Dave Inc./DE

Previous wording

The following discussion and analysis of Dave’s financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the notes related thereto which are included in Part I, Item 1. “Financial Statements” of this Quarterly Report on Form 10-Q. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Cautionary Note Regarding Forward-Looking Statements,” “Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission (the “SEC”) on March 2, 2026 (the “Annual Report”), our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 and this Quarterly Report on Form 10-Q.

Current wording

The following discussion and analysis of Dave’s financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the notes related thereto which are included in Part I, Item 1. “Financial Statements” of this Quarterly Report on Form 10-Q. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Cautionary Note Regarding Forward-Looking Statements,” “Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission (the “SEC”) on March 2, 2026 (the “Annual Report”), our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 and this Quarterly Report on Form 10-Q.

Previous wording

Since inception, over 21 million Members have signed up for the Dave app, with over 15 million having used at least one of our products. We have provided Members with nearly $27 billion in ExtraCash, offering critical liquidity when they need it most, and have donated over $25 million to charity and important causes.

Current wording

Since inception, over 22 million Members have signed up for the Dave app, with nearly 16 million having used at least one of our products. We have provided Members with over $29 billion in ExtraCash, offering critical liquidity when they need it most, and have donated over $25 million to charity and important causes.

Previous wording

Customers value our products, as demonstrated by more than 850,000 App Store reviews with an average 4.8-star rating. Dave has earned multiple Best Place to Work recognitions from Built In over the past several years, reflecting our ongoing investment in becoming an exceptional workplace.

Current wording

Members value our products, as demonstrated by more than 900,000 App Store reviews with an average 4.8-star rating. Dave has earned multiple Best Place to Work recognitions from Built In over the past several years, reflecting our ongoing investment in becoming an exceptional workplace.

Previous wording

According to the Financial Health Network in 2025, approximately 185 million Americans, representing 69% of the U.S. population, are classified as financially "coping" or "vulnerable," up from 66% in 2021. According to PYMNTS in 2025, 67% of U.S. consumers were living paycheck to paycheck, up from 57% in 2021. The financially vulnerable and coping populations pay approximately $35 billion annually in basic checking fees and over $225 billion in annual fees and interest for short-term credit, according to FHN research. We estimate our total addressable market to be approximately 185 million Americans who do not have access to affordable and effective banking solutions.

Current wording

According to the Financial Health Network’s 2026 Financial Health Pulse, approximately 69% of U.S. households are classified as financially “coping” or “vulnerable,” and the share of financially vulnerable households rose to 17% in 2026, an increase of 2% since 2025. According to PYMNTS, approximately two-thirds of U.S. adults were living paycheck to paycheck as of 2026. The financially vulnerable and coping populations pay approximately $35 billion annually in basic checking fees and over $225 billion in annual fees and interest for short-term credit, according to Financial Health Network research. We estimate our total addressable market to be the approximately 180 million to 190 million U.S. adults who are financially coping or vulnerable or who live paycheck to paycheck, and who are underserved by traditional banking and credit products.

Previous wording

We believe these high costs reflect the cost structure of incumbents. Legacy institutions with brick-and-mortar networks, antiquated technology, and inefficient customer acquisition strategies have significant costs to serve, which they pass on to customers. By leveraging technology and AI, we have dramatically reduced our cost to serve, enabling us to provide banking and credit products at lower costs with a stronger value proposition.

Current wording

We believe these high costs reflect the cost structure of incumbents. Legacy institutions with brick-and-mortar networks, antiquated technology, and inefficient customer acquisition strategies have significant costs to serve, which they pass on to customers. By leveraging technology and AI, we have significantly reduced our cost to serve, enabling us to provide banking and credit products at lower costs with a stronger value proposition.

Previous wording

Revenue growth depends on efficiently acquiring new Members and driving product cross-sell. During the three months ended June 30, 2026, customer acquisition costs remained approximately flat compared to the three months ended June 30, 2025 at approximately $19, while payback periods improved to under four months. We direct acquisition spend toward the highest-return opportunities, managing customer acquisition cost and payback periods to preserve efficient unit economics as we scale.

Current wording

Revenue growth depends on efficiently acquiring new Members and driving product cross-sell. During the three months ended September 30, 2026, customer acquisition cost was approximately $22, up 14% compared to the prior-year period while payback periods remained under four months. We direct acquisition spend toward the highest-return opportunities to preserve efficient unit economics as we scale.

Previous wording

ARPU expansion is primarily driven by ExtraCash volume and the adoption of Dave Checking by Members, and ARPU continued to expand year-over-year in the second quarter of 2026. Dave Debit Card actives generate approximately 1.7 times the monthly ARPU relative to non-card users and 11 times the average monthly transaction volume, indicating materially higher engagement and lifetime value. Dave Debit Card spend was $530 million in the second quarter of 2026, a 7% increase year-over-year. Our mid-2025 subscription fee increase from $1 to $3 for new members improved customer lifetime value without materially affecting conversion or retention. Subscription revenue grew 87% during the three months ended June 30, 2026, over the three months ended June 30, 2025.

Current wording

Average revenue per user ("ARPU"), which we calculate as total operating revenues, net divided by average Monthly Transacting Members for the period, annualized, continued to expand year over year in the third quarter of 2026, driven primarily by ExtraCash volume and the adoption of Dave Checking by Members. Dave Debit Card actives generate approximately 1.6 times the monthly ARPU relative to non-card users and 10 times the average monthly transaction volume, indicating materially higher engagement and lifetime value. Dave Debit Card spend was $533 million in the third quarter of 2026, a 5% increase year over year. Our mid-2025 subscription fee increase from $1 to $3 for new Members improved customer lifetime value without materially affecting conversion or retention. Subscription revenue grew 74% during the three months ended September 30, 2026, over the three months ended September 30, 2025.

Previous wording

ExtraCash profitability depends on approving creditworthy Members while maintaining disciplined delinquency and write-off rates. In September 2025, we deployed CashAI v5.5, which nearly doubles the feature set of prior versions. Thus far, results demonstrate improved risk ranking, higher average approval amounts, and lower delinquency rates. CashAI has leveraged insights from over 215 million ExtraCash originations, a proprietary cash flow dataset that we believe provides a structural advantage in real-time credit decisioning. The short average term of ExtraCash (approximately 12 days) creates rapid feedback loops, enabling iterative model refinement. Late in the second quarter of 2026, we began deploying CashAI v6.0, our latest underwriting model, which remains in the early stages of rollout and continues to scale across ExtraCash originations.

Current wording

ExtraCash profitability depends on approving creditworthy Members while maintaining disciplined delinquency and write-off rates. In September 2025, we deployed CashAI v5.5, which nearly doubled the feature set of prior versions and delivered improved risk ranking, higher average approval amounts, and lower delinquency rates. CashAI has leveraged insights from over 230 million ExtraCash originations, a proprietary cash flow dataset that we believe provides a structural advantage in real-time credit decisioning. The short average term of ExtraCash (approximately 12 days) creates rapid feedback loops, enabling iterative model refinement. During the third quarter of 2026, we continued to deploy CashAI v6.0, our latest underwriting model, and by the end of the third quarter of 2026 it had been deployed across all ExtraCash originations.

Previous wording

During the first quarter of 2025, we entered into the Program Agreement with Coastal under which Coastal issues and maintains deposit accounts and sponsors access to debit and ACH networks. As of the fourth quarter of 2025, all new Members are being onboarded to Coastal, and we expect the transition of existing Members to be substantially finalized by the end of 2026. Effective June 1, 2026, under the amended Program Agreement with Coastal, ExtraCash receivables are originated and retained on Coastal's balance sheet, reducing our direct funding obligations for those receivables and we hold a commitment to purchase, and provide a financial guarantee with respect to, those receivables. Coastal earns a fee equal to a variable rate based on the federal funds rate plus a margin on both ExtraCash and Dave Flex receivables balances while such receivables remain on its balance sheet, and we maintain a deposit account at Coastal in Coastal's name (the "Cash Collateral Account") to secure our credit and fraud loss obligations.

Current wording

During the first quarter of 2025, we entered into the Program Agreement with Coastal under which Coastal issues and maintains deposit accounts and sponsors access to debit and ACH networks. Since the fourth quarter of 2025, all new Members have been onboarded to Coastal, and we expect the transition of existing Members to be substantially completed in early 2027. Effective June 1, 2026, under the amended Program Agreement with Coastal, ExtraCash receivables are originated and retained on Coastal's balance sheet, reducing our direct funding obligations for those receivables, and we hold a commitment to purchase, and provide a financial guarantee with respect to, those receivables. Coastal earns a fee equal to a variable rate based on the federal funds rate plus a margin on both ExtraCash and Dave Flex receivables balances while such receivables remain on its balance sheet, and we maintain cash collateral with Coastal (the “Cash Collateral Account”) that Coastal may apply against our credit and fraud loss obligations under the program.

Previous wording

Higher interest rates create dual impacts: increased funding costs reduce gross margins, while elevated rates may increase Member demand for supplemental liquidity but simultaneously reduce settlement capacity. We actively manage funding costs through bank partner relationships and debt facility negotiations.

Current wording

Higher interest rates create dual impacts: increased funding costs reduce gross margins, while elevated rates may increase Member demand for supplemental liquidity but simultaneously reduce settlement capacity. We actively manage funding costs through our bank partner relationships.

Previous wording

Recent and proposed changes in U.S. trade policy, including tariffs and related measures, together with associated legal and regulatory developments, may contribute to higher consumer prices and inflationary pressure. While we do not import goods and have no direct tariff exposure, such conditions could reduce our Members’ discretionary income and ability to repay ExtraCash advances, which could increase our provision for credit losses and affect demand for our products. We continue to monitor these developments; as of June 30, 2026, we had not identified a material direct impact on our results of operations or financial condition from these factors.

Current wording

Recent and proposed changes in U.S. trade policy, including tariffs and related measures, together with associated legal and regulatory developments, including recent judicial decisions addressing the scope and validity of certain tariff measures, may contribute to higher consumer prices and inflationary pressure. While we do not import goods and have no direct tariff exposure, and have not paid tariffs for which a refund would be recoverable, such conditions could reduce our Members' discretionary income and ability to repay outstanding ExtraCash amounts, which could increase our provision for credit losses and affect demand for our products. We continue to monitor these developments; as of September 30, 2026, we had not identified a material direct impact on our results of operations or financial condition from these factors.

Previous wording

We operate in a complex and evolving regulatory environment. Regulatory developments and increased supervisory scrutiny of bank-fintech partnerships could result in changes to our product structures, increased compliance costs, or new operational requirements. We continue to monitor these developments. See "Item 1. Business—Regulatory Environment" and "Item 1A. Risk Factors" for additional discussion.

Current wording

We operate in a complex and evolving regulatory environment. Regulatory developments and increased supervisory scrutiny of bank-fintech partnerships could result in changes to our product structures, increased compliance costs, or new operational requirements. See Note 11, Commitments and Contingencies. We continue to monitor these developments. See "Item 1. Business—Regulatory Environment" and "Item 1A. Risk Factors" in our Annual Report and Part II, Item 1A, “Risk Factors” of this Quarterly Report on Form 10-Q for additional discussion.

Previous wording

Service based revenue, net primarily consists of overdraft service fees and subscriptions charged to Members, net of processor-related costs associated with ExtraCash disbursements, and also includes lead generation fees from our Side Hustle advertising partners and revenue share from our Surveys partner. Prior to February 2025, service based revenue, net also included optional tips and optional processing fees, which we discontinued in February 2025. The Company also earns installment and monthly participation fees on Dave Flex, which were immaterial for the periods presented.

Current wording

Service based revenue, net primarily consists of overdraft service fees and subscriptions charged to Members, net of processor-related costs associated with ExtraCash disbursements, and also includes lead generation fees from our Side Hustle advertising partners and, through the first quarter of 2026, revenue share from our Surveys partner. Prior to February 2025, service based revenue, net also included optional tips and optional processing fees, which we discontinued in February 2025. We also earn installment and monthly participation fees on Dave Flex, which were immaterial for the periods presented.

Previous wording

The provision for credit losses primarily consists of an allowance for credit losses at a level estimated to be adequate to absorb credit losses inherent in the outstanding ExtraCash receivables, inclusive of outstanding processing and overdraft 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 the provision for credit losses in the condensed consolidated statements of operations when collected. The provision for credit losses also reflects expected credit losses on purchased Dave Flex receivables and, beginning June 1, 2026, changes in the off-balance-sheet credit-loss liability for guaranteed ExtraCash receivables held by Coastal.

Current wording

The provision for credit losses reflects the amount required to maintain an allowance for credit losses at a level that represents lifetime expected credit losses on outstanding ExtraCash receivables, including outstanding processing and overdraft service fees, as well as expected credit losses on purchased Dave Flex receivables and, beginning June 1, 2026, changes in the credit loss liability for guaranteed ExtraCash receivables held by Coastal. We estimate the allowance using historical loss and collections experience and consider, as relevant, the nature and volume of the portfolio, economic conditions, collection trends and cash collections received after the balance sheet date. ExtraCash receivables that are determined to be uncollectible, or that remain outstanding 120 days after origination, are written off against the allowance, and subsequent recoveries are recorded as a recovery of the allowance when received.

Previous wording

Financial network and transaction costs primarily consist of program management fees, card network association fees, payment processing costs, losses related to Member-disputed transactions, bank card fees and fraud-related losses.

Current wording

Financial network and transaction costs primarily consist of program management fees, card network association fees, payment processing costs, losses related to Member-disputed transactions, bank card fees, balance sheet capacity fees paid to Coastal, and fraud-related losses.

Previous wording

Advertising and activation expenses primarily consist of fees paid to our advertising and marketing platform partners for online, social media, and television campaigns, as well as promotional partnerships. These expenses also include activation-related costs, such as third-party fees (e.g., Plaid) incurred to onboard new Members to our platform. Advertising and activation costs are expensed as incurred, even though they may provide benefits over an extended period.

Current wording

Advertising and activation expenses primarily consist of fees paid to our advertising and marketing platform partners for online, social media, and television campaigns, as well as promotional partnerships. These expenses also include activation-related costs, such as physical debit card costs, identity verification (KYC) and other third-party fees (e.g., Plaid) incurred to onboard new Members to our platform. Advertising and activation costs are expensed as incurred, even though they may provide benefits over an extended period.

Previous wording

Other operating expenses primarily include legal fees and settlements, depreciation and amortization of property and equipment and internally developed software, charitable contributions, travel and entertainment, office and occupancy costs, insurance, sales tax and other taxes, computer expenses, licenses and fees, dues and subscriptions, balance sheet capacity fees, and other general and administrative costs. These costs generally reflect our investments in infrastructure, business development, risk management, and administrative operations, and may vary period to period based on operational needs and strategic initiatives.

Current wording

Other operating expenses primarily include legal fees and settlements, professional fees, including consulting and accounting fees and costs related to other strategic financing activities, depreciation and amortization of property and equipment and internally developed software, insurance, sales tax and other non-income taxes, charitable contributions, travel and entertainment, office and occupancy costs, licenses, dues and fees, and other general and administrative costs. These costs generally reflect our investments in infrastructure, business development, risk management, and administrative operations, and may vary period to period based on operational needs, legal matters and strategic initiatives.

Previous wording

Processing and overdraft service fees, net of processing and servicing costs associated with ExtraCash originations, totaled $144.9 million for the three months ended June 30, 2026, representing an increase of $31.5 million, or 28%, compared to $113.5 million for the three months ended June 30, 2025. The increase was primarily driven by an approximate 17% increase in average monthly transacting Members, an increase in total ExtraCash origination volume from approximately $1.8 billion to approximately $2.3 billion, a rise in the average ExtraCash amounts that increased from $206 to $215 period over period, the changes to our fee structure implemented in February 2025, and the removal of the maximum overdraft service fee (the "fee cap") for certain Member cohorts during the second quarter of 2026. Average processing and overdraft service fees also increased slightly period over period, in part reflecting the fee cap removal. We expect processing and overdraft service fees to continue to increase in line with growth in ExtraCash volume and Member engagement.

Current wording

Processing and overdraft service fees, net of processing and servicing costs associated with ExtraCash originations, totaled $168.9 million for the three months ended September 30, 2026, representing an increase of $39.8 million, or 31%, compared to $129.2 million for the three months ended September 30, 2025. The increase was primarily driven by an approximate 18% increase in average monthly transacting Members, an increase in total ExtraCash origination volume from approximately $2.0 billion to approximately $2.5 billion, a rise in the average ExtraCash amounts that increased from $207 to $218 period over period, the changes to our fee structure implemented in February 2025, and the removal of the maximum overdraft service fee (the "fee cap") for certain Member cohorts during the second quarter of 2026. Average processing and overdraft service fees also increased slightly period over period, in part reflecting the fee cap removal. We expect processing and overdraft service fees to continue to increase in line with growth in ExtraCash volume and Member engagement.

Previous wording

Subscription revenue totaled $15.1 million for the three months ended June 30, 2026, an increase of $7.0 million, or 87%, compared to $8.1 million for the three months ended June 30, 2025. The increase was primarily attributable to growth in the number of paying Members on our platform, as well as the increase in the monthly subscription fee for new Members implemented in June 2025.

Current wording

Subscription revenue totaled $17.3 million for the three months ended September 30, 2026, an increase of $7.3 million, or 74%, compared to $10.0 million for the three months ended September 30, 2025. The increase was primarily attributable to growth in the number of paying Members on our platform, as well as the increase in the monthly subscription fee for new Members implemented in June 2025.

Previous wording

The period-over-period increase was comprised of two principal drivers. The provision for ExtraCash receivables aged over 120 days and those deemed uncollectible increased by $9.1 million, driven by higher receivable volumes and loss timing consistent with a growing Member base and maturing Member receivables portfolio. Provision expense for ExtraCash receivables aged 120 days and under decreased by $5.6 million, reflecting a lower allowance on these balances at period end. Because provision expense represents the change in the allowance for credit losses during the period, and these receivables are short-term with an average term of approximately 12 days, the provision on the 120-days-and-under buckets moves with the balances outstanding at each period end and the timing of originations and collections around the balance sheet date. The decrease reflects this balance and timing effect rather than a change in underlying credit performance or loss rates, which remained relatively stable, and occurred even as full-period origination volume grew. In aggregate, these drivers reflect the impact of portfolio expansion, including an approximate 17% increase in average transacting Members, an increase in average ExtraCash advance amounts from $206 to $215, and growth in total ExtraCash origination volume from approximately $1.8 billion to $2.3 billion for the three months ended June 30, 2025 and 2026, respectively.

Current wording

The period-over-period change was comprised of two principal drivers. The provision for ExtraCash receivables aged over 120 days and those deemed uncollectible increased by $7.5 million, reflecting origination growth in prior periods. Because uncollected ExtraCash receivables are written off 120 days after origination, this component of the provision generally reflects originations from approximately March through May 2026, during which origination volume increased approximately 27% year over year. Provision expense for ExtraCash receivables aged 120 days and under decreased by $1.0 million, reflecting a smaller increase in the allowance on these balances during the quarter than in the prior-year quarter, driven by the level and timing of balances outstanding at period end, partially offset by the slight increase in historical loss rates. The remaining increase of $0.2 million primarily relates to Dave Flex receivables. In aggregate, these drivers reflect the impact of portfolio expansion, including an approximate 18% increase in average transacting Members and an increase in average ExtraCash amounts from $207 to $218 for the three months ended September 30, 2025 and 2026, respectively.

Previous wording

Management regularly updates ExtraCash eligibility requirements, new Member conversion processes, and risk detection capabilities to align with expected loss emergence patterns and to respond to economic conditions and seasonal shifts in Member activity. Under the CECL model, management estimates lifetime expected credit losses based on historical experience, current conditions, and reasonable and supportable forecasts. Our CECL methodology pools ExtraCash receivables based on shared risk characteristics, such as vintage and payment behavior, and applies historical loss rates adjusted for observed and forecasted economic trends, including anticipated seasonal effects.

Current wording

Because our allowance for credit losses is estimated by applying historical loss rates, by aging bucket, to ExtraCash receivables outstanding at the period-end measurement date, and these receivables have an average term of approximately 12 days, provision expense in any period reflects net write-offs during the period plus the change in the allowance and, beginning June 1, 2026, the credit loss liability. The level and aging of receivables outstanding at period end are affected by seasonal patterns in Member activity and by the calendar day on which the period ends, given intra-week fluctuations in outstanding balances related to Member pay cycles, which can cause provision expense to vary between periods independent of underlying credit performance. Under the CECL model, management estimates lifetime expected credit losses based on historical experience, current conditions, and reasonable and supportable forecasts. Our CECL methodology pools ExtraCash receivables based on shared risk characteristics, principally the number of days from origination, and we consider whether current conditions and reasonable and supportable forecasts, including seasonal effects, warrant an adjustment to historical loss experience; for the periods presented, we determined that historical loss rates remained most indicative of lifetime expected losses. As of September 30, 2026, our allowance for credit losses and off-balance-sheet credit loss liability together represented 12.7% of the related on- and off-balance-sheet Member receivables, compared to 13.0% as of September 30, 2025. Management regularly updates ExtraCash eligibility requirements, new Member conversion processes, and risk detection capabilities to align with expected loss emergence patterns and to respond to economic conditions and seasonal shifts in Member activity, and during the third quarter of 2026 made targeted refinements to ExtraCash eligibility and advance amounts for certain Members. All uncollectible ExtraCash receivables are written off against the allowance for credit losses. For the aging composition of ExtraCash receivables and a roll-forward of the allowance for credit losses, see Note 5, Member Receivables, Net.

Previous wording

Advertising and activation costs—Advertising and activation costs totaled $20.4 million for the three months ended June 30, 2026, compared to $15.5 million for the three months ended June 30, 2025. The increase of $4.9 million, or 32%, was primarily driven by our continued investment in Member acquisition and engagement, with spend refined to capitalize on seasonal trends and high-return opportunities. During the three months ended June 30, 2026, we increased new Member acquisition year-over-year while holding customer acquisition costs flat, at approximately $19. Payback periods also improved to under four months, reflecting our focus on directing acquisition spend toward the highest return opportunities.

Current wording

Advertising and activation costs—Advertising and activation costs totaled $28.0 million for the three months ended September 30, 2026, compared to $18.9 million for the three months ended September 30, 2025. The increase of $9.0 million, or 48%, was primarily driven by our continued investment in Member acquisition and engagement, with spend refined to capitalize on seasonal trends and high-return opportunities, as we increased new Member acquisition year over year by 35% with customer acquisition costs increasing by 14%.

Previous wording

Compensation and benefits—Compensation and benefits expenses totaled $35.7 million for the three months ended June 30, 2026, compared to $26.4 million for the three months ended June 30, 2025. The increase of $9.3 million, or 35%, was primarily attributable to the following:

Current wording

Compensation and benefits—Compensation and benefits expenses totaled $43.3 million for the three months ended September 30, 2026, compared to $24.8 million for the three months ended September 30, 2025. The increase of $18.5 million, or 74%, was primarily attributable to the following:

Previous wording

an increase in stock-based compensation of $8.1 million, primarily due to the increase in stock-based compensation expense related to performance-based restricted stock units;

Current wording

an increase in stock-based compensation of $14.8 million, primarily due to the increase in stock-based compensation expense related to performance-based restricted stock units;

Previous wording

an increase in temporary labor and contractor costs of $0.7 million, as we continued to leverage specialized skills and flexible workforce arrangements to support key operating initiatives and capacity needs during the three months ended June 30, 2026; and

Current wording

an increase in temporary labor and contractor costs of $0.6 million, as we continued to leverage specialized skills and flexible workforce arrangements to support key operating initiatives and capacity needs during the three months ended September 30, 2026; and

Previous wording

an increase in salaries, bonuses, benefits and insurance, and employer taxes of $0.5 million.

Current wording

an increase in salaries, bonuses, benefits and insurance, and employer taxes of $3.1 million.

Previous wording

Technology and infrastructure—Technology and infrastructure expenses totaled $7.2 million for the six months ended June 30, 2026, compared to $5.6 million for the six months ended June 30, 2025. The increase of $1.6 million, or 29%, was primarily driven by continued investment in the reliability, security, and scalability of our systems. Management remains focused on balancing operational efficiency with infrastructure resilience, directing technology-related spend toward initiatives that support business growth, cybersecurity, and the evolving needs of our Members.

Current wording

Technology and infrastructure—Technology and infrastructure expenses totaled $4.5 million for the three months ended September 30, 2026, compared to $3.2 million for the three months ended September 30, 2025. The increase of $1.3 million, or 41%, was primarily driven by continued investment in the reliability, security, and scalability of our systems. Our technology investments remain focused on scaling our platform efficiently while strengthening security and resilience as our Member base and transaction volumes grow.

Previous wording

Other operating expenses—Other operating expenses totaled $11.5 million for the three months ended June 30, 2026, compared to $6.2 million for the three months ended June 30, 2025. The increase of $5.3 million, or 86%, was primarily attributable to the following:

Current wording

Other operating expenses—Other operating expenses totaled $14.2 million for the three months ended September 30, 2026, compared to $11.3 million for the three months ended September 30, 2025. The increase of $2.9 million, or 26%, was primarily attributable to the following:

Previous wording

an increase in legal expenses of $3.4 million, primarily attributable to higher litigation and settlement-related costs compared to the prior period;

Current wording

an increase in legal expenses of $1.7 million, primarily attributable to higher litigation and settlement-related costs compared to the prior period;

Previous wording

an increase of $1.1 million related to sales tax expense and various state and local gross receipts taxes, both primarily attributable to increases in revenue;

Current wording

an increase of $0.1 million related to sales tax expense and various state and local gross receipts taxes, both primarily attributable to increases in revenue; and

Previous wording

an increase in professional service fees of $0.3 million related to expenditures for external consulting and compliance-related services in support of key operational and regulatory priorities; and

Current wording

an increase in professional service fees of $1.0 million related to expenditures for external consulting and compliance-related services in support of key operational and regulatory priorities.

Previous wording

Interest income—Interest income totaled $1.3 million for the three months ended June 30, 2026, compared to $0.6 million for the three months ended June 30, 2025. The increase of $0.7 million, or 126%, was primarily driven by higher average cash balances held in interest-bearing accounts, partially offset by an overall decline in interest rates period over period.

Current wording

Interest income—Interest income totaled $2.2 million for the three months ended September 30, 2026, compared to $0.3 million for the three months ended September 30, 2025. The increase of $1.9 million, or 647%, was primarily driven by higher average cash balances held in interest-bearing accounts, partially offset by lower interest rates.

Previous wording

Interest expense—Interest expense totaled $2.0 million for the three months ended June 30, 2026, compared to $1.8 million for the three months ended June 30, 2025. The increase of $0.2 million, or 14%, was primarily driven by the amortization of deferred debt issuance costs for the convertible notes issued in March 2026.

Current wording

Interest expense—Interest expense totaled $2.1 million for the three months ended September 30, 2026, compared to $1.8 million for the three months ended September 30, 2025. The increase of $0.3 million, or 15%, was primarily driven by the amortization of debt issuance costs for the 2031 Notes issued in March 2026, partially offset by lower interest expense on the Debt Facility due to lower interest rates.

Previous wording

Provision for income taxes for the three months ended June 30, 2026 increased by approximately $5.5 million, or 224%, compared to the three months ended June 30, 2025. The increase was primarily due to higher taxable income reported for the three months ended June 30, 2026, compared to the three months ended June 30, 2025.

Current wording

Provision for income taxes for the three months ended September 30, 2026 increased by approximately $44.4 million compared to the three months ended September 30, 2025. The increase was primarily due to the release of $27.4 million of our valuation allowance on deferred tax assets, recognized as a discrete tax benefit during the three months ended September 30, 2025. There was no valuation allowance release during the three months ended September 30, 2026. The increase is also due to higher pre-tax income reported for the three months ended September 30, 2026, compared to the three months ended September 30, 2025.

Previous wording

Processing and overdraft service fees, net of processing and servicing costs associated with ExtraCash originations, totaled $278.5 million for the six months ended June 30, 2026, an increase of $81.6 million, or 41%, compared to $196.9 million for the six months ended June 30, 2025. The increase was primarily driven by an approximately 18% increase in average monthly transacting Members, growth in total ExtraCash origination volume from approximately $3.3 billion to approximately $4.4 billion, a rise in the average ExtraCash amount from $199 to $213 period over period, the changes to our fee structure implemented in February 2025, and the removal of the maximum overdraft service fee (the "fee cap") for certain Member cohorts during the second quarter of 2026. Average processing and overdraft service fees also increased modestly during the current period, in part reflecting the fee cap removal. We expect processing and overdraft service fees to continue to increase in line with growth in ExtraCash volume and Member engagement.

Current wording

Processing and overdraft service fees, net of processing and servicing costs associated with ExtraCash originations, totaled $447.5 million for the nine months ended September 30, 2026, an increase of $121.4 million, or 37%, compared to $326.1 million for the nine months ended September 30, 2025. The increase was primarily driven by an approximately 18% increase in average monthly transacting Members, growth in total ExtraCash origination volume from approximately $5.3 billion to approximately $6.9 billion, a rise in the average ExtraCash amount from $202 to $215 period over period, the changes to our fee structure implemented in February 2025, and the removal of the maximum overdraft service fee (the "fee cap") for certain Member cohorts during the second quarter of 2026. Average processing and overdraft service fees also increased modestly during the current period, in part reflecting the fee cap removal. We expect processing and overdraft service fees to continue to increase in line with growth in ExtraCash volume and Member engagement.

Previous wording

Tips decreased $7.5 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 due to the elimination of the Member tipping option in February 2025.

Current wording

Tips decreased $7.5 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 due to the elimination of the Member tipping option in February 2025.

Previous wording

Subscription revenue totaled $29.0 million for the six months ended June 30, 2026, an increase of $14.1 million, or 95%, compared to $14.9 million for the six months ended June 30, 2025. The increase was primarily attributable to the growth in the number of paying Members on our platform, in addition to subscription fee increases for new Members that took place during June 2025.

Current wording

Subscription revenue totaled $46.3 million for the nine months ended September 30, 2026, an increase of $21.5 million, or 87%, compared to $24.8 million for the nine months ended September 30, 2025. The increase was primarily attributable to the growth in the number of paying Members on our platform, in addition to subscription fee increases for new Members that took place during June 2025.

Previous wording

Transaction based revenue, net, was $21.6 million for the six months ended June 30, 2026, an increase of $1.3 million, or 6%, compared to $20.3 million for the six months ended June 30, 2025. The increase was primarily driven by higher fees earned from Members' funding and withdrawal-related transactions, maintenance fees on inactive accounts, and volume incentives from our card network partners. Net interchange revenue increased modestly period over period, as growth in Members engaging with our Checking Product and an approximately 8% increase in card spend and transaction volume was largely offset by related interchange costs. These increases were partially offset by a decrease in ATM revenue due to temporarily reduced fee rates and a slight increase in interest paid to Members.

Current wording

Transaction based revenue, net, was $32.9 million for the nine months ended September 30, 2026, an increase of $1.1 million, or 4%, compared to $31.8 million for the nine months ended September 30, 2025. The increase was primarily driven by higher fees earned from Members' funding and withdrawal-related transactions, a decrease in interest paid to Members, and volume incentives from our card network partners. Net interchange revenue increased modestly period over period, reflecting growth in Members engaging with our Checking Product and an approximately 7% increase in card spend and transaction volume. These increases were partially offset by a decrease in ATM revenue due to temporarily reduced fee rates and a decrease in deposit referral revenue.

Previous wording

Provision for credit losses—The provision for credit losses was $55.4 million for the six months ended June 30, 2026, compared to $35.9 million for the six months ended June 30, 2025, an increase of $19.5 million, or 54%. The increase was primarily driven by growth in ExtraCash origination volume and continued expansion of our Member base, together with the timing of provision recognition across periods, including the timing of provision recognized in the comparative prior-year periods. Because the allowance for credit losses is derived by applying historical loss rates, by aging bucket, to receivables outstanding at each period-end measurement date, and provision expense is the change in that allowance during the period, the provision moves with origination volume, the level and aging of receivables outstanding, historical loss rates, and origination and collection timing on this short-duration portfolio, which has an average term of approximately 12 days. Underlying credit performance and loss rates remained relatively stable over the period, supported by ongoing enhancements to our CashAI underwriting engine, including the initial deployment of CashAI v6.0 late in the second quarter of 2026, and the increase reflects portfolio growth and these timing factors rather than a deterioration in credit quality. Beginning June 1, 2026, the provision also captures expected credit losses on guaranteed ExtraCash receivables held by Coastal, which we reserve for using the same CECL methodology and loss rates as our on-balance-sheet receivables (see Note 5, Member Receivables, Net).

Current wording

Provision for credit losses—The provision for credit losses was $92.0 million for the nine months ended September 30, 2026, compared to $65.7 million for the nine months ended September 30, 2025, an increase of $26.2 million, or 40%. The increase was primarily driven by growth in ExtraCash origination volume from approximately $5.3 billion to approximately $6.9 billion for the nine months ended September 30, 2025 and 2026, respectively, as well as the timing of provision recognition across periods, including the calendar day on which each period ended. Historical loss rates by aging bucket increased slightly period over period, and the increase in provision primarily reflects portfolio growth and these timing factors rather than a significant change in underlying credit quality. We continued to enhance CashAI during the period, including the deployment of CashAI v6.0. Beginning June 1, 2026, the provision also includes expected credit losses on guaranteed ExtraCash receivables held by Coastal, as described above for the three months ended September 30, 2026.

Previous wording

The period-over-period increase was comprised of two principal drivers. The provision for ExtraCash receivables aged over 120 days and those deemed uncollectible increased by $22.0 million, driven by higher receivable volumes and loss timing consistent with a growing Member base and maturing receivables portfolio. Provision expense for ExtraCash receivables aged 120 days and under decreased by $2.5 million, primarily reflecting lower period-end balances in these short-dated buckets and the timing of originations and collections around the balance sheet date, consistent with the dynamic described above for the three months ended June 30, 2026, and not a change in underlying credit performance. In aggregate, these drivers reflect the impact of portfolio expansion, including an 18% increase in average transacting Members, an increase in average ExtraCash advance amounts from $199 to $213, and growth in total ExtraCash origination volume from approximately $3.3 billion to $4.4 billion for the six months ended June 30, 2025 and 2026, respectively.

Current wording

The period-over-period increase was comprised of two principal drivers. The provision for ExtraCash receivables aged over 120 days and those deemed uncollectible increased by $29.6 million, reflecting origination growth from late 2025 through mid-2026, given the 120-day write-off period described above, and the slight increase in historical loss rates. Provision expense for ExtraCash receivables aged 120 days and under decreased by $3.5 million, reflecting a smaller increase in the allowance on these balances during the period than in the prior-year period, primarily due to period-end balance and timing effects. The remaining increase of $0.2 million primarily relates to Dave Flex receivables. In aggregate, these drivers reflect the impact of portfolio expansion, including an 18% increase in average transacting Members and an increase in average ExtraCash amounts from $202 to $215 for the nine months ended September 30, 2025 and 2026, respectively.