see that the transaction margin of each of our cohorts grows net of churn, net of attrition year after year. And these sort of more aged cohorts are monetizing in excess of $400 a year of average revenue per active member.

And then you see when our members are using 6 or more products, which is over 15% of our member base today, those folks are monetizing over $500. So all of these products are designed to develop deeper relationships to make them -- to make our members think of Chime as the place to get all of their products and services including liquidity products. So while we like the fact that our business is primarily payments driven, it's, of course, natural if you own the primary account relationship to get into more areas of credit and lending.

We really like the characteristics of this lending model that we have. It's very short term in nature, like I mentioned. The risk team has done an incredible job of managing loss rates at a point that it's obviously a very good business model for us. It's well over $400 million revenue run rate business. It's accelerating rapidly. It's very attractive transaction margins. And with this new instant loan product, which is definitely smaller, we originate billions of dollars of MyPay each quarter. The instant loan business is more $100 million plus at this point, but it's growing at a pretty good clip.

We're offering that to a smaller subset of our member base. It's an installment loan product that can be paid back over 3, 6, 9, 12 months at a very low price. And what we're seeing, particularly in our repeat borrowers that the way that portfolio looks is very, very attractive and gives us confidence that we can continue to grow it in a measured way. But I think that we announced on our call is that we think by the end of the year that this becomes a product that starts to actually being -- it will start becoming a real contributor to our transaction profit profile in the years to come.

Right. But it does sound a little more measured than MyPay, if I were to compare it back to the...

Yes. I would say MyPay is going to be a more broadly -- first, we have SpotMe, which is our free overdraft service, which is that you don't even really take action to get that product, right? You just swipe, and if you go negative, we let you go negative up to $200 without a fee. MyPay takes a little bit of action to actually draw the amount down, but you pay it back in a very short period of time, inside of 2 weeks, whereas the installment loan product, instant loan, you pay back over a longer period of time. So there'll be a smaller subset of people, we won't have nearly the penetration rate of MyPay, but we think it will continue to tick up as we deepen relationships with our members and figure out ways to do that in a responsible way.

What else can you tell us on the product side without preannouncing too much? I know with ChimeCore, you've talked about product velocity will improve. You've talked about joint accounts, I think investments. So what's on the come here? I know you've been very methodical about what you want to do, but it does feel like we will see more...

For sure, for sure. I think investment accounts is something that we're really excited about. We're going to have a combination of robo investing and the ability to buy individual names. We'll be rolling that out this summer. We've been very vocal advocates of Trump Accounts and the opportunity that, that has to make so many more people in our country have a real ownership stake. We think it's critical. We think it's a product that is really designed perfectly for the core everyday consumer that we serve. So we're all over it. We're close to treasury. We're doing a bunch of events to promote it.

In fact, I think we estimate that we had about almost 150,000 people within our member base sign up for Trump Accounts just already based on some of the promotion that we've done and the tax filing service that we can observe. So we're going to keep pushing on that and hope to be a participant in the ability to roll over those accounts into Chime. And we think that's a natural evolution for us. We help people in the short term avoid fees and get access to loans and credit building and that sort of thing, but naturally, we want to help people longer term to create wealth for their families. So we think investment accounts is going to be a natural awesome new product for us. We think joint accounts, sure there's a subset of people that want to bank with Chime, but it's just if you can't share it with your spouse, it's a deal breaker. So that's a big one.

And then I think the one that we're really excited about is the evolution of our AI copilot called Jade, which is in our app now and sort of slowly rolling out to our member base to not just give them advice about looking backwards and seeing where they spent and that sort of thing, but actually being -- shifting from reactive to proactive and having a banking app that can actually take action on your behalf. If you give us permission to pay off high interest debt, to move money into a high-yield savings or to an investment account, the thing that the AI can help to determine is going to be the best for your long-term financial success.

We think there's an incredible role that we can play. And one that we think is -- can't really be replicated by some third-party AI app because we're actually in the regulated tech stack running all aspects of the consumer experience within their financial accounts. We think that we have a unique position relative to maybe other software company -- consumer software companies that maybe might have some workflow that gets AI in some way. We think we have a very different position than I think a lot of other companies in that regard.

So just to stay with that, Chris, just thinking about AI and the opportunity. I know financial literacy is a really difficult thing for a lot of that, a lot of the -- I think the broader population. So is that the vision of where you see Jade going? Because we really haven't had a great tool, right, that whether it's historically or now to really do some of that. Is that how you see it?

I think that's a big part of it. Most of Americans don't get much in the way of financial education in high school or in college. And they're not going to read textbooks and watch long-winded presentations on how to manage money. It's got to be bite-size, it's got to be actionable, it's got to be sort of in the experience where your financial life actually happens. And so it's an incredible opportunity for us to understand the goals of our member base and the ways to help them make progress in their life. It starts with being prepared to maximize the amount that you can earn, so that might be giving you guidance on how to save for education or some sort of vocational training that might help your financial life.

And I just think there's so many areas that an AI bank account can actually help someone truly make financial progress and not just sort of deal in the short term of how to get through the week or the month, but actually put into place the discipline required over years and years that I think so many people know that they need to get into a healthy habit, but they just can't actually get themselves to do it. So I think that we have an incredible opportunity to be the tool, to be the service that actually makes those actions actually come to life.

Good. No, it'll be fun to track that, Chris. The -- just to hit a few things to make sure we should hit. So to get to where you want to be, Chris, we talked about a lot of different products that you're rolling out, investment accounts, things like that, does Chime need to be a bank? Do you need a bank license to get to ultimately where you want to be? I know you have a strong partner model, and I'm sure there's questions around access to funding and things like that. But to get to where you want to be, is it -- do you ultimately need to have your own bank license?

I think we've been consistent on this. I think we're probably a shining example of maybe better than most anyone in the United States in terms of how successful a bank partnership model can work. We've given affordable access to banking services to huge segments of the population that, otherwise, we'd be getting $40 overdraft fees and minimum balance fees and that sort of thing.

So the relationship that we have with our bank partners has been awesome. And -- but every year, we take a step back and evaluate is now the time because to some extent to achieve our long-term vision it's probably -- it's more of a when, not if, right? I mean, we want to be the #1 provider of banking and financial services to everyday Americans. So it's to some degree an inevitability that we'll become a bank. The question is just when.

Obviously, this is a moment in time where the regulatory environment is open, and we applaud the regulators for embracing innovation and allowing more competition to enter the market. So I think it's something that, again, we'll be looking at again this year and figuring out what the best path is. But in the meantime, we're very satisfied with the relationships that we have, and they've just been -- both of our bank partners have been incredible thought partners for us and super supportive and played a key role in all the impact that we've had across the country.

Yes. No, it seems like it's gone well and the funding side is well taken care of. So I'll just keep asking you the question then as we go on. A couple of minutes left. I'm going to hit a couple of other subjects. Just on the enterprise side. I know that was talked about at the IPO as a channel that could be important. You've had some progress, it does feel natural, right? The employer pushing from a funnel standpoint directly to you. Are you happy with the progress so far?

We love this line of business. It's enterprise. So sales cycles are longer than just our direct-to-consumer orientation or DNA, I guess, you could say. But this quarter was a great one for us. We announced 4 new partners. We launched -- or we announced the launch of First Student, which is the biggest school bus company in America. Now that I mentioned that name, the next time you look at a yellow school bus, it's probably going to say First Student on the side. And all of a sudden, it said, wow, that's the company. So 65,000 employees there, and they will be offered Chime accounts for free and the ability to get access to their pay on demand, 100% of the wages earned each day for no fee. And the channels, I would say, is humming. We have a really nice pipeline.

It's pretty compelling when you go and you pitch a Chief People Officer or Head of Human Resources and you explain all the great benefits of -- that the employees will get if you were to offer this product, and then, they look across their employee base, and they already see that 5% to 10% of their employees are already banking with Chime. And now, this feature will make it even -- that much more powerful. So we feel very confident about our opportunity in this channel. It's going to be a pretty nice growth vector for us, especially given that a lot of the employers that we are targeting have fairly high turnover. So you could sort of think about these channels as once you open it up, they almost become evergreen. But we're still planting seeds. It's not a material driver of our net new member growth yet, but we expect that it will be over time.

Yes. No, it feels like that from a potential standpoint. All right, less than a minute left. I thought -- all right, so your first time at the conference as a public company, right? So you went public just under a year or so ago, right? So I always like to ask you...

Yes, June 12, my son's birthday. So I would not forget that date.

My anniversary as well. I think...

Really. Yes.

Yes. So a good reminder on that's coming up.

It was a great day. My son was kind of bummed when we told him that was the date. He was like, "You got to be kidding me. That's going to be the IPO date, my birthday". But then when he saw his face up on the NASDAQ screen in the middle of Times Square, that was a pretty cool moment.

You nailed it. I thought that was so cool. I think I texted you that day, right? I thought it was so cool to see you guys out there and celebrating that way. I thought that was a...

It was a family moment and a family -- and also just a moment for all the Chimers over the -- all the different chapters of Chimers over the years that did so much to create this incredible business that we have. And we're just getting started. We've got 5% penetration of 200 million Americans that make up to $100,000 a year. We're a leading brand with the best set of products and the lowest cost structure. So we feel very bullish about the prospects for continued top line growth, user growth, and you're going to continue to see this great profitability profile just continue to improve. So I appreciate the time and opportunity to meet with all the investors out here. Thanks.

Happy birthday on June 12. Remember that. Thank you, Chris. Appreciate the time today. Yes.

Good afternoon, and welcome to Chime's First Quarter Fiscal 2026 Earnings Call. Following the speakers' remarks, we will open the line for your questions. As a reminder, this conference 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 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 First 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 Q&A. 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 our 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 those risks and uncertainties are described in our SEC filings, including our Form 10-K filed on March 6, 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.

With that, I'll hand it over to Chris.

Thanks, Peter, and thank you all for joining us today. 2026 is off to a strong start. In Q1, we delivered strong active member growth, continued taking share from the largest banks, achieved GAAP profitability and accelerated price velocity. Last month, we launched Chime Prime, our new premium membership tier. Prime offers higher cash back rewards, high-yield savings, greater access to liquidity and premium perks for members who make Chime, their primary financial partner.

Early signs are encouraging, and I'll share more in a moment. The strength of our brand and offerings have never been clear. We added nearly 700,000 active members in Q1, bringing total active members to a record $10.2 million. Consumers are drawn at Chimes expanding product suite and low fee model. As a result, Chime again ranked #1 in U.S. checking account openings per J.D. Power's Q1 survey and 50% ahead of the next competitor. While members earning 75,000-plus remained our fastest-growing segment.

Unaided brand awareness also continues to rise among consumers earning up to $100,000. Turning to the quarter. Revenue grew 25% year-over-year, exceeding the high end of our guidance range. Coupled with strong cost discipline, we delivered over 13 points of adjusted EBITDA margin expansion year-over-year, demonstrating the powerful fixed cost leverage in our business model. Q1 also marked our first quarter of positive GAAP EPS, a major milestone for our shareholders. And we expect to deliver positive GAAP EPS for our full year results.

Our Q1 results highlight our core competitive advantages, primary relationships, our trusted brand, a low cost to serve and rapid innovation powered by ChimeCore now accelerated with AI. Understandably, the health of the American consumer is a major focus for investors today. fueled by geopolitical uncertainty, high energy costs and overall affordability concerns. We look closely at our members' behavior. And as we've reported for the past several quarters, we continue to see broad consumer resilience.

Even with fuel spending up, overall purchase volumes and saving rates remain strong and consistent, and average account balances among our recurring direct depositors continue to grow aided in part by year-over-year growth in the average tax refund. And we've yet to see any meaningful changes in the number of our members receiving unemployment benefits. In terms of lending, our credit loss rates continue to improve, reflecting the strength of our short duration loan portfolio underwritten by recurring direct deposits and our ability to rapidly fine-tune our lending risk models.

These factors dramatically lower our loan portfolio risk and are what separate us from other lending businesses.

Turning to our 2026 priorities. As we mentioned last quarter, our first priority is to extend our lead as the best financial partner for everyday Americans. This starts by leveraging our proprietary tech stack and cost-to-serve advantage to provide products and services that enable our members to unlock financial progress while maintaining our position as the market's low-cost leader. Our membership tiers embody our central brand promise of offering the most rewarding fee-free banking experiences in the market for everyday Americans.

At the same time, they reinforce a simple idea. The more members engaged with Chime as their primary financial partner, the more value they unlock. Our membership tiers drive deeper direct deposit relationships, increased product usage and expanded ARPAM as evidenced again this quarter. Building on the success of Chime Plus, our basic membership tier that rewards members who set up direct deposit, we're really excited about the launch of Chime Prime, which offers an even richer set of rewards to members making at least $3,000 of qualifying direct deposits per month.

And as with Chime Plus, there are no fees. Chime Prime members unlock a market-leading 5% cash back on the category of their choice when they spend with their Chime card. Categories include groceries, restaurants, gas, utilities or travel. So for example, a family spending $1,500 on groceries per month would receive $75 in cash back on Chime Prime. Prime also includes 3.75% APY on savings, a rate 9x the national average, up to 70 points of credit score improvement, higher levels of liquidity through MyPay and instant loans and premium travel and lifestyle perks like access to exclusive airport lounges and special access to concerts.

Early results show that our new Prime peer is increasing direct deposit intent and improving retention among existing direct depositors. Prime members are also more likely to adopt Chime card for everyday spend, helping to drive a continued shift we're seeing from debit to credit spending, which delivers a higher take rate for us. The benefits from this more premium tier deepens our relationship with higher-earning members who are becoming a larger portion of our member base.

Turning to our short-term liquidity products. Q1 was another strong quarter for MyPay, which is already a $400 million-plus run rate business. We rolled out our variable MyPay pricing plan and expanded access to earned wages earlier in the pay cycle addressing our most frequent member requests while at the same time, retaining our leadership as the low-cost provider in the market with higher origination volumes, improved yields and low steady loss rates, MyPay transaction profit was up over tenfold year-over-year.

We're also making great progress with instant loans, which we believe positions the product to become a meaningful contributor to transaction profit growth over the coming quarters. Members qualifying for Chime Prime are prequalified for instant loans, and continued optimization of our underwriting models is enabling us to broaden member access while we reduce loss rates.

Our first priority at North Star is to help our members unlock financial progress. In service of this goal, our product road map for this year will expand to meet even more of their everyday financial needs with investing joint accounts and custodial accounts all coming soon. With a broader portfolio of products, we believe we'll continue to deepen our member relationships. The evidence at the cohort level is clear and compelling. The longer a Chime member stays with us, the greater the average product attach rate, purchase volume and transaction profit. This compounding dynamic is the core of our long-term growth model.

Our second priority is scaling Chime Enterprise. Our expanded earned wage access and suite of financial wellness tools completely free to employees through their employers. As we've mentioned, the sales cycle for enterprise accounts tend to be long but our pipeline and customer count is growing steadily. We're excited to announce that we've signed 4 new employer partners in Q1, including first student, the largest provider of student transportation in the nation with over 65,000 employees. As we prepare to roll out with First Student, our Workday partnership will support seamless integration and implementation.

Our third priority is to deeply embed AI across Chime and into the member experience. For a full stack fintech like Chime with proprietary data, integrated infrastructure, deep bank partnerships and a trusted brand, AI compounds our structural advantage and further differentiates us from incumbent banks. As the primary account for millions of members we have a real-time view of their financial lives, paychecks, spending, bills, balances, all flowing through our platform. And because ChimeCore powers everything from the ledger to the app experience, we can take action, not just provide insights. With the member's permission, we can move money to where it earns more, extend credit in the moment it's needed and stop unwanted charges before they post, capabilities no third-party app could replicate.

With Jade, our AI copilot rolling out now, we're bringing us to life. Jade will help us move from reactive tools to proactive financial management, helping members spend smarter, save more, pay bills on time, borrow responsibly and build long-term wealth. Early results from scaled beta testing have been encouraging and will continue to expand access over the coming months. While AI will accelerate innovation across the industry, it won't replicate the foundations of our model, bank partnerships, payment networks and compliance infrastructure.

As choice expands, consumers will choose the platform that delivers the best products at the lowest cost from a brand that they trust. AI is already transforming the way we work. In product and engineering, AI power development is quickly becoming the norm. 84% of the code we shipped in March was developed with AI, up from 29% just 4 months ago that's driving a meaningful increase in velocity. We're now taking the next step with Arete, our AI native software factory where we can move from idea to a shipped product with AI agents during the majority of the development.

More broadly, our communities represents a fundamental shift in how we build at Chime from AI assisting humans to AI at the center of how we design and develop products while maintaining the quality, control and compliance our platform requires. AI is driving operating leverage at scale, increasing levels of output while keeping headcount flat. We're at a unique moment where AI is unlocking the entirely new possibilities in financial services. Because we're not burdened by legacy systems, we can move faster, build better and lead this transformation with our platform, model and momentum, we're uniquely positioned to shape what comes next.

AI isn't just a tailwind for our business. It's an accelerant of our core advantages, further expanding what we can deliver for our members and for our business.

I'll turn it over to Matt to cover our financial results and provide an updated outlook for Q2 and the full year.

Thanks, Chris. In Q1, our fourth quarter as a public company. We again demonstrated both strong execution and the resiliency of our model. We're continuing to execute on multiple dimensions of growth with 19% growth in active members, 5% growth in average revenue per active member or ARPAM, and a 9 percentage point improvement in transaction margin in Q1. These are compounding growth levers and together drove 41% growth in transaction profit in the quarter.

We're the clear #1 share gainer in a massive market with a radical cost-to-serve advantage and a technology and product innovation advantage that continues to extend our lead over the competition. And powered by our deeply engaged primary account relationships, we have a durable, low credit risk, 70% plus transaction margin business that we're scaling over a largely fixed OpEx base. These are the ingredients of a business model with strong long-term earnings power.

And in Q1, we again demonstrated our rapid progress along that path. Our Q1 adjusted EBITDA margin of 18% and improved over 1,300 basis points year-over-year. Our incremental adjusted EBITDA margin was 72% in the quarter, and we are GAAP profitable. Given the strength in the business, we are raising full year guidance. And having exhausted our prior repurchase program, we are also announcing an additional $200 million share repurchase authorization. While markets are volatile, our long-term earnings power is not, and this authorization allows us to continue to opportunistically take advantage of market dislocations in our share price.

Let me dive into more detail on our Q1 operating results, starting with active members. We have a consistent track record as the leading share gainer in a market of nearly 200 million Americans making up to $100,000. In Q1, we added nearly 700,000 net new active members quarter-over-quarter. Some of this growth was driven by particularly strong seasonal tailwinds. As a reminder, each year in Q1, tax refund related activity drives seasonally higher levels of reengaged active members. This year, we saw the number of members using our embedded tax filing service grow over 50% year-over-year.

Also, this year's later start to tax season concentrated more of this reengagement later in the quarter. That said, our overall growth algorithm continues to perform well with several other drivers contributing to this quarter's strong performance. First, our top of funnel remains strong. Our brand awareness continues to grow, and new value propositions like Chime Cards Cashback rewards on everyday spend are clearly resonating with members. Looking ahead, we're excited about the opportunity to use rewards more broadly to drive both new member growth and retention and expect to continue to experiment this year.

Second, our early engagement initiatives, which make it easier to get started with Chime continue to be successful. These initiatives have enabled us to engage members we wouldn't have otherwise engaged, driving all-time high activation rates, lowering our tax and improving our payback carries to 5 to 6 quarters. We're also finding that they are increasingly an on-ramp to more deeply engaged direct deposit relationships, not just lightly engaged members. Given this progress, we believe we are on track to exceed our original goal of 1.4 million net new actives for 2026.

Second is ARPAM. We have a high-quality member base. We serve the majority of our members in the primary account capacity, which gives us deep levels of engagement, strong retention and high levels of ARPAM. As our members' primary account relationship, we've also earned both the trust and mind share to drive strong product cross-sell. 15% of our active members use 6 or more products each month and their ARPAM is north of $500, double our average. In Q1 specifically, overall ARPAM increased 5% year-over-year to 263, driven by strength in both payments and platform revenue.

Combined payments and OIT revenue increased 19% year-over-year. Resilient member spend trends, along with larger tax refund deposits drove PV and OIT volume growth of 15%. We're also continuing to drive strong adoption of Chime Card across both new and existing members. As of March, nearly half of our members are using a secured credit card, either our legacy credit builder card or increasingly our new Chime Card on a monthly basis. That's up from just over 1/3 of members in September prior to our Chime Card launch. This progress has increased the portion of total purchase volume that is on credit to nearly 25% in March, up from 16% in September.

Chime Card is a win-win. Members benefit from cash back rewards on their everyday spend, and we benefit from the higher net interchange rates we earn on credit. And as Chris noted, we're excited for Chime Prime's potential to drive China Card adoption even higher. Platform-related revenue increased 50% year-over-year, driven by continued strong performance across our liquidity products. Our success in direct deposit relationships enables us to offer liquidity products profitably at low cost and with low risk.

In Q1, we completed the rollout of our new variable pricing model for MyPay, while also maintaining loss rates at our steady-state target of 1%. Together, this grew our MyPay transaction margin to 62%, and overall MyPay transaction profit dollars to $64 million, up 10x year-over-year. We're also seeing strong performance for instant loans, our 3- to 12-month installment loan products. We're scaling access. In Q1, we originated $180 million of instant loans.

We're also offering longer duration loans to repeat borrowers, which come with better economics. In Q1, we doubled origination volume quarter-over-quarter for 9- and 12-month loans, and we're driving lower loss rates. We continue to see loss rates improve as much as 50% for repeat borrowers compared to first-time borrowers. Taken together, we're very excited about the progress with this product and its path to becoming a meaningful driver of transaction profit growth over the coming quarters.

Third is transaction profit. Our low-cost operating model has enabled us to offer what we believe is the most compelling directive services for mainstream consumers, delivered at over 70% transaction margin. We don't believe any incumbent offers consumers anywhere near the level of utility and value that Chime offers, including for higher earners. In Q1, as a result of our recent transition to ChimeCore as well as continued strong loss rate performance, we improved our transaction margin to 76%, up 9 percentage points year-over-year.

Together with our growth in actives and ARPAM, overall transaction profit grew 41% year-over-year to $491 million. So we're compounding growth across multiple dimensions and we're driving this growth with strong unit economics. We continue to acquire members efficiently with 5- to 6-quarter transaction profit payback period. But just as important is the durability of our cohorts driven by our deeply engaged, long-lasting primary account relationships. Our cohorts are underpinned by everyday reoccurring nondiscretionary spend. Our cohorts double in ARPAM as they season as members attached to more products over time.

And our cohorts see over 100% dollar-based transaction profit retention, net of churn. Taken together, this drives LTV to tax of over 8x. It's these unit economics that allow us to drive strong operating leverage while continuing to make meaningful investments in growth. In Q1, non-GAAP OpEx as a percent of revenue fell 5 percentage points year-over-year with leverage across all OpEx categories. And in Q1, we grew our adjusted EBITDA margin to 18%, up 13 percentage points year-over-year at an incremental margin of over 70%. In total, we delivered $119 million of adjusted EBITDA and $53 million of GAAP net income.

Turning to our guidance. In the second quarter, we expect revenue between $633 million and $642 million, resulting in year-over-year revenue growth between 20% and 22%. We expect adjusted EBITDA between $72 million and $77 million an adjusted EBITDA margin between 11% and 12%. For the full year, we expect revenue between $2.66 billion and $2.69 billion, resulting in year-over-year revenue growth between 22% and 23%. And we expect full year adjusted EBITDA of between $416 million and $431 million and an adjusted EBITDA margin of 16%. We now expect an incremental adjusted EBITDA margin of approximately 60% for 2026.

There are a few things to keep in mind about our second quarter and full year guide. As a reminder, we have a seasonal business. Many of our metrics, including active members, transaction volumes and ARPAM benefits from tax refund related activity in Q1. In particular, because tax refund related activity drives more members to reengage with us in the first quarter, we benefit from seasonally high quarter-over-quarter net adds each Q1, but lower net adds each Q2. We expect to see this typical seasonality again this Q2.

We also see seasonally elevated transaction margin in Q1 due to higher purchase volume, as well as those lower utilization and higher repayment rates on our liquidity products. As such, we expect transaction margin to normalize from 76% in Q1 to between 70% and 72% for the rest of the year.

Finally, while we'll continue driving operating leverage at attractive incremental margins, as we've noted previously, we are investing in the sales and marketing and member support costs to support the recent launch of our Chime Prime premium membership tier this year, particularly in Q2.

With that, I'll open it up to Q&A.

[Operator Instructions] At this time, we will open the floor for questions. And we'll take our first question from Sinton Wong with JPMorgan.

Great really great results here guys. Nice to talk to you all. Just, Matt, you went through a lot with the ads. So I won't ask you to go through it again, but just thinking about drafting off of the strong tax rebate season and some of the initiatives you guys have put in as you're thinking around, additions and how it's going to track for the rest of the year? Has that changed at all?

And it does feel like you've gotten a little bit more momentum on instant loans and it's showing up already. So how impactful might that be here as we recast our forecast for the rest of the year?

Thanks, Tien-tsin. Yes, we're really pleased with the continued momentum that we're seeing on our active growth. As I mentioned, our overall growth algorithm remains really strong. Capetonians very healthy. Our brand awareness continues to grow. You're seeing this result corroborated by third-party data, J.D. Power, came out with their latest survey in Q1 where Chime again went #1 by a large margin in terms of checking account openings.

I think our product velocity is really helping us as well. New products like Chime Card and more recently, Chime Prime are clearly resonating with members. And all of this also supports our early engagement initiatives. We're continuing to see great progress. That's led to shorter payback periods and LTV to CAC north of 8x. That being said, we also saw that some of the -- we also saw some outsized seasonal tailwinds on active growth in the quarter as well. And as a reminder there, every Q1 we see seasonally high reengagement related to tax refunds.

In this quarter, there are really sort of 2 factors that magnified this. We saw a later start to tax season than in years prior, and that concentrated more of the reengagement later in the quarter. As a reminder, we measure monthly actives as of the last month of the quarter. And then we also saw a really strong engagement with our embedded tax filing service this year. So in sum, we're continuing to see broad momentum, but it is true some of the performance in terms of net adds in Q1 was related to seasonal factors. But in aggregate, we're feeling very good about exceeding the $1.4 million annual target that we set out at the beginning of the year and broadly speaking, to follow the similar seasonal trends that we've seen in years prior.

Maybe I'll pass it to Mark to touch on instant loans.

Tien-tsin, it's Mark. I think on instant loans, we've been very pleased with the progress there. And just to give you an indication there, we originated $180 million in the quarter of instant loans. We expect that to accelerate going forward. Just to remind everybody, Chime Prime members automatically qualify for instant loans. So we do expect some significant growth to come from the instant loan product. In addition to Chime Prime, we're continuing to offer a longer duration loans to our repeat borrowers. Those borrowers operate 50% better loss rates.

And so the model that we've developed here over the last 12 to 18 months seems to be working well. In terms of what it can do overall, we're not giving sort of specific guidance. And I do think this will still be small compared to MyPay. But I think it's fair to say that we expect instant loans can become a material contributor to transaction profit over the coming quarters.

We'll take our next question from James Fosen with Morgan Stanley.

Apologies for the background noise. A couple of quick questions here. You mentioned that the above $75,000 income over was kind of your fastest-growing segment. Can you just help us understand how you think about segmentation? And as part of that, I thought the comments around products attached, were also very compelling. How is -- how do those numbers as they come in at that higher income bracket, what is their attach rate or pacing compared to maybe a restorcustomer base as a whole?

Thanks, James. It's Chris here. Yes. We're really excited about the progress that we're making across really a wide range of segments that we serve. We reported again, I think this is the third quarter in a row where we've announced that specifically the 75,000 plus segment of income is the fastest growing for us. We really have a mainstream service here that appeals to consumers across income segments. And I think we not only see it in our own data, but we also see it in the J.D. Power data, the external data that said that we open up the most checking accounts.

When you double-click into reports, they actually break out by income levels, and you see Chime also near the top of the list for higher-earning demos as well. So -- when we look at the sort of higher income demo specifically, we see retention rates that are similar to -- or right at the same level as the rest of the portfolio. So just as a reminder, a 90-plus percent retention rates after the first year, and we see very high levels of product attached that are similar to all of our cohorts as they continue to age and just a reminder on that, we have some information in the supplemental that shows how our cohorts continue to drive outsized or ARPAM as they age.

The more tenured cohorts are doing over $400 of ARPAM and we see that of our member base that attach 6 or more products actually generate $500 or more of ARPAM. So obviously, a higher earning customer has the ability to spend more, which is the key driver of our of our economic model, but it also gives us an ability to offer a wider range of products, including lending and credit products. And now with our Chime Prime product, which gives you 5% in a category of your choice and 3.75% APY. This is extremely full and something that is broadly compelling. And so I think we now have even more reasons for our members to stick with us for life.

And I think that's particularly relevant to these higher earnings segments as well.

That's great to hear. And then I wanted to follow up on one of the other comments I made in terms of accelerating product development and the benefits that you're getting from some of the AI development tools, et cetera. How should we think about kind of what that accelerated product road map can look like?

I mean -- and really I'm trying to think about it from a business and financial standpoint, does this help accelerate? Is it more so that it improves your ability to attract members, et cetera? Or should we think about it more as accelerating incremental products for your members and you're not instead of really accelerating member growth per se, that it's really about finding incremental ways to serve existing members et cetera.

Well, I think we really see it as a force multiplier for us. It starts with the way that we actually get work done around here. We talked in our intro remarks about our committees, which is our software factory that allows our developers to basically run what is essentially a multi-agent development pipeline so we can build products much faster from idea into production with AI handling the vast majority of that work. So we're going to be able to get more products into the hands of our members even faster.

We've got a really exciting road map for the rest of the year that we've outlined with investing in joint accounts and custodial accounts and the thing that I think we're most excited about is the progress that we're making on our actual AI copilot called Jade, which is going to allow our members to not just get financial advice, but -- and tips, but also to -- given our unique position of having -- enjoying this primary account relationship, we can give advice and then allow with their permission to take action on the behalf of our members to help them make financial progress.

So you should expect to see exciting developments on that front. And I think it's going to give us one more reason for consumers to come to Chime, use us as a primary bank account and I think over time, you're going to see that this technology advantage that we have relative to incumbents is going to only expand in the coming quarters as we deploy these AI tools, both in development and in the consumer product itself.

Our next question from Adam Frisch with Evercore.

Great results here. Two questions for you. One, the fiscal year guide was increased more than the 1Q B, which is great to see. So the business momentum is pretty obvious. Matt, was the second quarter guide more conservatism given the seasonality there and not a read on decelerated momentum in the business or anything like that into the second half?

And my second question was for Chime Prime, what are the early adoption, eligibility or activation rates? Anything you can tell us about if you're seeing kind of a lift, in direction deposit conversion and all that kind of good stuff that would go along with that program?

Thanks, Adam, Matt here. I'll talk first about the guidance, and then I'll hand it over to Chris to talk a little bit about our early results on Chime Prime. As you mentioned, we're really pleased with really the broad-based business strength we're seeing and the momentum heading into the rest of the year. And just as you said, we're raising our expectations on both revenue and adjusted EBITDA for the full year. As it relates to Q2 specifically, a couple of points to keep in mind. First, on the top line, we do face a more difficult year-over-year growth comparable in Q2.

In the year ago period, we saw a 500 basis point revenue growth acceleration from Q1 and which is primarily due to how we were scaling MyPay at the time. So if you were to actually look at Q1 and Q2 on a 2-year stack basis, what you see is that revenue growth in Q2 is very comparable to Q1. On top of that, with the launch of Chime Prime, that will also lead to some higher rewards costs beginning in Q2. So those are 2 factors as it relates to top line.

On bottom line, 2 things to point out. On a sequential basis, we do expect to see our normal step down from Q1 seasonally high transaction margin. We mentioned in our prepared remarks that we expect transaction margin to land in the 70% to 72% zone for the remaining quarters of the year. And also, as we telegraphed last quarter, we expect to invest behind our Chime Prime launch in Q2, both in sales and marketing and member support. On an incremental basis, we expect adjusted EBITDA margins in the low 50s in Q2.

So from a phasing perspective, this is all in line with our plans. And again, to reiterate, we're raising our expectations for the full year on both revenue and adjusted EBITDA. And on the full year, just as you said, not only are we flowing through our outperformance from Q1, we're raising our expectations for the remainder of the year as well.

Maybe I'll talk about Prime results. Thanks for the question on that. It's really early days, but we're feeling really good. Just as a reminder, we launched Chime Prime to the public on April 2. So a bit early to get a read, but we are seeing already that it is demonstrated to be effective in driving higher levels of direct deposits. So that's a plus, obviously, because as or under, you have to do $3,000 of direct deposit to get access to those benefits, including that hefty cash back on Prime of 5%.

The other thing that we're excited about is just looking at the retention rates among people who qualify for Prime, we're already seeing that in the first month or so here that it does appear to drive higher levels of direct deposit retention. And at the same time, we're seeing overall continued increase in the adoption of Chime Card. In other words, Prime -- members who qualify for Prime are more likely to be adopting Chime Card. They're taking it up at a higher rate which is a great tailwind for our mix of payments volume, which is increasingly shifting towards credit.

So these are all really, really great tailwinds for us. We've got lots of exciting marketing campaigns and product initiatives this -- over the next few months. In fact, you'll see tomorrow -- during the NBA game, you'll see our first spot with our newest brand ambassador John Cena, America's champ, he's going to talk about all the great benefits of Chime Prime and is very relevant to the consumers we serve. So yes, feeling like great progress on that front and continued great tailwinds on this mix of spend towards credit.

We'll take our next question from Will Nance with Goldman Sachs.

Maybe I could just follow up a little bit on some of the commentary around Chime Prime. And specifically on unit economics, you're clearly embedding some incremental customer acquisition costs in the second quarter. How are you thinking about the impact of that push as it relates to net adds specifically and particularly in 2Q, I mean, is there any expectation of an offset to some of the seasonal weakness that you alluded to earlier in the second quarter?

And just more broadly, what are you looking at to gauge success? And then maybe if I could just sneak in a numerical question for Chime Prime. I think you previously talked about like a 1.75 net interchange for the new card taking into account the higher rewards rate, is something in like the $130 million to $140 million range on the new card. Is that the right way to think about it? Just correct me if I'm wrong there.

Thanks for the question, Will. This is Matt. I'll chime in on both of those. So yes, as we discussed, we're really excited about this launch. We are ramping up a bit of investment behind the launch. That's going to be really across a wide range of marketing efforts. And so that's certainly part of our plans and OpEx phasing for the year. As it relates specifically to the cadence of net adds over the quarter, I think the best baseline expectation is to take a look at the cadence of seasonal net new adds that we've seen over the last few years.

Again, Q1 being the outsized one, Q2 being the seasonally lower net adds quarter whereas Q3 and Q4 in the middle. So I think that is the right cadence to expect for us. As it relates to take rates, we've discussed in the past how, yes, Chime Card earns around 175 basis points. We've now launched both Chime Prime as well as a new 2% category of your choice cashback offer on Chime Plus that's an improvement from the previous Plus offering. The way to think about take rates is on our Plus offering for take rates to be in that 175 basis point zone whereas Chime Prime will be slightly below that, not as low as what you alluded to, but slightly below those ranges.

Those are the ranges we see today. I'll have to caveat that things will shift a bit and fluctuate a bit over time as members choose the categories that they choose to spend in, but that's sort of the appropriate range to think about for us today.

No, that's awesome. Glad I asked on the Chime Prime side. And then just maybe sticking with the take rate commentary. I was wondering if you could help pick apart some of the sequential moves in take rates from 4Q to 1Q. I know there's been -- I mean, you just alluded to some of the movements in the rewards offerings.

But I also know there's some seasonal factors that impacted in the first quarter. So if you could just unpack that and specifically in the context of credit mix going up several points sequentially from 4Q to 1Q. What are some of the offsets that drove the date rate this quarter?

Yes, great question. There's really sort of 3 factors to keep it buying as it relates to take rates, specifically in Q1. We talked about one already, which is, of course, credit mix and how the continued adoption of Chime Card is continuing to drive higher credit mix. In Q1, that ranged right around 25% of total spend, up from about 16% before we launched Chime Card in September. And on that front, what I'll say is, we're certainly continuing to see momentum both on new members but also existing members.

New members coming into Chime, nearly 60% of them are spending with Chime Card. And among those, they're spending about 70% of their time spend on the card. And for existing members, we're seeing that those who have adopted Chime Card are using it for an increasing portion of their Chime spent. So good momentum on that front. And again, that's helping to drive take rates up in the quarter.

The second thing to point out as you did, Will, is seasonality. So interchange rates are another metric in our business that are affected by tax refund related seasonality in Q1. More specifically, because outsized deposit volumes from tax refunds result in purchase volume with higher ticket prices, what you see is interchange rates because there's both a variable and a fixed component, are actually a bit lower each Q1. Again, that's a very typical seasonal pattern. We saw that again this year.

So as I would encourage you to do with the rest of our business, you really got to look at things on a year-over-year basis. And then lastly, as we shared in our prepared remarks, we are doing more to experiment with member rewards to drive both new member growth and retention. That includes not just the cashback rewards on Chime Card, which is clearly doing well and resonating with members, but it's also included in initiatives like limited time cash back and referral offers, introductory bonuses and other initiatives. These types of member awards are accounted for as contra revenue, which makes the calculated net take rate of payments revenue and purchase volume looks a touch lower.

That, of course, is all included in our transaction profit payback period. In the scheme of things, it's a fairly small amount, but we are excited about the potential. So that's one additional factor to keep in mind as it relates to take rates.

We'll take our next question from Andrew Jeffrey with William Blair.

I wanted to ask a little bit about learnings from variable pricing in my pay. And if that's sort of a lever you can pull to drive monetization, obviously, the performance there has been terrific with the tenfold increase in transaction profit contribution. But I wonder if if you could just elaborate a little bit on what you've seen and what the outlook is for those initiatives?

Yes, sure, I'll take that 1 up. Okay. At a high level, we've been very pleased with my pay performance. $400 million business, now 62% transaction profit margins and still operating at a 1% loss ratio inside -- in a product that really has been on for less than 2 years. So from a pricing perspective, if you remember, as Chris outlined in the early remarks, the real reason we did this was so that you were limited by a fixed fee model, the variable fee model enables us to actually give members access to greater MyPay limits earlier in the pay cycle.

And that effectively, to your point, enables us to actually accelerate advancing more MyPay to members. Now having said that, we obviously want to make sure we're advancing this to people who can actually repay our in situation. What we're not wanting to do here is to create a debt burden that our members cannot handle. So that's been an important part of developing our underwriting model. And I think as you look at the yields, you guys will probably have noticed that if you look year-over-year, our yield on MyPay increased about 35% and if you looked at Q1 relative to Q3 last year, it increased about 20%, and that was really driven by the price change that came in starting in Q4 and then finishing in Q1.

And those are key contributors to that tax year-over-year growth in the MyPay to MyPay profit. I think it's also important to continue to bear in mind that even at our 2.6% or 2.7% MyPay yield, we are half the cost of our newest competitors in the space. And that continues to be one of the reasons why we we bring more people into our firm and continue to attract and retain members year after year after year. So I think we feel really good that we now have the pricing structure and the underwriting model in place to start to expand MyPay access to those who can handle it.

I appreciate that, Mark. And then as a follow-up, one of the things that I hear sort of keenly from investors is about the purchase volume per MAU KPI, which seems to me to kind of miss the point. Nonetheless, investors seem to care about it. And I know there were some seasonal factors influencing 1Q. Can you talk a little bit about your expectations for that KPI and whether it's something that should maybe get as much attention or not get as much attention as it seems to.

I'll pick up that one. Thanks, Andrew. So at the highest level, what I would say first is, as we've shared the last few quarters, we're seeing very consistent overall trends in purchase volumes. And I would say that really is one of the key advantages of our business model and our focus on earning primary account relationships. Our spend is highly concentrated in nondiscretionary everyday categories.

And that's been -- that's the type of spend. It's very resilient across business cycles. If you take a look at our at our cohorts, our tenured cohorts, we're seeing very consistent growth in spending. That's true across both discretionary and nondiscretionary categories. It's true across income groups. At the same time, we're seeing account balances increase year-over-year. Again, this is a healthy consumer willing and able to spend and that's translated into a pretty consistent pace of payments in OIT revenue growth. That grew 19% year-over-year in Q1.

As it relates to the per active metric specifically, as we shared previously, the reason that purchase volume plus the OIT volume per active is down on a year-over-year basis is largely the result of these early engagement initiatives that have been very successful for us. They've helped us engage new members. We wouldn't have otherwise engaged. This has strengthened our unit economics. That being said, it has had the effect of diluting the headline purchase volume per active metric since these initiatives have driven faster growth of the new linage actives who aren't yet spending as much on Chime. It's creating a larger denominator.

We do expect these trends to start to normalize in the back half of this year, in particular, as we start to lap last year's launch of these early engagement initiatives. So this is just to kind of hit your question head on, this is really just a phenomenon of the successful early engagement initiatives. It's not a reflection of any sort of concerning underlying spend trends. On that front, we see a lot of resilience and consistent trends.

We'll take our next question from Timothy Chiodo with UBS.

Great. So on Chime Prime, I know the overall paybacks are very attractive 5 to 6 quarters, the LTV CAC is 8% or higher, those sort of great numbers. For Chime Prime, I heard you say obviously a much higher ARPAM. And I also heard that some of the early data suggest that the retention is even higher. So absent a meaningfully higher TAC, I would suggest really, really attractive LTV payback.

So I was -- I was wondering if you could talk a little bit about that CAC and just how much higher it might be for these clearly more attractive customers and time think clearly that high pack is well worth in the context of the ARPAM and the retention?

Tim, it's Matt here again. We're really excited about Chime. As Chris mentioned, early signs of a lot of potential benefits across the business. That's true across retention, that's true across Chime Card card attach, that's true across direct deposit conversion and attach. And so yes, we're very excited about the potential there. That being said, it's very early days here. We've just started to roll this out. It is too early to give you a sense, specifically on sort of what the unit economic equation specific to Chime Prime looks like.

But again, we think this is a great add to our overall product mix and value props and we're excited to keep you posted in the coming quarters.

We'll take our next question from Patrick Moley with Piper Sandler.

This is Will Cops on for Patrick Polo. As it relates to Chime Enterprise, have -- are you thinking about any sort of future percentage of total member adds coming from the segment? And what's the CAC relative to other traditional channels for member acquisition?

Well, it's Mark here. I'll pick that up. I think Enterprise is progressing really well, as Chris indicated in the prepared remarks. The falling property is really strong. It's a broader financial office product. The EWA is totally fee free. And anytime we approach a large enterprise, we find that 5% to 10% of their employee base is really on direct deposit with Chime, which gives us an age. So it's resonating really well in the market. It's still early days for us.

These enterprise sales cycles are quite long and it takes a little while to get the boat on the water. I think the good news is we think the boat is out of the water, and that's actually translating into a good pipeline here with a steady drumbeat of conversions, including some large ones like we announcing today with First Student, which is the largest student transportation company in the in the U.S. So yes, the momentum is strong, as we've indicated, it's one of our priorities.

We're not giving specific guidance with respect to enterprises contribution to net ads. We think the fact that it's a priority, we'll probably tell you that we believe it has the potential to be a meaningful contributor. But we're not giving specific guidance related to that. As it relates to CAC, the CAC on Enterprise is materially lower. But really, it's -- the CAC there really is the fixed cost of the Enterprise division and the sales cycle rather than a sort of variable CAC. So that CAC will start off higher, although considerably lower than our consumer channel, and then it will reduce as we get more ads through that same sales cost base. That's how we think of the enterprise channel.

We'll take our next question from Alex Markgraff with KeyBanc Capital Markets.

More questions, maybe 2, if I can squeeze the second one in. First on Prime for Chris. I'm curious, when we think about the ramp of this offering and some of the forthcoming products or features that you mentioned outside of the really strong initial offering. How do you think about the catalyst that those forthcoming products represent, whether it's account types or at some point, more unsecured credit. Just be curious to understand how those connect as catalysts for the ramp as we think forward?

Yes, we think that the progress we've made year-to-date has been great. This new offering is incredibly compelling. I mean, if you think about the cost of fuel today, if you're a Chime member that selects the gas category and you're spending, say, $800 a month on gas, you're getting $40 cash back. It's a really, really powerful offering that I think is broadly appealing and that's very consistent with how we're thinking about our product road map.

We want to create an even broader set of products for our members to engage with us and not just to avoid fees and not just to get access to short-term liquidity and credit building, but to also play a role in helping take the long-term financial health and progress for our members. And that's why we'll be launching investment accounts and a combination of allowing people to buy equities directly, we'll have a robo offering for people who are maybe feeling a little less sophisticated or less comfortable investing in the market to try to get them moving in that direction.

And we're really excited about using AI to guide people towards all of these exciting new products. We think that as we evolve them and we offer an even more comprehensive set of services that we can truly be even more broadly appealing to consumers even in the 100,000-plus category. We have the core products and services to meet their needs. So I think -- I think the combination of these services together will allow us to -- will be a catalyst to drive even more awareness of Chime's product offerings and open up new segments of the population.

We've heard of Chime to really take another look at it and I think you're already seeing the progress in the net asset that we're adding each quarter. So expect more and more product offerings coming down the pike, including more products in the area of credit and lending. We're going to keep pushing on those fronts as well. I think Mark mentioned that the Chime Prime tier comes with an instant approved instant loan product.

And so we're going to continue to have credit and lending products to serve that segment as well and certainly down the line we anticipate having some form of an unsecured credit card product as well, but that's not something we have on the sort of short-term route.

Understood. I appreciate that. And then maybe if I could squeeze one in, just on underwriting. Just having heard from some peers in the ecosystem, talked about step changes in underwriting model quality as a result of AI-related improvements. I'm just curious to maybe sort of a pulse check. Obviously, you guys have made a ton of progress and hitting target loss rates around MyPay. But just sort of curious to pull check the maturity of models and if there are opportunities that you all see that didn't exist 12 months ago with respect to model quality?

Yes, I'll take that one up. I think, look, 2 things. One, it's important to just bear in mind the key advantages we have on the underwriting side. Mike, the first one is we -- as the primary count, we have a lot of unique data. Secondly, we're actually underwriting against a recurring direct deposits. So we said top of the repayment stack. Those very, very significant advantages that we leverage. In addition to that, we obviously continue to use those data signals through increasingly sophisticated models.

We've been using advanced machine learning on these things for some time. We do think there will be increased advantages with AI, and we will -- we want to continue to sort of lead that -- but I think if you have a look at our underwriting performance and you look at something like MyPay, a year ago, we were sitting at 1.7% loss rate, and now we're sitting around 1%. So I think that while there are still meaningful improvements ahead with AI, I think a lot of the advantage is coming from the unique data and the position we have in the recurring direct deposit stack.

At this time, we've reached our allotted time for questions. I'll now turn the call back over to Chris Britt for any additional or closing remarks.

Great. Thanks again. I want to congratulate the team on a great quarter and looking forward to seeing you all on the road.

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

Good afternoon, everybody. We'll go ahead and get started. Thanks to everybody for joining us here in person at the Morgan Stanley TMT Conference and those joining via the webcast. Very excited this afternoon to speak with Chris Britt, CEO of Chime. Before we get started with Chris, just a couple of things. I'm James Faucette. I'm the senior fintech analyst here at Morgan Stanley. And before we launch into our conversation with Chris, I do have a disclosure I'm supposed to read. Please see the Morgan Stanley research disclosure website at morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley representative.

Chris, great to have you here. It's always exciting to -- at least for me to talk to you, I think, the vision and the business you've been building for years now is quite compelling. So maybe you can just though for the benefit of all of us, provide an overview of the business and its strategy from your perspective?

Yes, for sure. Thank you so much for hosting. This is always such a great conference and proud to be here representing the team at Chime. Yes. For those of you in the audience who don't know our business as well, we're really a disruptor in the consumer banking and payments space. And over the past few years, we've made great progress in becoming a destination of choice for consumers who are deciding to switch their primary account relationship. And we started the business with a vision of serving the roughly 200 million Americans that make up to about $100,000 a year and largely live paycheck to paycheck. That's really remains our sweet spot, although we're starting to move a little bit higher on the income spectrum recently. And we go to market with a suite of services that are helpful and easy and free and address the most acute pain points of everyday consumers, helping them make financial progress, avoid fees develop savings, improve their credit. And it's working. The feedback we get from our members is like, 97% of them say that we're helping them make financial progress, and they just love banking with Chime. They're leaving the traditional incumbent banks to switch over to work with us.

So one other thing -- look, there's been a lot of players that have tried to go after this market. I think one of the things that's always resonated with me around Chime has been that for most of your customers and even those that aren't your customers in that target demographic, moving to Chime is almost always the smart financial thing to do for them personally. So that's my impression, though. What do you find in terms of the brand? What resonates with the Chime brand? Or What about the Chime brand resonates with your consumers? And why do people show up at your doorstep if you will, or your virtual doorstep to begin with?

Yes, it's a great question, and a lot of investors and I guess, investors and competitors have always asked a question, like what is the thing? Why [indiscernible].

Right, right, right.

It isn't a thing. It is not a thing. It is a holistic suite of services and probably most importantly, a mission to authentically help people make progress in their lives. So it started off with no fee banking, not a prepaid card, an actual pay account with FDIC insurance and [ REGI ] protection and dispute, provisional credits and disputes and all things you get from a BofA or a Chase account, that sort of thing. It evolved to getting paid early. We kind of invented getting paid 2 days early, taking advantage of how the ACH system, the sort of latency in the system [indiscernible].

Right, right, right.

That was a big one. And then we evolved that over time to do things like making overdraft totally fee-free. And this was a massive industry in the United States with banks just really praying on people that live paycheck to paycheck. And then more recently, things like credit building and larger lines of credit, giving people access to their payroll on demand. We are constantly innovating in ways that make Chime the no-brainer place to develop your primary direct deposit relationship. And that -- if there's any takeaway for investors out there, is that's the difference between Chime and other fintechs. We are not a point solution that just offers a thing or a service. We are the place and a brand that people think of as primary banking. And you can see it in the stats, not our stats. If you look at third-party research on unaided brand awareness, what banks come -- what brands come to mind when you think of online banking. Today, Chime only trails Chase on that regard?

Right, right.

But if you look at account openings, we actually -- third-party research from J.D. Power came out and said that Chime opens up more bank accounts in America every month than any brand in America and about 40% higher than the #2 player, Chase in that regard. So we're expanding market share with a wide range of services, but overall like a brand halo that is trusted and is associated with primary banking relationships.

Love it. So coming off your recent Q4 call, Help us frame the top 2 or 3 priorities for 2026.

Well, we were really excited about the call. That was our third quarter as a public company, third quarter of beating and raisin. We announced 25% top line growth and a 10% adjusted EBITDA margin, incrementally up 50% year-over-year, so -- on the adjusted EBITDA front. So lots of great progress. But going into this year, it's -- first, the thing that's more important than anything is continuing to innovate in consumer products that resonate with consumers so that we can fuel and extend our lead in capturing more market share of primary bank accounts. So last year, we launched Chime Card, which is a new version of our Secured Credit Card that gets you the rewards and higher yield on their savings. We're going to be launching a new more premium tier of service that will provide even more rewards and more APY and a host of services and make Chime the most rewarding place to bank. We announced our plan to get into investment accounts to support Trump accounts, to have joint accounts, custodial accounts for kids. There's a whole list of product initiatives that will drive our growth this year. I'd say the second area is our new channel, the enterprise channel, which is still in its early days but we're planting seeds and early momentum in that area has been very promising, but there's clearly ways to go on that front. That would be sort of the second area of focus. And the third area would be, as I imagine you probably have every company talk about is, how we use AI to create a better experience for our members and to improve the operations of the business. we announced that in Q2, we'll be launching the next evolution of our AI copilot, which we call Jade, which is going to move beyond just being sort of answering customer inquiries, but more proactive in sort of nudging people to make smart financial decisions to move their lives forward. And then we're also deploying AI across the business. We're already very lean and we're -- we've seen the success of AI across the business. We've -- if you look over the past 3 years, we've reduced our operating -- our cost to serve by 30% and improved our average revenue per active, about 25%. So you can expect to see continued momentum on that front while keeping our sort of payroll and employee envelope consistent.

That's great. That's great. So let's go back and kind of when you gave the priorities and places where you're making progress, product velocity, I mean, you can't help but notice the number of new products and new offerings that you're bringing to market. You mentioned that you're expanding the envelope or the TAM, if you will, of customers and where you can deliver value. It seems like a lot of that is being powered by your ChimeCore. Just talk about and remind investors what that is? Its benefits to the company financially and particularly from a product introduction and rollout perspective?

This has been a huge unlock for us, and it's something that we spent a few years working on and we think it's quite a bit differentiated in our sector. When you operate a banking and a payments company, typically, you rely on a third-party processing for ledgers and connections into the networks and so forth. And we embarked an audacious path over the past few years, and we finally reached the conclusion of now operating ChimeCore as our core ledger and across the same platform. That's allowed us to not only reap the benefits of cost saves, but also product velocity and unlock. Just to remind investors, we operate at a cost to serve that is about 1/3 of big money center sort of traditional bank per active checking account member and about 1/5 of a regional bank. So we have a massive cost structure advantage. We estimate that the benefit financially of running our own processing and ledger, 60% cost save. We've realized a good chunk of that already. But more important than the cost save, we're operating a business with about a close to 90% gross margin and sort of 70% transaction margin. More important than the cost benefits, I would argue, is the unlock in terms of product velocity. We don't have to rely on a third party and to get in their queue for a product enhancement or a feature. We run it in-house, I can prioritize what features get launched and prioritized at what cadence. And I appreciate you saying that. I think the market is sort of giving us that feedback as well that they've seen just the second half of last year, launching Chime Card launching Chime+, all the work in the enterprise channel and some of the products that I mentioned earlier that we've sort of teased to come out over the course of Q2 and beyond.

Great. So let's talk about Chime Card. We've been really impressed by that traction to date. And I think this is, in some ways, can get -- like it can be a little bit crowded or confusing because every fintech seems to have their flavor of a card. But your traction in particular, seems incredibly strong. Talk about why you're excited about that opportunity? And any insights you can give to, once again, what attracts a Chime customer to the Chime Card offering?

Sure. Well, when we started the business, it was a checking account and debit card. And the credit card product we have today is actually a Secured Credit Card. So the consumer sets money aside and you can run up a balance on your card that is equal to the amount that you have in the account. So it has the benefits of the consumer to be able to sort of have a credit card but not take on a whole bunch of risk, and we're able to support -- to report that successful repayment of the card each month to the bureaus and it results positive credit score up to about 70 points. But with this latest Chime Card launch that we launched in the second half of last year, we've now made it the most rewarding way to do your everyday spend on a Secured Card. So we've added a couple of percentage points of cash back in rotating categories. The most essential kind of everyday categories...

They're most likely to spend.

Fuel, groceries, utilities, cable, that sort of thing. And it's been a great driver of growth and just another reason to come to Chime to not just think about saving money and getting your financial responsibility on a better track, but also to reap the rewards. And I think we're excited about the impact that we've had on the business as well. So not only does it help the members get a better credit score and get those rewards. But because it's a credit card product, we actually get higher interchange rates, and that allows us to deliver even better benefits back to our member. We reported last quarter that we shifted the percentage of total purchase volume on our Secured Credit Card from 16% of total purchase volume to 21%. So it's a pretty substantial change. And I think something that you should expect to give us a healthy tailwind for actually years to come because when you look at the top of the funnel, people who haven't yet established -- maybe aren't ingrained in the debit card usage behavior, at the top of the funnel, we're seeing over half of our new members take the product, and they're putting about 70% of their spend on that product, which is almost double the interchange of a debit card. So it's pretty exciting when you think about the future cohorts now they can start to stack and become a larger percentage of our member base. It's a pretty attractive tailwind for our business.

No, it's really impressive. And I think when we look at some of the others that have rolled out in the market is that their mix has been decidedly different. So I think a lot of benefit, obviously, to you financially and behaviorally. So if that's where we're at already, what can you do to drive adoption higher? What incremental things can you attach to the card or what would make sense at least?

Yes. We've only had this in market for a few months. So there's clearly optimizations at the top of the funnel. But I would say if you were to sign up new to a Chime account, I know you're an active member for years now.

Yes, yes, yes. For years.

If we're to sign up at the top of the funnel, new, you would be sort of driven down a path. It would be like sort of the suggested path would be to use as your primary way to do year everyday spend. We give everyone the option to get a debit card and some people just want to have that and that we're cool with that. But I think, look, there's more work we could do on the installed base of customers that are using debit cards primarily. There's been a very real trend over the past 2, 3 decades, where main mainstream America prefers to pay with debit cards because they are seeking the control that they would get from a product like that. And that's the great thing about this product because it kind of gives you the control of a debit card, but also gives you the benefits of credit building and rewards. So there's going to be sort of Golden Gate Bridge painting exercise of just trying to remind people that, hey, if you had paid with the Chime Card, you would have gotten rewards on your Chevron purchase or whatever it may be. And then in addition to that, sort of bigger picture, what we're doing is in Q2, we're going to launch a more premium tier of rewards. We haven't given all the details yet, but suffice it to say that there will be even juicier rewards on spending. We're going to give even more control to our member to decide what category or merchants that they want to earn the rewards in, and we're going to give higher yield savings. And just other sort of perks and lifestyle benefits that you might more closely associate with the traditional Amex Card, right?

Right, right, right.

So we're pretty excited about having an offering that will appeal to our existing members who -- some of them can give us more of their deposits. It's going to basically be unlocked if you do more deposits with us, and also appeal to higher-income segment, which we're actually getting great traction with. We've announced now 3 quarters in a row that our fastest-growing segment is for -- among members who make -- who self declare that they make $75,000 [indiscernible].

Right, right, right. So along those same lines, and you mentioned in terms of credit building, et cetera. I'd be remiss if I didn't ask an even if we're looking well into the future, what's your appetite for unsecured credit products, et cetera? That's something that typically we associate with an even higher income bracket.

Yes. I mean, look, we are already moving into unsecured credit as it relates to our -- we basically do cash flow underwriting of our spot, the overdraft service, our MyPay product, as well as our Instant Loans product. And those are becoming bigger and bigger businesses. I mean, MyPay last year, I mean, talk about hitting it out of the park. We went from essentially a standstill product to close to $500 million revenue run rate on a lending product, short-term lending product that is far and away the lowest cost consumer price product in the category, and brought our loss rates from 1.7% down to 1% last quarter. I mean the team, the Risk team absolutely killed it this year. And I'm so excited about that sort of building our muscle in this area, proving that we have the ability to underwrite consumers in our segment really, really well. And I think that's just the beginning. We're going to push more into this installment loan product called Instant Loans for a subset of our member base, it's longer duration loans, 3 to 12 months but still lowest cost in the market. And we certainly see a future where we'll get into things like unsecured lines of credit, and I'm sure, over time, eventually an unsecured credit card as well. We will do it in a Chime like way where there's probably some element of at least to start that, the goal is always primary account relationships. So we'll give it to people that use this for direct deposit and the primary way to their banking everyday banking.

So let's talk about MyPay. I mean I think this is another incredible example. I mean I know personally, some people that operate in essentially the payday lending space. And if you contrast that with MyPay, once again, I think this is an example where for that cohort or constituency of customers using MyPay is a better financial decision in almost all cases. And I think the growth that you talked about really underlines that as a key point. And you just mentioned it, but to repeat it, as part of the last quarter, you talked about how MyPay had reached about a 1% loss rate. It's certainly -- we'd always in our forecast, it anticipated that the loss rates would come down, but they came down a lot faster than we had expected, which was a nice surprise. You've also shared that you're planning to implement some new variable pricing around that product. Talk about like, a, why you think that you were able to drive down the loss rate so quickly? And then secondly, why is that now the right time to introduce some variability to the pricing model there?

We thought it was important to change the pricing. Look, there's clearly a tremendous amount of daylight between how we price our products and our competitors. So we already have that going for us and...

Right. Yes, yes. There's a lot of space.

Yes. We certainly got a lot of investor feedback on that fact as well. But more importantly than just the opportunity to monetize better was improving the customer experience. So the way the product used to work was that it was a flat $2 fee regardless of transaction size. And what you end up with a pricing model like that is you end up having people that take smaller draws, essentially subsidize people that we give larger draws. So the pricing isn't exactly fair, if you will. And we also wanted to make some changes based on some feedback that we heard from members, which they found it a little bit annoying that the way the product works is over the course of the pay period, you get incrementally more access to this short-term line of credit.

Right. Presumably what you've earned, but have yet been paid.

Yes, up to $500. And then -- so you get paid on the 15th of the month, in our case, probably the 13th of the month, we pay early. But you kind of get reset to a low level. And a lot of our members were frustrated that they would be reset down to a low level. So this new pricing allows us to make the product experience better because we don't have to bring it all the way back down. And the progress on risk loss was just smarter -- it's like any risk product, like you get -- you're going to have higher losses and cut them in half as you make more progress and figure out your scoring and underwriting ability. But what I'm most excited about is, look, we got to the 1%. We now have flexibility. It won't be exactly 1%. It will probably be a little higher sometimes and slightly over some time. But what we've really directed the team towards now is -- now that we've proven that we can manage the loss rate, let's focus on maximizing transaction profit dollars. And that means like how to -- this is like 60% transaction margin product already. How do we make the product available to people? How do we think about potentially being more aggressive with certain segments in terms of giving them access to even larger lines. So we'll be flexing on that a little bit, and that may charge it, lead it to go up, the loss rates to go up slightly. But at the end of the day, it's the transaction dollar amount that is most important to us.

Got it. Got it. So let's talk about Chime Enterprise. Chime Enterprise in my mind, should dovetail really nicely with the MyPay product eventually. And the ability for enterprises to offer that to their employee base. And hopefully, and as I envision it, turn into another source of customer acquisition for you. And I know that you've talked about Chime Enterprise being one of your top priorities. Talk about recent progress there and what we should be doing is outside observers and investors as to how to measure and meter that progress?

Yes, it's a good question, and I'm -- it's a relatively new line of business. So I'm always trying to manage investor excitement but also temper it with the reality of the enterprise sales.

Right, right. Well, we can -- I can get excited. Yes, yes, for sure.

We felt the excitement and we get a lot of questions about this, but we can need to be more excited than ever were. Like every Chime product, not only is it going to be the best consumer experience, but it's going to be the lowest cost. We think that combination is a winning formula. It's worked in all of the other areas that we've competed in, and we believe it's going to work in this area as well. Our message has absolutely resonated with the employers that we talk to. We're right in the mix on a number of RFPs. We announced a number of new employers just in the last couple of weeks here. We developed important strategic relationships with Workday and UKG. So we're in the payroll system, which allows us to -- if you're working at an employer that turns on a Chime Enterprise version of MyPay, you don't get capped at $500 and you also don't get charged a fee because we know that you've worked the hours and we know that the direct deposit is coming at Chime. So we'll give you -- there's a cost of capital that we incur, but a very low amount of risk.

Right, right, right.

So it's incredibly compelling product to pitch to employers. They hear and they see from their employee base. I mean a lot of the employers that we pitch or have turned on, chime is already the bank account that 10% or more of their employees already is.

Right, right, right.

So for that population, the experience becomes better. We introduced new people to Chime that maybe have seen an ad or seen our brand somewhere out in the wild, maybe on the Portland Fire or MLS brand partnerships we just announced. And then we also reengaged some members that maybe had a Chime account a few years ago, but for whatever reason, changed their jobs and stopped using it. So feedback has been great, and we expect to have some announcements real soon that. We're thinking of it as like planting seeds and building the pipeline.

And as that grows, help us envision a little bit what that monetization path looks like, right? Like it's -- if you're not charging the employee, if you will, and there's larger limits, but hopefully lower losses, but what's the revenue contribution? How does that come through?

Yes. I think if there's anything that's differentiated Chime over the years is not just our ability to attract a large amount of consumers, but serve them in this primary account capacity of close to 2/3 of people that use us that way. If you think about this channel definitionally, every person that we sign up through this channel is a direct depositor, is a primary account relationship. And so that drives outsized amounts of transaction activity and spend and engagement. So we can monetize not by having to charge a fee on the draw like all of the competitors in the EWA space do, but just by monetizing the everyday transaction activity. So we're seeing much higher levels of monetization right out of the gate in the enterprise channel than we do through the consumer channel, for sure. Yes, it's pretty exciting. And then even beyond that, you think about our offering relative to the competitive landscape, they monetize on one-off transactions a few times while the employees is at that employer. Well, if they leave, it's over. With Chime, if you leave the employer, you still have a Chime account, wherever you work, whether or not they're an enterprise client or not, you can get access to MyPay. It costs a little bit more, and there are a few limits than you get from the enterprise addition of it, but it's still a compelling offering. And so that gives us the opportunity to monetize the relationship and develop longer lasting partnerships with consumers for a longer period of time.

Like it. So we spent the first part of our conversation this afternoon talking about Chime specific things that you're doing, the products that you're doing, how well you're executing, et cetera. But per usual, there's always a wall of worry to be climbed in the market, et cetera. And I would say, right now, most of that wall of worry, at least as it relates to Chime is probably more macro related. So let's hit on a couple of those topics. Let's start with consumer health. It seemed like from your perspective, and you guys have great representation in that core segment of your market and visibility. You noted that, that remained strong in Q4. What are you seeing so far to start this year? And kind of anything that you would call out for better or worse in consumer behavior and spend trends?

Yes, I'd say the wall of worry was even more pronounced in the prior quarter, where I think there's a little baby bathwater situation of people thinking like the consumer was really going sideways. And on that call, we made very clear that we're seeing a resilient consumer. We announced that again in this past call, we see spend up on a per member basis. We see -- and that's across discretionary and nondiscretionary. Most of our spend, just to reset everyone is -- most of our spend is nondiscretionary, which is obviously, a very resilient form of spend and something that lasts for many, many years. But we, again, continue to see a healthy consumer. Average savings account balances are up. Average checking account balances are up. Spend is up. People are doing things. They're using rideshare, they're going out to restaurants. They're indulging. They're paying for the delivery of Instacarts and DoorDashes and all these sorts of things. So we continue to see a healthy customer base despite the skepticism and people thinking that they may be going sideways. I'll also note, we're seeing consistent deposit trends of payroll. And when there are upticks in unemployment, we will see people getting unemployment benefit, and it's obviously something that our economics team looks at all the time, and we have not seen any an uptick. So we still continue to feel optimistic. The -- we're pretty close to full employment here. I know there's a lot of concern around white collar, maybe our jobs, but for the customers that we serve, we have not seen any impact yet.

So -- and to be clear, just to make sure that I caught 2 things that you said there. First, discretionary, you're seeing increase in discretionary spend right now. And then the second thing was that you were seeing increase in balances. And I guess, presumably, that -- like that statement or that data comes from really before we started to get to the biggest part of the tax refund season. This is usually a period of the year where we start to see some of that benefit, but it sounds like that [indiscernible].

It is. It's -- we -- after this meeting, I will go back to the computer and we will hit refresh, and we will look and see how those are coming in. We expect to be another solid tax refund season. Obviously, the one big beautiful bill we expect will allow us to see a little bit of upside. I think the actual timing of tax refunds this year is slightly delayed.

Slightly later, right.

So we don't have 100% full visibility. We're optimistic, but it's a little bit still too early to say like emphatically that this is the all-time best or [indiscernible] a statement like that.

So 2 more topics I want to hit in the last few minutes. Other existential wall of worry element, AI, you mentioned maybe the white collar jobs get displaced, et cetera. But how do you work between any headwind from that versus really getting leverage? And I know you called it out a little earlier, but I'd love a little more detail there.

Yes. I mean we look at the opportunity with AI as a huge tailwind for our business. We are going to be a winner in this incredibly important development that's happened to our economy and to the world. We think of the opportunity to sort of give everyone inside of the company an Iron Man suit, and it give us all super powers. We are already -- I shared some of the stats around cost to serve save and RPAM increase and some of our vision around having a more proactive partner, co-pilot, if you will. All these things are starting to come to life. Right now. And as we think about just the envelope of the company, and we're already operating, we don't need to make some sort of drastic changes. We already -- last quarter on a run rate basis, we're about $1.6 million of revenue per Chime employee, about $1.2 million of gross profit per employee. And we've announced our intention to essentially keep the employee base or at least the envelope of payroll cost essentially flat, while we continue to grow the business. So we're going to see more and more leverage. We're going to see the ability for not just engineers and product folks. Obviously, we'll get a lot of benefit from [indiscernible] but just really across the board. You think about things like compliance reviews and making sure you don't have UDAAP violations and all the things like you still need some element of human involvement, but there's so many ways to make these processes more and more efficient. But I think interesting in our category, at the end of the day, we do still operate in a highly regulated business that requires deep interactions with banks, with regulators. And so it's not something that can just be AI-ed overnight. It takes a long time to get all that stuff right and make sure you're dealing with disputes in a legally compliant way and all these sorts of things. We certainly think that AI can make all those processes more efficient, and we're on the forefront of doing that. We think a heck of a lot faster than probably a traditional bank would be able to.

Got it. Last couple of minutes here. you've charted an aggressive path towards profitability and one I think that investors are excited to watch. What are the drivers for that? What has to happen to get to the level of profitability you think that you can and should be at?

Yes, in our roadshow, we talked about long-term adjusted EBITDA margin of 35%. We haven't really changed it since the acceleration of AI, but we have had questions about that. We're going to keep it at that for now. I think what needs to happen is we need to continue to operate with discipline. We need to keep OpEx costs in line. We need to -- and that's something that we're -- we've been very deliberate about and more than just talking, I think we're doing. We've shown a 50% increase in incremental adjusted EBITDA last year. We're going to show it again this year. And we need to continue to grow the top line of the business. And it's that combination of expanding our active member base, engaging them more, continue to drive RPAM through product attached, but increasingly showing the actual operating leverage in the business. And by using AI and being the sort of asset-light technology company that happens to operate in the bank account business, we think it's an incredible combination that we're seeing a lot of excitement and enthusiasm for.

Great. Well, that's all the time we have. Chris, thank you for being here and being part of the Chime team and joining us here at the Morgan Stanley TMT Conference.

Thanks, James.

And really looking forward to the rest of this year.

Appreciate it.

Thank you.

Good afternoon. Welcome to Chime's Fourth Quarter Fiscal 2025 Earnings Call. [Operator Instructions] 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 like to turn the call over to David Pearce, Vice President of Investor Relations and Capital Markets. Thank you. You may begin.

Good afternoon, everyone, and thank you for joining us for Chime's Fourth Quarter 2025 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.

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 in our 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 our actual results to differ materially from those described. Many of those risks and uncertainties are described in our SEC filings, including our Form 10-Q filed on November 10, 2025. 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.

With that, I'll hand it over to Chris.

Thanks, David, and thank you all for joining us. I'm proud to report another strong quarter. In Q4, we again delivered results that exceeded our guidance, closing out a momentous year. But before I get into the details, I want to reflect on 2025 and preview plans for a year of acceleration in 2026.

Despite headlines of a pressured consumer, we continue to see stability, consistent with what we reported last quarter. Member spending remained healthy in Q4 and with steady growth across both discretionary and nondiscretionary categories among our tenured cohorts and across all income levels. We're seeing higher average deposit balances and consistent use of our liquidity products with lower losses, including all-time low loss rates on MyPay, and importantly, no signs of increasing job loss within our member base.

Our business is rooted in primary account relationships and every day, largely nondiscretionary spend. So we're built for resilience. In times of uncertainty, our value proposition becomes even more compelling. Fee-free access to liquidity, payroll on-demand, high-yield savings, credit building, tools that help members build financial stability. In 2025, we delivered 31% revenue growth with strong operating leverage, including a 12-point year-over-year improvement in adjusted EBITDA margin to 10% in fourth quarter. In Q4, we also added approximately 500,000 net new active members, bringing our total to $9.5 million.

In 2025, our biggest unlock was ChimeCore, our homegrown transaction processor and ledger. We're now 100% on our own tech stack after completing a multiyear migration in Q4. ChimeCore strengthens our cost advantage with a cost to serve of roughly 1/3 of large banks and 1/5 of regional banks. ChimeCore also reduces transaction processing costs by an estimated 60% supporting our long-term gross margin target of 90%. But the bigger impact for us is velocity, only our own tech stack enables us to innovate faster and deliver the lowest cost products to our members. That unique advantage powered our 2025 product launches extending our lead over traditional banks and fintechs as the most rewarding place for mainstream America to bank.

For example, Chime Card, our new secured cash-back credit card and first product built entirely on ChimeCore. Direct depositors earn 1.5% cash-back on everyday spend, a 3% savings rate, which is 7x the national average, fee-free overdrafts, early access to pay, free credit building that increases average scores up to 70 points and access to a free ATM network that's larger than the 3 biggest banks combined, all at no cost. No other company offers this breadth of services for everyday consumers, and we deliver it with an over 70% transaction margin.

Chime Card is already resonating at the top of the funnel and driving strong engagement. Over half of members in our new cohorts are adopting it, and those members are using it for over 70% of their Chime spend. This has resulted in credit spend as a percent of overall purchase volume increasing to 21% in December, up from 16% in September. As a reminder, spend on Chime Card earns us nearly 2x the take rate of our debit card serving as a multiyear tailwind to revenue growth.

MyPay, our on-demand payroll product had a standout year. We scaled MyPay to over $400 million in revenue run rate in Q4, while generating transaction margin of nearly 60%, only 1 year after launch. We began 2025 with MyPay loss rates of 1.7%. And in Q4, we reached our steady-state loss rate target of 1%, significantly faster than planned. With losses stabilized and a new variable pricing model in place, we can now scale both access and profitability. We're focused on making MyPay available to more members with higher limits and on driving growth in transaction profit dollars while maintaining MyPay as the low-cost product in the market.

We also launched Chime Workplace, our employer financial wellness offering, bringing Chime into the enterprise channel with MyPay at work. We saw early traction in 2025, onboarding our first customers and channel partners, and we entered 2026 with strong momentum and a growing pipeline. More broadly, our progress across liquidity products showcases our structural repayment advantage that comes from deep primary account relationships and enables low cost, low credit risk liquidity offerings. Across SpotMe, MyPay and Instant Loans, we exited the year at over $40 billion in annualized origination volume.

In 2025, we also cemented our position as the primary bank account of choice for mainstream America. In terms of brand consideration, Chime is now #1 for online banking, among Americans earning up to $100,000 a year based on third-party survey data. In 2026, NerdWallet named Chime the best checking account and best online banking experience. And last year, Times National Consumer survey recognized us as the #1 brand in banking.

Our marketing isn't just driving awareness but also primary account intent. Recently, J.D. Power named Chime the leader in U.S. checking account openings ahead of all other financial institutions. They estimate that 13% of all new checking accounts opened in the U.S. were at Chime, nearly 50% more than the #2 brand on the list, Chase, and above a long tail of other U.S. banking and fintech brands.

Our momentum in 2025, combined with the launch of ChimeCore, sets the foundation for accelerating product velocity in 2026. This year, we're focused on 3 priorities to advance our growth agenda: First, we're going to extend our lead as the best financial partner for everyday consumers. In the coming weeks, we'll launch a new premium membership tier with an even more rewarding value proposition for our most engaged and higher-earning members, including those making more than $100,000 a year. It will deliver higher savings rates, exclusive perks and even better rewards, all fee-free while maintaining our advantaged unit economics.

We're also expanding our product suite to meet the needs of our fastest-growing segment. Members earning $75,000 a year and more by introducing new value propositions to address more complex needs, deepen engagement and drive long-term growth and profitability. For example, we'll launch joint accounts as well as teen accounts and custodial accounts, so members can more easily manage shared family finances.

This summer, we'll be expanding into investing, automated and self-directed, and we will support Trump accounts. These offerings provide members with new and accessible ways to build wealth. With tax season underway, we're increasing awareness of Trump accounts among millions of eligible everyday Americans, broadening access and participation at scale. That translated into strong early traction with tens of thousands of members initiating enrollment through tax filing with Chime in the first week alone.

Our second priority is accelerating momentum in our enterprise channel. Chime is transforming the direct-to-employer earned wage access industry by delivering a full suite of financial tools and pay on demand for free for employers and employees. We've seen a strong response from the market, including a growing roster of employer partners and channel partnerships like Workday and UKG. Our offering is resonating with employees. Among early cohorts, adoption is high, and these members are transacting more and retaining better than new cohorts in our direct-to-consumer channel.

In 2026, our focus is scale. Expanding to more employers and building enterprise into an evergreen customer acquisition channel. We're off to a strong start, and we recently announced several new employer partners and expect additional announcements in the very near future.

And finally, we'll continue to deeply embed AI across Chime and into the member experience. A lot has been written about the financial literacy gap in our country, and it's real. More than half of U.S. adults like basic financial knowledge. And even when people are educated, they often lack the tools, the support and consistency needed to take action and turn good intentions into lasting financial progress. And that's why we're excited to expand our consumer AI offering.

Chime's relationship with our members is fundamentally different than most fintechs. The majority of our members rely on Chime as their primary account, and our average member engages with us 5 times per day. We sit at the center of our members' financial lives, and that depth of engagement allows us to not just provide insights but to take intelligent real-time action with and on behalf of our members.

In Q2, we'll launch the next generation of our consumer AI offering, Jade. With the vision of delivering an always-on financial copilot embedded in-app, providing personalized guidance that helps members take action automatically and make smarter financial decisions. We're currently testing Jade employees, which gives us valuable feedback ahead of launch.

With Jade, we'll move from reactive tools to more proactive financial management, helping members spend smarter save more, pay bills on time, borrow responsibly and build long-term wealth, transforming the way mainstream consumers manage their finances. Beyond Jay, AI is already transforming how we operate. Over the past 3 years, we've reduced our cost to serve by nearly 30% and increased our RPM by 23%, all while improving customer satisfaction levels. AI has driven step-change efficiency across customer support, reduced fraud rates by 30% since 2023 and meaningfully increased internal productivity. We boosted developer throughput cut code review times and more than doubled marketing creative output while reducing production costs. In disputes, automation has reduced time to decision by 30% while maintaining over 99% accuracy, delivering faster, high-quality resolutions for our members.

This is the leverage of a technology-first financial services company embracing AI at scale grounded in relentless member obsession. We innovate faster, deliver better experiences and operate at a fraction of the cost of legacy players. This allows us to deliver more value to our members and these advantages compound as we grow. Last year, we generated nearly $2.2 billion in revenue with approximately 1,500 employees. As we shared on our last call, we expect to continue to scale without needing to add headcount.

I'll now turn it over to Matt to cover Q4 and our 2026 outlook.

Thanks, Chris. Q4 capped off a landmark year for Chime, our shareholders and our financial position. We went public, strengthened our balance sheet and continued to drive strong financial results. In 2025, we delivered 31% revenue growth and significant operating leverage, growing our adjusted EBITDA margin by 12 percentage points year-over-year in Q4. We each ahead of our guidance. And we expect to maintain this momentum in 2026 with a clear line of sight to strong growth and further operating leverage, including GAAP profitability for the balance of the year, an important milestone that we expect to achieve ahead of previous internal expectations.

But first, let's discuss Q4. Our third consecutive quarter of strong results as a public company when we again exceeded our prior guidance on both top and bottom lines. We grew revenue by 25% year-over-year and transaction profit by 31% year-over-year in Q4, compounding growth even as we fully lapped 2024s launch of MyPay. We've done this by continuing to execute across multiple dimensions of growth: active members, average revenue per active member or ARPM and transaction margin.

In Q4, we added approximately 500,000 net new active members quarter-over-quarter and $1.5 million year-over-year. Of course, our actives aren't just any actives. They're deeply engaged, a result of our relentless focus on serving our members in a primary account capacity. Our average active member transacts with us 55 times per month that is very different from other fintechs with single-point solutions whose comparable metric is often in single digits. We have a fundamentally different customer relationship. Primary accounts drive consistent and resilient top of wallet spend, provide us an underwriting advantage through our privileged repayment position and give us a unique opportunity to cross-sell and deepen engagement even further over time. This results in consistent, durable and long-lasting member cohorts. Our oldest cohorts are now nearly a decade old and are generating more transaction profit now than they did pre-COVID, and that's net of churn.

And our cohort performance is getting even better. Building on our success in H1 with our early engagement initiatives, which made it easier to get started with Chime. In Q4, we improved the quality of our new cohorts in several other areas. First, in Q4, we saw a record high number of new members convert to direct deposit. Second, we continue to grow engagement -- our new cohorts are attaching to more products faster, including with many of the products we launched and scaled in 2025, like our new Chime Card, MyPay, outbound instant transfer and instant loans. Members using 6 or more products each month now make up 15% of our actives, up from 5% 2 years ago.

Finally, fueled by these increasing levels of product attach, we've also grown monetization. This is particularly true in our newest cohorts, we are seeing members do more of their spend on Chime card compared to prior cohorts that transacted more on debit. Shankar earned us approximately 175 basis points on purchase volume -- compared to under 100 basis points on debit. Taken together, we've strengthened the quality of our new member cohorts while continuing to acquire at attractive tax, yielding 5 to 6 quarter transaction profit payback periods, and LTV to CAC of over 8x.

In Q4, overall ARPM increased 5% year-over-year and 21% over 2 years to $257 a driven by the strength in both payments and platform-related revenue. Our tenured cohorts have reached ARPAM of nearly $400. In terms of transaction volumes, we continue to see very steady spend trends consistent with a resilient consumer. Combined purchase an OIT volumes grew 16% in Q4, fueling payments and OIT revenue growth of 21% year-over-year, an acceleration from Q3, driven by higher take rates on Chime card and IT. Platform-related revenue increased 47% year-over-year or 37% year-over-year, excluding OIT.

One additional contributor to ARPA growth is instant loans are up to $1,000 installment loan product with terms of 3 to 12 months. Instant loans complement our short-term liquidity product offerings to meet our members' larger, more episodic liquidity needs.

We originated approximately $400 million of incident loans in 2025. and as of Q4, 10% of active members had an open loan. We expect instant loans to scale further in 2026 and like we demonstrated with SpotMe and MyPay, unit economics improved significantly as the portfolio matures. We've seen as much as 50% lower loss rates for repeat borrowers compared to first-time borrowers.

In Q4, we increased transaction margin to 72%, up from 69% in Q3, a result of delivering on 2 critical strategic priorities that we committed to as part of our IPO last summer, completing our ChimeCore migration and reducing MyPay loss rate to 1%. In addition to the velocity and innovation benefits that ChimeCore unlocks, the final stage of our migration also drove a 200 basis point increase in our gross margin, helping us close in on our long-term target of 90%. This improvement alongside our faster-than-expected progress to our 1% steady-state loss rate target on Mita, helped us grow annualized transaction profit to $1.7 billion in Q4, up 31% year-over-year.

Finally, alongside our strong growth, we continued to drive operating leverage with $57 million of adjusted EBITDA in Q4. In Q4, non-GAAP OpEx as a percent of revenue fell 9 percentage points year-over-year. Our adjusted EBITDA margin growth accelerated further with 12 percentage points improvement year-over-year in Q4, the largest margin improvement of any quarter in 2025.

In our first call as a public company, we committed to delivering an uptick in profitability in the back half of 2025, and that's exactly what we did. The 57% incremental adjusted EBITDA margin we delivered in Q4 exceeded our initial guide as well as the higher bar we set for ourselves on our last call.

So meaningful progress last year, but we're even more excited about the opportunity ahead. We believe we're extremely well positioned entering 2026 with a number of tailwinds that will support both continued strong top line growth, even faster transaction profit growth and further bottom line margin expansion this year.

First, we're the market leader in account openings and the #1 brand in banking. In 2026, we expect to continue delivering steady and predictable growth in our core business, powered by a growing member base and their resilience everyday nondiscretionary spend.

Second, we have several strong top line tailwinds exiting 2025, including Chime Card, driving higher take rates, a new variable MyPay pricing model, unlocking further scale and higher monetization. In our instant loans products ramping across our member base with strengthening unit economics.

Third, our new products and go-to-market priorities that Chris outlined, including new premium membership peers, investment accounts, joint accounts and Chime Enterprise will set the stage for continued growth in 2026 and in years to come.

And finally, we'll do all of this without needing to grow our headcount, thanks to efficiencies from ChimeCore, and our ongoing AI initiatives.

Turning to our guide. In Q1, we expect revenue between $627 million and $637 million, resulting in year-over-year revenue growth between 21% and 23%. We expect adjusted EBITDA between $90 million and $95 million and adjusted EBITDA margin of 14% to 15%. For full year '26, we expect revenue between $2.63 billion and $2.67 billion, resulting in year-over-year revenue growth between 20% and 22%, and adjusted EBITDA between $380 million and $400 million. an adjusted EBITDA margin between 14% and 15%. This represents 8 to 9 points of margin expansion year-over-year and an incremental adjusted EBITDA margin of over 55%. And as mentioned previously, we expect to be GAAP profitable for the balance of the year.

There are a few things to keep in mind about our Q1 and full year outlook. First, we have a seasonal business, Specifically, Q1 is tax refund season, but we like to call the most wonderful time of the year. Each Q1, with the increased activity resulting from members receiving their tax refunds, -- we see seasonally higher purchase volume, RPM, transaction margin and net new active member additions. And in each Q2, we see a normalization of these seasonal trends. with significantly fewer net new active member additions than in other quarters and lower sequential purchase volume, payments revenue and transaction margin.

This Q1, we also expect to benefit from larger than usual tax refunds resulting from the one big beautiful bill at, which would magnify the seasonality. It's still early. We haven't yet hit the peak of tax season. and the timing of this year's refunds are a bit later than in the years prior. That said, so far, refunds are tracking higher, in line with our expectations. More broadly, for the full year, we will continue making progress across our growth framework, Active members, RPAM and transaction margin. As the market share leader in new account openings, we expect to maintain strong momentum and net new active member additions this year.

For the full year, our goal is to add approximately 1.4 million net new actives at attractive ROI, building on the increasingly strong cohort quality we saw in Q4. We will also continue to drive RPM growth as we scale Chime Card, MyPay and instant loans, helping us grow LTVs and reinforce our strong cohort quality. And finally, we expect transaction margins remain consistent with Q4 '25 level as we realize the ongoing benefits of lower transaction processing costs from our ChimeCore migration.

From an OpEx perspective, as Chris noted, we're excited about our road map this year and plan to invest in sales and marketing behind our new product launches, particularly in Q2 when we plan to launch our new premium membership tier.

With that, I will open it up to Q&A.

[Operator Instructions] Our first question comes from Tien-Tsin Huang from JPMorgan.

I want to ask a couple of member questions, if that's okay. Just curious, and thanks for the outlook and all the detail that you gave. I know there's been a lot of talk in the past about widening the product funnel. I'm just curious if you're getting the member behavior reaction that you're looking for from those actions and how you might do that differently in '26 versus '25 in terms of member growth focus? And I heard, Chris, you talked about the premium tiering and the new strategy there. I think that's great. I'm curious, are you solving for new member growth there or higher engagement retention, that kind of thing as you're thinking about the outlook in '26 and beyond?

Thanks, Tien-Tsin. Yes, maybe just as a setup and a reminder for folks on the call. A little over a year ago, we kicked off a series of initiatives to try to make the top of the funnel, even wider, if you will. So we did things like made it easier to fund the Chime Account, to get access to certain features like credit building and our outbound instant transfer feature. -- right out of the gate. And I mean, I think there's no question that this has been a positive development for our top of the funnel numbers and you can see it in the results. In the prepared remarks, we talked about the J.D. Power survey that showed Chime is opening up more checking accounts than any player in the industry, 50% higher than the #2 player Chase. And so going forward, we intend to continue to be the market leader in terms of new checking account openings. We're going to do that. I think with we're excited about the new product innovations that we'll be rolling out in some of these new channels that I'm sure we'll talk about more on the call to ignite our growth. And we're going to do that while continuing to manage towards increasing levels of profitability. We're also seeing that these new cohorts that we're bringing in are delivering high-quality members into the hold and maybe Matt can talk to what we're seeing on that front.

Yes, I agree. We feel really good about the overall pace of headline net new actives. But I think what's most exciting and really what's even more important for the business is the quality of our new active cohorts. That's continuing to get stronger and stronger. We mentioned, we've been setting record highs in terms of the number of new members converted to direct deposit or early engagement initiatives have been a contributor to that. We continue to drive very meaningful reps on engagement we're also driving higher monetization. That's particularly true among our newest cohorts that are adopting Chime Card at a very strong rate. So we're feeling very good. And I think the proof is in the putting. You're seeing that in our cohort metrics. Our transaction profit payback periods are strengthening. They're now at 5 to 6 quarters that supports a long-term LTV to CAC over 8x.

And then at the enterprise level, the strong cohort performance is translating into very strong growth in profitability, which, again, we're balancing goals there alongside our -- so again, we feel good, not just at the quantum, but also importantly, the quality of our active member growth to enter the year.

And maybe just a follow-up on the other questions you asked, Tien-Tsin, I don't think we would do much in the way of anything different. We really like this opportunity to have more active members in the mix and have them have a relationship with Chime because we know that the point in which in someone's life that they make a conversion to direct deposit is different. It might be the results of a life change or a new job. And so the more people that we can have relationships with so that we're in the mix at that moment of time, we think that's a great place to be.

And as it relates to the question about the new product sort of membership tiering, that's really just based on our analysis of our member base and the fact that we can see we're growing among our higher income level members. We're growing that at a nice clip. We want to make sure that we have products and services that really deliver great value to them. So that's what you should expect to see in new tiers, members who give us more of their direct deposit or going to get an even more rewarding experience using Chime as their primary bank account. So yes, I guess it's intended to open up that segment of the market even further and make sure that we are -- give ourselves the best chance of retaining those higher income numbers as well.

Like Chris, anything to call out on the competitive landscape thinking about what you're seeing from your peers? And is that impacting member behavior at all? And I'm especially curious as you go into tax season, if you're seeing any change in customer acquisition strategy from the group?

Well, I think like Matt said, tax season is always a great 1 for us. We have a tax prep service. We're seeing huge engagement with that. We're continuing to see lots of -- even though it's early, we're seeing lots of tax refunds into the accounts. We're seeing people signing up for Trump accounts and kicking off that process within the tax filing process, which is really exciting. And I just think a great development for our country, particularly the kind of everyday consumers that we serve. Yes. Of course, we're always looking across the competitive landscape. Most of the primary checking account relationships in America reside at the big banks, and we continue to outperform relative to those players. And of course, we're always keeping an eye on other fintechs that are trying to get into the area of the business that I think we've been able to prove some success in. So we're monitoring, but we feel really good about the position that we enjoy right now.

We'll move next to James Faucette with Morgan Stanley.

I appreciate all the color here. I wanted to ask you just on kind of the activity levels and continuing to add users at a pretty good clip. But wondering how we should think about that in context of your efforts to really ungate more products to more of your customers? What you're learning from that process? How we should expect refinement during '26? And I guess, really what we're kind of looking at is -- is there a possibility that we could even see some acceleration from a pretty consistent rate of member growth?

Right. Thanks for the question, James. Like we said, we feel really good about the efforts and the impact of opening up the top of the funnel, and Matt sort of shared some of the highlights. Our payback periods on our customer acquisition are as good as they've been in a really long time and getting better. So we feel like these early engagement initiatives are absolutely playing out well for us. We don't anticipate any major changes to them. We're constantly trying to figure out ways to make it even easier to fund an account and to get engaged to get access to services that are appealing to you we're going to continue to innovate and test services that allow our members to gain access to trial, temporarily getting access to higher-level tiers if you're not quite qualified for it yet. So -- we think there's going to be lots of ways to give people a taste of all the benefits of Chime, so that when they have that moment that life moment when it's time to convert a primary banking account relationship that we're hopefully on that consideration set for them. And at the same time, we're seeing huge success building a brand and not just awareness of the brand, but the building a brand that is trusted and stands for really a new way to manage your money. It's authentically helpful and easy and in most cases, free.

Yes, makes a lot of sense. And then I wanted to touch quickly on credit. Credit mix seems to be improving nicely, especially following the Chime Card relaunch. Any color there? In particular, how has customer response been to rewards on the secured card? Are you seeing incremental spend per user or other things? And I'm just wondering if and how this may tie into some of the plans you have to be attractive even to consumers that are making above $100,000 a year?

Thanks, James, for the question, this is Matt. Yes, we're really drilled without the early progress on Chime Card. Again, that's our new secured rewards credit card. And we do think this is going to be a multiyear growth tailwind for us. I think you know this card earns up nearly 2x the take rate versus debit. So it's a really exciting opportunity for us to continue to improve our unit economics. If you just take a look at credit mix as a percentage of purchase volume, you saw that increase from 16% when we launched the card in September to 21% in December. So a 30% increase just in the past few months.

And in particular, we're really seeing very strong adoption among our newest cohorts. Our news cohorts over half of them, half of our new members are spending with the Chime Card. Those that do adopt it, over 70% of their Chime spend. And on your question, these members are spending more than members who've not adopted China card. So net-net work, we're seeing really strong credit mix for these new cohorts. The credit mix of new cohort specifically is close to 50%. And on a go-forward basis, we're -- we think there's a lot of opportunity to continue to drive this higher, including through this year's product road map and specifically our new premium membership here, where we're going to offer even better rewards and exclusive perks while maintaining pretty similar take rates overall.

We'll move next to Andrew Jeffrey with William Blair.

Great to see things play out as anticipated in the business. I thought I might drill down a little bit into instant loans because it feels like that product is moving a little bit more front and center for Chime? And -- it's an area where we've spent a lot of time and are very bullish, just broadly speaking, short-term consumer liquidity products, which are so much better than alternatives in the market, of course, instant loans and my pay included. Could you just sort of frame up for us how the credit performance is in that particular product, what the growth opportunity is? And -- maybe just your perspective on how this suite of liquidity products really enhances consumer value as I think there's some confusion or some pushback in the market about fairness and implied APRs and all the kind of stuff that folks don't like about payday loans and credit revolving credit. So kind of a far-reaching question, but I'd just love to get some perspective on your products, in particular, in our overall view.

Yes, sure. This is Mark. Just to play instant loan. -- is loans and installment loan product that, as Matt indicated earlier that our members due for their larger more episodic needs. So unlike MyPay or SpotMe, which tend to be intrapay period our liquidity. This is longer duration. It's anything from 3 months up to a year, we're testing right now. And right now, we're looking at limits anywhere between $300 and $1,000. So -- it's really for really used to sort of larger longer-term liquidity requirements amongst our lenders. And -- this is something we've been testing and you guys have heard us talking about this. We've been testing this for some time now and really refining the risk models and making sure we have this really solid.

We're very excited about the performance in '25. We did $200 million of originations, and we reached a 10% product attached by the end of Q4. And like all our leasing products, it's the notice only available to our direct deposit members who have been with us for a period of time. So this is a product where we're actually able to use the privileged data we have in terms of their behavior and our privileged position at the top of the repayment stack to sort of to manage the risk here and therefore, actually offer rates that are unmatched for these members in the market.

So as you -- like any lending product here, what tends to happen is as you start off and certainly with your first time loan due to have higher losses. But what we're seeing -- what we've really seen here, as Matt has indicated, is as much as a 50% reduction in our repeat loans, and we actually expect the loan performance on instant loans to mirror the trajectory that we've seen with partly in my play over the years. So it's not at the point where it really is ready to scale and you started to see some of that in Q4 and you will see that throughout '26. And grades become a sort of growth platform for us if we think it's going to be a much more meaningful contributor to transaction profit over time.

Having said that, these are risky loans. The longer duration, higher limits. So you're not going to see the sort of attach rates that you would see with something like MyPay. But if you were to look at the APRs on a product like this, this is well within the sort of lending 36% APR cap. So this is not a -- compare us to a loan or even some of the sort of more creative product out there would be a huge justice to this product. In fact, it's such a great product. This is actually our highest NPS product that we have today in our portfolio. And we're really, really excited about its prospects.

Yes. It sounds that way. And just to be clear, Matt, will instant loans be transaction profit margin accretive in 2 or comparable to the rest of the company, I guess, the way to ask the question?

Yes. We do expect this to be a contributor to transaction profit dollars, particularly as we exit the year.

Okay. But perhaps lower margin with the opportunity for going forward.

Yes. Look, I think from a marketing perspective, it will look different than other parts of our liquidity contest -- this is also, as Mark mentioned, something that will continue to improve over time as our portfolio matures, as the portfolio shifts to more repeat borrowers or longer duration. Again, very -- kind of a very similar playbook that we saw with spotline, where either economics just get better and better retirement.

We'll take our next question from Will Nance with Goldman Sachs.

I was hoping to the commentary around the new variable pricing model for MyPay? Obviously, really great traction in getting the margin profile to where it is and down to 1%. With the new variable pricing model, could you talk about your expectations for how that will impact both the ARPU and the transaction margin starting in the first quarter? And then -- maybe you can elaborate a little bit on some of the commentary around expanding access. How should we think about that in the context of, obviously, higher revenue from higher pricing is there room to maybe tweak up the losses to expand access? Would you expect a lot of that to slow to the bottom line and ultimately to the margin? Just how you think about some of those moving pieces?

Thanks, Will. [indiscernible] up a bit. I think we're really excited about the tailwinds that we have with MyPay from a revenue perspective going into '26 here. We think it's -- it's one of many tailwinds that we have. We talked about Chime Card adoption, talked about instant loans, but we are excited about some of these changes, both on the revenue side but also in terms of opening up the availability to more folks. So maybe I'll pass over to Mark since he oversees that part of the business.

Thanks, Chris. Will, as we indicated in the prepared remarks, Mike really was very light for us in 200 million in revenue, transaction profit margin by the end of Q4, almost 60%. And that's really in the first year of this as a lending product, which is -- which we're very excited about. I think, as you know, we started MyPay off with a fixed fee pricing model. So it was free if you receive your advance within up to 24 hours, and it was $2.6 fee if you did it immediately. What we realized pretty quickly was that we were trying to scale the product, trying to give access to bigger limits to more people faster that fixed fee actually became a hindrance to our ability to be able to do that. And so we shifted to a variable pricing model that really will allow us to leverage this much more of the growth platform and sort of scale MyPay over time.

We did that in a series of actions really that started in Q4 last year and culminated in the middle of January this year. So you would already have seen some of the increase in MyPay yield already in Q4 over Q3. There is more to come in Q1 and beyond. Having said that, it's still very early days. We -- with respect to the latest pricing changes, we haven't even had our first full calendar month yet. So I think it's fair to say that -- this is meeting our expectations, and we're excited by the impact of this. But we're not going to be giving specific guidance on the MyPay impact individually for 2026, but it is built into our overall revenue and EBITDA guidance for the year.

And I think what you're going to see with us to come back to the second part of your question, we do see opportunities going forward for us instead of necessarily maintaining that 1% loss rate for us to really optimize MyPay more effectively from a net experience and a transaction profit perspective. So this is going to be a strong growth platform for us going forward. And we're going to continue to do that while maintaining the lowest cost product in the market.

That's great. Appreciate that color. And then just on the user growth, obviously, pretty strong this quarter. and I hear the commentary on your expectations for the full year. I'm just wondering if you could talk a little bit about the trajectory of Chime Enterprise over time with some of the partners, and it sounds like more to announce in the near future. How are you thinking about when Chime Enterprise could be a more meaningful contributor to the user growth? And is that something we could see as we progress through the year?

Sure. I'll continue with that one. In terms of an enterprise, we continue to be really excited and there's the reason that it's 1 of our priorities for 2026 as Chris outlined up time. we're seeing the value prop is resonating really well with employers, it's a broader suite rather than just in the way Jack totally 3 with some third offerings out there. And we find that in the employer that we speak to really have a solid installed base of Chime members, which gives us a strong differentiator. And so I think you started seeing that manifesting itself in this steady drumbeat of employees that we've been announcing. And we just announced another few partners earlier this week.

Look, it's a new go-to-market ration for us, and it does take longer than ramping up our consumer channel. But we have a solid pipeline. We expect to be making some more announcements here in the near future. We're not giving specific guidance related to add from enterprise. But again, those are included in our overall guidance. One piece of that I can share is that we and our employer partners, we are not only seeing strong adoption. But what we're actually seeing is higher monetization and greater retention on our enterprise members than we're actually seeing in our direct-to-consumer channel. So -- this is something we continue to be excited about.

We'll move next to Jeff Cantwell with Seaport Research.

I wanted to ask one on your LTV, the CAC. I want to ask if you can drill into that customer acquisition cost side of the equation. Can you maybe talk about what the trend is right now? Because you added 500,000 active members this quarter just really strong. So I'm curious whether you made any changes in terms of how you acquire customers? And then related to that, can you maybe unpack or help us understand what's driving that LTV to tack you're highlighting in the deck? Is that more of the impact when we spending the new products and the penetration is driving LTV higher? Or how should we be thinking about LTV versus CAC?

Yes. Thanks for the question, Jeff. So what I would say first on the new customer acquisition side is very consistent trends that we've seen in the past. Over 50% of new actives continue to come to chime via organic and member-driven channels like referrals that continues to be a star of our show. We've actually made some gains on the CAC side year-over-year. CAC for the full year in 2025 is actually down about 10% relative to the prior year. A lot of the early engagement initiatives that Chris mentioned earlier about making it easier to get started with Chime were big contributors to that. So doing really good, I think, about the overall trajectory on CAC. I think probably even more so, are we feeling good about the LTV gains that we're seeing. And that I think is probably the primary driver here of the strong print on overall LTV to captive north of 8x. A few of the contributors to that have been the overall step-up in transaction margin resulting from our term core migration. That's driven a step-up an additional benefit has certainly been on MyPay loss rate improvement. You've seen that build into our transaction margin as well. And then third, again, particularly among our new cohorts. Chime Card is really resonated. Again, where new cohorts are seeing close to 50% credit mix. And of course, credit arena 2x the take rate compared to So -- yes, I guess, in summary, we're mentioning strong progress on both sides, both CAC and LTV.

Appreciate it. to ask you about ARPA. As you're thinking about 2026, do you mind just telling us what is the right growth assumptions you have for RPM. It seems like you have I'm hearing you, it has good product momentum right now across inside loans and my pay and others. And so maybe just talk about that and what you see as some more immediate drivers impacting RPM over the course of 2026?

Yes. I think, Jeff, a lot of the similar drivers that I mentioned will flow through to 2026 as well from an RPM perspective. So Chime Card, I think, is probably the a great one to start with, again, for 2x the take rate. This new Mie pricing and monetization model that we have will also be a contributor to RPM growth we expect this year, and instant as well is a third contributor to RPM growth this year. So multiple exciting tailwinds of products that we've already launched and are really scaling. And then beyond that, we're also very excited about the new product road map that Chris mentioned, again, across new membership tiers, investing products, joint accounts and other sites.

We'll move next to Adam Frisch with Evercore ISI.

Really nice update here and execution. I want to hit operating leverage for a sec. Obviously, a lot of the algorithm depends on growth on the top line, but are the cost levers still the same heading into the next few years? And if you could talk about maybe the top few biggest levers is core at the top of the list? Or has a lot of that been realized? Where is that leverage going to come from? And then on MyPay, losses reached 100 basis points. Is there still room to improve further? Or is this the level that you want as the right balance between growth and loss?

Yes. Thanks for the question, Adam. So I think the high level answer here is, yes, we do continue to expect a continued trajectory of strong operating leverage. You've seen that across every part of our base, and you should expect to continue to see that across every part of our OpEx base this year. As you mentioned in the remarks, now that we have ChimeCore behind us, and of course, a result of our ongoing AI initiatives. We can just do more. We can move faster. We can innovate more quickly and be more nimble. And that's allowing us to get more done without needing to grow our headcount. So we are excited about continued operating leverage, again, across the business. I'll pass it to Mark to talk a little bit about...

Yes. I think your this is exactly right. We will continue -- everything else being equal, we will continue to see improvements in those loss rates. If we were just lending to the same people because we're going to get more and more efficient. And we're still seeing meaningful improvements in our loss rates and our understanding and Realty is benefiting from more tended members who have more loans. So there would be a natural decrease in loss rates for over time. I think what you're going to see us do though is reinvest some of those in growth of MyPay to continue to expand attach on adoption rates, limits and optimize overall transaction profit from MyPay. So -- my guess is you'll see something probably a little bit higher than that in the future, but it will be far more than compensated by an increase in revenue.

Sorry, Mark, did you say a little bit higher than 100 going forward, but more revenue to show for it?

I think it's going to be in the range. It's going to be in a range a little bit below that to a little bit of our list the specific guidance with respect to where it would be. I think what we're really trying to do is to give you a sense of the -- conceptually, how we're thinking about using made drive greater transaction profit going forward rather than just meeting that 1% loss rate threshold.

Got it. So maybe it flexes up a little bit when you have a big marketing campaign in a quarter, but it goes lower than that when you digest the growth and that's just the way the business is going to run. That makes sense.

We'll take our next question from Sanjay Sakhrani with KBW.

I just want to follow up on some of the questions that were asked for. Maybe just one on the strong uptake on the new products and initiatives, including the fact that you have stronger tax refunds this year. I'm just curious, as we think about what's embedded in the assumptions that you guys have, how much of that have you sort of factored in?

Yes. Thanks for the question, Sanjay. So we are, as I mentioned, expecting an outsized tax season this year as a result, again, of the one big beautiful bill act. It's -- we haven't yet seen the peak of tax season. It is the timing of refunds are a little bit later this year than we've seen in years past. But again, we do expect the magnitude to be higher. And so far, we are seeing that they are higher. If you take a look at the average tax refund as of the end of last week, it was up double digits compared to the average tax refund at the same time last year. So we have more to go, more data to see here in the next few weeks. But so far, that's what we're seeing. And what we're seeing so far is embedded into our guidance.

We'll move next to Darrin Peller with Wolfe Research.

Some of my questions were asked, but I want to hone in a little bit more on the products, the product velocity you guys have been putting out. Obviously, it was very strong with MyPay this year. When we think about the new products that will contribute in your view, the most in '26 incrementally above and beyond the pricing and the MyPay dynamic beyond that, what are you most excited about in the year ahead? And I guess, related to that also on the Chime Enterprise or workplace, it sounds like it's going really well in terms of users, partners to add and employers had. But -- is that incorporated in the $1.4 million of new users? I would hope that would actually be somewhat additive versus last year, where I think you did about $1.5 million. So just how should we think about that too?

Thanks for the question. Look, when we look out over the course of next year or this year, I should say, and what product initiatives we're most excited about having impact in terms of the revenue for the business. I think, clearly, the continued adoption of Chime Card is going to be a major tailwind for the business. We're seeing it in the top of the funnel. We're also seeing more and more of our existing install active debit card using member base take this card as well. And then I think when we launch this next new premium tier, we believe that it's also going to continue to drive even more adoption of this core secured credit card and drive even more spend through that product category, which is going to be really helpful to the business. I would say those are -- those 2 initiatives are probably the 2 most likely to have an impact 2026. I don't know what you'd add to that.

No, I think that's correct. In terms of the enterprise, I think as we indicated earlier, the -- we're not going to give specific guidance related to enterprise ads that are included in our overall guidance. This is a new business. So we're obviously going to be conservative in terms of what we're putting forward with respect to EPS.

At this time, we've reached our allotted time for questions. I'll now turn the call back over to Chris for any additional or closing remarks.

Great. Thank you all for joining me today and thanks to the Chime team for incredible execution. We look forward to spending more time with you all soon.

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

Okay. Great. Welcome, everyone. Glad to have you here this afternoon. Welcome to the afternoon session here at our UBS Global Technology and AI Conference. We're very pleased to have with us today the team from Chime, 2 members of the team joining us today. We have Matthew Newcomb, the CFO, who is here on stage with us. And we also have David Pierce, who is the Head of Investor Relations, who is here in Arizona as well. So we want to say, starting off, thank you to both of you for making the trip here and being a big part of our conference.

Thank you for having us.

All right. Excellent. Well, I think many in the audience here, just looking across, are very familiar with Chime. But for those maybe less familiar, just digging into the company or those may be on the webcast, maybe we can start with the intro to the company.

Sure. So we believe there is a secular shift happening in mainstream America towards digital banking that is helpful, free and easy, and we believe Chime is very much leading the way, leading the charge on that. We created Chime to help the nearly 200 million U.S. adults making up to $100,000 unlock their financial progress. And this is a segment of the market that I think has been very much overlooked by the incumbents, and it's working.

So 97% of our members tell us they have -- we have helped them unlock their financial progress. J.D. Power just came out with a report showing that more people in America are opening up checking accounts at Chime than any other institution. Among people making up to $100,000, we're the #1 destination for people switching their direct deposit relationship.

And finally, Time just named Chime, the #1 bank brand in America. We're not even bank. And we're serving a broad segment of this market. In fact, people making over $75,000 a year are our fastest-growing segment. And I think if you were to sort of zoom out at a very high level for a second, the playbook that we're using, I think, is very similar to digital disruptors in adjacent categories, whether that's Amazon and retail, Netflix and entertainment, Uber and transportation. We are maniacally focused on solving critical needs for our customer base.

We've radically innovated on cost structure, which enables us to deliver better value back to the consumer. We've earned some of the deepest levels of engagement and trust in our category. And I think what that does is it allows us to be a real platform business. We're not a single point solution. We're actually helping our members across multiple areas of their financial lives. And I think it's very much still early days for us on that playbook.

All right. Excellent. Well, one of the hallmarks of Chime is your primary account relationships, right, industry-leading by far. So you've made a point to highlight some of these. And maybe you could talk a little bit about some of the benefits of these relationships, both for you and for the members. And then more importantly, how are you able to convert some of your members over to this primary account status?

I think we have had more success in this area probably than anybody else in the ecosystem. And I think at the core, what has enabled us to do that is this track record of product innovation. We again have been really maniacally focused on the core needs of this segment of the market.

Historically, that's been products like get paid early, SpotMe, our fee-free overdraft product, Credit Builder. I think you've seen our product velocity increase over the past year with launches like MyPay, Chime+, Instant Loans, fee-free tax filing. But I think maybe most exciting is the product velocity still ahead for us now that we have transitioned to ChimeCore, which is our proprietary in-house payment processor and ledger.

The first example of a product that we've launched on this new system is Chime Card, and we've also got lots more in the hopper for next year across joint and custodial accounts, investment products and even more premium membership tiers. And so primary accounts really drive our business. They give us a tremendous amount of engagement. Our average active member does 55 transactions with Chime per month. It drives habitual recurring spend. It enables us to drive high levels of ARPAM without relying on fees and also incredible longevity in our cohorts.

There's data out there that suggests the average tenure of a primary checking account is 15 years or more. We haven't been around that long. We don't have cohorts that old, but we do have cohorts that are now approaching 10 years and they have not asymptoted. That really is the power of owning a primary account. And again, in an ecosystem of a lot of point solutions, it's enabling us to really be a platform. We're serving our members across multiple areas of their financial lives. Our tenured cohorts now use 4 products on a monthly basis, their ARPAM is closer to $350 compared to $250. And that's just on our current product set. Lots more to do for our members over time.

All right. Great. Thank you, Matt. Let's talk about -- you touched on this actually earlier, the 75,000 number and how that portion of your customers are growing faster. Maybe you could talk a little bit more about what you're doing to meet the needs of that higher earning group of customers.

Yes. So first and foremost, there are 200 million people making up to $100,000. There's another 30 million people in the U.S. making between $100,000 and $200,000. And we serve a broad segment of this universe today. I think in the past, there's probably been a little bit of a misconception that we serve the unbanked. That is not true. We serve the unhappily banked. 90% of our members come from prior banking relationships when they come to Chime.

If you really look at the financial reality of this segment of the market, the reality is that a broad segment faces real financial challenges. 2/3 of America lives paycheck to paycheck. Even among people making more than $100,000 per year, about 50% of them live paycheck to paycheck. And so that's why I think our products, credit builder, getting access to short-term liquidity, no fees, that's why it's resonated with such a broad segment of the market. That being said, it is certainly true that as you move to the higher end of the segment, there are other value props that rise in importance. It is why we have things like high-yield savings. We offer 3.5% on high-yield savings accounts, 8x the national average. It's why we just launched Chime Card, which offers rewards, 1.5% cash back on rotating categories.

It's why next year, we're going to launch things like, again, joint and custodial accounts, investment products, even higher membership tiers. And so we are having some success with this, as I mentioned -- as you mentioned, $75,000 plus is our fastest-growing segment. And we're serving them well, too. We retain this segment of our member base at essentially the same rate as our average active member.

So there's no real notion of members moving on from Chime or graduating from Chime. In fact, it's quite the opposite. Our members are growing with Chime. And I think you see that in our cohorts where they adopt more products over time, and we're able to drive higher ARPAM -- rates of ARPAM over time as well.

All right. Excellent. We're going to go to another big topic for Chime, which has been the ungating efforts that have been going on for the past year or so. Maybe you can share more about why you decided to pursue this strategy, this ungating strategy and what have the benefits been thus far?

Yes. So historically, we've been really focused on earning and bringing our members into Chime and having them adopt us as a primary account right out of the gate. And I want to be clear, that remains our focus today.

And as I mentioned earlier, we are the #1 destination among people making up to $100,000 switching their direct deposit relationship in the U.S. That being said, doing that's kind of like getting married on the first date. And we know that, that doesn't necessarily work for everybody. People might want to try before they buy. But the Chime experience as a nondirect depositor hasn't really been that good, to be honest.

We haven't really given members a lot of reason or ways to try before they buy. And so we felt like we were just leaving some opportunity on the table. So we've made a deliberate effort over the last year or so to make it easier to get started with Chime. We've done things like ungated certain value props from the direct deposit paywall, so now you can get credit builder without being a direct depositor as an example.

We made it easier to fund your Chime account with a debit card instantly, with Apple Pay, with mobile check deposit. And these things are working. They're already having a positive impact on our business. We're seeing some of the highest first-time activation rates among new enrollments that we've ever seen as a company. That's helped us accelerate our new member growth.

We've added 1.6 million new actives over the last year. That compares to 1.2 million for the prior 12 months. That's helped us bring down our CAC. And at the same time, we're also monetizing these yet to be primary accounts in a more material way. The transaction profit per active member that's not yet a primary account is up about 20% versus where it was a year ago. So all this amounts to actually better unit economics.

Our recent cohorts are tracking to 5- to 6-quarter transaction profit payback versus 7 quarters or so previously. So it's already having an impact. I will say, though, ultimately, the goal is the same. The goal is to convert these members to a primary account relationship over time. And we're actually seeing some early success with that.

We're seeing an increase in the number of people that are converting to Chime at a later stage, late-stage conversion to direct deposit. And we think there's still lots more we can do there. So I think zooming out, the way to think about this is an important evolution of our new customer acquisition funnel, but it's just that. It's an evolution. It's not a change to the ultimate strategy of earning primary account relationships that drive this very sustained return ROI on our new customer acquisition spend, 8x LTV to CAC. That really remains the core focus of the business.

All right. Excellent. We're going to move on to another topic. You alluded to this earlier, but we can expand upon it. So the competition with the incumbent banks, which is really who your primary competitors are. Maybe talk a little bit about that. Specifically to that, one of your tools to compete, as we know, is ChimeCore, right? So maybe you could talk a little bit about what ChimeCore means and how it benefits you in that competition, but then also some of the financial aspects associated with ChimeCore as well.

So we like to say that we fish where the fish are. And the reality is that pretty much all primary accounts in America sit at the incumbent banks. And we feel like we've got some real structural advantages that are enabling us to compete so well with these institutions. The first is cost structure. One of our nation's leading bank CEOs in his shareholder letter earlier this year said that the cost to maintain the majority of his accounts is higher than the revenue that he earns from them.

In contrast, we have a $250 ARPAM that we monetize at roughly 70% transaction margin. Our cost to serve is about 1/3 or 1/5 that of an incumbent bank. I don't know if there's a better summation of our opportunity, honestly, than that. And ChimeCore, to your question, has played a key part of this. We have now transitioned our portfolio entirely to ChimeCore, again, our own payment processor and ledger, and that's reducing our processing costs by over 50%.

The second advantage is really around our focus, our focus on serving the needs of this customer segment. We are not trying to say that the traditional banks are out to get the everyday person or the mainstream American, but they just don't have a lot of incentive to innovate for this customer when they're upside down the unit economics. And I think the product experience and product suite really shows that.

That's all we care about. That's why we've been so focused on launching things like SpotMe, Credit Builder, get paid early. These are the things that matter most to everyday Americans. And then lastly as brand. We now have unaided awareness that is rivaling essentially the top 3 banks in America.

But I think more importantly is that everyday folks think about Chime or more prone to think about Chime is solving their most critical financial challenges. They really are thinking about us as the key for their primary financial needs. So yes, these are some of the key advantages. I think the other piece of ChimeCore is that it's enabling us to innovate faster. I talked about product velocity. That is a key piece of how we think ChimeCore is going to stand us in good stead going forward.

All right. ChimeCore covered well. Thank you. Let's move on to another exciting topic for Chime, which is Chime Card. So you talked about this a little bit earlier as well, but maybe talk a little bit about what you're seeing with this product and talk about the benefits that the company could see over time. And then if you don't mind, I'll have a quick follow-up.

Yes. So Chime Card is our latest innovation. Again, we built Chime Card on ChimeCore. It's really the first product that we launched on the new core system. And the way to think about it is it makes banking with Chime that much more rewarding. So Chime Card offers -- is a secured credit card and it offers direct depositors 1.5% cash back on a rotating set of categories. It also comes with a premium card design. And of course, as a secured card helps our members build their credit.

This really comes on top of all the benefits that you get from Chime+ available to direct depositors like [ fee-free credit building, early access to your pay through MyPay, free overdrafts, 8x the national average high-yield savings rate, priority member support. This is a combination of value props that is just unmatched relative to what you could get in an incumbent institution.

And so we're quite excited about Chime Card across a few different actually dimensions of growth. The first is take rate. So Chime Card is a secured credit card. Net of rewards, it earns about 175 basis points on transaction volume. That's about 50% higher than our average take rate in the portfolio today.

The second dimension is new customer acquisition. We think Chime Card is potentially a great new customer acquisition tool. We're just starting to promote it now. You'll see it in some of our holiday ad campaigns. So stay tuned for that. And then third is engagement. Rewards on Chime Card are only available to direct depositors. And so we think this is a great additional incentive for people to bring more of their financial lives to Chime, spend with us and then get the benefit.

This is part of a broader strategy, again, to help our members understand that as they do more with Chime, they get more with Chime. And so we're quite excited about some of the early results among people who are adopting this product, new cohorts of members. They're using it for about 80% of their spend. So it's early days. We have a lot more to do. It's a very new product, but we're very excited about this as a growth lever.

Great. And that follow-up is, so if a new member were to go to Chime today and sign up, can you talk about the onboarding flow and how this card is presented to them and maybe just directionally, the proportion of new customers that are adopting the Chime Card?

Yes. So if you are a new customer coming to Chime, in the onboarding flow, you're going to see Chime Card first. That is now the primary option that we are surfacing to you as a customer, kind of all the benefits of the existing product, but of course, with rewards, the ability to build your credit and a new premium card design.

So as a result of that, we're seeing pretty solid adoption rates among new cohorts of members coming into Chime. There's always going to be a portion of members that prefer debit. That's just a sort of secular reality. But by surfacing this early in our members' journey when they're just starting their habit formation, we do think there's a great opportunity to drive attach rate on this product among new cohorts of members.

Existing members, we are also beginning to give them the opportunity to adopt this product. They're a little bit deeper in their habit formation, that's probably a little bit of a harder piece to solve, but it is something that we're also going to work on over time as well.

All right. Excellent. Let's move on to some of the liquidity products. So clearly, Chime is a payments-based business, right? You're driven by largely nondiscretionary everyday spend. But in the recent past, you've moved a little bit more into some of the liquidity products such as MyPay and Instant Loans. And maybe you could just talk a little bit about the advantages to your business for offering those. And I would preface it by saying the way -- my word, it's not yours. The way we like to describe it is it's CAC that pays for itself and then some, and it certainly drives the core business and the core revenue.

Yes. So you're exactly right. The core of our business is this asset-light payments-driven business focused on nondiscretionary spend. So 2/3 of our revenue comes from interchange-based fees and about 70% of the transaction volume driving that revenue is in nondiscretionary categories. The biggest ones being gas, groceries, restaurants, the type of spend that I think sticks with you really regardless of the macro environment. I think that gives our model a ton of resiliency.

At the same time, when you own direct deposit relationships, you do get tremendous advantage in offering members access to short-term liquidity for a couple of reasons. One, we have a ton of data on our members. We see essentially all their inflows and all of their outflows.

And number two, we have a privileged repayment position. We are essentially the top of the repayment stack. We offer members access to MyPay, to SpotMe, to an Instant Loan. The next time their direct deposit comes in, we get paid back first. And that is a fundamentally different risk profile than I think is typical in -- at least the way people typically think of consumer credit.

In some ways, the way I would say it is we sort of flipped -- we've sort of done a 180 on the way these businesses often work, which is typically, you think about the sort of top of the funnel adverse selection game. We acquire a direct deposit relationship first and then only offer those members access to liquidity. So again, this is a very different risk profile. It's very short duration.

SpotMe repays in less than a week, MyPay in less than 2 weeks. It's small dollar and highly diffuse and again, underwritten by direct deposits. And so yes, I think we've got a lot of advantages in what this essentially amounts to in the end is an ability to price our products very competitively while keeping our loss rates low and our risk profile low.

And so today, these products are about 20% of revenue. We think it's an awesome opportunity of continued growth for us. But I wouldn't go so far as to sort of think that Chime is going to transform into a lend-centric or balance sheet-heavy business anytime soon.

Excellent. All right. Covered very well. Let's move on to the next one. This is kind of an industry question, kind of a Chime-specific question. So a little bit of the state of the consumer and then the resilience built into the very nondiscretionary spend associated with Chime's business model. So sometimes there's talk of this K-shaped recovery in the economy or K-shaped economy. But you guys shared that on your Q3 call, at least at that time, that you were seeing resiliency. Maybe you could talk a little bit about what you're seeing thus far throughout the quarter? And then longer term, that resiliency built into the model.

Yes. So we serve obviously millions of people in a primary account capacity. And so we think we've got a pretty great real-time view into the state of the everyday consumer. And I do feel like we've been a broken record on this, but the gist of it is we just continue to see a lot of resiliency despite all the headlines around this.

We talked about how nondiscretionary forms the majority of our spend, but discretionary continues to hold up well. In fact, it's growing faster than nondiscretionary. We saw, for example, in Q3, a number of quick service type restaurants talk about lower foot traffic. They kind of alluded to that being macro driven. We look at our data for those particular names, we see the same thing, but we don't see it for restaurants as a whole.

Restaurants as a whole have been very resilient and steady and continue to grow at a very steady rate. So we're not quite sure that's macro related, I guess, is one way to say it. We just had Black Friday. Black Friday, too, was very much in line, I think, with what you're hearing from others, a solid report. We took a look at apparel and merchandise spend, and that was up among people shopping on Black Friday, about 10% year-over-year. That was a little bit higher growth than what we saw last year.

So overall, again, very steady trends on that front. Beyond spend, we also see a lot of steadiness in employment. We have not seen -- despite even this morning's report from ADP on payroll, we've not seen an uptick in unemployment insurance coming into Chime. Account balances continue to grow year-over-year. Usage of our liquidity products remains very consistent, loss rates very consistent. So again, a lot of steadiness in the business. And just the thing that zooming out, what I would say on this, too, is just -- we just have a model that I think is -- can work well both in good times and in tougher times. Again, nondiscretionary spend. To the extent that there is joblessness and our members receive unemployment, it's probably going to come to Chime. We're their primary account. We saw this in droves in the early stages of COVID.

Our liquidity products are very short duration, so we can very nimbly adjust if we do see a blip in the night. And I think more broadly, oftentimes, when times are tougher, people sort of take stock of what they're spending on and are a little bit more thoughtful about that. We feel like we're the lowest cost producer in this category, the lowest cost options in the market. And in many ways, stand to benefit when times are tougher. They need things like access to short-term liquidity, credit building even more. So good in good times, but maybe even great in tougher times.

All right. Excellent. We're going to move on to another exciting topic, which is Chime Enterprise. So you've already announced a few big partners, including Workday. Maybe talk a little bit about these and how they fit into the overall strategy with Chime Enterprise.

Yes. So as a reminder, we acquired a small company called Salt Labs late last year. Salt Labs was founded by the founding team of DailyPay, which really pioneered the earned wage access B2B space. And so with that acquisition, we established Chime Enterprise and the goal of Chime Enterprise is to sell the suite of Chime products as a holistic financial wellness solution to employers for them to offer to their employees. And what's exciting for Chime is that this, we believe, offers us a chance to establish a new strategic, low-cost and kind of evergreen channel for new customer acquisition growth coming to Chime.

Early days, we're excited by the progress. So we've announced a couple of initial partnerships, both with Workday and UKG, obviously, large human capital management platforms. The way to think about that is that this really enables any Workday or UKG customer to pretty seamlessly switch on Chime Enterprise to offer to their employees.

And then we've also announced 3 direct deals with employers. So [ Ubiquiti, ETEC ] and a company called Maxwell Group, on the smaller side so far. And those companies are still ramping up. Employees are adopting the product. But I would say, right out of the gate, the adoption that we've seen has surpassed our expectations. We've been really excited about that.

And I think what makes us excited about this as a category going forward is we think we've got a couple of really strong advantages to compete. Number one, most of the players in this space are kind of monoline players. We're going to market with a full suite of services. Number two, cost. MyPay at Work customers get access to up to 100% of their earned wages for free. That is very different than the monoline players that are charging upwards of $40 a month sometimes. And then third is our brand.

When we go talk to some of these employers, a high single-digit percentage of their employees are already banking with Chime. We're sort of a recognized brand. And so we're really excited about this. This is an enterprise sales cycle. It takes time, but we're excited about the pipeline and more to come on that.

Excellent. All right. Well, in the time that we have left, maybe we could just group the final 2 questions together because they kind of go together. But we'll talk a little bit about the growth framework. You've highlighted many of the drivers during this presentation, but maybe just highlight some of the growth levers that are most important to you, Matt. And then lastly, around your AI efforts and how they relate to operating leverage and some of your potential long-term profit margins. Yes.

There's really 2 big growth levers in our business, active members and ARPAM. Actives today, we've got 9 million. There's 200 million people making up to 100,000. Just getting started, we think. We've accelerated our pace of active member growth. We've added 1.6 million over the last year compared to 1.2 million the year prior. And we're very excited about new product initiatives, including enterprise to continue to drive growth.

On ARPAM, when you own a primary account relationship, you are in this very unique position to be able to cross-sell additional products. And I think we've proven that over and over with high-yield savings, with Pay Anyone, with SpotMe, most recently certainly with MyPay, which grew from 0 to a $350 million revenue run rate product in a year.

That's really the power of having a customer relationship that is in the app every single day, again, transacts with us 55 times a month and thinks of us as their central financial hub. And when you put those 2 things together, again, you get this cohort performance that almost looks a lot like a subscription business. It just continues to spin off transaction profit year after year. Again, cohort is now 10 years old without ever asymptoting. And so we're really excited about still being early days across, I think, both of these dimensions.

On the AI side and margin side, I think if you were to boil down the unit economics of our business, what we're essentially doing is we're scaling a highly recurring portfolio of payments revenue that monetizes at roughly 70% transaction margin, retains on a net dollar basis above 100% year-over-year over a largely fixed expense base. There's a lot of operating leverage in a model like that. And I think you've seen that from us. You've seen adjusted EBITDA margin grow substantially. You've seen OpEx as a percentage of revenue come down substantially.

And we think that's only going to accelerate from here, partly because of AI and partly because we now have this major migration to ChimeCore behind us. On the AI side, I think where we're seeing the biggest impact of the business today is in our customer support function.

So we launched a Gen AI chatbot in Q1, a Gen AI voicebot in Q2. And most recently, in Q3, we pointed Gen AI at one of the most labor-intensive parts of our customer support function, which are dispute investigations. And the impact is awesome. It is basically cutting agent handle time in half, but it's also providing a better member experience. It's helping our members get their disputes resolved more quickly. And the impact of that, the numbers sort of speak for themselves.

We've seen the highest customer service NPS scores that we've ever seen as a company in Q3. And so we're just at a point now where we don't feel like we need to grow our OpEx base as quickly as we have historically to meet our ambitious growth targets. We're going to keep headcount roughly flat over the next year. And you should expect to see that translate to an accelerating profit margin story, 9 points improvement in Q3. We expect 11 points improvement to adjusted EBITDA margin in Q4, mid-50s incremental, which we expect to grow even further in '26.

All extremely clear. Matt, excellent job. Really a pleasure having you up here and having both you and David here in Arizona. So thank you so much for being a big part of this event.

Thanks, Tim.

Good afternoon. Welcome to Chime's Third Quarter Fiscal 2025 Earnings Call. [Operator Instructions]

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 like to turn the call over to David Pearce, Vice President of Investor Relations and Capital Markets. Thank you. You may begin.

Good afternoon, everyone, and thank you for joining us for Chime's Third Quarter 2025 Earnings Conference Call. Joining me today are Chris Britt, our Co-Founder and CEO; and Matt Newcomb, our CFO; Mark Troughton, our COO, will participate in Q&A.

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 our 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 those risks and uncertainties are described in our SEC filings, including our Form 10-Q filed on August 11, 2025. 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.

With that, I'll hand it over to Chris.

Thanks, David, and thank you all for joining us. Q3 was another strong quarter for us, and I'm so proud to lead this talented team that has made Chime an industry leader in banking mainstream America. Month after month, more everyday people are choosing to move their banking relationship to Chime than any other fintech or bank. In fact, just last month, J.D. Power reported that, in Q3, more people opened a checking account at Chime than any other U.S. company.

And we're still just getting started. We're up to 9.1 million active members in a market of nearly 200 million people earning up to $100,000 per year. We're at a $2 billion revenue run rate in an over $400 billion market.

There is a secular shift happening in mainstream America towards digital banking that's helpful, easy and free, and Chime is leading the way. Our strong Q3 financial and operating results demonstrate our progress. We delivered 29% year-over-year revenue growth, despite lapping the initial launch of our blockbuster new product MyPay. We also improved our adjusted EBITDA margin by 9 points year-over-year. Both revenue and adjusted EBITDA exceeded guidance for the quarter. Driving this growth was a 21% year-over-year increase in active members to 9.1 million, a sequential increase of approximately $400,000 from Q2. Given this momentum, we're raising our Q4 and full year guidance for revenue and adjusted EBITDA.

Despite the headlines about macro risks and consumer health, we see continued resilience among our members. Our business is powered by long-lasting primary account relationships. We maintain low credit risk through our short-duration liquidity products underwritten by recurring direct deposits. Over the last decade, our business has proven to be resilient across macro cycles. In fact, Chime can shine most when times are tough. In softer macro environments, consumers often become more value conscious, and we believe that Chime offers the most compelling banking experience and the best value.

Our members continue to show strong financial health with steady growth in spending among tenured cohorts, higher average deposit balances and consistent use of our liquidity products with lower loss rates. Importantly, we're not seeing any signs of unemployment pressure within our member base.

Today, I'll share some highlights from Q3 and what continues to set Chime apart, including our category-leading products, trusted brand and cost to serve advantage. Starting with product.

In September, we launched our new Chime Card, our latest innovation to make Chime the best checking account for mainstream America. This new card makes fee-free banking with Chime even more rewarding. With 1.5% cash-back on everyday spend categories for direct depositors and a Titanium Card option, we're now delivering an even more premium banking experience for our members.

Chime Card builds on the strength of Chime+, which offers our direct deposit members a 3.5% interest rate on savings, 8x the national average. It also offers fee-free overdrafts, access to your paycheck on-demand with MyPay, free credit building and priority member support.

We don't believe any incumbent offers consumers anywhere near this level of utility and value, including higher earners. In fact, in Q3, members making $75,000 or more annually were our fastest-growing consumer segment.

The new Chime Card is a secure credit card that helps our members earn rewards while improving their credit score. Because it's a credit card, we earn 175 basis points of interchange, which is over 50% higher than our average Q3 take rate.

The results in the first 2 months are promising. New members who adopted Chime Card are already using it for 80% of their spend. Portfolio-wide spend on our credit card products represents only 16% of total purchase volume as of Q3, so we're very excited about the growth potential as volume shifts to credit spend.

We've also enhanced our short-term liquidity products, including MyPay. In the year since we first rolled out this product, MyPay has proven to be another essential feature that's loved by our members for its convenience and low cost. MyPay is now an over $350 million annual run rate product, with a transaction margin of over 45%. We've more than quadrupled MyPay transaction margin in just the last 2 quarters. These results are a case study in product innovation, only possible due to Chime's primary direct deposit relationships.

In terms of our brand leadership, Chime continues to gain momentum, setting us apart from both legacy players and potential new entrants. In Q3, our unaided awareness in the online banking category reached 41%, up 12 points since 2023, with the fastest growth among Americans earning $50,000 to $100,000 annually. Chime now only trails the 2 largest banks in unaided awareness for online banking and is ahead of Wells Fargo, Citi and every other national bank.

And just last month, Time released their latest national survey and ranking of the top U.S. brands by category. For the first time, Chime was ranked the #1 banking brand in the U.S. according to consumers for 2025, ahead of all major banks and fintechs, and we're not even a bank.

The final advantage I want to recap is the significant progress we've made in our cost to serve. Chime's cost to serve is roughly 1/3 to 1/5 of an incumbent bank, and this advantage continues to improve. Over the last 2 years, we've reduced our cost to serve by 20% while growing ARPAM by 18%.

Our continued operating leverage is clear in our Q3 financials, which Matt will discuss. With our scaled model and the growing benefits we're realizing from AI, we don't believe we need to grow OpEx nearly as fast as we have historically to fuel our growth. In fact, we expect to keep head count flat over the next year. This should translate to significantly slower OpEx growth in 2026 versus 2025.

A major contributor to our cost to serve improvement has been our investment in ChimeCore, our proprietary transaction processing core and ledger. I'm excited to announce today that we've completed our migration ahead of schedule, and we're now 100% on our own technology stack. ChimeCore sets us apart from both traditional banks and fintechs that rely on costly and often inflexible third-party solutions. Not only does ChimeCore provide efficiency gains that Matt will share, but it will continue to accelerate shipping velocity, proprietary innovation and our AI advantage.

ChimeCore allowed us to launch our new Chime Card, a key driver of growth for 2026 and beyond. And with ChimeCore fully live, it unleashes the next era of innovation for Chime to extend our league as the go-to banking platform for everyday Americans. Our near-term product road map includes a new, more premium membership tier that will launch to reward our most engaged and higher-earning members: joint accounts, custodial accounts and investment products. And that's just some of what we have on the docket for 2026. These new innovations will give our members even more reasons to rely on Chime for all aspects of their financial lives across spending, savings, borrowing, investing and more.

I also want to share a few updates on other emerging growth areas, including our early engagement programs in Chime Enterprise. Our early engagement strategy is all about making it easier to use time right out of the gate and is helping us drive strong member acquisition at increasingly attractive unit economics. We've ungated our credit-building features, added more deposit options like inbound instant transfers and funding with Apple Pay. We continue to experiment with offering MyPay before members direct-deposit, and it made it easier to transfer money from Chime with outbound instant transfers, or our OIT service.

In Q3, the combination of these new initiatives helped reduce CAC while allowing us to monetize relationships earlier and in new ways. There's more work to do, but we're also encouraged by the early signs of success converting these new Chime members to direct depositors over time, especially those who want to try before they buy.

Lastly, on China Enterprise. I'm incredibly bullish about the impact this new business unit will have on our growth. We're seeing early traction in the employer channel, bringing Chime solutions to employees of our enterprise partners. We recently announced partnerships with both Workday and UKG, 2 of the largest global human capital management platforms. These integrations allow their employer customers to seamlessly offer Chime Workplace to their employees. In Q3, we signed several new employer partners, including Maxwell Group, Ubiquity and Etech. While still early days for Chime Enterprise, employee adoption rates of direct deposit has far exceeded our expectations. Enterprise sales cycles can be long, but I'm excited by the momentum in our pipeline.

Our business continues to fire on all cylinders and is poised to deliver an exceptional 2026. That said, we do not believe our current stock price reflects the strength of our business. So today, we're announcing a $200 million share repurchase authorization, which we expect to implement in the coming months. We continue to have a robust cash position and a strong outlook on free cash flow generation, putting us in a great position to buy back shares at attractive values while continuing to invest in the growth of our business.

We are well on our way to deliver on our vision to transform the way mainstream Americans bank, helping millions achieve lasting financial progress. I'm deeply proud of this generational company we're building. We have a brand that's loved and already rivals the largest banks in the world with more consumers choosing us than any other institution. The future of banking belongs to Chime.

With that, I'll turn it over to Matt.

Thanks, Chris. Good afternoon, everyone. Thank you all for joining us today. I'm excited to discuss our strong third quarter results and outlook.

In Q3, we delivered 29% year-over-year revenue growth, and our adjusted EBITDA margin rose to 5%, up 9 percentage points year-over-year. These results exceeded our previous guidance, and with this momentum, we're raising guidance for Q4 and full year 2025.

The platform we're building at Chime gives us multiple ways to win in the large market we serve. I'd like to provide a few highlights about our strong performance across actives, purchase volume, ARPAM and transaction margin in Q3.

First, we continue to see strong new active member growth at attractive and improving unit economics. In Q3, thanks in part to our early engagement initiatives, we grew active members by 21% year-over-year, approximately 400,000 sequentially, while reducing CAC by over 10% year-over-year for the third consecutive quarter. This has resulted in faster paybacks. Recent cohorts are trending to a 5 to 6-quarter transaction profit payback, a reduction from the 7-quarter payback we've seen previously.

Of course, the real magic in our business is the stickiness of our cohorts for years and years beyond CAC payback, which drives an LTV-to-CAC profile of 8x or higher, powered by the consistent recurring engagement of our primary account relationships. Industry data suggests the average life of the checking account is over 15 years. Our oldest cohorts are now nearly a decade old and showing no signs of slowing down.

Second, purchase volume. We have a resilient payments-based revenue model driven by our members' top of wallet, recurring and largely nondiscretionary spend. Like Chris mentioned, despite the concerns of our macro, we're seeing very consistent spend trends among our tenured cohorts. I want to quickly highlight a product enhancement that is having a positive impact on the business: outbound instant transfers or OIT.

While the majority of our members use Chime as their primary account, some also maintain secondary accounts for activities like investing or peer-to-peer payments, especially those who are new to Chime. Historically, funding those accounts meant visiting these other apps and pooling funds using their Chime cards. These transactions are included in our purchase volume or PV.

With OIT, members can now push money instantly to external accounts directly from the Chime China app, offering a faster, more convenient member experience. OIT volume is not included in PV. We're seeing members shift volumes to this new experience. Since launching in January, OIT volume has scaled rapidly to $640 million in Q3. This mix shift to OIT tempers our reported PV growth but actually serves as a tailwind for our overall business. We earn a 1.75% fee on these OIT transactions, far higher than our take rate on debit purchase volume transactions.

In Q3, purchase volume totaled $32.3 billion, up 15% year-over-year; and $32.9 billion, up 18% year-over-year, when combined with OIT volume. This drove payments revenue growth of 16% year-over-year in Q3 and 20% when combined with OIT revenue, which is included in platform revenue, a very consistent pace of growth with the first half of the year.

Third, average revenue per active member or ARPAM. Primary account relationships drive our already strong ARPAM, and it continues to power higher alongside increasing levels of product attached. In Q3, ARPAM grew 6% year-over-year to $245, and we continue to see growth across every cohort, with our [ seeding ] cohort now at over $350 ARPAM. This growth coincides with continued growth in attach rates across our expanding product ecosystem.

In Q3, 13% of our active members use 6 or more products on a monthly basis, up from 5% 2 years ago. This segment of members has an ARPAM of $466, nearly double our average active member and up 15% over the last 2 years. Said another way, not only is the breadth of Chime's opportunity massive with 9.1 million actives among 200 million everyday Americans, but so is the depth. We're serving our members across multiple areas of their financial lives, and there are so many more areas left to go.

Finally, we continue to make progress on transaction margin. A few highlights to call out on this front. First, as Chris mentioned, we completed our migration to ChimeCore, a massive unlock for future product velocity and continued cost efficiency. We expect this final step of our migration to increase our gross margin to close to 90% in Q4.

Second, MyPay loss rates fell below 120 basis points in Q3, a more than 20 basis points sequential improvement from Q2, representing continued faster-than-planned progress to our 1% loss rate target. MyPay transaction margin is now over 45%.

Moving to the rest of our P&L. We continue to drive strong operating leverage in our business. In Q3, non-GAAP OpEx grew just 7% year-over-year, down from 14% growth in H1 and the slowest rate in years, even as we continue to put substantial growth capital work at 8x LTV-to-CAC. As a percentage of revenue, non-GAAP OpEx fell by 14 percentage points year-over-year in Q3, with continued operating leverage across every OpEx category.

Along with our progress on MyPay transaction margin, this translated to a significant acceleration of our adjusted EBITDA margin growth, improving 9 percentage points year-over-year in Q3, well ahead of what we delivered in H1. And we expect this trend to continue in Q4, where we now expect 11 percentage points improvement to our adjusted EBITDA margin year-over-year and an incremental margin in the mid-50s, even higher than the mid-40s we guided to last quarter.

More specifically on our outlook, we're pleased to raise our fourth quarter and full year guidance, driven by continued broad-based strength in the business. In the fourth quarter, we expect revenue between $572 million and $582 million, resulting in year-over-year revenue growth between 20% and 23%. This exceeds our previous guidance, which forecasts 20% growth at the midpoint.

We expect adjusted EBITDA between $43 million and $48 million and an adjusted EBITDA margin of 8%. This also exceeds our previous guidance of 6% margin at the midpoint.

There are a few things to keep in mind about Q4. First, we expect to see steady progress on active member growth at attractive ROI with continued positive results from our early engagement strategies. We expect to continue to see strong growth in OIT and, therefore, a continued mix shift of revenue from payments to platform in Q4. This, of course, is a positive for our financials given the higher take rates on OIT volume.

As you'll recall, we are now lapping last year's launch of MyPay, which began ramping in Q3 '24. We we'll fully lap the launch in Q4 '25, which is what is driving some further normalization of our top line growth rate in our Q4 guide.

Finally, as part of our termination agreement with our third-party processor, Galileo, we will incur a onetime expense of approximately $33 million excluded from adjusted EBITDA. We originally expected to recognize this expense in Q1 '26, but with our ChimeCore migration concluding ahead of schedule, we now expect to recognize this in Q4. We will maintain a contractual relationship with Galileo through March 2026.

For the full year, we expect revenue of $2.163 billion to $2.173 billion, and adjusted EBITDA of $113 million to $118 million, above our prior guidance.

So we're pleased with our strong Q3 results and outlook for Q4, but we're even more optimistic about 2026 and beyond. While we won't give formal guidance for 2026 until our next earnings call, we believe the strong progress we're seeing across the business is setting the stage for continued strong top line growth, additional transaction margin expansion and substantially slower OpEx growth, resulting in a step-up in our adjusted EBITDA margin that is above our previous expectations. Specifically, we expect our 26% incremental adjusted EBITDA margin to be above the mid-50s we're guiding to for Q4 of this year.

Finally, as a reminder, our full IPO lockup ends on Friday morning, the beginning of the second full trading day following today's earnings announcement.

With that, I will open it up to Q&A.

[Operator Instructions] And we'll take our first question from Tien-Tsin Huang from JPMorgan.

Really nice results, guys. So happy to see it. On the member growth, I want to ask about that and what you're seeing competitively there. Any change in competitiveness? It sounds like CAC was still an improvement there, but I'm curious what you're seeing on the ground and any learnings from widening the funnel, that kind of thing.

Tien-Tsin, thanks for the question. Yes. Look, we continue to see really strong momentum and we feel good about our competitive position. As you heard in the opening statement, we are the #1 destination for people that are switching their direct deposits for people that make up to about $100,000 a year. And just in the past couple of weeks, J.D. Power reaffirmed our leadership in that area.

So I think it's fair to say that we've broken out as a top brand in banking, and that fuels a lot of our growth in business, including our referral channel, our organic channel, which continue to power over 50% of our new active member growth.

In opening statement, we talked about 21% growth in our active members. But if you look at the last 12 months, we've added 1.6 million actives, and that's an acceleration from the 1.2 million actives that we delivered in the 12 months trailing Q3 '24.

So good top-of-the-funnel growth, and we're continuing to see strong conversion rates on the direct deposit right out of the gate, which of course, is what we're always optimizing for. But at the same time, we're seeing positive impact from our early engagement strategy, which makes it easier for people to start using Chime even if you're not ready to direct-deposit on day 1, for example, things like making it easier fund to build your credit and even use a version of MyPay before you start doing direct deposits.

So we're feeling good about the results from these initiatives. And maybe, Matt, I don't know if you want to share any color on that, some of those results.

Yes. I think -- thanks, Chris. The high level here is that the combination of these early engagement initiatives is really already having a positive impact on the business. We're seeing, among new checking account openings, a record number of people activating with us out of the gate. We're seeing lower CAC, as Chris mentioned, down 10% -- over 10% year-over-year for the third consecutive quarter.

At the same time, we're monetizing at higher rates. So our recent cohorts continue to engage with us in new ways. They're attaching to more products earlier in their tenure. I think you see this in the overall growth of our ARPAM.

But we're also seeing specifically, for those members who haven't yet engaged with us in a direct deposit capacity, we're seeing, for that segment of members, their average transaction profit is up about 20% versus last year. So combined with what Chris mentioned, which is continued strong conversion to direct deposit among those people that are ready to do so right out of the gate, the result of all of this has actually been an improvement to our cohort performance. And more specifically, that our most recent quarterly cohorts are tracking to closer to a 5 to 6-quarter transaction profit payback, compared to closer to 7 quarters in previous cohorts.

We'll take our next question from James Faucette with Morgan Stanley.

I wanted to ask a couple of follow-up questions to that. It seems like payment volume per user is down a little bit. But we haven't really seen a big increase in the pace of quarterly user or quarterly adds. Some of that softness seems to be -- or some of that like kind of sequential change seems to be un-gating perhaps, or at least that's what it was previously. Is that still the primary dynamic? Or any other nuance around consumer health within the base that we should be sensitive to?

Yes. Let me touch on that. Thanks for the question, James. I think the other point to call out here is, first, number one, we're actually seeing very consistent overall transaction volumes year-to-date. The one thing that is a newer trend is the very fast adoption of outbound instant transfers, or OIT. This is what we talked about in the prepared remarks a little bit earlier. This has grown even faster than our own internal expectations. So as we mentioned earlier, OIT enables members to instantly push money to secondary accounts directly from the Chime app.

Historically, the only way to move funds instantly was for our members to go to their secondary accounts and pull money using their Chime cards. That's a transaction that's very similar to a purchase transaction, and it earns us interchange. The result of this is a mix shift from payments to platform revenue. And that's because the volume from the historical way to make instant transfers is included in purchase volume, whereas OIT is separate from purchase volume and captured in platform revenue.

So the much better and far more like-for-like way to look at this is to take a look at combined purchase volume and OIT volume. And when you do that, what you see is that while payments revenue grew 16% year-over-year in Q3, payments in OIT platform revenue combined grew 20% year-over-year in Q3. And that's been a very consistent pace of growth compared to what we saw in Q1 and Q2.

Let me pass to Chris to talk about a little bit what we're seeing on the consumer.

Yes. I mean the consistent growth that Matt mentioned, I think as it relates to broader consumer health, I think, despite what you hear in the headlines around macro risk and health of consumers, among our members, we're seeing -- and this is obviously a very mainstream consumer, we're seeing spending that's remaining robust, and we're not seeing signs of a pullback.

As you all know, about 70% of our members purchase volume goes to everyday essential purchases. And when we look at our most tenured members, the growth in their discretionary spending is actually outpacing the growth in their essential spending. So we think that suggests a healthy consumer, somebody who's confident to spend on those nonessential items and we're seeing year-over-year increases in categories like restaurants with DoorDash and Uber Eats. Our members are willing to pay to order in, but they're also going out. They're using Lyfts, they're using Ubers. We're seeing double-digit growth in places like Amazon, Costco, triple-digit growth in newer entrants like TikTok Shop.

And at the same time, we're seeing continued increases in our members' average balances, which are up nearly double-digit year after year. So I think despite all the noise, our data suggests that consumers are healthy, consumers are remaining employed, and in general, appear to be on a pretty steady ground.

Great. Appreciate that, Chris, Matt. And then just a quick question. The margin improvement was really impressive. And it looks like some of that is coming from the improved loss rates on MyPay. But can you give us some updated thinking on how we should be anticipating the path to margin expansion from here? You also highlighted kind of change in the move to ChimeCore, et cetera, also contributing. But just trying to contextualize on what that means on a go-forward basis.

Yes. Thanks, James. So as I mentioned earlier, I think one of the nearest-term highlights from a margin perspective is going to be the uplift that we expect to see in our gross margin as a result of the migration to ChimeCore. And again, more specifically there what we expect is our gross margin to get to right close to 90% here in Q4. And of course, that flows through to transaction margin as well.

On MyPay loss rates, we are thrilled with the progress that we're making there. As we mentioned earlier, the trajectory we've been on here is certainly faster than we planned. We went from close to 1.7% loss rate in Q1 to 1.4% loss rate in Q2 and, in Q3, that fell below 1.2% loss rate. And so great progress, and we expect more progress from here. We talked about a 1% more steady-state loss rate for this product. We're well on our way to that and expect that to hit that here in the coming few quarters.

We'll take our next question from Andrew Jeffrey with William Blair.

Great progress on MyPay. A couple of questions on that product as well as instant loans. I guess, Matt, where do you think transaction margin at 1% is in MyPay? And I guess as kind of a follow-up on that, if you get there quickly, and it seems like you're on that trajectory, then do you kind of say, hey, look, maybe we're not growing this business fast enough, and review sort of the underwriting criteria? What is the dynamic in your view as you look out on the future of MyPay? And then I just wanted to get an update on the short-term loan product.

Yes, sure. I'll pick up the first part of that. I think what happens when you launch a new lending product is typically your first cohort, as you're going through your underwriting criteria, tend to have high loss rates. So there's a couple of dynamics we're seeing with respect to MyPay. The first one is, obviously, it's this cohort season and we have more loss performance data on MyPay. We're seeing a natural reduction in loss rates.

I think secondly, as you've indicated, this product has been out for just over a year, and we continue to iterate on those underwriting models to make better and better loss decisions. So I think those are 2 of the things that are driving improvement on the loss rates.

I think we're not expecting to start to go and answer this more broadly in a way that would actually start to compromise those gross margins. I think that's a really, really important point here. In fact, we actually see opportunity for us to continue to expand those gross margins over time.

Maybe I'll pass it over to Matt just with respect to that 1% -- the 1% target.

Yes, obviously, that represents continued margin expansion -- transaction margin expansion on MyPay. We aren't giving a specific target there just yet. And of course, transaction margin also is dependent on the usage of the product and, of course, the top line as well. So we're going to continue to look to make improvements to this really already loved product for us. And I think the message we're trying to deliver today is that we're really pleased with the unit economic performance and expect even more to come.

Yes. It's a $350 million run rate product in just a year, great margins, and we've done this while being the lowest cost product in the market, with lots of daylight between us and the pricing of other offerings. So really excited about this one.

Okay. And then the instant loan product, short-term loan product, is that -- should we expect to hear more about that next year?

Yes. I think -- instant loans, I think, as we've indicated before, it's something we've been working on here for 12 to 18 months, and it's something we've rolled out on a conservative basis. We've been very excited about the progress with that product. It's actually our highest NPS product today. In fact, our NPS on instant loans is around 80% -- 80 points. So our members love it. I think that is something that we will continue to roll out and expand. It's not something that we're giving separate guidance on yet at this stage.

We'll take our next question from Adam Frisch with Evercore ISI.

Really nice job on the quarter here. Some encouraging nuggets in the press release about Enterprise showing direct deposit levels above expectations. It's obviously something that can drive a whole lot of goodness on the other side of that. I know it's still early days, but can you provide some color on the TAM from the 2 partnerships mentioned? Maybe some color on the sales pipeline? And any initial revenue and profit indications of members coming in from this channel?

Yes, Mark oversees the Enterprise channel. So Mark, why don't you take that one?

Thanks, Chris. Adam, I think, as Chris indicated in the prepared remarks, we've -- we continue to be really excited about the progress broadly within Enterprise. Just for some context, we launched the product at the end of April, beginning of May. So it's a relatively new product.

I think the way we've -- this is a B2B motion. So the way we've rolled that product out is we've really started with some smaller employers just to prove the adoption model and make sure that -- make sure the go-to-market motion and the employee engagement and all those sort of things are working really, really well. And I think we've succeeded in that.

And I think what we're seeing here really is across these 3 employers, we're seeing adoption rates that exceed what we would expect and what you're seeing other providers in the market have. And we think that the reason for that is because of the competitive advantages we have here. We're going to market with a broader value prop around financial wellness, not just around sort of GTE, EWA product.

And I think -- so in addition to those 3 partners, of course, we've just signed the strategic partnerships with Workday and UKG, and we think that these are important partnerships as we look to access employer and payroll data. And these are going to be important partners for us in terms of actually accessing new employer relationship. So we're excited about those 2.

The pipeline looks good at this stage. And the value prop we have appears to be resonating really well with the market. So I think that's what's continuing to give us excitement for the channel.

We're not at the point here where we're ready to give separate guidance related to Enterprise. This is B2B. There's sale cycles along, in particular with the bigger enterprises who are the ones that would likely have the more material impact on our outcome. But we do think medium to long term, this will be a material driver of PV growth for us, and we expect to see that coming in at a significantly lower CAC than we have in our consumer channel.

Okay. Awesome. And then if I could just throw in one addendum here. Congrats on getting ChimeCore out and in production ahead of schedule. That's really good stuff. Matt, if you could just provide some color on where you think the margin impact will be. I assume it's staying a little bit in the previous quarters as you've rolled some things over, but how does it progress through the following quarters? And then really looking forward to future conversations like this where we can talk about ChimeCore, and you went faster or bigger or smarter because you have that proprietary platform. So again, congrats on that.

Yes, thanks. We're thrilled to have this enormous milestone behind us with ChimeCore. And as I mentioned earlier, this is really setting the stage for kind of the next -- really the next generation of product development for us, which were thrilled about and, of course, also cost efficiency. On the cost efficiency side, what we expect now is for an uplift to our gross profit margin to close to 90% now starting in Q4 as a result of migrating to ChimeCore and lowering our transaction processing costs, which is a key part of our cost of revenue.

Why don't I pass it to Chris to talk a little bit more about what ChimeCore unlocks for us on the new product development side as well?

Thanks. Yes. I really believe that ChimeCore, when you look -- when we look back a few years down the line here, you're going to look at ChimeCore as being a key element of what has set us apart from a lot of the traditional incumbents as well as some of the other fintechs. It's having full control over our tech stack is something that's really differentiated and allows us to launch exciting new products, the first of which is this Chime Card product, which we rolled out to new members and are now in the process of rolling out across our existing member base. And the potential impact of that over the course of this year and going into 26%, we think, is really exciting when you think about the opportunity to move more of our spend from debit onto the secured credit product that not only helps people build their credit, but also gives them great rewards.

So we really believe that ChimeCore is going to unlock even more rapid launch of new products and services and things like even more premium membership tiers so that we're providing even more value to consumers that can give us more of their paycheck and give us more of their spend. We're going to reward them with that with new premium tier. We're going to launch joint accounts, custodial accounts, investment services. These are all things that can be enabled from this core platform that we now own. And so we think the future is bright on the product side as a result of this investment we've made.

We'll take our next question from Timothy Chiodo with UBS.

This is actually a little bit related there to Adam's question in a way around, as we get to the Chime Cards, so the secured credit card offering. You mentioned the higher interchange, you mentioned allowing your members to improve their credit score and there's some stats on the website around that, it's pretty impressive. So it seems like a great win-win product for both the members and for Chime. As we've talked about in the past, there's always this concept of the graduation. So someone comes on to Credit Builder, they're a great customer, they improve their credit score, and now their scores higher. And they might want to move on to a traditional credit card offering. And not asking you to preannounce future products, but to the extent you could just talk about maybe ChimeCore can enable a traditional credit card or other concerns or reasons why you would or would not want to offer a traditional credit card to the members?

Yes, sure. Tim, I'll pick that one up. As Chris indicated, our first priority really is getting as many of our members as we can onto the Chime Card because we see that as a significant opportunity. But having said that, we know today that there is significant demand amongst our member base for a more traditional credit card, one that offers high levels of liquidity and rewards, and -- number one.

Number two, we believe that with the superior transaction data we have on our members, where we see all the inflows and outflows, we get a really unique underwriting opportunity and a lot of unique underwriting data. And because we sit at the top, we're receiving direct deposit into our cards, we also sit top of the repayment stack. And we think these 2 factors actually give us a significant advantage to offer a really compelling credit card to our members.

So this is something that I think Chime will do over time. But it is not something that we should be indexing on as a material contributor to 2026.

I will also say that as we've indicated in the past, we intend to stay a payments business. So as we do this, we will do this in an asset-light way, in a way that doesn't create a lot of overhead on the balance sheet.

Maybe I'll just -- one last point on that is -- you talked about graduation risk. One of the points that we wanted to highlight is that when you look at our newest active member cohorts, we're actually seeing the fastest growth among consumers in the $75,000 to $100,000 earning segment. So we think that the product today continues to get better and better, especially for those that have more transaction activity and more deposit activity that they can do with us. So we'll keep pushing on that and think about future, more longer-term products like Mark just highlighted.

We'll take our next question from Will Nance with Goldman Sachs.

I also wanted to ask on Chime Card product rollout. I was wondering if you could talk a little bit about 2 things. You mentioned that -- you mentioned some of the early progress in rolling that out. I'm wondering if you could speak to just expectations for attach rates on new cohorts and just the prioritization of Chime Card for new customers. Is it -- it's our understanding that you're expecting that attach rate to be relatively high on new cohorts, that this is sort of the primary experience that you want to put in front of customers. I was just wondering if you could confirm that and talk about whether attach rates are there.

And then you mentioned 175 basis points on the card for interchange was very helpful. I'm just wondering if you could share just the ballpark estimate of where you think the rewards cost could shake out for the direct deposit customers and just clarify the reward is going to be booked as part of transaction margin or would that be like a sales and marketing line?

Thanks, Will. I'll start. Yes, we started by rolling this out just to new members, and we're really encouraged for the folks that select the Chime -- the new Chime Card, we're seeing 80% of their purchase volume within the Chime ecosystem coming off as credit spend. That's obviously a really exciting development for us. And we have rewards and more premium versions of the actual physical card as well that I think are pretty compelling as well. It's still very early days in terms of rolling this out across our existing member base, but that's something that we're pushing hard right now.

I don't know if you want to -- how much more detail you want to share in terms of expectations.

Yes. Will, as it relates to your second question around the rewards expense, rewards actually contra revenue. So the 175 interchange rate that we were referencing earlier is actually already net of our rewards expense. That's the sort of all-in take.

That's awesome. That's great. Okay. And then I guess as a follow-up, I really appreciate the disclosures around OIT. Just wondering if you could talk a little bit around, I guess, attach and adoption rate. I guess it seems like we should be thinking about this mix shift dynamic continuing and thinking about the payment volume per active inclusive of this number. So just wondering, is that -- are you seeing that substitution effect level out where effectively the -- what was previously pull is now fully migrated over to push? Or would you expect that to be something that grows pretty fast and faster than kind of sequential changes in payment volume for the next couple of quarters?

Yes. The short story here is we do expect this to grow faster for the next few quarters. Said another way, we do expect a sort of mix shift from payments to platform to continue. This is a product that's used by the majority of our customers at all in any way, but it is by a smaller set of our members. And of course, it has grown fast. And so when you take a look at the impact on overall purchase volume rates, we felt it was very important to clarify this.

We are seeing that some of our newer cohorts are adopting this at higher rates than our existing members. And so as that continues, that's why we expect this mix shift again to continue here for the next few quarters.

Got it. That's super helpful. I appreciate you guys flagging that.

We'll take our next question from Darrin Peller with Wolfe Research.

All right. Nice job on the quarter. When I think about -- as a follow-up to attach rates and thinking about ARPAM for a moment, I mean, now that you're, like you said, I mean, you're anniversarying the rollout, the initial rollout of MyPay. Just help us understand how to think about growth in ARPAM going forward in Europe from your perspective, both from a financial modeling perspective would be helpful, but also really thinking about it from a perspective of the different products that can help drive it and those that you're most excited about going forward in the next year or so?

Yes. Well, maybe I'll touch just very briefly on sort of the near-term trajectory in ARPAM, and then I'll hand it over to Chris to talk about some of the opportunities to continue to grow ARPAM over time. So the first thing I'd say is, as we mentioned, we are lapping the initial rollout of our really blockbuster product, MyPay, this quarter. You should think about Q3 as sort of a partial lapping. We began rolling out MyPay Q3 of last year, whereas Q4 is when we fully lapped the launch. And as a result of that, you should expect ARPAM growth just to moderate a bit in Q4 relative to Q3.

I would say though, overall, at the cohort level, we continue to see very strong ARPAM growth. Our members are continuing to attach to more products over time that coincides with continued growth in ARPAM by cohorts, across every cohort, with our most tenured cohorts now at over $350.

Let me pass to Chris to talk about some of the other product opportunities we're excited about.

Yes. I think naturally, as we show in the supplemental pack, you can see consistently that as our cohorts age, the ARPAM increases. And one of the things that we love about how that ARPAM increases is that it increases as a result of just more engagement, right, more spend, capturing more deposits over time, capturing more spend over time. And now with higher monetizing card transactions, we think there's an opportunity for that to continue to go even higher.

Look, across the board, we -- one of the things we talked about on the road show is not only do we have the best suite of products, we believe, for the mainstream everyday consumer, but we also have the lowest-cost products. So there's lots of opportunity for us on that side as well because we think that there's still quite a bit of room between the way many competitors price their products and ours.

So we're going to continue to add new products to drive more attach, and we think that's going to drive more engagement, and we'll launch new products with prices that will continue to be market leading. And really excited about the opportunity to drive more engagement and revenue over time.

What's the latest on MyPay day 1? Just a quick update, if you don't mind, and then will turn it back to the queue.

Sure. MyPay day 1 is really one piece of this early engagement strategy that we've highlighted around making it easier to use us right out of the gate. I wouldn't sort of over-rotate on that opportunity, but early results are promising, albeit on a fairly small scale at this point in time. We really think that there's -- this combination of being able to fund your account easily, being able to -- and have multiple ways to fund your account, to move money out of the account with OIT, to use our P2P service, to get -- the more we can get people access to trial of our product, we think the better chance we have over time to convert them to long-lasting primary accounts.

So we're going to continue to trial that experience of MyPay day 1 for people who don't yet have a direct deposit relationship. And we'll also be adding other trial experiences as well. But no major update to provide on that. It's still relatively small scale.

We'll take our next question from Sanjay Sakhrani with KBW.

This is Vasu Govil for Sanjay. Maybe could you just comment on the competitive environment a little bit? I know there are a number of different providers that are sort of trying to target the paycheck-to-paycheck consumer with short duration loans for customer acquisition. Can you tell when your customers are engaging with any of these third-party platforms? And anything you sense in terms of change in competitive intensity in the market?

Yes, sure. I'm happy to pick that one up. I think maybe the first thing we should do to level-set here is our real competition are big banks, number one. They have the vast majority of primary account relationships, and that is our primary -- that is by far our primary competition. If you took all the rest of the fintechs, we are much larger than all the rest of the fintechs combined in terms of primary account relationships today. And so I think, number one, we should index on large banks.

Secondly, we're 3% penetrated today in our TAM. So there's a lot of opportunity here ahead of us. We continue to obviously watch some of the smaller fintechs that are approaching our members. There's very few, if any of them, that are really making much progress on the primary account side, I think to your point. Some of them are competing and offering liquidity services that would compete along with, say, SpotMe or MyPay.

I think our perspective on that is if you look at the price points that these members -- these competitors are offering, they are far in excess of the rates we have for MyPay and for SpotMe. Having said that, we do see some of our members who may be doubling up and using these additional services in addition to what they get from Chime to access higher levels of liquidity. We like our position there because we talk of the repayment stack and we get paid first. And we're going to continue to do this at a very, very competitive rate.

So we're not seeing -- as Chris indicated early on, even J.D. Power has just confirmed that more members are switching to Chime than anywhere else, and that trend continues. So we don't see these offerings impacting our acquisition of primary account relationships.

And just for my follow-up, if I could ask on the model for 4Q as we're thinking about new account adds versus volume growth, sort of anything be mindful of from a seasonal perspective that you would tell us?

Q4 -- when we see seasonality in our business, the sort of primary quarter to call out is Q1 and, therefore, Q2 right after, just from a tax refund perspective. That's really when we see most seasonality across our metrics, including purchase volume per active, including ARPAM, including new account adds, et cetera. Q4, I think, seasonally tends to see a little bit higher spend on a per active member basis just around the holidays, but not nearly as much as sort of the seasonally higher spend Q1. Beyond that, I think Q4 is a pretty standard quarter for us.

So we're excited to continue to grow across those metrics, actives and purchase volume.

Thank you. We've reached our allotted time for questions. I will now turn the call back to Chris Britt for additional or closing remarks.

Thanks so much. I really want to appreciate everyone and thank you all for joining us today. We look forward to seeing you all out on the road, hopefully, sometime soon.

Thank you. This does conclude today's meeting. Thank you for your time and participation. You may disconnect at any time, and have a wonderful day.

All right. We are going to get started. Up next, we have Chime and CEO, Chris Britt, who is the Co-Founder and CEO. He co-founded Chime in 2013 and completed a successful public offering earlier this year. It's a very exciting time to be in the fintech space and excited time to have you on stage.

Great to be here. Thanks for having me.

So Chris, I think for those on the webcast, particularly one of the first conference presentations post going public, I think it would be helpful just to maybe go over overview of who the company is, the strategy. And then I'm looking forward to asking some follow-ups and going one level deeper.

Sure. Chime is a consumer fintech company. We're actually not a bank, but we've had a lot of success in the U.S. market in developing an alternative to traditional banks, particularly for everyday consumers. So we target consumers that make up to about $100,000 a year, which happens to be about 75% of our country. And we focus on the needs that matter most to this population segment, and that includes things like avoiding fees, getting access to short-term liquidity, building credit and building savings. And we wrap that into a mobile-first experience, and have been able to develop a lot of credibility and a brand authenticity around genuinely trying to help people make progress in their financial lives. It's been working really, really well. I'm incredibly proud of the success that we've had.

Just to give you a sense, today, Chime on an unaided brand awareness, if you ask consumers in America, what brands come to mind when you think of online banking. Today, Chime only trails JPMorgan and Bank of America. So great progress.

And I think the innovation is a combination of having services that really resonate with this population segment, but also doing it in a mobile-first way that a technology company would. So we own and operate the vast majority of our tech stack, including all of our processing, which we think is quite a bit differentiated. And by operating at that low cost structure, we're able to deliver better value and essentially free banking services to this huge population that has historically been subject to enormous amounts of fees.

Sure. So maybe let's talk about competitive advantage. I think Jamie Dimon said in a recent letter that they can't serve the majority of their consumer checking accounts profitably. Can you talk about the structural advantages that Chime has and what allows you to do what some of the largest banks in the country have been unable to?

Yes, for sure. I saw that quote that he had in his shareholder letter, and I kind of wanted to put it in the S-1, but I didn't think it was appropriate, JPMorgan was on the deal. So that would have been weird.

But we did bring that quote up a lot because I think it did a great job of just capturing what the real opportunity is, which is basically like any reasonable business person if you have a segment of the population that you can generate high profits from and another segment that you can't, you're obviously going to focus on the segment that you can develop profitable relationships with.

The only way what Jamie is saying out loud what others maybe are afraid to say is that the only way that they can develop profitable relationships with this segment is by relying heavily on fees. And so we believe there truly is a generational shift that's happening right now in banking, I'd say, respectfully, sometimes some of the investor class people who aren't subject to the fees and aren't dealing with the friction that an everyday consumer that maybe makes $40,000, $50,000 a year faces day-to-day, I think maybe it's harder to see. But we're changing the way that people are accessing basic core banking services and doing it in a modern mobile way.

I mentioned the fact that we are not a bank. We're actually a technology company. So we are able to leverage two key bank partners, Bancorp Bank and Stride Bank are our primary bank partners who actually hold all the deposits of the consumers. So we truly do operate as the technology company and the consumer brand and the interface that sort of runs all aspects of the transaction account for our member.

And by doing that, by letting the banks hold the deposits and operating the tech stack in-house as opposed to operating what has historically been a traditional banks, sort of a patchwork of different service providers, maybe one card processing system for your credit card, another one -- another core for your deposit services, another platform for check deposits, another one for risk management. We operate that all through a single platform called ChimeCore. And it is a real competitive advantage for us because we have all of the cost structure savings of being able to operate this in-house. In fact, we used to rely on a third party. So we know that when we complete our conversion over to ChimeCore by the end of this year, the savings that we've been able to achieve will equate to something like 60%.

So that gives us a great cost advantage, but it also gives us a flexibility to be able to innovate and launch new products without having to rely on third parties. So I'd say the combination of advantages are of course, this cost structure, but probably more important than that is the member obsession we have on this population segment because for us, they're incredibly desirable because we're able to actually help them in their lives, and we can do it really profitably because of the way that we go to market.

Yes. So let's talk about that customer -- the target customer a little bit. Obviously, there's a lot of money in the high-net-worth population that a lot of the large banks focus on. For the everyday American making less than $100,000 a year, I think there's often a misperception. I think we talked about this earlier today that you cater to unbanked or underserved individuals. Like how would you describe your typical member? How large is the market? And how do you generate revenue from this customer without charging excessive fees?

Yes, I'd like to remove that vernacular from the description of what Chime does. So I want to be really clear, Chime does not serve the unbanked, we don't serve the underserved. We serve people who are unhappily banked at traditional banks. That's where all of our customers come from. It's typically someone that has a frustrated relationship with the traditional big money center incumbent bank that isn't delivering against the needs that they have, and I sort of outlined what some of those key areas of needs happen to be.

And yes, I just think it's kind of an entirely different orientation to actually serving this population. It's regular everyday people. It's nurses, it's firefighters. It's -- I remember on the roadshow, one the first meetings we had, the -- literally the first meeting on the roadshow, the person at the front desk checking us in. We said we were from the Chime team, and their face lit up and they said, "I bank with Chime too," and he showed his card. It was awesome.

That is awesome.

A great way to sort of kick off the meeting. So this is regular everyday people. And I think by being able to focus on the needs that they have, we're able to develop a brand that's really resonated with a population that, again, I don't -- my message is not that the banks are evil and they're trying to hurt this population segment. They just don't focus on them because they can't develop profitable relationships because of their physical orientation to customer acquisition, to servicing and so forth, it's just the mathematics don't work out. So we truly believe we've built a better mousetrap, and it served us well because I think if you really wanted to boil down the essence of why we're winning in this category is because of the alignment that we have with our member base.

Great. And so I guess a quick follow-up on that. Can you speak to the durability of these members? Any anecdotes that you can share around member lifetime, churn rates and just how you think about kind of the average life of your customer?

Yes. I mean from the earliest days of starting this company, we've been focused on developing primary account relationships, direct recurring relationships, recurring largely direct deposit relationships. And I remember investors would always pooh-pooh that and say, man, that is like the hardest relationship to develop. Why don't you start with a wedge product and then you can get to direct deposit later. And I think our focus on developing primary account relationships has really allowed us to set ourselves apart in terms of what we're known for from a sort of brand perspective.

So look, when you develop a direct deposit relationship, especially in our case, after the first year, we see 90% retention rates among our primary account members. So we've only been around for 13 years and really active with a product that's even remotely in its current form for maybe 9 years at this point in time. So I can't tell you for sure how long these relationships last, but I think typical research shows that it's something like 15 to 20 years is the average life of a checking account, and we certainly see that our early cohorts continue to stick with us.

And I think one of the things that we shared in the S-1 is that these cohorts not only stick with us, but the relationships actually expand over time. So as people change jobs or get raises or have multiple jobs, we're able to capture more of their direct deposit over time and actually expand the retention on a net dollar basis of over 100%.

That's great. And look, I think it's so important, you mentioned talking about focusing on the direct deposit relationships first. And one thing I repeated numerous times during the roadshow was they really started with the hard part first, and they got it right, and that kind of gives them the ability and the right to expand to other areas of the business and new activities. But how do you feel about the durability of the growth in direct deposit customers? And then I want to talk about some of the strategy of widening the funnel there.

Yes. I mean, that is the opportunity. And I think more than any company out there, I think we've shown the most success and dedication to that. In fact, we just finished a survey that we run regularly, which canvasses the marketplace outside of Chime specifically, but we commissioned a third-party survey of tens of thousands of people who make up to $100,000. And we question whether or not you've -- we screen for people who have only -- who have converted a primary account or a direct deposit relationship in the past year. And again, Chime has earned the spot as the #1 destination among people who switched their bank account. So -- and their direct deposit relationship in that up to $100,000 segment.

So we think that we are winning in this area. And I think when you look at our product structure and the way we're evolving our product structure and our features, you're seeing a commitment to making it clear that when you bank through Chime and use as a primary account, you're going to unlock a whole host of benefits. And that's what a lot of our new product efforts are about.

Great. So maybe pivoting into some of the recent strategy shifts around widening the funnel of the incoming customer base, I think one of the phrases you and the team used a lot with us was, you kind of asked customers to get married on the first day historically, you're really going after that direct deposit relationship. And I think you've been pretty clear year-to-date about the strategy of widening the funnel, releasing more products for non-direct deposit customers. So can you talk a little bit about the strategy? How is it playing out so far? And where else could we see Chime kind of broaden out the aperture of customer acquisition?

Yes. I think this is a fairly obvious approach that I would argue we probably should have pursued even earlier. The reality is when you look at the top of the funnel and you see people coming through, we looked ourselves in the mirror and realize that there's a lot of people that we essentially pay a lot of these folks to enter at the top of the funnel through a paid referral or paid media and so forth. And they don't even fund the account. They don't -- like they look at it, and they're not ready to do direct deposit on the first day, and so they kind of just go dormant. It just felt like a waste to us.

So I think we still have some work to figure out this funnel of people who sign up, maybe fund and engage in a lightweight way and successfully convert them into direct deposits. And maybe just to take a step back, our focus is always, when you come in, we display and we scream from the rooftops. The best way to get the most value from Chime is to get direct deposit, and we show all these features that unlock when you do it.

But we just -- it just feels obvious to us that we have to give people an option. It shouldn't be the default, but there should be an option of if you're not quite ready to do that right out of the gate, you should be able to really easily fund your account. You should be able to plug-in your debit card, hit Apple Pay, fund it instantly, so you have a chance to use the product. And I think you should expect to continue to see us to try out different approaches to give people -- you can think of almost like a trial experience. It's natural for us. You can't just hit everyone over the head with a 2x4 and hope they're going to set up for direct deposit. We're pretty good at that. But we want to give people the chance to try before they buy. And so we're going to continue to innovate on that area. And build a bigger pond efficient and get more people over time to get to direct deposit because not everyone is just going to do it right out of the gate.

Yes. And I guess the understandable focus on direct deposit really shows up in some of the financials. You cited 7 to 8x LTV to CAC in your business. That's despite having those customers that come in and never fund the account, never use it. Can you say more about what drives the strong unit economics? How do you build up to that? And how do you think about kind of marketing efficiencies over time?

Yes. Look, the great unit economics come in large part from an acquisition funnel that, in large part relies on referrals from our existing member, referrals and organic and word-of-mouth represents about 50% at the top of the funnel of new enrollees into the account. And then the ability to monetize the relationships because of the depth of the relationship. We announced last quarter that we grew our ARPAM or our Average Revenue Per Active Member by 12% year-over-year to about $245, which is, I think, pretty high in our category.

And importantly, the success we have in driving product attached leads to even higher levels of ARPAM. So if you look at the members, which is now over 10% of our members that attach 6 or more products that ARPAM is close to $500. So we feel really good about the LTV to CAC that you cited of sort of 7-ish quarter payback on CAC. But we've actually seen that come down a bit in recent quarters, closer to the 5 to 6 zone. And so we feel really good about the success that we're having in putting dollars to work in a high ROI way to develop relationships that span for many, many years.

And I think if you were really to boil down the differentiation of Chime relative to other companies, it's that success in developing these long-term primary account relationships. Our low-cost approach to all of our products is always in service to developing the primary account relationships. We're happy to sacrifice short-term revenue if it means to long-term recurring payments-driven revenue.

Got it. That makes sense. And just for clarification, the 5 to 6, is that payback? Or is that LTV to CAC?

I'm sorry, that was payback.

Payback. Yes. Sorry, that's a good trajectory...

Sorry, I thought you were talking about acquisition efficiency.

Yes. No, Great, great, great. Okay. So let's go back to ChimeCore. Your proprietary payment processing application and ledger. I mean, this is pretty differentiated. There's a very small number of people who have built this out internally. Most people are leveraging Marqeta or Galileo or some other platform in order to do most of the card issuance. Can you talk about, a, what did it take to get here because that's a big undertaking. And then where are you in that transition? And how do you frame the benefit once that's fully completed?

Right. It took a few years for us to get here for sure. So this was not an insignificant task. And I'm excited that we are near the end of our journey. There will still be investments to KTLO, the platform, but the bulk of our work is right at the -- in the red zone or -- we had -- we've announced to the Street that it was our intention to have all elements of our conversion over to the ChimeCore as the system of record and processing platform for all of our cards by the end of this year. And from an internal process perspective, we're actually ahead of schedule on that front.

So I mentioned earlier that we think this -- in total, we've already realized some of this benefit, a good amount of it. But in total, we think it's about a 60% cost save. But more important than that is just being able to have full control of our destiny and not having to -- even if -- even when you have some amount of like market influence and ability to get third parties to perform development for innovation, we like being able to control the priorities on our side.

And importantly, when you create new innovations to be able to have those innovations be proprietary because naturally, when processing systems launch a feature enhancement and so forth, the first thing they do is to sell it to other potential competitors.

So we think this is going to only accelerate the velocity of innovation that you've seen from us over the past few quarters with the launch of Chime+, Chime Card yesterday and the soon-to-be completed conversion to ChimeCore.

And do you see longer term, are there other areas of benefit from some of the infrastructure? I know you leveraged a number of banking partners on the background. Do you see these as potential future opportunities to drive more efficiencies?

Are you saying the bank partnerships?

Yes. With the bank partnerships or any other area like third-party vendors.

Well, I think that there's a real strategic advantage of having that processing tech stack in-house and the centralization of data in an AI-powered world like having to rely on third parties and different data pools to get the data and to iterate on data for better intelligence and to design AI-powered systems. We think this is a real competitive advantage, especially relative to incumbents who may have 3 or 4 different platforms that they have to rely on that maybe are associated with an individual consumer.

So -- but look, we're always -- as we -- we're in a payments business and the payments business certainly rewards scale. And I think you see that in the business and our margins, and the margins get better as more transactions run through the system, for sure.

Yes, makes sense. Okay. Let's pivot to Chime Card. This is a big announcement yesterday. So why don't you talk a little bit about what's changing to the -- what you use to kind of refer to as the Credit Builder Card. And how does the journey from new consumers coming into Chime change post this announcement?

We're incredibly excited about creating a more rewarding approach to banking with this Chime Card product that we launched yesterday. So yes, Chime Card is a sort of latest incarnation of our Credit Builder Card, we're just calling this Chime Card, but it still gets to the credit building feature that you get from a secured card. It allows consumers to sign up for a Chime account and decide to bank with us to use this secured card where you get a line of credit that is equivalent to the amount of money that you put -- that you set aside in advance. So if you have a $1,000, you can set that aside and that gives you a line of credit of up to $1,000. And it's a safe way to spend and build credit because you only spend what you have available to put aside in the secured account. And that allows our members to continue to build credit just from their everyday transactions. And it's really been a hit product for us.

What I'm excited about is this new version of the product just sort of levels it up a bit. It's a more premium addition plastic. We also have a Titanium metal card option that people can sign up for an additional fee, a onetime fee. And the way it works is, if you are signed up for a Chime account and you're getting direct deposit and you have one of these new Chime Card, secured cards, you can get 1.5% cash back on everyday transactions in a rotating set of categories.

So every month, we rotate to categories that are generally like primary, a lot of nondiscretionary spend items. So it could be like groceries or fuel or restaurants, some online transactions. And we're pretty excited about this being just another reason why you'd want to sign up, get direct deposit, activate our Chime+ level of service because you're doing direct deposit, and that unlocks the 1.5% cash back.

So I think you're going to continue to see from us more and more reasons, more bundling of products and services that reward our members who elect to use us as their primary account. And we also want to make sure that we're giving differentiation and unlock even more premium features and rewards for people that give us more of their direct deposit, more of their spend. And this is an exciting step in that direction.

And I'll just say like you asked about how it will work in the journey. Our members will still 100% be able to get a debit card, that's going to be -- continue to be a big part of our product offering, but this will sort of be like the featured service because it has enhanced benefits. So we're hopeful that it drives even greater attach of the credit product. And that actually helps a bit with our spend mix, right, driving even more volumes through credit as opposed to debt.

Yes. No, it makes perfect sense. Okay. And then I wanted to switch to MyPay. I think when we think about the traditional banking business model, you kind of think of taking deposits and making loans, the corollary in your business is a lot of the money has been made on the deposit side and monetizing the spending side. I think MyPay is one of the foray into more of a lending relationship and probably been one of the most -- I would imagine, the most successful product launch in the company's history, really significant penetration out of the gate starting last year. You've also seen improving unit economics since the launch.

So maybe you can talk a little bit about the adoption of that product that you've seen, the performance and loss rates that you've seen to date and just how you think about the trajectory that we're on, both in terms of adoption and loss rates over the next couple of quarters?

Yes, we're really pleased with the rollout of this product. It's now close to 30% attach rate and a top reason at the top of the funnel, why people sign up for Chime, another reason people often ask like, what is the thing that people sign up for -- with Chime for. And it isn't a single thing. It's a package of services that address those categories of needs. But -- so this is the latest product in the short-term liquidity area.

Yes, we're seeing really nice levels of attach. We're seeing really good performance. It's now already over a $300 million revenue run rate business for us. And what's great is that we're able to have such an exciting business that's kind of gone from 0 to 60 so quickly, but also a product at the same time that is far and away the best value in the category of essentially earned wage access products because when you sign up for our MyPay product, there's a free option, where you can get up to $500 of your paycheck on demand. If you wait 24 hours, it's free. If you want it instantly, it's a $2 fee, that's the best lowest cost in the market.

And on the performance side, we're very pleased. We announced that we had been at about a 1.6% loss rate and moved it to 1.4% in the last quarter, and we've also signaled that you should expect to see that to continue to move in that same direction closer to 1% over time. So really good performance and it's only going to get better as we get a little bit mature -- a little bit more mature in the rollout of this credit product. But I also just want to reiterate, like this is not a typical consumer lending product that you might see at traditional lenders in that it's extremely short duration, right? These short-term credit extensions get paid back in essentially 1.5 weeks. So we have full control of the dial if we ever needed to change course for some reason.

And so we feel really good about this as being a core value prop and once again taking a lead in the category and setting direction for consumer-friendly products for a population segment that often has taken advantage of.

Yes. No, that makes sense. And I want to bring it back to an earlier part of the conversation around broadening the funnel. I know MyPay, day one, allowing kind of new users to the platform to get a taste of that experience. What's your thought process there? Where are you in that process? Any kind of early signs of adoption there?

It's very early. I don't know if it's going to work. We're trying it out. We're going to continue to test on different ways to get people through to become direct deposit account holders. So just for those of you that don't know, we are experimenting on a very limited basis to offer people who have not yet signed up for direct deposit that we think, okay, we -- for whatever reason, we're not being effective in converting them, we will -- we are testing the opportunity to give them a smaller level of MyPay, much less than the $500 for a higher price.

Not so much to create a new standalone moneymaking business, but to see if we can unlock a new channel to get people to try it out, see that it's a nice service and see that if they actually do their direct deposit, that they get the same product, the same construct of the product but with just a better version of it with higher limits and lower prices.

Yes. That makes sense. We look forward to hearing more about it.

Yes, we hope it works. But again, we're only a month or 2 into the test.

Great. Okay. And then Instant Loans, I think, was another new product that launched this year. In my experience, this has gotten a little bit less attention than some of the other new products. So maybe frame out the value proposition of that product to your members and maybe talk about where you are in the rollout process and kind of anything that you're seeing?

We're really excited about this product. Our members love this product. I think the Net Promoter Score on it is something like 80. And for those of you that aren't aware of it, it's a basic installment loan product. It's just really easy to sign up for and use. People are prequalified for it. You can select a 3-month or 6-month payback option, paying back on a monthly basis. It's a low price, and we're trying it out on a much smaller subset of our members that we've offered MyPay to. So I think like single-digit percentage of our member base.

And I think we're just building our underwriting muscle in our most valuable customers that we have the longest relationship with, and we feel like we have ability to underwrite them based on this cash flow that's coming into the account. And I think it's going to be, as we see repeat users of the service, we're seeing it really perform very, very well. So we expect it to be -- continue to be an exciting part of our portfolio, we will likely evolve it so that you could imagine looking in your transaction history and seeing a larger transaction, you could -- Chime would say, hey, do you want to finance that over 3 months or 6 months, we'll give you the money back for the transaction you just made.

So I think there's cool ways to use this as a relationship product because, again, at the end of the day, we look at all of these products in service of driving and retaining long-term direct deposit relationships.

And look, over time, as we think about, for example, potentially offering an unsecured credit card for a subset of our members, again, who have direct deposit, we think that our experience with this product will help to inform a rollout of that type of product down the line as well.

Got it. Okay. One kind of loosely financial-oriented question, Matt is in the audience, so he's leaving you hanging up here. You've talked about a lot of new products, both lending and non-lending. How do you think about the result and trajectory of ARPAM over time?

I mentioned 12% year-over-year. And I didn't know all your questions. So maybe I already like answered this question to some extent. But our most engaged members are doing double that of ARPAM.

So -- and what's great about the ARPAM that we're generating from these more highly engaged members, it's not like we're just getting more ARPAM by driving up more fees. We're actually getting more ARPAM because as they attach more products, they actually do even more of their spending with us. So again, it's like -- it's very much aligned with the consumer.

So there's no question. There's a ton of runway for us on the ARPAM side, and I think investors should think of that as an important dial that we can turn to drive even more profitable relationships with our members. Again, doing it in a very member aligned way, I think we're going to continue to push on this. We've said in our roadshow that this is probably one area that we have not focused a lot of time on. And in some ways, I think that's good because our primary focus has been on just member engagement and direct deposits as opposed to trying to eke out every last profit or revenue line that we can. I think that's what probably sets us apart from a big bank in that regard.

Totally.

So -- but for the record, we're not against fees. Especially in products that require fees to make the economics work, but we think we're uniquely positioned to have the lowest cost products in our category.

Yes. No, very clear. Okay. We got a couple of minutes left. I want to squeeze two last ones in. First on Chime Enterprise. If I remember, this is one of the products during the IPO, you were saying you were most excited about. You've announced a couple of partnerships since earnings. So could you give us an update on that strategy? How are you thinking about the launch of new Employer Partners? And then just how do you think about the channel as a feeder to net adds and direct depositors over time?

We're really excited about this channel. Yes, we launched two employers, Ubiquity, which is a call center company and a company called Etech and early results have been awesome. We're seeing great adoption rates. We're actually seeing that a lot of the workers at these employers actually have Chime accounts. So now their Chime accounts just got better because with the enterprise version of MyPay, you get 100% of your paycheck every day on demand for free. So there's a real benefit to the employer because they've got a more valuable offering to the employee.

We've also seen resurrection among members who had Chime accounts that work at these companies that now are signing up for a Chime account reengaging with us. The biggest segment is people who don't have Chime accounts and they are coming to us. So we're really excited. These are -- we look at these as real evergreen channels because if you think about the turnover in a lot of these employees, like they might go through -- like a retailer might go through 2 turns of employees over the course of a year.

And then we also announced our relationship with Workday. So now if you're a Workday employer, it's really easy to sign up for Chime services for our core account, for our paycheck on demand, our earned wage access product. It's -- now we already have like that direct integration into the time and attendance and payroll system. So it's really easy for new folks to sign up.

And we're excited to hopefully have some referenceable accounts now that we're in the wild live with the product. And that should lead to additional growth. We're trying to temper expectations because these are enterprise deals, they take a long time to implement. And even when you implement it, it takes a little bit of time to get into the core operating system of how the HR and benefits teams work at these companies.

But it's a big focus of ours, probably not much of an impact this year, but we're hopeful that next year this becomes an increasingly important channel for us.

That's great. All right. In the last couple of minutes here or second, I guess, it is a tech conference, I'd be remiss if I didn't ask you about AI. How is Chime using AI today? And then how do you think about AI, particularly from a customer-facing perspective longer term?

Well, we are embedding AI into every aspect of our business. We have essentially every employee using AI. It's now the expectation of how we do our work. I think it's helping us to of all the way work gets done inside of the company. So our product and [indiscernible] teams are already becoming smaller teams, more self-sufficient because they can get more done with fewer people, which can lead to greater output. We think there's no question that this is going to lead to additional opportunity for us.

On the OpEx side, we already see AI having a huge impact on our customer support service. It's like 72% of interactions are now handled by AI, including voice AI. It works very well, not only is it lower cost, but it's actually higher satisfaction scores. And maybe just -- I'll leave you with the parting point on this is, that's all well and good, and we're going to use it for more and more efficiency, but the real opportunity is harnessing this new technology to create better consumer experience, as you can imagine us helping our members essentially have an adviser in your pocket that gives you advice on answers questions and gives you a direction on where to spend, where not to spend, how you're trending versus people in a similar demo questions about what else they can do outside of our credit building services to build their credit scores and help them think about long-term financial success. We aim to play a role in that regard. And we think given this deep relationship we have and this unique data set that we have that we should be able to do that better than anyone.

Great. Well, I think with that, we're out of time. But thanks so much for taking the time today. I really appreciate your support of the conference. Congratulations on the successful IPO, and we look forward to see you next year.

Thanks, Will.

All right, everyone. Thank you very much for attending. For those of you who don't know me, I'm Nate Svensson. I'm the lead payments and fintech analyst here at Deutsche Bank. I'm very excited to have Matt Newcomb, CFO of Chime, a recent IPO, new entrant into the public markets here, on their first conference. So we'll get to learn a lot about the story here from Matt on some key initiatives. So Matt, thank you so much for being here.

Thanks for having me.

Yes. I mean, just starting on that note, maybe some folks in the room are listening on the webcast that are new to the company. So maybe you can give us an overview of Chime, who you are, what you do, what the growth opportunity is here.

That sounds great. So excited to be here. We think about ourselves as the digital disruptor in payments and banking for everyday people. We started Chime to help unlock financial progress for the 200 million U.S. adults making up to $100,000 annually. That's how we define our target market. And this is the population that's really been, we think, overlooked by the incumbent banking ecosystem. And so far, it's working. 97% of our members tell us we have helped them unlock financial progress. Chime is the #1 destination in America among people making up to $100,000, switching their direct deposit accounts in this country.

And I think if you're going to zoom out and maybe look at this at a more strategic or abstract level for a second, I think we're using a playbook that is very much the same one that digital disruptors in adjacent categories have used, so Amazon in retail, Airbnb in hospitality, Uber in transportation, and that is we are maniacally focused on solving the most critical challenges for our members. We've radically innovated on cost structure to be able to deliver the best value to our members at the lowest cost in the market. Doing that well has allowed us to develop some of the deepest levels of customer engagement in our category. And it's also allowed us to become a true platform. I think our category is definitely characterized by a lot of point solutions.

We serve our members across a range of financial areas. You see that in our product attach rates and ultimately, our LTV. So that's the playbook we're using. It's been very successful in other categories, and we think we're early days in executing on that at Chime.

Yes. Yes, great overview. I think one of the things that's really stood out to me learning more about the Chime story is your ability to win these primary account relationships with your users. So I would love to hear what you are doing specifically in order to win the primary account relationships and then how you see that playing out going forward and then converting those that are not primary account relationships today to that going forward?

Yes. I think this is the area where I do think Chime is differentiated the most relative to others in the market. The vast majority of our members, our active members, are using Chime as a primary account relationship. And primary accounts are the flywheel in our business. They generate, I think, really unmatched levels of engagement. Our active members are transacting with Chime 55 times per month on average. They're in our app every single day. They generate highly recurring and habitual type of spend concentrated in nondiscretionary categories. Our members are using us to pay for their everyday expenses.

We've been able to develop an RPM profile that I think is very differentiated without relying on fees. And they also generate these kind of annuity-like cohorts in our business with really strong LTV to CAC of 8x or higher. There's data out there that suggests that the average tenure or lifetime of a primary account relationship is something like 15 to 20 years. We've even been around that long. So we're not quite sure. But we've got cohorts that are 10 years old, still going strong, continuing to chug along and spin off transaction profit at high rates.

And I think maybe more strategically, what primary accounts do for us is we think it allows us to do things with our product that others simply can't. We have a tremendous amount of data on our members, and we have this first in line or privileged repayment position by virtue of the fact that their next direct deposit is coming to Chime, their next paycheck is coming to Chime. And that allows us to price things like MyPay and our other liquidity products at what we believe are the lowest cost in the market. And again, this is enabling us, we think, to become a real platform rather than a point solution in the industry.

Yes. And we'll talk more about MyPay later on. So it's a good little introduction there. I mean maybe the related question to the primary account relationships is I think you have described the incumbent banks as your primary competitor. So maybe you can talk about why that is and what specific advantages Chime has relative to those legacy players.

Yes. We like to say that we fish where the fish are and all of the primary account relationships, maybe with the exception of Chime, exists at the incumbent banks, not other fintechs. So when we wake up in the morning, that's what we are focused on. And I think there's some very entrenched structural advantages that we have at Chime that are enabling us to compete so effectively against the incumbent banks. Number one is cost structure. We estimate that our cost to serve is something like 1/3 to 1/5 that of an incumbent bank.

One of our nation's top bank CEOs, in his own shareholder letter, most recent shareholder letter, admitted the fact that for the majority of their accounts, the cost to maintain those accounts exceeds the revenue that they earn from those accounts. And I think if you compare that to Chime, we developed a business that monetizes at close to 70% transaction margin. If there's anything that sums up our opportunity more, I think it's probably that.

The second piece is our focus on our product innovation. And it's not me sitting here saying that the big banks are out to get the everyday consumer, they just aren't focused on this customer segment because the economics don't really incentivize them. And I think you see that show up in the product portfolio. Things like helping our members get access to short-term liquidity, build their credit, these are not problems that the big banks are effectively helping everyday folks with.

And the third is brand. Among people making up to $100,000, Chime has unaided brand awareness that now rivals the top 2 largest banks in America. And maybe even more importantly, everyday Americans associate Chime with the most critical financial challenges, solving those most critical financial challenges, like building your credit, like getting access to short-term liquidity. And again, I think the proof is in the pudding, more people are coming to Chime than any other institution in America. So we've got 8.7 million actives today. There's nearly 200 million people in this country making up to $100,000. I think it's very early days continuing to compete with the big banks.

Yes, that's great. And maybe one on that last topic. So accelerating user growth, on a year-over-year basis, you're up to 8.7 million today. So maybe you can talk about, as you've expanded the aperture and the top of the funnel to get more users onto the platform, how have unit economics with those users trended? And how do you expect those unit economics to play out going forward?

Yes. So maybe just to quickly level set, I think the way to think about Chime is we are, at our core, a payments-driven business, which is very different than traditional banks that are much more NIM or balance sheet-driven businesses. And we developed a pretty compelling, I think, compelling set of unit economics around this core payments relationship with our members, and that is, back to primary accounts, entirely driven by the fact that we've been successful earning primary account status for our members in this top-of-wallet card position. That is what gives us, again, this habitual daily spend focused on these nondiscretionary categories. It's what gives us very strong long-term retention rates with net dollar retention over 100% across our cohorts and ultimately, very strong LTV profile.

And yes, we've actually seen -- while we've accelerated our member growth, our unit economics improved in recent cohorts. So in Q2, our active members grew 23% year-over-year. That was an acceleration from where we were in 2024. We did that while bringing down CAC over 10% year-over-year. Meanwhile, you've seen us grow ARPAM, our average revenue per active member. That was up 12% year-over-year in Q2. And so the net effect of that is, relative to what we disclosed in our S-1 not too long ago, about cohorts that have trended to about a 7-quarter transaction profit CAC payback, our more recent cohorts trended to 5 to 6 quarters. So we're really excited about the progress really across the business.

Yes, absolutely. And you mentioned the growth in ARPAM there, and I promise we would come back to MyPay. MyPay has been a great success since you launched it last year. So again, some folks might be newer to the story here. So maybe you can explain what MyPay is, what value you're bringing to your consumers and then how it fits into the overall strategy at Chime.

Yes. The basic premise of MyPay is that you should not have to wait to get paid for the work that you've already done. There's something like $340 billion trapped in a 2-week pay cycle, every 2 weeks in this country. That is an antiquated system. It should not work that way. And so the basic premise of MyPay, and the way that MyPay works, is we allow our members to get access to up to $500 or 50% of their earned wages on demand: no credit check, no interest and no mandatory fee. It is completely free if you wait 24 hours or you can pay an optional $2 fee if you want to get MyPay instantly.

I think one of the really important things to understand about MyPay, which is also true across our other liquidity products, is that we're underwriting via direct deposit. Again, direct deposit gives us an enormous amount of data. It allows us to get repaid first because the next paycheck is coming to Chime. And that has enabled us to price this product at what we believe is by far the lowest cost in the market. And we've been really satisfied and happy with the traction on MyPay. I think it really illustrates the power of having a primary account installed base, an installed base that is as deeply engaged as we have at Chime.

We've basically taken MyPay from 0 to about a $300 million revenue run rate product since launching it about a year ago. It is now one of the top reasons that new members are coming to Chime. And we've also been making recently a lot of progress honing the loss rates on MyPay. And so excited about it, but still a lot to do, including with the enterprise version.

Right. Again, a topic we will touch on later on here. You mentioned loss rates. It's a question we get a lot from investors. You're making really good progress. On the earnings call, you talked about sort of moving ahead of plan. I think loss rates were down to 1.4%. I think you are targeting over the long term a 1% loss rate for MyPay. So maybe you can talk more about what specifically you have to do at Chime in order to get to that target and maybe a time frame for how long it might take to get down to 1%.

Yes. So what we disclosed in our earnings calls is, yes, we have been making faster progress than we had planned on honing MyPay loss rates. In Q1, MyPay loss rates as a percentage of advanced volume was a little north of 1.6%. By Q2, we brought that down to 1.4%, which again is faster progress than we had planned. And I think as it relates to what's driving that, there's a few things to call out there. Number one, this is the natural seasoning of a new credit product. So as MyPay cohorts mature, our good members comprise a greater portion of the portfolio. Those members have lower loss rates, natural maturing. Second, we're getting better at underwriting. We have more data. We're feeding those into our underwriting models. We're fine-tuning who to give what limit to and when. That's helping. And then last is we made some progress on collection and repayments.

So as an example, we actually built in the ability to manually repay an outstanding MyPay balance. We saw a lot of members actually want to do that, so they could continue to get access to the product, and that's helped improve repayment rates. So all these things are contributing to the improvement in MyPay loss rates. And I think this is sort of the natural course or trajectory of any new credit product. It just so happens it's exactly what we saw with SpotMe, which is our free overdraft product, where we've taken loss rates down by about 50% since we launched the $200 version of that product.

So we think we're well on our way to what we've said is a more reasonable steady-state loss rate on this product of closer to 1%. I will say it's not necessarily going to be a straight line or linear. We are constantly making trade-offs between honing loss rates, but improving the member experience, trying to drive stickiness to the core spend relationship. So we're going to continue to do that, but the trajectory here is a really, really strong one.

Yes, yes, that's great. And then especially the details on the manual repayment.,, I think that's a good tangible example of some of the things that you're doing. So we talked about MyPay. In one of your previous answers, you talked about instant loans, and Matt and I were chatting about this before coming on stage, sort of the branding between a financial company and a tech company. So these liquidity-based products are becoming a larger part of the Chime story. So is this a shift to becoming more of a lending-focused business? Or is that not the case? Like, how should investors think about how these new liquidity products play into Chime's thesis and Chime's narrative from here?

Yes. With the success that we've had earning primary account relationships with our members, we feel like we've earned the right to serve our members across a range of their financial lives, be that spending, saving, building credit, borrowing, investing and more. If you look at our credit and liquidity products today, SpotMe, MyPay, Instant Loans, which is newer, just beginning to roll out, today, they comprise about mid-teens percentage of our revenue. And while they are growing quite quickly, I want to be very declarative that we envision that Chime monetizes and we're going to stay focused on monetizing primarily via this payments relationship with our members. You should not expect Chime to transform into a lend-centric or balance sheet-heavy business really at all.

I think the other thing to point out, too, it's important to understand about the credit that we do have in our business that it's being offered in, we think, is a very low-risk way, particularly relative to what I think people traditionally think about from a consumer credit perspective: small dollar, very diffused among our member base, very short duration; SpotMe outstanding balances repay in roughly a week or less; MyPay in less than 2 weeks; and again, underwritten on direct deposits where we have this privileged repayment position.

So I think oftentimes people think about consumer credit as the top of funnel adverse selection game. That's not what we're doing. And in fact, we're kind of doing the opposite. We are cross-selling MyPay and other liquidity products to a member base that's already trusted us with their direct deposit relationship, that engages with us on a daily basis. And we're using this product to reinforce and drive stickiness with this core spend relationship. I think an analogy on this is SMB payments or usage-based SaaS companies like a Toast or a Shopify that use credit and liquidity products as sort of a value-added service to reinforce a core payments relationship with their customers.

Yes. No, that's a great analogy. Actually, I think this is the question I'm probably most excited about to hear, the update on -- but it's been a busy week for Chime, announcing a few relationships on the Chime Enterprise initiative. So you have Workday, a couple of other ones. So can you explain to us about the partnership with Workday specifically, maybe the other 2 partners as well and then how the Chime Enterprise strategy fits into the overall Chime growth story?

So the context behind Chime Enterprise, we acquired a company middle of last year called Salt Labs. Salt Labs is founded by the founding team of a company called DailyPay, which really pioneered earned wage access, or EWA, in the employer space. With that acquisition, we established Chime Enterprise. Chime Enterprise's goal is to offer Chime's suite of products as sort of a holistic employee financial wellness suite to employees via employers. And what's exciting about this for Chime is we think this opens up a new strategic low CAC and kind of evergreen new customer acquisition channel for us. And we're very excited about, yes, some of the recent progress and updates.

So last week, we announced a new partnership with Workday. Chime is a wellness partner. And what that essentially means is we are integrated into the Workday Benefits platform. And so what this does for us is this gives us exposure to Workday's something like 6,000 customers, and there are 30 million end consumers in the U.S. to offer Chime products to. And it basically creates a very quick way for Workday customers to switch on Chime Workplace, our suite of services directly integrated into their existing HR system. So we're really excited about this sort of a channel partnership within the enterprise space.

We also recently announced, and by recently, I think I mean yesterday and today, 2 of our newest employer partners, companies called Etech and Ubiquity. These are leaders in the BPO and customer experience space. And we've been really pleased with the progress there. These are on the smaller end of employers. We've been really pleased with the progress there both in terms of the adoption of Chime among the user base as well as interestingly, reengaging previously active Chime members who are sort of being reintroduced to Chime now via this channel. So it is very early days. These are relatively small customers, but we're really excited about this progress.

And I think one of the things that we've been trying to be clear on is, look, this is an enterprise sales cycle. This is going to take time to build. I think we've been pretty clear that we should not be building this into our financial models for 2025, but we remain very excited about this in the medium term.

And I think that's because we feel like we have a couple of key advantages in building out this business. Number one, we are going to market with a holistic suite of products as opposed to sort of a monoline, stand-alone EWA service. Number two, we're pricing this for free. So with Chime Enterprise, Chime Workplace, we are offering -- think about it as a kind of souped-up version of our direct-to-consumer MyPay product, where instead of access to $500, we're giving access to up to $1,000 of earned wages truly for free. That is very different than the other players in the market that are charging, I think, oftentimes pretty exorbitant fees for this type of product. And then the third is our brand. We're talking to employers that already have sometimes high single-digit percentage of their workforces already banking with Chime. So again, still early days on Chime Enterprise, but we are really excited about this as a channel.

Yes. No, that was a great update. And if I may ask 2 follow-ups on this just because I think it's a really interesting topic. So 2 things you mentioned. Like, when I think about channel partnerships or distribution partnerships across the fintech ecosystem, you oftentimes worry about owning the direct customer relationship, but you mentioned this sort of anecdote that you've been able to go out and reengage Chime users that may have lapsed. So I would love to hear how you think about owning, maintaining, redeveloping or reengaging that customer relationship via the Chime Enterprise channel.

And then the second question on MyPay being offered for free, we talked about the dynamics in loss rates coming down in the core direct-to-consumer MyPay loan book. But from my understanding and sort of theoretically on the enterprise side, you're going to have access to the payroll information from the employers. Those loss rates are going to be a lot lower and the benefits to you are pretty clear, but I would love to hear more color on that.

Yes, you got it exactly right. This is a fundamentally different risk profile compared to our direct-to-consumer version of MyPay, where we are underwriting based off of direct deposit history, what we know about a customer base. In the enterprise channel, we're directly integrated into the payroll system. We have time and attendance data. The loss rate profile of that is far different, far lower than what we see in the direct-to-consumer. That's why we can offer this truly for free and monetize this via the core spend relationship that we have with our members.

On your first question, part of the bet here is that we're going to market again with the Chime brand. We're not building a white label type of business here. This is a bet that we can go acquire members at the point of employment and hopefully serve them not just through that job, and look, there's a lot of turnover in this population and these types of employers, but the next job and the next one and the next one, turning this into a long-term customer relationship. That's the hypothesis. We got to go prove that, but we think we're well on our way and pretty excited about that.

That's great. And like you said, we've had 2 announcements over the last 2 days. So I'm looking forward to getting the Bloomberg notification for the next batch that is coming up here. Next few set of questions, maybe a little higher level, taking a step back. So I guess when we just think about the growth profile of the company, can you talk about the levers you have to pull to drive growth, maybe what some of the building blocks for your overall growth algorithm are to help investors understand what the trajectory is from here for Chime.

I talked about how we think we're a platform. And I think one of the benefits of being a platform, oftentimes, you have multiple ways to win. And we think that's very true for Chime across active members, across continuing to grow ARPAM, or average revenue per active member, and number three, our transaction profit margin as we continue to scale. So I'll tick through kind of each of those real quick.

On actives, we have 8.7 million active members monthly transacting actives today, just scratching the surface again of the nearly 200 million, making up to $100,000 U.S. adults in this country. We are already the #1 destination, again, among anybody in the U.S. for primary account or direct deposit switchers in the U.S. We are making it easier for new members coming to Chime to get a taste of Chime. We've talked about this a little bit in the past as our day 1 strategy. We've opened up key value props from the direct deposit paywall, if you will, like credit builder, making it easier to engage and get the value prop from that, earlier in our members' journey. We've made it easier to fund your account with Apple Pay or a debit card. That's helped accelerate some of our growth. We're going to continue to launch new value props. And of course, we're very excited about Chime Enterprise. So a lot of levers to continue to grow active members.

ARPAM is the second. And we've had, I think, some good success on this recently as well. In Q2, ARPAM grew 12% year-over-year. A lot of that driven by the continued breakout success of MyPay. We think there's a lot more to do on this dimension as well, even just within our current or existing product set. So if you take a look at our most engaged members, we define those as ones that have adopted 6 or more of our products. This is a double-digit percentage of our active member base. Their ARPAM is double our average of closer to $250. And you see our cohorts trend up over time as well.

And there's a few different levers underneath that, that are going to help us continue to grow ARPAM. One is share of wallet. So we're already capturing a big portion, but there's more to go. And I think one of the reflections we've had as a business is we actually haven't done the best job helping our members understand that as they bring more of their financial life to Chime, they get more from us. And so that's why we're doing things like Chime+, which is our free membership tier. We get much more from Chime when you bring a direct deposit to us. The second one is take rate. And specifically, what I would point out on take rate is the opportunity to help more of our members get more out of our credit building service, specifically our credit builder card, which earns interchange rates that are far higher than debit. And then third, of course, when we launch new products, we open up new revenue streams. So multiple levers across ARPAM as well.

And then the last one is transaction margin. I think we are going to continue to see opportunities in transaction margin across, again, a few dimensions. One, as we complete the final stages of our Chime core migration, which we have slated for the back half of this year, we stand to benefit from additional gross margin expansion in the business. We're going to continue to hone our loss rates. We talked about that as it relates to MyPay. And we also benefit from economies of scale. This is a payments business at the end of the day, and the payments businesses are all about scale.

One thing that I would say about transaction margin as it relates to how we manage and run the business, you should expect our transaction margin to fluctuate over time. A great example of this is MyPay, where we deliberately brought transaction margin down with the initial launch of this product. It's a lower-margin product, but now it's getting better over time. Our philosophy and decision framework is all around how do we maximize transaction profit dollars over the long term. We think that's the most strategic way to grow. I think you're seeing that play out right now with MyPay, now with us returning to an incremental adjusted EBITDA margin of mid-40s or higher by the end of this year. So that's how we manage the business, and we'll continue to invest some margin for the sake of long-term growth going forward as well.

Yes, it makes a ton of sense. And you just mentioned EBITDA margins. And if I think about the 3 topics I discussed most with investors, it's net user adds TAM, which we've talked about; it's loss rates at MyPay, which we've talked about; and then it's adjusted EBITDA margins, both near term and long term. So fiscal '24, you were breakeven adjusted EBITDA margins. We get up to 4% in 2Q '25. You've also talked about your long-term target to getting to 35% adjusted EBITDA margin. So maybe you could talk about the confidence of your ability to achieve that longer-term target. Maybe anything you can say on time lines, levers to pull, operational leverage, et cetera?

Yes. If you boil down the core economics of our business, think about how our business operates, this is essentially a recurring payments portfolio that monetizes at close to 70% transaction margin, that retains north of 100% year-over-year on a net dollar basis. And we're scaling that over a largely fixed OpEx base that's really concentrated in discretionary investments in growth, new member acquisition, product development. There is a lot of operating leverage in a model like that. I think our numbers kind of speak for themselves on that front. If you took a look at OpEx as a percentage of revenue, that's improved 19 points over the last 2 years. You've seen leverage across every OpEx category. That's flowed through to our adjusted EBITDA margin. That improved 18 points over the last 2 years in Q2. And we expect that the margin improvement that we posted this year to accelerate as we move into the back half of the year. We called that out in our guidance for Q3 and the full year.

And I think one other way to look at this is on an incremental basis, as I mentioned. If you take a look at our business on an incremental adjusted EBITDA margin basis, you would have seen that in 2024, our incremental was 46%. We then temporarily brought that down with the initial launch of MyPay. And now as loss rates are improving, our guide is calling for returning to the mid-40s or higher incremental adjusted EBITDA margin by Q4. I don't think a four-handle is a crazy place to see Chime execute against over the years ahead. And that's why we think we've got a really strong line of sight to a 35% or higher long-term margin in the business.

Yes. Maybe sort of a related topic, you mentioned it in one of your prior answers, is ChimeCore, which I think is a really interesting initiative. You were previously using a third-party provider. You've built out your own proprietary payment processing engine. So maybe you could just give a very brief overview of the work you've done there. You've migrated part of the portfolio. So what remains and then what the benefits of the P&L are going to be from there?

Yes. This has been a pretty massive and multiyear effort. to build our own transaction processing engine and core ledger. This is really the guts of any sort of payments business. And we're really excited now to be in the final stages of our ChimeCore migration. Just to give a quick lay of the land there. Last year, we migrated our credit portfolio over to the ChimeCore system. This year is all about migrating our debit and savings portfolio over to ChimeCore. We've already transferred all new accounts coming on to Chime, on a ChimeCore. The last stage is to convert essentially the back book of debit and savings accounts to ChimeCore, which we have scheduled for the back half of this year.

We're excited about this on a number of dimensions. Number one, for sure, this is some additional cost savings opportunity for Chime. We're already benefiting from some of this already. But as we complete the final stages, we do anticipate another uptick to our gross margin as we head into 2026. But I think maybe more strategically and really the biggest reason why we embarked on this multiyear expensive journey is this is going to allow us to innovate way more and way faster. When you own your technology stack end-to-end, you don't have to go get into the queue of a third-party system. You can design things the way you want, you can iterate much, much faster. So I think the biggest payoff long term is that really this is setting the stage for future, even faster product innovation for Chime.

Yes. No, I think it's a very exciting initiative. So I always want to hear more color on it. I think we have at least one question in the audience, so I will turn it over here.

Scott Barishaw from Deutsche Bank. You talked about all these great things that you're doing to increase new adds, which is exciting. Can you talk a little bit about some of the things you're doing to prevent people from leaving, right? I mean that's one of the things that I think may concern people that you grow out of Chime and you want to move on to another financial institution. But I think on the roadshow, you were talking about some other things down the road like some investing products and sort of those types of things that are going to not let people leave.

Yes. A few things on this. One, just to address your question head-on, we've gotten this question a few times, do Chime customers "graduate" from Chime to another bank maybe that has more capabilities. The reality is we don't see a lot of that. That is not a large phenomenon in our business at all. That being said, we know we need to continue to grow with our member base, that some of their financial needs are going to evolve over time. Certainly, there's going to be a portion of our member base that is going to be able to utilize a more traditional unsecured credit card. We got to play a role in that. Certainly, our member base needs to solve problems around long-term savings and investing. We feel like we got a right to play in that as well. And the list sort of goes on.

So our product road map is pretty much fully booked for the next decade, I would say. We've got a lot to do. But this is also a case where I think one of the realities that we've had to explain is, for members, our members, again, everyday folks, there's a lot more job switching than maybe we all are maybe more accustomed to. For example, in Chime Enterprise employers, they turn over their workforce basically twice a year. And so there's quite a bit of people resurrecting, coming back to Chime. Maybe they lost their job, maybe they're switching jobs, but then the next time they engage with us is when they get a new direct deposit with their new employer. When we ask our members, who do churn, where did you go, that's always the #1 answer. And we do see a lot of folks coming back to Chime.

Thanks for that, Scott. We are right at time. I am going to sneak one more in. This is the Deutsche Bank Tech Conference. Every other company that's been here has taken the opportunity to talk about AI. So I would be remiss not to ask Matt about what is going on with AI at Chime, how you're using it today and what's next on the horizon.

Yes. Look, I think maybe you've heard this from other companies, but we did issue a pretty clear call to arms to Chimers to think about how they could adopt AI really across the business. And we are seeing this change the way that we work in all areas of our business: engineering, marketing, risk, compliance and certainly, customer support. And I think that last category is where we're probably seeing the biggest business benefits so far. So now our AI-powered customer support tools automate 72% of customer interactions. That's sort of thousands of human agents. We launched a gen AI voice bot in Q2. It doubled member satisfaction scores. Our members prefer to talk to a robot. That did not used to be the case, not so long ago. And what's cool about this is we're obviously getting efficiency, but we're also improving the quality, which is pretty cool.

I don't think that the world of an AI-powered financial coach or adviser in your pocket is actually that far away from us now. There's a lot of hype around this kind of thing. But I think at Chime, we've got as good of a shot as anybody bringing that to the real world and making that a reality for 2 reasons. Number one, the multiplier on AI is data. We have tremendous data on our members. And number two, you have to be able to harness that. Because we built our infrastructure layer, our data is centralized, we can harness our data and leverage it for AI in ways that I think is far superior, particularly relative to traditional institutions that kind of rely on the patchwork. So we're very excited about AI, but I think it is still early days on that front.

Yes, absolutely. Well, it's a great note to end on, Matt. We touched on a lot of topics. Thank you so much for your time. It was great to have you here. So everyone give it up for Matt. Thank you very much.

Thank you.

Good afternoon. Welcome to Chime's Second Quarter Fiscal 2025 Earnings Call. [Operator Instructions]. As a reminder, this conference call is being recorded, and a replay of the call will be available on our Investor Relations website for a reasonable period of time after the call.

I'd like to turn the call over to David Pearce, Vice President of Investor Relations and Capital Markets. Thank you. You may begin.

Good afternoon, everyone, and thank you for joining us for Chime's Second Quarter 2025 Earnings Conference Call. Joining me today are Chris Britt, our co-founder and CEO; and Matt Newcomb, our CFO. Mark Troughton, our COO, will participate in the Q&A.

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 our 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 those risks and uncertainties are described in our SEC filings, including our final prospectus filed on June 12, 2025. 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.

With that, I'll hand it over to Chris.

Thanks, David, and thank you all for joining our first earnings call as a public company. As you'll hear today, we're off to a very strong start. I'd like to begin by expressing my gratitude to our members for placing their trust in us and to our employees for their hard work and dedication that brought us to this moment.

Over the past few decades, major industries like transportation, hospitality and retail that were once dominated by legacy players have been upended by customer-obsessed technology companies. New entrants offered consumers better experiences at lower prices, earning the trust of millions and, in the process, established a new generation of beloved brands. Their digital-first business models allowed them to quickly and efficiently reach massive scale. This same transition is happening now in consumer banking, and I'm proud that Chime has emerged as a clear leader with a mission to unlock financial progress for our members.

We created Chime to help everyday people, starting with those earning up to $100,000 a year, who've been overlooked by traditional banks, not the unbanked, but the unhappily banked. Today, we're already the primary financial partner for millions, but our ambition is much bolder, to become the largest provider of primary account relationships in the U.S.

And we're doing that as a technology company with a scalable and low-cost operating model, with a combination of recurring payments revenue, high gross margin and very low credit risk. We've earned the trust of our members and will support them in all areas of their financial lives across spending, saving, building credit, borrowing, investing and more. With our modern tech stack and radical cost-to-serve advantage, we can deliver innovative, personalized experiences to address each of these needs for free or low cost. And by utilizing AI built on our uniquely rich data set, we're becoming an even more indispensable partner, deeply attuned to our members' individual needs, anticipating what's next and guiding their financial progress every step of the way. Our vision isn't just aspirational. It's grounded in an attractive business model that's driving rapid growth at scale and strong operating leverage.

In Q2, we achieved 37% year-over-year revenue growth, an acceleration relative to our seasonally strong Q1, when tax refund activity drives higher levels of re-engaged Active Members, Purchase Volume and revenue. Our adjusted EBITDA margin rose to 3% in Q2, an 18 percentage point increase over the last two years. In Q2, we grew Active Members 23% year-over-year to 8.7 million with the majority relying on Chime as their primary account relationship.

Among U.S. adults earning up to $100,000 annually, Chime is the top destination for those switching their direct deposit, thanks to our scalable referral-driven acquisition model. Despite our scale, with less than 5% penetration, we're barely scratching the surface of the opportunity to serve nearly 200 million everyday Americans earning up to $100,000. Banking for this large segment of everyday people is an area ripe for disruption. In a recent shareholder letter, one of our nation's top bank CEOs reported that for low balance accounts, which make up the majority of their accounts, their costs to serve them are far greater than the revenue they earn.

The reasons? First, high-cost structures, due to a combination of an in-person approach to service delivery, physical branches and legacy tech. And second, their net interest margin, or NIM-driven business model, which doesn't work for everyday Americans with low, average balances and who often don't fit their credit box. Without NIM to cover their high-fixed-cost structures, incumbents charged consumers over $18 billion in estimated fees in 2023, 95% of which were paid by everyday American households.

These are the people who are unhappy with their bank relationship and are coming to Chime. We pioneered a business model that succeeds when we earn our members' trust by designing products that are helpful, easy and free. If they can't be free, we aim to be the lowest cost provider. This approach leads to top-of-wallet, primary account relationships, giving us a level of engagement and payments-based monetization that we believe is among the highest in consumer fintech. Chime is not a bank. Our member deposits reside in regulated, FDIC-insured accounts at our partner banks.

We are an asset-light technology company, obsessed with addressing our members' most critical financial needs. Our early progress has been fueled by 4 distinct competitive advantages that we believe will continue to expand as we grow. These are our low-cost structure, our track record of product innovation, our primary account relationships and our beloved brand.

I'll now spend a few minutes walking through the progress we've made in each of these 4 areas in Q2. Our first competitive strength is our significant cost advantage, which allows us to serve customers at 1/3 the cost of a large bank and 1/5 the cost of a regional bank. This is fueled by our digital-first, bank partnership model and vertically integrated tech stack. The recent introduction of ChimeCore, our proprietary transaction processing core and ledger, has enhanced our cost advantage and accelerated our product development velocity.

In Q2, we successfully transitioned all new debit and savings accounts onto our new system. Our tech stack was also designed to centralize our data, which facilitates the deployment of AI to improve member experiences, while significantly reducing our cost to serve.

In May, we launched our Gen AI voicebot to all members, which more than doubled our satisfaction scores compared to our legacy voice system. AI-powered tools now fully automate the majority of our support interactions and do the work of thousands of human agents.

As a reminder, since 2022, we've reduced our cost to serve by nearly 30%, and over time, we think AI can power nearly all of our support interactions. AI is improving the way banking services are delivered, and we believe we're at the forefront. Our second competitive advantage is our track record of developing some of the most impactful product innovations in consumer banking and payments for everyday people.

Last year, we launched MyPay, another hit product enabling members to access their earned wages on demand. MyPay is now an over $300 million annual revenue run-rate product and another key driver of new member growth. In terms of risk, we made faster progress than planned on improving MyPay loss rates in Q2, which led to transaction margins for this product tripling in the quarter, and we expect further progress in the quarters ahead. Going forward, we think there's much more to do with MyPay, including our enterprise version offered through Chime Workplace, our employee financial wellness solution for employers. We expect to announce some of our early enterprise partnerships in the weeks and months ahead.

Because of our strong performance across the business, including MyPay, we've raised our expectations for revenue growth and adjusted EBITDA for the rest of 2025 relative to our previous internal expectations, which I'll have Matt walk through later. In Q2, we also started scaling Instant Loans, our installment loan product which allows pre-approved members to borrow up to $1,000 at affordable rates, repaid over a 3- and 6-month period. Early results are encouraging and we observe higher engagement and retention among members who take an Instant Loan, reinforcing our long-term core spending relationship. Loss rates have been in line with our internal expectations, as we continue our measured rollout.

The final Q2 product update was our continued rollout of Chime+, our free, premium membership tier. Chime+ showcases the products our members unlock with direct deposit, like SpotMe and MyPay combined with enhanced benefits including exclusive cashback deals, a higher interest rate of 3.75% on savings and dedicated member support.

Early results here are promising. We're already seeing Chime+ lead to higher direct deposit conversion and member retention rates. Chime+ is just the beginning of a broader effort to show our members that as they engage more, they get more with Chime. Our third competitive differentiator is our success in earning primary account relationships with the majority of our Active Members. Our approach has resulted in what we believe are among the highest levels of engagement, long-term retention and customer lifetime values in consumer fintech.

In Q2, our average Active Member did 55 transactions per month with us and engaged with our app an average of 5 times per day, positioning Chime at the center of their financial lives. Our real-time view into the state of the everyday American consumer is showing healthy member spending and stable account balances. Even in an uncertain macro environment, our model focused on non-discretionary spend and short duration liquidity products as well as our privileged repayment position is incredibly resilient.

We grew our Active Members 23% year-over-year in Q2, while also reducing our member acquisition costs. We continued to see that over 50% of new members came to Chime from organic and member-driven channels, including referrals. And our members don't just like Chime, they love Chime. They are passionate about us and want to tell their friends about us.

Our final competitive advantage is the market leading and trusted brand we've built in banking and payments. We're now a clear leader with unaided brand awareness of 40%, rivaling the 2 largest traditional banks in the U.S. and the go-to brand for the most critical financial needs of everyday Americans. Our brand-building initiatives connect with culture. And in April, we celebrated Financial Progress Month, featuring partnerships with Deion Sanders aka Coach Chime and WrestleMania.

In June, we announced our newest brand ambassador, Cooper Flagg, the NBA's #1 Draft pick, with content that went viral on TikTok. We believe our combination of competitive advantages is only growing stronger as we demonstrated in Q2.

And with that, I'll hand it to our CFO, Matt, to discuss our financial results and outlook.

Thanks Chris. Good afternoon everyone, thank you all for joining us today. I'm excited to discuss our second quarter results and outlook.

As Chris noted, we had a great second quarter with revenue of $528 million, up 37% year-over-year and continued adjusted EBITDA margin expansion. Given the strong performance across the business, we are raising our expectations for both revenue and adjusted EBITDA for the second half of the year relative to our previous internal expectations.

Our Q2 financial performance was strong across the board. Payments revenue was $366 million, up 19% year-over-year, slightly ahead of Purchase Volume growth of 18%. Platform revenue totaled $162 million, up 113% year-over-year, as we continued to see very strong MyPay performance. Gross profit was $461 million, yielding an 87% gross margin; and transaction profit, which is gross profit less transaction and risk loss, was $363 million, yielding a 69% transaction margin, driven in part by faster-than-planned progress on MyPay loss rates.

Finally, we continued driving operating leverage with $16 million of adjusted EBITDA in Q2, a 3% margin, representing an 18 percentage point improvement over the last 2 years. Given this is our first earnings call, I'd like to take a step back and help connect our mission, strategy and member-aligned business model to our financials. We believe there are 4 core elements that are critical to understanding our financial model.

First, we have a payments-based revenue model driven by recurring, largely non-discretionary member spend. Second, we have multiple levers enabling us to drive rapid growth at scale across Active Members, Average Revenue per Active Member or ARPAM and transaction margin. Third, our success earning primary account relationships drives strong unit economics, with an estimated LTV to CAC of roughly 8x. Finally, our high transaction margin and a largely fixed OpEx base drive strong operating leverage and incremental margins.

Let me jump into each of these themes. We have an asset-light payments-based business. 69% of our revenue in Q2 was payments revenue earned from interchange-based fees on the Purchase Volume generated by Chime members using their Chime-branded debit and secured credit cards. We believe the combination of scale and growth we've achieved on our Purchase Volume is unmatched in the industry. We are now one of the largest and fastest growing card portfolios in the U.S.

In Q2, Purchase Volume totaled $32 billion, up 18% year-over-year, coming off our seasonally strong Q1 when members received their tax refunds. The important thing to understand is, because our members use Chime as a primary account, this Purchase Volume is highly resilient and habitual, concentrated in essential, everyday, non-discretionary items like food, gas and utilities. This drives durable, long-lasting cohorts in our business. It also gives us what we think is a very unique business model in our category. Compared to many consumer fintechs that primarily generate revenue from lending, consumer charges, or trading fees, our model generates high-quality, recurring, and in our case, high-margin payments revenue.

Our model is very low credit risk. Mid-teens percent of revenue was from credit and liquidity products as of Q2. And where we do extend credit, it's in a low risk way. Small dollar and highly diffuse among our member base, short duration, with average repayment periods of less than a week on SpotMe and less than two weeks on MyPay and underwritten by direct deposits, which gives us both a data and first-in-line repayment advantage.

We think our model is analogous to SMB payment and usage-based SaaS businesses, which monetize a core payments relationship and then deepen this engagement by cross-selling value-added services. The second theme is our multi-dimensioned growth opportunity, across Active Members, ARPAM and transaction margin. In Q2, we grew Active Members to 8.7 million, up 23% year-over-year, while simultaneously bringing down CACs by over 10% year-over-year.

One quick note, we see seasonality in our Active Members as well. Tax refund activity in Q1 results in a larger number of members re-engaging with us on an Active basis, resulting in seasonally high quarter-over-quarter net adds in Q1, and lower net adds in Q2. 23% year-over-year Active Member growth in Q2 was in line with growth in Q1 and an acceleration from 2024. Great progress, yet still early days in our journey to serve the nearly 200 million everyday people making up to $100,000 annually in the U.S.

Second is our ARPAM profile, which, we believe, is among the highest in consumer fintech despite very little of our revenue coming from mandatory fees. Our high ARPAM is driven by our deep engagement and a top-of-wallet card position. As we've expanded our platform, we've grown ARPAM significantly. In Q2, we grew ARPAM by 12% year-over-year to $245, fueled by the continued breakout success of MyPay. We think there is still a massive opportunity ahead, certainly as we continue to add new products to our platform, but even as we continue to drive adoption across our existing product base.

In Q2, our most engaged Active Members, those using 6 or more products each month, generated over twice as much ARPAM as our average Active Member. Finally, transaction margin. Our gross profit margin less transaction and risk losses, including losses related to our liquidity products such as MyPay and SpotMe. In Q2, our gross margin was 87% and our transaction margin was 69%. Over the last several years, driven by our investments in technology and increasing scale, we've grown our transaction margin substantially, from 66% in 2022 to 74% in 2024.

Starting in Q3 '24, we brought our transaction margin down with the initial launch of MyPay, a positive, but lower margin product compared to the rest of our business. A great example of the power of primary account relationships, we've already scaled MyPay, which we believe is the lowest cost earned wage access product in the market, to an over $300 million annual revenue run-rate product. Now as is typical for new credit products, and similar to what we saw when we rolled out SpotMe several years ago, as MyPay begins to mature, as cohorts season and as our underwriting improves, we're seeing MyPay economics improve substantially, and that's happening even faster than we planned.

While our regular quarterly reporting will focus on overall levels of transaction and risk loss, we wanted to highlight a few additional details of our MyPay economics today, given how rapidly the product is maturing. In Q1, MyPay loss rates were just north of 160 basis points of advanced volume.

In Q2, we drove loss rates of approximately 140 basis points, great progress toward our steady-state loss rate target of approximately 1% for our existing MyPay product. This progress, combined with continued strong usage rates, is what enabled us to triple MyPay transaction margin quarter-over-quarter in Q2. We expect continued progress over the coming quarters, which is driving accelerated adjusted EBITDA margin growth in our guidance, which I'll discuss shortly.

The third theme is our strong unit economics. The combination of our highly engaged primary accounts, our ability to effectively cross-sell and increase ARPAM, and our strong long-term retention rates and transaction margin drive long-lasting cohorts of transaction profit.

We have cohorts now nearing a decade old and still going strong. Our unit economics illustrate why we believe primary accounts are the most valuable relationships in financial services, driving differentiated lifetime values relative to single-point solutions with more cursory levels of engagement. These differentiated LTVs drive strong and sustained returns on our investments in new member acquisition, enabling us to generate an estimated LTV to CAC of approximately 8x in our business today.

The final theme is about how our high transaction margin and a largely fixed OpEx base enable us to drive strong operating leverage and incremental margins. In 2024, our incremental adjusted EBITDA margin was 46%. In contrast to incumbent banks, our digital, asset-light platform allows us to efficiently scale our services over a growing Active Member base without needing to make massive investments in infrastructure or people.

In addition, our OpEx base is heavily concentrated in discretionary investments in growth. These factors make our OpEx base very scalable and have allowed us to drive strong operating leverage across every OpEx category. In Q2, Non-GAAP OpEx represented 66% of revenue, an 11 percentage point improvement year-over-year and a 19 percentage point improvement over the last 2 years. That operating leverage has translated to meaningful adjusted EBITDA margin expansion, which we expect to accelerate in H2.

Turning briefly to our balance sheet, we remain well capitalized. Net of transaction expenses and tax withholding payments made on vested RSUs, we raised $448 million in proceeds from our IPO. As of the end of Q2, we had $1.1 billion in unrestricted cash and marketable securities on our balance sheet. We also had $444 million available to draw under our revolving credit facility.

Finally, turning to our third quarter and full year outlook, we're pleased to provide guidance that exceeds our previous internal expectations, driven by the broad business strength we're seeing. In the third quarter, we expect revenue between $525 and $535 million, resulting in year-over-year revenue growth between 24% and 27%. We expect adjusted EBITDA between $12 million and $17 million, and an adjusted EBITDA margin between 2% and 3%.

For fiscal year 2025, we expect revenue between $2.135 billion and $2.155 billion, resulting in year-over-year revenue growth between 28% and 29%, and adjusted EBITDA between $84 million and $94 million, an adjusted EBITDA margin of 4%.

I'd highlight a few things about H2. In H2, we expect our revenue growth to be driven predominantly by the continued growth of Active Members, following the strong growth and ROI we see to start the year. As a reminder, we began scaling MyPay in Q3 of last year. As a result, we expect platform revenue year-over-year growth rates to see some natural normalization in the second half of the year as we lap this initial roll out. What's really exciting is that driven by our progress on MyPay economics, we expect the strong top line growth we've driven over the last year to begin to really flow through to the rest of our P&L, with accelerating adjusted EBITDA margin growth in the back of the year.

We expect adjusted EBITDA margin to grow between 5 and 6 points year-over-year in Q3, ahead of both Q1 and Q2, with further expansion in Q4. On an incremental adjusted EBITDA margin basis, we expect to return to the mid-40s or higher by Q4, faster than we previously anticipated, and great progress toward our long-term adjusted EBITDA margin target of 35% or higher.

And with that, I'll turn it back to Chris to wrap us up.

Thanks Matt. Before we turn to your questions, I want to reiterate how proud I am of this team for raising the bar for core banking services in America. Our member-aligned model, track record of product innovation and proprietary tech stack now enhanced with AI are meaningfully improving the user experience for everyday consumers while helping us build a loved and trusted generational brand.

With that, I'll open it up for questions.

[Operator Instructions] And we will take our first question from Tien-Tsin Huang with JPMorgan.

Congrats again on the IPO and the first public earnings call for you guys. Glad to be on it. Just wanted to start maybe and ask you for an update on the strategy of widening the funnel and lifting restrictions. I know that was talked about during the roadshow and it's early, but are you getting the results that you wanted? Any interesting learnings or impact to gross adds or product attach retention, that kind of thing?

Yes, sure. Thanks, Tien-Tsin. I appreciate the kind words. I think coming out of a really strong Q1, which is obviously always a seasonally strong quarter for us, we continue to see great progress at the top of the funnel, 23% growth year-over-year in terms of actives with lower CAC down about 10%. And so we're growing these primary accounts, while also successfully trying to drive earlier engagement. We talked about, as you indicated, was about our -- what we call our day 1 initiatives, trying to make Chime even easier to use right out of the gate. And so we have had some great success in terms of expanding our funding rails, making it easier to add money to an account as a new member, opening up Apple Pay, for example, mobile check deposit and also providing introductory access to certain value props that historically have been behind the paywall, if you will, of direct deposits.

So things like credit building and getting people using our P2P and these sorts of things before direct deposit. And it's -- the success has been great. We're seeing increased amounts of activation rates among enrollees and funding rates, which we feel good about sort of increasing the size of the pond to fish in. We're seeing higher adoption rates of our credit building -- credit builder card, which is good. As you know, that's a higher interchange product for us. So it's good for the business as well, while also being helpful for our members. And I think it's -- this whole area of initiative is around the recognition that there isn't going to be a single path to converting people to direct deposit, which is always our #1 goal. We know that some people are going to want to date a bit before they get married. And so we feel really good about this strategy, and I think you're seeing it in the numbers in terms of the ads at the top of the funnel.

Okay. Great. That's good summary there. Just my quick follow-up. I wanted to ask on MyPay, the transaction margin there, really impressive. Maybe give a little bit more on what's driving the momentum? Are you seeing higher attach usage? And curious about sustainability given, again, what you've learned so far?

Yes, sure. Maybe I'll start and pass it over to Matt on the risk performance. But maybe just to level set, we're so excited about this product. We mentioned it's a $300 million run rate business already just about a year in. And if you just look at the actual offering itself, with MyPay, everyday people have the opportunity to access to $500 of their paycheck on demand for free before the paycheck actually arrives. And if they want it instantly, they can get it for a low fee of $2. That's less than a couple of Starbucks. So the team has proven an ability to manage this product incredibly well in terms of the risk. But importantly for us is that not only is it a profitable product, it's getting better, but it's also a really key element of the suite of value propositions for why people come to Chime in the first place. It continues to show in survey research and activation that this is one of the top reasons that people come to Chime. But maybe you want to talk to some of the success on the risk side, Matt?

Yes. Thanks, Chris. As Chris mentioned, we're very pleased with the continued progress on MyPay. And that's true both on the top line, but also on our margin and loss rate specifically. We did see attach rates on the product tick up sequentially quarter-over-quarter. That's driven by the continued strong interest in this product among our member base. But what I will say there, too, there's also a little bit of seasonality here, seasonality with respect to the usage of our liquidity products. Utilization of liquidity products does tend to be a touch lower during Q1 after members have higher balances when they receive their tax refunds. But in general, we're seeing very strong and continued great product attach. But as I mentioned in our earlier prepared remarks, what's really exciting is our faster-than-planned progress on loss rates. And that is, again, what drove loss rates to closer to 140 basis points in Q2 from just over 160 basis points in Q1.

And again, great progress towards what we think is a more reasonable steady-state loss rate on this product of approximately 1%. And so when you put that together, the loss rates plus continued strong engagement, that's what's enabled us to triple our MyPay transaction margin quarter-over-quarter. In terms of what's driving that, I'd point out a couple of things. Number one, this is sort of the natural evolution of the new credit product as cohorts season, as the product matures, loss rates do tend to improve. So I think we're just sort of following a natural course there.

But we're also improving our underwriting as we learn on this product and iterate on it over time. And if I sort of zoom out for a second, it's really the same playbook that we use for SpotMe, where we actually saw about a 50% improvement in loss rates today versus when we launched the $200 version of that product. So we're really excited about this progress. And again, that's a key reason behind why we've raised our expectations for adjusted EBITDA margin growth in the back half of this year relative to our previous internal expectations. And as I mentioned, we expect to return to the mid-40s or higher incremental adjusted EBITDA margin by Q4.

And we will take our next question from James Faucette with Morgan Stanley.

And I want to echo the congratulations on being public and all the work that's gone into getting to where you are today. I want to follow up on, Matt, just kind of your comments around loss rates on MyPay, et cetera, really impressive performance here in the last quarter. And I appreciate wanting to get those loss rates down to 1%. But how are you thinking about the pace that makes sense to get them to those levels versus using MyPay as an effective way to grow and engage with new customers and expand engagement with existing customers? Just trying to make sure that we're kind of level set correctly in terms of how quickly we should expect that to continue to improve.

Yes. Thanks for the question, James, and I appreciate the comments there as well. So a few thoughts here. You're exactly right. We control the dials here on MyPay loss rates. And I think the journey that we're on here is continuing to iterate between continued improvement in loss rates and making sure that the member experience on MyPay is best-in-class and everything that our members would expect. And so that certainly may mean that the trajectory on loss rates may or may not be linear. And we oftentimes want to make sure that we're looking at the holistic picture. If there's ways to offer a little bit more member impact on MyPay that can drive bigger impact to our overall business in terms of engagement, retention or direct deposit attach, that's -- those are trade-offs that we would make all day. That being said, given the faster progress that we've seen on this, I don't think you should think about that 1% loss rate as a long-term target. This is really a level that we could foresee getting to really in the quarters ahead, the medium term. And so we're quite excited about the progress here overall.

Good, good. Yes, that should be really exciting. And then, Chris, I wanted to ask just in terms of, obviously, MyPay as a product has a lot of potential as a way to engage with enterprise. And I know that you've talked about enterprise and workplace initiatives to help grow engagement for potential Chime members, et cetera. Can you give us an update on that initiative and kind of the milestones we should be tracking over the coming quarters as to its progress?

Absolutely. Thanks, James. Appreciate it. For this one, I'm going to pass it over to Mark Troughton, our COO. He looks over this part of the business and is close to it. So why don't you take it, Mark.

Thanks, Chris. James, I think just to level set for everybody on the call, Chime Workplace is the division of Chime where we deliver our products as a free employee financial wellness solution through large enterprises. And we use Workplace to partner with employers. And the goal here really is to unlock a new acquisition channel for partner account for Chime. I think it's fair to say that we continue to be increasingly excited about Chime Enterprise and Workplace. And we have a team there, a well-established team that actually pioneered the whole enterprise sale of earned wage access product. The team has built a strong pipeline. We have launched a number of partners. And I think it's fair to say that so far, what we're seeing there is, in terms of adoption and satisfaction, is actually exceeding our expectations. So we don't have any specific announcements to make today, but we hope to be sharing more here in the coming weeks and months.

And our next question comes from Will Nance with Goldman Sachs.

Echo the other congrats on the call so far about the IPO and around the first quarter out of the gate, awesome to see. I wanted to ask on just some of the spending trends that you guys saw in the quarter. I think if we look at kind of spend volume per customer, that number has been down kind of low to mid-single digits the last couple of quarters. And I know I think Tien-Tsin asked about the widening the funnel initiatives. And so I'm sure there's some mix dynamics going on there. So wondering if you could talk about that trend and help us decompose that a little bit. What are you seeing on the underlying spend levels per customer? And just for modeling purposes, how would you kind of -- how would you help us think about kind of that metric on a go-forward basis?

Sure. Maybe I'll take that. And then, Matt, if you have anything to add. Maybe just some context here. We are now at an over $130 billion run rate in terms of purchase volume across our portfolio. So back in '24, that would make us just on our debit card portion, the sixth largest debit issuer in America and growing at a rate that's -- compared to the rest of the top 10, our rate of growth is 9x faster. So we've achieved very nice scale and also continue to grow. It is true that as we add new actives at the top of the funnel and push our service offering so that people are able to engage with us in a lighter weight way out of the gate that on a per active basis, average spend per active came down a little bit. we think this is -- and early results show that this is an investment worth making because we know that not everyone is going to immediately convert to direct deposits. So we think that this is a good investment for us.

I'll also just highlight that we are a nominal payments business. So we've benefited from some inflationary tailwinds over the past few years. Inflation was something like 8% in 2022 and now down to a little under 3%, 2.7% in June. So that provides a little bit of headwinds in terms of like the actual spend per customer that happens. But we're going to continue to invest in what we have from the earliest days of this company from day 1, which is developing people into primary direct deposit relationships because we know that that's the best way to develop aligned long-term relationships and be able to unlock the best product experience for them. So I think you may see a little bit of choppiness from quarter-to-quarter. But at the end of the day, the amount of spend that we have on our Active Member base is, I think, significantly higher than you'll typically see in the industry.

Yes. Just to add to this, to quickly comment on overall spend trends as well as -- we're seeing very steady trends. So if you take a look at our primary account users, our more tenured users, you're seeing continued growth in -- among those users. So the per active metric that you referenced is really just driven by mix shift. And so I think the high-level trend that you're seeing in our business of a steady spend, stable trends is very much aligned with, I think, what you're hearing around the industry at this point of a healthy consumer. And that's true both across discretionary and nondiscretionary categories. Of course, we are a heavily concentrated nondiscretionary spend business. We help our members pay for their everyday expenses, which is steady regardless of the cycle. But again, we're seeing steady trends really across the board.

Awesome. Appreciate all that color. And then just on the MyPay outside the direct deposit base initiative, I was wondering if you could comment on some of the proposed bank fees that are out there. Does this have any impact on just the unit economics or cost structure of that product? And just any thoughts on whether that is meaningful enough to kind of change strategy or pricing there?

Yes. Maybe just to comment on that pricing proposal, one of the bank's proposed pricing for access to data. Look, we believe that consumers should have the ability to move their data to whatever service provider they want without having to incur fees for it. I think we're quite a bit different than most fintechs out there, in that we own the primary account relationship. So we are the ones that actually have the data and the majority of our deposits are coming to us from that direct deposit relationship. So I don't think that -- if that change were to happen, it wouldn't affect us. And it sounds like based on what the CFPB recently came out with that, that pricing actually isn't going to happen anyway or is unlikely to anytime soon.

But as it relates to our MyPay day 1, MyPay day 1 is just one experiment that we're trying at the top of the funnel, again, in the vein of trying to make interacting with Chime, getting access to some features from the early days, available to members before they engage with direct deposit. Any potential changes would have essentially negligible impact on that product, which again is an experiment that's part of a broader suite of services available to people at the -- from the outset of the relationship. But we'll be learning more over the course of this quarter and beyond on the effectiveness of that product and how effective it is in getting people to ultimately sign up for direct deposit and primary account relationships.

I think, Chris, just to add to that, it maybe also worth just saying that, look, if we don't think this is going to happen. But even if charging for access to banking transactions became the industry norm, the reality is that is probably a net benefit to Chime as somebody who has a lot of primary account relationships. So we really don't see this idea of charging for access as having any sort of negative impact on Chime at all.

[Operator Instructions] And we will take our next question from Darrin Peller with Wolfe Research.

Congrats on the first quarter out. I want to understand a little bit more your thought process going forward now that you've had some really good success for about a quarter to 2 quarters on the ungated new users, ungated to direct deposit that was touched on before. How do you think about the mix going forward around that, your strategy? And then I guess, how does that play into what we should think about modeling CAC? It was obviously down, and there's been really good word of mouth that's been driving a very strong CAC for a while, down 10% year-over-year again. I guess, I'm just curious if that plays into it to some degree. But more importantly, just as an add-on, how do we model that? How do you want us to model that going forward?

Thanks for your question, and I'll take it. If you want to add to that, you can. But like I said, we feel really good about this strategic decision to make Chime easier to use right out of the gate. And I think the key for us is a combination of giving people that are new to the story, new to the platform, giving them enough to get a taste of Chime services, but also, at the same time, make it clear that as you engage with Chime and you do more with us, you're going to get more from us. And that's really the strategy behind products like Chime+, which really is an effort to package all of the best features of Chime that you get when you engage with us as a primary account holder, using direct deposit, getting higher rates on your savings account, getting access to these core liquidity services of MyPay and SpotMe and additional benefits and services. You're going to continue to see from us an investment into ways to make Chime more accessible for people out of the gate, but also even more rewarding to our members as they engage with us.

So we think creating this larger pool of members to engage with us is a decision that makes sense. It's a natural one for us and especially as we layer on a suite of offerings that get better as you engage more, we think it's a natural win-win. We've got -- we still have lots of people that come through the top of the funnel and have already decided that they want to switch their banking to Chime and others that are going to engage in a lighter weight way for a period of time. And look, the top of the funnel and the cost save on that side is the result of just great execution from our product and marketing team, opening up new channels, new video channels using AI at the top of the funnel, having even more success with member referral programs. I mean, that's what's really driving our success at the top of the funnel and the efficiency that we're having in that area. And we're going to keep pushing on that because we really like the ROI on those investments.

What I'd add to that, Darrin, is in addition to the great progress on CAC is we're also driving higher LTVs. You're really seeing that in the growth in ARPAM, as an example, growing 12% year-over-year in Q2. And so when you put these things together, what you're seeing is improvement in our already strong unit economics, and they're translating to payback periods that are now more in the zone of 5 to 6 quarters for our most recent cohorts compared to 7 quarters that we mentioned in our S-1 a few months ago. And those payback periods support longer-term LTV to CAC of 8x or higher.

And we will take our next question from Timothy Chiodo with UBS.

I want to see if we could circle back to Chime Workplace again a little bit and dig into it a little bit just to bring it to life. So clearly, you've stated that it's going to be a great low CAC channel, brings in a lot of members. And I think the beauty of it is it kind of replenishes itself as those employees who have Chime accounts move on to other jobs, they can stay with you and it kind of replenishes. So it seems like a great channel. I wanted to see if you could bring to life a little bit more of the conversations with these large enterprise merchants. I know you mentioned there's a few over the next few weeks that you might be able to announce. But when you go in and speak to them, I mean, what is the status quo? Are they speaking to competitors? Are they maybe using a competitor? Is this totally new to them? Is there any pushback? Or it's just sort of inertia and where it falls on their priority list?

Yes. Sure. That's a great question. I think in terms of, are they new to the category versus do they have an existing provider, I think a lot of them are new to the category because the penetration is still really low in this market. But there obviously are some that we're speaking to who have an existing provider and may be considering a switch. So I think that probably gives you an indication there. I think it's probably worth discussing what we think our sort of competitive advantages are and why we think they're actually open to the calls and why we think we actually stand a chance in this channel. And really, there's a few things. The first one is historically, this market has been approached by people who are just offering earn wage access. It's a sort of narrow point solution. And really, our solution is much broader. It's offering broader financial wellness, part of which is earned wage access, but it goes beyond into credit building and savings and broader financial health.

And so when we chat to an employer, we're actually able to address not only a portion of their employee base that's interested in earned wage access, which may be 30% or 40%, but actually, we're able to address 100% of their employee base, number one. Number two, if you just bring it back to the earned wage access piece, our belief here is that our offering is superior to the extent that we are offering up to 100% -- access to 100% of wages without any fees at all. Just to remind people on the call, the Workplace -- the Chime Workplace option actually is different to the consumer option. We offer up to 100% of earned wages with no fee irrespective of whether you want to receive it immediately or delayed.

That offering is absolutely unmatched in the market and really compares very favorably against other earned wage access providers who are charging $3 to $4 per draw, where members may be paying $40 a month, and with the top quartile may be paying in excess of $70 to $80 a month. So that's a strong advantage for us. And then I think the third core advantage there for us is really the Chime brand and our installed base, where given our scale and our installed base of customers, we're able to drive greater adoption and satisfaction through this. So we think those are the advantages that are resonating today in those sales calls. But as we indicated earlier, we're not at the point here where we're going to be discussing specific customers and partners that we've launched. But we do hope here in the coming weeks and months to be able to share more specifics with you of the progress in the channel.

And our next question comes from Andrew Jeffrey with William Blair.

Great to be involved on this first public call. Matt, I had a couple of questions actually. One is housekeeping. Could you give us a sense of what you think interchange rates are going to look like? I know that's a function of mix between credit spend and debit spend as we think about building our models for the rest of the year? And then also, could you give us the fully diluted share count, just so we can calculate enterprise value correctly?

Yes. Thanks, Andrew. Appreciate the questions. So on the interchange rate side, I think what we're seeing there in general is a lot of stability. So what you're seeing on a year-over-year basis in Q2 was a -- with a slight uptick in rates relative to the year prior. But in general, our expectation is for stability across both debit and credit volumes. Of course, credit earns significantly higher interchange rates versus debit. This is for our secured credit card. And so that remains a big opportunity for us as we continue to drive adoption of our credit building services for our members. On the fully diluted share count question, what you'll see in our filing is a share count of approximately 100 -- I'm sorry, 370 million. That's our issued share count as of the end of Q2.

And we will take our next question from Sanjay Sakhrani with KBW.

Congrats again. I had a question about ARPAM. Strong growth in the second quarter, excelled a bit versus 1Q. I know MyPay and other initiatives are going to help. Just curious how we should think about the growth trajectory over the course of the year and into next. Maybe, Matt, you could help us with sort of how the sequencing of that would play out over the course of that time.

Yes. Thanks, Sanjay. Happy to take that one. So a couple of quick thoughts on that. The first, what I would say is we've certainly benefited on the ARPAM side over the last year from the launch of MyPay. That's been a key contributor of our growth in ARPAM over the last 4 quarters. Naturally, we are now facing the sort of 1-year anniversary of the launch of MyPay. And as a result of that, you should expect some natural normalization of our ARPAM growth rate as we lap that initial launch, which again was in Q3 of last year. We ramped throughout the course of Q3. So in Q2 '25, we're sort of growing off of a lower base versus Q3. And so that's, I think, the progression there on the ARPAM side. What I just sort of say on top of that, of course, that we're really excited about is, again, after driving such strong top line from MyPay, what we're now expecting over the course of the second half is again for that strong top line to really start to flow through the rest of our P&L.

And again, that's a key reason why our guide is calling for an acceleration to our adjusted EBITDA margin growth in H2 relative to H1. As a reminder, we expect adjusted EBITDA margin expansion to accelerate about 5 to 6 points year-over-year in Q3. That's ahead of both Q1 and Q2 of this year. And we also expect even further expansion in Q4. And again, on an incremental adjusted EBITDA margin basis, we expect to return to the mid-40s or higher by Q4.

That's very helpful. And I guess, like my follow-up was actually on the margin. I mean, Chris mentioned AI. Obviously, that could be quite enhancing to efficiency, the strong incremental margins that you have. What kind of time line do you think we could expect to get to sort of the longer-term goals that you have on the operating margin? Like what do you think it can happen over an intermediate term?

Yes. So as a reminder, we think that on a more steady-state basis, our adjusted EBITDA margin should approach 35% over time. And I think that the progress that we've made on EBITDA margin growth the first half of this year and our expectations for the back half of this year, again, returning to mid-40s or higher and gives us a strong line of sight to get to those levels. The other thing I would say is the path that we take there, I think, also depends on our levels of growth investment. Such a significant portion of our OpEx are based off discretionary investments in growth. And so we have the dials there to trade off over time as well. So you should not think about that as a decade-long target for us. But of course, we're going to continue to invest in this business over the next couple of years as well.

And it appears that we have reached our allotted time for questions. I will now turn the call back to Chris Britt for closing remarks.

Appreciate it. And I just want to thank everyone for joining the call today. We look forward to spending more time with you in the weeks and months ahead.

Thank you. This does conclude today's presentation. Thank you for your participation. You may disconnect at any time.