Dave IncDE

Previous wording

The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the notes related thereto which are included elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Cautionary Note Regarding Forward-Looking Statements,” “Risk Factors” and elsewhere in our Annual Report on Form 10-Kfor the year ended December 31, 2023 filed with the Securities and Exchange Commission (the “SEC”) on March 5, 2024 (the “Annual Report”) and in our subsequent Quarterly Reports on Form 10-Q.

Current wording

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

Previous wording

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

Current wording

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

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. 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.

Current wording

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

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 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.

Current wording

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

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 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.

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

Previous 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.

Current wording

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

Previous wording

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

Current wording

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

Previous 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.

Current wording

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

Previous 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.

Current wording

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

Previous 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.

Current wording

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

Previous 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.

Current wording

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

Previous 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.

Current wording

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

Previous 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.

Current wording

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

Previous 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.

Current wording

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

Previous 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.

Current wording

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

Previous 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:

Current wording

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

Previous 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

Current wording

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

Previous wording

an increase in payroll and related costs of $2.2 million, primarily related to increases in salaries and performance bonuses; offset by

Current wording

an increase in payroll related costs of $1.4 million, primarily due to increased compensation, employer related taxes and performance bonuses, offset by severance costs incurred during the three months ended March 31, 2024.

Previous 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:

Current wording

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

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; and

Current wording

an increase in expenses related to our Checking Product of $0.6 million, primarily attributable to card processing fees, card fees and fraud related costs associated with the growth in Members and the number of transactions processed; and

Previous 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.

Current wording

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

Previous 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.

Current wording

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

Previous 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.

Current wording

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

Previous 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.

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

The following table reconciles net income (loss) to Adjusted EBITDA (loss) for the three and nine months ended September 30, 2024 and 2023, respectively:

Current wording

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

Previous wording

In the past, we have financed our operations primarily from cash receipts from service and transaction based revenues, equity financings, borrowings under the Debt Facility, issuances of convertible notes and funds received as a result of the business combination. As of September 30, 2024 and December 31, 2023 our cash and cash equivalents, marketable securities, investments and restricted cash balance was $76.7 million and $157.3 million, respectively.

Current wording

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

Previous wording

Although we have fully implemented our remote employee workforce strategy in the U.S., we have not closed our leased office locations. We are required to continue making our contractual payments until our operating leases are formally terminated or expire. Our remaining leases have terms of approximately 1.3 to 4.1 years as of September 30, 2024, and we had a total lease liability of $0.6 million. See Note 12, Leases in the notes to our condensed consolidated financial statements for additional information regarding our lease liabilities as of September 30, 2024.

Current wording

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

Previous wording

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

Current wording

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

Previous wording

During the nine months ended September 30, 2024, net cash provided by operating activities increased compared to the nine months ended September 30, 2023 due to increases in operating revenues and a reduction in various operating expenses across the organization. Net cash provided by operating activities for the nine months ended September 30, 2024 included net income of $41.1 million, and excluding non-cash impacts, included increase in legal settlement accrual of $3.8 million, an increase in accounts payable of $2.9 million, an increase in other non-current liabilities of $2.8 million, an increase in accrued expenses of $4.5 million, and a decrease in prepaid income taxes of $0.1 million. These changes were offset by an increase in prepaid expenses and other current assets of $6.0 million, an increase in ExtraCash receivables, service based revenue of $3.7 million.

Current wording

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

Previous wording

During the nine months ended September 30, 2024, net cash provided by investing activities was $19.0 million. This included the sale and maturity of investments of $147.7 million and sale of marketable securities of $60.1 million, offset by purchases of investments of $74.8 million, purchases of marketable securities of $59.3 million, net ExtraCash originations and collections of $87.0 million and payments related to internally developed software costs and property and equipment of $5.5 million.

Current wording

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

Previous wording

During the nine months ended September 30, 2024, net cash used in financing activities was $70.9 million, which consisted of the $71.8 million paydown of the FTX Ventures Ltd. convertible note and associated costs, offset by $0.9 million for proceeds received for stock option exercises.

Current wording

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

Previous wording

Actual results may differ from these estimates under different assumptions or conditions. We believe that the accounting estimates discussed below are critical to understanding our historical and future performance, as these estimates relate to the more significant areas involving management’s judgments and estimates. For further details, please refer to Note 2 in our accompanying condensed consolidated financial statements for the three and nine months ended September 30, 2024 and 2023 included in this Form 10-Q.

Current wording

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

Previous wording

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

Current wording

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

Previous wording

ASC 740 provides that a tax benefit from an uncertain tax position may be recognized when it is more-likely-than-not that the position will be sustained in a court of last resort, based on the technical merits. If more-likely-than-not, the amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized upon examination, including compromise settlements. For tax positions not meeting the more-likely-than-not threshold, no tax benefit is recorded. We have estimated $1.8 million and $1.1 million of uncertain tax positions as of September 30, 2024 and 2023, respectively, related to state income taxes and federal and state R&D tax credits.

Current wording

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

Previous wording

We are an “emerging growth company” as defined in Section 2(a) of the Securities Act of 1933, as amended, and have elected to take advantage of the benefits of the extended transition period for new or revised financial accounting standards. We expect to remain an emerging growth company and to continue to take advantage of the benefits of the extended transition period, although we may decide to early adopt such new or revised accounting standards to the extent permitted by such standards. We expect to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and non-public companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. This may make it difficult or impossible to compare our financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions because of the potential differences in accounting standards used. See Note 2 of our accompanying condensed consolidated financial statements included in this report for the recent accounting pronouncements adopted and the recent accounting pronouncements not yet adopted for the three months ended September 30, 2024 and 2023.

Current wording

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