Dave IncDE

Previous wording

Further, we see a significant opportunity to address the broader short-term credit market. According to a 2023 report by The Financial Health Network ("FHN"), legacy financial institutions charge approximately $40 billion in fees annually. The FHN estimates that financially “coping” and “vulnerable” populations pay over $160 billion a year in fees and interest for access to short-term credit. Our prospective Member opportunity is also significant. We estimate that our total addressable market consists of between 160 million to 180 million Americans who are in need of financial stability and are either not served or underserved by legacy financial institutions.

Current wording

Further, we see a significant opportunity to address the broader short-term credit market. According to a 2024 report by The Financial Health Network ("FHN"), legacy financial institutions charge approximately $40 billion in fees annually. The FHN estimates that financially “coping” and “vulnerable” populations pay over $200 billion a year in fees and interest for access to short-term credit. Our prospective Member opportunity is also significant. We estimate that our total addressable market consists of between 170 million and 190 million Americans who are in need of financial stability and are either not served or underserved by legacy financial institutions.

Previous wording

Dave offers a suite of innovative financial products aimed at helping our Members improve their financial health. To help Members avoid punitive overdraft fees and access short-term liquidity, Dave offers cash advances through its flagship 0% interest ExtraCash product. Through Dave Banking, we provide a digital checking account experience, seamlessly integrated with ExtraCash advances, with no hidden fees. With a Dave Banking account, Members have access to valuable tools for building long-term financial health, such as Goals savings accounts and customizable automatic round-up savings on debit spend transactions. We also help Members generate extra income for spending or emergencies through high APY savings rates, our Side Hustle product, where we present Members with supplemental work opportunities, and through our Surveys product, where Members can earn supplemental income by taking surveys. Our budgeting tool helps Members manage their upcoming bills to avoid overspending.

Current wording

Dave offers a suite of innovative financial products aimed at helping our Members improve their financial health. To help Members avoid punitive overdraft fees and access short-term liquidity, Dave offers, through Evolve, its flagship 0% interest ExtraCash product. Through Dave Banking, we provide a digital checking account experience, seamlessly integrated with ExtraCash, with no hidden fees. With a Dave Banking account, Members have access to valuable tools for building long-term financial health, such as Goals savings accounts and customizable automatic round-up savings on debit spend transactions. We also help Members generate extra income for spending or emergencies through high APY savings rates, our Side Hustle product, where we present Members with supplemental work opportunities, and through our Surveys product, where Members can earn supplemental income by taking surveys. Our budgeting tool helps Members manage their upcoming bills to avoid overspending.

Previous wording

We have only begun to address the many inequities in financial services, but our progress to date demonstrates the demand for Dave to improve the financial system for the everyday person. Since inception and through the date of this report, nearly 15 million Members have registered on the Dave app and over 11 million Members have used at least one of our products and we believe that we have a substantial opportunity to continue growing our Member base going forward. We strongly believe that the value proposition of our platform approach will continue to accelerate as a result of our data-driven perspective of our Members, allowing us to introduce products and services that address their changing life circumstances.

Current wording

We have only begun to address the many inequities in financial services, but our progress to date demonstrates the demand for Dave to improve the financial system for the everyday person. Since inception and through the date of this report, nearly 16 million Members have registered on the Dave app and nearly 12 million Members have used at least one of our products and we believe that we have a substantial opportunity to continue growing our Member base going forward. We strongly believe that the value proposition of our platform approach will continue to accelerate as a result of our data-driven perspective of our Members, allowing us to introduce products and services that address their changing life circumstances.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

Processing fees, net of processor costs associated with advance disbursements, for the three months ended June 30, 2024 were $49.6 million, an increase of $13.6 million, or 38%, from $36.0 million for the three months ended June 30, 2023. The increase was primarily attributable to an 18% increase in monthly transacting Members period over period, increases in total advance volume from approximately $866.9 million to approximately $1,186.2 million period over period and average advance amounts that increased from $156 to $166 as of the three months ended June 30, 2023 and 2024, respectively. The average processing fees Members paid to expedite these advances increased slightly due to the aforementioned factors above, while the percentage of Members that chose to pay a processing fee to expedite an advance decreased slightly for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, respectively. Prospectively, we expect processing fees to increase as expedited advance volume and average expedited advance sizes increase, however, processing fees have not always trended ratably. Prior to the implementation of percentage-based processing fees in late 2023, processing fees did not scale ratably with expedited advance disbursement sizes.

Current wording

Processing fees, net of processor costs associated with ExtraCash originations, for the three months ended September 30, 2024 were $58.7 million, an increase of $19.5 million, or 50%, from $39.2 million for the three months ended September 30, 2023. The increase was primarily attributable to a 23% increase in monthly transacting Members period over period, increases in total ExtraCash volume from approximately $931.5 million to approximately $1,359.5 million period over period and average ExtraCash amounts that increased from $147 to $172 as of the three months ended September 30, 2023 and 2024, respectively. Additionally, the average processing fees Members paid to expedite ExtraCash increased, while the percentage of Members that chose to pay a processing fee to expedite ExtraCash remained flat for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, respectively. Prospectively, we expect processing fees to increase as expedited ExtraCash volume and average expedited ExtraCash sizes increase, however, processing fees have not always trended ratably. Prior to the implementation of percentage-based processing fees in late 2023, processing fees did not scale ratably with expedited ExtraCash origination amounts.

Previous wording

Tips for the three months ended June 30, 2024 were $16.1 million, an increase of $2.9 million, or 22%, from $13.1 million for the three months ended June 30, 2023. The increase was primarily attributable to higher tips from Members relating to increases in total advance volume from approximately $866.9 million to approximately $1,186.2 million year over year and average advance amounts increased from $156 to $166 for the three months ended June 30, 2023 and 2024, respectively. The average tip Members chose to leave increased modestly while the percentage of Members that chose to leave a tip decreased modestly for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, respectively. Tip amounts may not always trend ratably as tips can vary depending on the total amount of the advance, amount of tips Members choose to leave and the percentage of Members who leave a tip.

Current wording

Tips for the three months ended September 30, 2024 were $18.3 million, an increase of $3.8 million, or 26%, from $14.5 million for the three months ended September 30, 2023. The increase was primarily attributable to higher tips from Members relating to increases in total ExtraCash volume from approximately $931.5 million to approximately $1,359.5 million period over period and average ExtraCash amounts increased from $147 to $172 for the three months ended September 30, 2023 and 2024, respectively. The average tip Members chose to leave increased while the percentage of Members that chose to leave a tip decreased for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, respectively. Tip amounts may not always trend ratably as tips can vary depending on the total amount of the ExtraCash, amount of tips Members choose to leave and the percentage of Members who leave a tip.

Previous wording

Subscriptions for the three months ended June 30, 2024 were $5.9 million, an increase of $0.5 million, or 8%, from $5.4 million for the three months ended June 30, 2023. The increase was primarily attributable to an increase in paying Members on our platform.

Current wording

Subscriptions for the three months ended September 30, 2024 were $6.3 million, an increase of $1.2 million, or 24%, from $5.1 million for the three months ended September 30, 2023. The increase was primarily attributable to an increase in paying Members on our platform.

Previous wording

Transaction based revenue, net—Transaction based revenue, net for the three months ended June 30, 2024 were $8.5 million, an increase of $2.2 million, or 35%, from $6.3 million for the three months ended June 30, 2024. The increase was primarily attributable to interchange revenue earned from the growth in Members engaging with our Checking Product and card spend of $388.4 million for the three months ended June 30, 2024, an increase of 29%, from $301.3 million for the three months ended June 30, 2023 and increases in fees earned from Members' funding and withdrawal-related transactions, offset by $0.4 million in interest due to Members for the three months ended June 30, 2024.

Current wording

Transaction based revenue, net for the three months ended September 30, 2024 was $9.1 million, an increase of $2.5 million, or 37%, from $6.6 million for the three months ended September 30, 2023. The increase was primarily attributable to interchange revenue earned from the growth in Members engaging with our Checking Product, card spend and transaction volume of $471.9 million for the three months ended September 30, 2024, an increase of 38%, from $341.0 million for the three months ended September 30, 2023, in addition to increases in fees earned from Members' funding and withdrawal-related transactions, offset by an increase of $0.3 million in interest due to Members.

Previous wording

Provision for credit losses—The provision for credit losses totaled $14.4 million for the three months ended June 30, 2024, compared to $15.9 million for the three months ended June 30, 2023. The decrease of $1.6 million, or 10%, was primarily attributable to a decrease in provision expense of $2.3 million related to Member advances aged over 120 days and those that have become uncollectible based on information available to us, offset by an increase in provision expense of $0.8 million related to Member advances aged 120 days and under.

Current wording

Provision for credit losses—The provision for credit losses totaled $13.7 million for the three months ended September 30, 2024, compared to $16.0 million for the three months ended September 30, 2023. The decrease of $2.3 million, or 14%, was primarily attributable to a decrease in provision expense of $2.9 million related to ExtraCash receivables aged over 120 days and those that have become uncollectible based on information available to us, offset by an increase in provision expense of $0.6 million related to ExtraCash receivables aged 120 days and under.

Previous wording

The decrease in provision expense of $2.3 million related to Member advances aged over 120 days and those which have become uncollectible based on information available to us, period over period, was attributed to improved collections performance due primarily to underwriting modifications related to advance eligibility requirements, advance stability, new Member conversion and risk detection, despite increases in transacting Members, average advance amounts from $156 to $166 and total advance volume from $866.9 million to approximately $1,186.2 million for the three months ended June 30, 2023 and 2024, respectively. All impaired advances deemed uncollectible are subsequently written-off and are a direct reduction to the allowance for credit losses.

Current wording

The decrease in provision expense of $2.9 million related to ExtraCash receivables aged over 120 days and those which have become uncollectible based on information available to us, period over period, was attributed to improved collections performance due primarily to underwriting modifications related to ExtraCash eligibility requirements, new Member conversion and risk detection, all despite increases in transacting Members, average ExtraCash amounts from $147 to $172 and total ExtraCash origination volume from $931.5 million to approximately $1,359.5 million for the three months ended September 30, 2023 and 2024, respectively. All impaired ExtraCash receivables deemed uncollectible are subsequently written-off and are a direct reduction to the allowance for credit losses.

Previous wording

The increase in provision expense of $0.8 million related to Member advances aged 120 days and under was primarily attributed to a 36.8% increase in advance volume during the period ended June 30, 2024 compared to the period ended June 30, 2023 with a corresponding increase in amounts outstanding as of the three months ended June 30, 2024 as compared to June 30, 2023. This resulted in an increase to the allowance for credit losses and corresponding increase in provision expense during the three months ended June 30, 2024 as compared to June 30, 2023. We anticipate volatility in Member advances outstanding each period as they are directly correlated with the timing and volume of Member advance activity during the last 120 days prior to the end of the period.

Current wording

The increase in provision expense of $0.6 million related to ExtraCash receivables aged 120 days and under was primarily attributed to an increase in receivables outstanding related to the 46% increase in ExtraCash origination volume, offset by improved collections performance during the period ended September 30, 2024 as compared to the period ended September 30, 2023. This resulted in an increase to the allowance for credit losses and corresponding increase in provision expense during the three months ended September 30, 2024 as compared to September 30, 2023. We anticipate volatility in ExtraCash receivables outstanding each period as they are directly correlated with the timing and volume of Member ExtraCash activity during the last 120 days prior to the end of the period.

Previous wording

Historical loss and collections rates utilized in the calculation of the provision for credit losses improved slightly when compared to historical rates due to continued improvement in historical collections performance. Any changes to our historical loss and collections experience directly affect the historical loss rates utilized in the calculation of the allowance for uncollectible advances. The changes in the allowance for credit losses, period over period, have a direct impact on the provision for credit losses.

Current wording

Historical loss and collections rates utilized in the calculation of the provision for credit losses improved slightly when compared to historical rates due to continued improvement in historical collections performance. Any changes to our historical loss and collections experience directly affect the historical loss rates utilized in the calculation of the allowance for credit losses. The changes in the allowance for credit losses, period over period, have a direct impact on the provision for credit losses.

Previous wording

For information on the aging of Member advances and a roll-forward of the allowance for credit losses, refer to the tables in Note 5 Member Advances, Net in the accompanying consolidated financial statements of Dave included in this report.

Current wording

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

Previous wording

Processing and service costs—Processing and servicing costs totaled $7.8 million for the three months ended June 30, 2024, compared to $7.2 million for the three months ended June 30, 2023. The increase of $0.6 million, or 8%, was primarily driven by increases in advance volume from $866.9 million to approximately $1,186.2 million, offset by, continued technology enhancements made to our ExtraCash payments structure along with discounts and cost savings due to price reductions from our processors.

Current wording

Processing and service costs—Processing and servicing costs totaled $8.6 million for the three months ended September 30, 2024, compared to $7.1 million for the three months ended September 30, 2023. The increase of $1.5 million, or 21%, was primarily driven by increases in ExtraCash origination volume from $931.5 million to approximately $1,359.5 million, offset by, continued technology enhancements made to our ExtraCash payments structure along with rebates and cost savings due to price reductions from our processors.

Previous wording

Advertising and marketing—Advertising and marketing expenses totaled $10.7 million for the three months ended June 30, 2024, compared to $15.0 million for the three months ended June 30, 2023. The decrease of $4.3 million, or 28%, was primarily attributable to a more targeted, conversion-focused spend approach on our advertising campaigns, production and promotions across various social media platforms and television. Additionally, channel and creative optimization, long-tail marketing investments made during the second quarter of 2023 and ongoing improvements to our measurement and reporting infrastructure allowed us to invest more intelligently across our marketing mix.

Current wording

Advertising and marketing—Advertising and marketing expenses totaled $12.5 million for the three months ended September 30, 2024, compared to $13.9 million for the three months ended September 30, 2023. The decrease of $1.4 million, or 10%, was primarily attributable to a more targeted, conversion-focused spend approach on our advertising campaigns, production and promotions across various social media platforms and television. Additionally, channel and creative optimization and ongoing improvements to our measurement and reporting infrastructure allowed us to invest more intelligently across our marketing mix.

Previous wording

Compensation and benefits—Compensation and benefits expenses totaled $24.5 million for the three months ended June 30, 2024, compared to $23.9 million for the three months ended June 30, 2023. The increase of $0.6 million, or 2%, was primarily attributable to the following:

Current wording

Compensation and benefits—Compensation and benefits expenses totaled $30.8 million for the three months ended September 30, 2024, compared to $23.1 million for the three months ended September 30, 2023. The increase of $7.7 million, or 33%, was primarily attributable to the following:

Previous wording

an increase in stock-based compensation of $1.1 million, primarily due to larger restricted stock units granted to employees during the three months ended June 30, 2024 compared to the three months ended June 30, 2023 and additional stock-based compensation expense related to a modification of price targets in the market vesting conditions for unvested RSUs, offset by a reduction in stock-based compensation expense related to stock options granted in prior years that have fully vested; offset by

Current wording

an increase in stock-based compensation of $6.6 million, primarily due to the vesting of certain performance based restricted stock units during the three months ended September 30, 2024, compared to the three months ended September 30, 2023, offset by a reduction in stock-based compensation expense related to stock options granted in prior years that have fully vested; and

Previous wording

Other operating expenses—Other operating expenses totaled $17.0 million for the three months ended June 30, 2024, compared to $20.1 million for the three months ended June 30, 2023. The decrease of $3.1 million, or 15%, was primarily attributable to the following:

Current wording

Other operating expenses—Other operating expenses totaled $24.4 million for the three months ended September 30, 2024, compared to $16.3 million for the three months ended September 30, 2023. The increase of $8.1 million, or 49%, was primarily attributable to the following:

Previous wording

an increase in expenses related to our Checking Product of $0.8 million, primarily attributable to processing fees, card fees and fraud related costs associated with the growth in Members and the number of transactions processed.

Current wording

an increase in expenses related to our Checking Product of $0.8 million, primarily attributable to processing fees, card fees and fraud related costs associated with the growth in Members and the number of transactions processed; and

Previous wording

an increase in depreciation and amortization of $0.6 million, primarily due to increased amortization of other internally capitalized project costs and depreciation related to leasehold improvements and equipment purchases; and

Current wording

an increase in depreciation and amortization of $0.4 million, primarily due to increased amortization of other internally capitalized project costs and depreciation related to leasehold improvements and equipment purchases; offset by

Previous wording

a decrease in various general and administrative expenses of $0.3 million, primarily due to cost cutting measures enacted across the company; offset by

Current wording

a decrease in various general and administrative expenses of $0.5 million, primarily due to cost cutting measures enacted across the Company.

Previous wording

Interest income— Interest income totaled $0.5 million for the three months ended June 30, 2024, compared to $1.5 million for three months ended June 30, 2023. The decrease of $1.0 million, or 64%, was primarily attributable to lower sales of investments during the quarter ended June 30, 2024 as compared to the quarter ended June 30, 2023.

Current wording

Interest income— Interest income totaled $0.4 million for the three months ended September 30, 2024, compared to $1.3 million for the three months ended September 30, 2023. The decrease of $0.9 million, or 67%, was primarily attributable to an average lower total balance of investments held during the quarter ended September 30, 2024 as compared to the quarter ended September 30, 2023.

Previous wording

Interest expense— Interest expense totaled $2.0 million for the three months ended June 30, 2024, compared to $3.0 million for the three months ended June 30, 2023. The decrease of $1.1 million, or 35%, was primarily attributable to a reduction of interest expense related to the repurchase of the convertible note with FTX Ventures Ltd. in January 2024.

Current wording

Interest expense— Interest expense totaled $2.0 million for the three months ended September 30, 2024, compared to $3.1 million for the three months ended September 30, 2023. The decrease of $1.1 million, or 36%, was primarily attributable to a reduction of interest expense related to the repurchase of the convertible note with FTX Ventures Ltd. in January 2024.

Previous wording

Changes in fair value of warrant liability—Changes in fair value of warrant liability totaled a gain of $0.3 million for the three months ended June 30, 2024, compared to an expense of $0.2 million for the three months ended June 30, 2023. The decrease of $0.4 million, or 266%, was primarily attributable to fair value adjustments associated with our public and private warrant liabilities due to decreases in our underlying Class A Common Stock price over the last three months.

Current wording

Changes in fair value of warrant liability—Changes in fair value of warrant liability totaled an expense of $0.2 million for the three months ended September 30, 2024, compared to a gain of $0.3 million for the three months ended September 30, 2023. The increase in expense of $0.5 million, or 179%, was primarily attributable to fair value adjustments associated with our public and private warrant liabilities due to increases in our underlying Class A Common Stock price compared to the quarter ended September 30, 2023.

Previous wording

Provision (benefit) for income taxes for the three months ended June 30, 2024 decreased by approximately $1.8 million compared to the three months ended June 30, 2023. The Company reported income for the three months ended June 30, 2024; however, a decrease in the 2024 estimated annual effective tax rate during the second quarter resulted in a decrease in income tax expense. The Company reported losses for the three months ended June 30, 2023 resulting in state minimum taxes but no income tax benefit on the losses due to the Company’s valuation allowance.

Current wording

Provision for income taxes for the three months ended September 30, 2024 increased by approximately $0.4 million compared to the three months ended September 30, 2023. The increase was primarily due to income reported for the three months ended September 30, 2024 compared to losses report for the three months ended September 30, 2023. The Company reported losses for the three months ended September 30, 2023 resulting in state minimum taxes but no income tax benefit on the losses due to the Company’s valuation allowance.

Previous wording

Processing fees, net of processor costs associated with advance disbursements, for the six months ended June 30, 2024 were $94.2 million, an increase of $25.2 million, or 37%, from $69.0 million for the six months ended June 30, 2023. The increase was primarily attributable to a 16% increase in monthly transacting Members period over period, increases in total advance volume from approximately $1,665.3 million to approximately $2,236.7 million period over period and average advance amounts that increased from $155 to $163 as of the six months ended June 30, 2023 and 2024, respectively. The average processing fees Members paid to expedite these advances increased slightly due to the aforementioned factors above while the percentage of Members that chose to pay a processing fee to expedite an advance remained flat for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, respectively. Prospectively, we expect processing fees to increase as expedited advance volume and average expedited advance sizes increase, however, processing fees have not always trended ratably. Prior to the implementation of percentage-based processing fees in late 2023, processing fees did not scale ratably with expedited advance disbursement sizes.

Current wording

Processing fees, net of processor costs associated with ExtraCash originations, for the nine months ended September 30, 2024 were $152.9 million, an increase of $44.7 million, or 41%, from $108.2 million for the nine months ended September 30, 2023. The increase was primarily attributable to an 18% increase in monthly transacting Members period over period, increases in total ExtraCash volume from approximately $2,596.9 million to approximately $3,596.2 million period over period and average ExtraCash amounts that increased from $152 to $166 as of the nine months ended September 30, 2023 and 2024, respectively. Additionally, the average processing fees Members paid to expedite ExtraCash increased while the percentage of Members that chose to pay a processing fee to expedite ExtraCash remained flat for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, respectively. Prospectively, we expect processing fees to increase as expedited ExtraCash volume and average expedited ExtraCash sizes increase, however, processing fees have not always trended ratably. Prior to the implementation of percentage-based processing fees in late 2023, processing fees did not scale ratably with expedited ExtraCash origination sizes.

Previous wording

Tips for the six months ended June 30, 2024 were $31.0 million, an increase of $4.1 million, or 15%, from $26.9 million for the six months ended June 30, 2023. The increase was primarily attributable to higher tips from Members relating to increases in total advance volume from approximately $1,665.3 million to approximately $2,236.7 million period over period and average advance amounts increased from $155 to $163 for the six months ended June 30, 2023 and 2024, respectively. The average tip Members chose to leave increased slightly while the percentage of Members that chose to leave a tip decreased modestly for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, respectively. Tip amounts may not always trend ratably as tips can vary depending on the total amount of the advance, the amount of tips Members choose to leave and the percentage of Members who leave a tip.

Current wording

ExtraCash amounts increased from $152 to $166 for the nine months ended September 30, 2023 and 2024, respectively. The average tip Members chose to leave increased while the percentage of Members that chose to leave a tip decreased for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, respectively. Tip amounts may not always trend ratably as tips can vary depending on the total amount of the ExtraCash, the amount of tips Members choose to leave and the percentage of Members who leave a tip.

Previous wording

Subscriptions for the six months ended June 30, 2024 were $11.8 million, an increase of $0.8 million, or 7%, from $11.0 million for the six months ended June 30, 2023. The increase was primarily attributable to an increase in paying Members on our platform.

Current wording

Subscriptions for the nine months ended September 30, 2024 were $18.1 million, an increase of $1.9 million, or 12%, from $16.2 million for the nine months ended September 30, 2023. The increase was primarily attributable to an increase in paying Members on our platform.

Previous wording

Transaction based revenue, net—Transaction based revenue, net for the six months ended June 30, 2024 were $16.5 million, an increase of $3.9 million, or 31%, from $12.6 million for the six months ended June 30, 2024. The increase was primarily attributable to interchange revenue earned from the growth in Members engaging with our Checking Product and card spend of $782.6 million for the six months ended June 30, 2024, an increase of 32%, from $594.8 million for the six months ended June 30, 2023 and increases in fees earned from Members' funding and withdrawal-related transactions, offset by $0.8 million in interest due to Members during the six months ended June 30, 2024.

Current wording

Transaction based revenue, net for the nine months ended September 30, 2024 were $25.6 million, an increase of $6.4 million, or 33%, from $19.2 million for the nine months ended September 30, 2023. The increase was primarily attributable to interchange revenue earned from the growth in Members engaging with our Checking Product, card spend and transaction volume of $1,393.8 million for the nine months ended September 30, 2024, an increase of 48%, from $940.0 million for the nine months ended September 30, 2023 and increases in fees earned from Members' funding and withdrawal-related transactions, offset by an increase of $1.1 million in interest due to Members during the nine months ended September 30, 2024.

Previous wording

Provision for credit losses—The provision for credit losses totaled $24.3 million for the six months ended June 30, 2024, compared to $27.9 million for the six months ended June 30, 2023. The decrease of $3.6 million, or 13%, was primarily attributable to a decrease in provision expense of $8.5 million related to Member advances aged over 120 days and those that have become uncollectible based on information available to us, offset by an increase in provision expense of $4.9 million related to Member advances aged 120 days and under.

Current wording

Provision for credit losses—The provision for credit losses totaled $38.0 million for the nine months ended September 30, 2024, compared to $43.9 million for the nine months ended September 30, 2023. The decrease of $5.9 million, or 13%, was primarily attributable to a decrease in provision expense of $11.4 million related to ExtraCash receivables aged over 120 days and those that have become uncollectible based on information available to us, offset by an increase in provision expense of $5.6 million related to ExtraCash receivables aged 120 days and under.

Previous wording

The decrease in provision expense of $8.5 million related to Member advances aged over 120 days and those which have become uncollectible based on information available to us, period over period, was attributed to improved collections performance due primarily to underwriting modifications related to advance eligibility requirements, advance stability, new Member conversion and risk detection, despite increases in transacting Members, average advance amounts from $155 to $163 and total advance volume from $1,665.3 million to $2,236.7 million for the six months ended June 30, 2023 and 2024, respectively. All impaired advances deemed uncollectible are subsequently written-off and are a direct reduction to the allowance for credit losses.

Current wording

The decrease in provision expense of $11.4 million related to ExtraCash receivables aged over 120 days and those which have become uncollectible based on information available to us, period over period, was attributed to improved collections performance due primarily to underwriting modifications related to ExtraCash eligibility requirements, new Member conversion and risk detection, despite increases in transacting Members, average ExtraCash from $152 to $166 and total ExtraCash origination volume from $2,596.9 million to approximately $3,596.2 million for the nine months ended September 30, 2023 and 2024, respectively. All impaired ExtraCash receivables deemed uncollectible are subsequently written-off and are a direct reduction to the allowance for credit losses.

Previous wording

The increase in provision expense of $4.9 million related to Member advances aged 120 days and under was primarily attributed to a 34.3% increase in advance volume during the six months ended June 30, 2024 compared to the six months ended June 30, 2023 with a corresponding increase in amounts outstanding as of the six months ended June 30, 2024 as compared to June 30, 2023. This resulted in an increase to the allowance for credit losses and corresponding increase in provision expense during the six months ended June 30, 2024 as compared to June 30, 2023. We anticipate volatility in Member advances outstanding each period as they are directly correlated with the timing and volume of Member advance activity during the last 120 days prior to the end of the period.

Current wording

The increase in provision expense of $5.6 million related to ExtraCash receivables aged 120 days and under was primarily attributed to an increase in receivables outstanding related to the 38% increase in ExtraCash volume, offset by improved collections performance during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. This resulted in an increase to the allowance for credit losses and corresponding increase in provision expense during the nine months ended September 30, 2024 as compared to September 30, 2023. We anticipate volatility in ExtraCash receivables outstanding each period as they are directly correlated with the timing and volume of Member ExtraCash activity during the last 120 days prior to the end of the period.

Previous wording

Historical loss and collections rates utilized in the calculation of the provision for credit losses decreased slightly when compared to historical rates due to continued improvement in historical collections performance. Any changes to our historical loss and collections experience directly affect the historical loss rates utilized in the calculation of the allowance for uncollectible advances. The changes in the allowance for credit losses, period over period, have a direct impact on the provision for credit losses.

Current wording

Historical loss and collections rates utilized in the calculation of the provision for credit losses decreased slightly when compared to historical rates due to continued improvement in historical collections performance. Any changes to our historical loss and collections experience directly affect the historical loss rates utilized in the calculation of the allowance for credit losses. The changes in the allowance for credit losses, period over period, have a direct impact on the provision for credit losses.

Previous wording

For information on the aging of Member advances and a roll-forward of the allowance for credit losses, refer to the tables in Note 5 Member Advances, Net in the accompanying consolidated financial statements of Dave included in this report.

Current wording

For information on the aging of ExtraCash receivables and a roll-forward of the allowance for credit losses, refer to the tables in Note 5 ExtraCash receivables, Net in the accompanying condensed consolidated financial statements of Dave included in this report.

Previous wording

Processing and service costs—Processing and servicing costs totaled $15.5 million for the six months ended June 30, 2024, compared to $14.4 million for the six months ended June 30, 2023. The increase of $1.2 million, or 8%, was primarily driven by increases in advance volume from $1,665.3 million to $2,236.7 million, offset by, technology enhancements made to our ExtraCash payments structure along with discounts and cost savings due to price reductions from our processors.

Current wording

Processing and service costs—Processing and servicing costs totaled $24.1 million for the nine months ended September 30, 2024, compared to $21.4 million for the nine months ended September 30, 2023. The increase of $2.7 million, or 13%, was primarily driven by increases in ExtraCash origination volume from $2,596.9 million to approximately $3,596.2 million, offset by, technology enhancements made to our ExtraCash payments structure along with rebates and cost savings due to price reductions from our processors.

Previous wording

Advertising and marketing—Advertising and marketing expenses totaled $19.8 million for the six months ended June 30, 2024, compared to $24.5 million for the six months ended June 30, 2023. The decrease of $4.7 million, or 19%, was primarily attributable to a more targeted, conversion-focused spend approach on our advertising campaigns, production and promotions across various social media platforms and television. Additionally, channel and creative optimization, long-tail marketing investments made during the second quarter of 2023 and ongoing improvements to our measurement and reporting infrastructure allowed us to invest more intelligently across our marketing mix.

Current wording

Advertising and marketing—Advertising and marketing expenses totaled $32.3 million for the nine months ended September 30, 2024, compared to $38.4 million for the nine months ended September 30, 2023. The decrease of $6.0 million, or 16%, was primarily attributable to a more targeted, conversion-focused spend approach on our advertising campaigns, production and promotions across various social media platforms and television. Additionally, channel and creative optimization and ongoing improvements to our measurement and reporting infrastructure allowed us to invest more intelligently across our marketing mix.

Previous wording

Compensation and benefits—Compensation and benefits expenses totaled $49.1 million for the six months ended June 30, 2024, compared to $48.3 million for the six months ended June 30, 2023. The increase of $0.8 million, or 2.0%, was primarily attributable to the following:

Current wording

Compensation and benefits—Compensation and benefits expenses totaled $79.8 million for the nine months ended September 30, 2024, compared to $71.4 million for the nine months ended September 30, 2023. The increase of $8.4 million, or 12%, was primarily attributable to the following: