DAVE 10-K & 10-Q changes, risk factors and insider trading

ExtraCash exposes us to credit risk of our Members and if our underwriting criteria for ExtraCash is not sufficient to mitigate against this risk, or if the data we useused to underwrite is inaccurate or incomplete, our financial condition and operating results could be adversely affected if a substantial number of our Members fail to repay the ExtraCash overdraft they receive.

If we are unable to keep pace with the rapid technological and AI-related developments in our industry and the larger financial services industry necessary to continue providing our Members with new and innovative products and services, the use of our platform and other products and services could decline. In addition, if the prices we charge for our products and services are unacceptable to our Members, our operating results will be harmed.

Use of artificial intelligenceAI in our operations and product offerings could result in reputational or competitive harm, legal or regulatory liability and adverse impacts on our results of operations.

We currently rely on a singletwo bank partner,partners, andbut ifintend to eventually rely on one bank partner. If our present or any future key banking relationships are terminated and we are not able to secure or successfully migrate client portfolios to a new bank partner or partners, or oura bank partner becomes subject to regulatory restrictions or other operational disruptions, our business would be adversely affected.

Our recent rapid growth, including growth in our volume of payments,ExtraCash transactions and related revenue, may not be indicative of our future growth, and if we continue to grow rapidly, we may not be able to manage our growth effectively. Our rapid growth also makes it difficult to evaluate our future prospects and may increase the risk that we will not continue to be successful.

Dave identified material weaknesses in its internal control over financial reporting in its financial statements for the years ended December 31, 2023 and 2022. If Dave identifies additional material weaknesses in the future or otherwise fails to maintain effective internal control over financial reporting, it may not be able to accurately or timely report its financial condition or results of operations, which may adversely affect Dave’s business and share price.

Our business is subject to extensive regulation and oversight in a variety of areas under federal, state and local laws, and is subject to regulatory investigationsinvestigations, consumer litigation and consumermass litigation.arbitrations.

The financial services industry continues to be highly regulated and subject to new laws or regulations in many jurisdictions, including the U.S. states and localities in which we operate, which could restrict the products and services we offer, impose additional compliance costs on us, render our current operations unprofitable or even prohibit our current or future operations.

Litigation, mass arbitrations, regulatory actions, and compliance issues could subject us to fines, penalties, judgments, remediation costs, and/or other requirements resulting in increased expenses and reputational harm.

The industries in which we compete are highly competitive and subject to rapid and significant changes. We compete against companies and financial institutions across the retail banking, financial services, consumer technology and financial technology services industries, as well as other nonbank lenders serving credit-challenged consumers, including online marketplace lenders, check cashers, point-of-sale lenders and payday lenders. We may compete with others in the market who may in the future provide offerings similar to ours, particularly companies who may provide money management, lending and other services thoughthrough a platform similar to our platform. These and other competitors in the banking and financial technology industries are introducing innovative products and services that may compete with ours. We expect that this competition will continue as banking and financial technology industries continue to evolve, particularly if non-traditional non-recourse advance providers and other parties gain greater market share in these industries or if changes in financial services regulation enable new competitors to enter the sector or new means of offering products and services that compete with ours. For example, some earned wage access providers with which Dave competes are evaluating whether to adopt new business models, such as through providing overdraft services through a partner bank or extending a line of credit. Additionally, these earned wage access providers are sponsoring federal and state legislative efforts that would provide support for the non-recourse earned wage products that they offer. If we are unable to differentiate our products and platform from and successfully compete with those of our competitors, or if our competitors adopt business models that more closely resemble our own, we may lose our competitive advantage and our business, results of operations and financial condition may be materially and adversely affected.

ExtraCash exposes us to credit risk of our Members and if our underwriting criteria for ExtraCash is not sufficient to mitigate against this risk, or if the data we useused to underwrite is inaccurate or incomplete, our financial condition and operating results could be adversely affected if a substantial number of our Members fail to repay the ExtraCash overdraft they receive.

The ExtraCash product exposes us to financial losses if Members do not repay the ExtraCash overdraft. The timing and volume of repaymentssettlements have a significant impact on our financial results and cash flows. If a large number of Members do not repay ExtraCash overdrafts, our financial condition and operating results would be adversely affected.

Our underwriting standards may not offer adequate protection against the risk of non-payment, especially in periods of economic uncertainty such as existed more recently with rising interest rates, and inflationary pressures. We rely on consumer’s bank account data obtained through a third party in order to develop our underwriting models and in order to underwrite any particular consumer’s ExtraCash overdraft. If this data becomes unavailable or is inaccurate or incomplete, our underwriting may not adequately predict repaymentsettlement of advances. In addition, if the cost to obtain this data materially increases, our business, results of operations and financial condition may be materially and adversely affected.

There can be no assurance that our performance forecasts will be accurate. In periods with changing economic conditions, elevated interest rates and persistent inflationary pressures, accurately forecasting repaymentsettlement of ExtraCash receivables is more difficult. Our credit loss allowance is an estimate, and if actual repaymentsettlement defaults are materially greater than our credit loss allowance, or more generally, if our forecasts are not accurate, our financial position, liquidity and results of operations could be materially adversely affected. Specifically, we may incur net charge-offs in excess of our reserves, or we may be required to increase our provision for credit losses, either of which would adversely affect our results of operations. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Estimates” in this Annual Report on Form 10-K.

Our Members may not view ExtraCash overdrafts facilitated through our platform as having the same significance as other credit obligations arising under more traditional circumstances.

The performance of ExtraCash is significantly dependent on our ability to develop and deploy effective models, with oversight by our bank partner,partners, to evaluate an applicant’s credit profile and likelihood of default based on a variety of factors and originate ExtraCash overdrafts. Despite recession-readiness planning and stress forecasting, there is no assurance that the credit criteria can accurately predict performance under economic conditions such as a prolonged down-cycle or recessionary economic environment or the governmental response to periods of disruption, which may drive unexpected outcomes. If the credit criteria does not accurately reflect credit risk on the ExtraCash overdrafts, greater than expected losses may result on these ExtraCash receivables and our business, operating results, financial condition and prospects could be materially and adversely affected.

If we are unable to keep pace with the rapid technological and AI-related developments in our industry and the larger financial services industry necessary to continue providing our Members with new and innovative products and services, the use of our platform and other products and services could decline.

The financial services industry is subject to rapid and significant technological changes.changes, including those related to AI. We cannot predict the effect of technological changes on our business. We expect that new services and technologies applicable to our industry will continue to emerge, and these new services and technologies may be superior to, or render obsolete, the technologies we currently utilize in our products and services. Our future success will depend, in part, on our ability to develop new technologies and adapt to technological changes and evolving industry standards. These initiatives are inherently risky, and they may not be successful or may have an adverse effect on our business, financial condition and results of operations. Additionally, we may make future investments in, or enter into strategic partnerships to develop new technologies and services or to implement infrastructure to further our strategic objectives, strengthen our existing businesses and remain competitive. However, our ability to transition to new services and technologies that we develop may be inhibited by a lack of industry-wide standards, changes to the regulatory landscape, resistance by consumers to these changes, or by the intellectual property rights of third parties.

WeIn recentlyFebruary changed2025, ourwe ExtraCashcompleted pricingthe modeltransition fromto ana simplified, transparent fee structure. The previous optional fee model towas replaced with a simplifiedmandatory 5% overdraft service fee structurefee, including a $5 minimum and $15 maximum.minimum. We also generate revenue by charging Members a fixed monthly rate for membership to our platform and from our Dave Bankingbanking Productproducts through interchange and out-of-network ATM fees, as well as from our job portal service through referral fees from partner companies. As the market for our platform matures, as new or existing competitors introduce new products or services that compete with ours or if general inflationary pressures continue, we may experience pricing pressure and be unable to retain current Members and attract new Members at prices that are consistent with our pricing model and operating budget. Our pricing strategy for existing or new products and services, including our recent changes to eliminate optional tips and fees, may prove to be unappealing to our Members, and our competitors could choose to bundle certain products and services to be competitive with ours. If this were to occur, it is possible that we would have to change our pricing strategies or reduce our prices, which could harm our revenue, gross profits, and operating results.

Use of artificial intelligenceAI in our operations and product offerings could result in reputational or competitive harm, legal or regulatory liability and adverse impacts on our results of operations.

We have incorporated, and expect to continue to incorporate in the future, AI solutions into our operations and product offerings. For exampleexample, our underwriting engine, CashAI, contains models that are built using AI technologies such as machine learning. We also have partnered with a third party vendor to offer DaveGPT, a generative AI chat bot that offers self-service customer inquiry resolution through natural language conversations. The use of AI creates various risks and challenges that could adversely affect our business, financial condition or results of operations. The development and deployment of AI systems involve inherent technical complexities and uncertainties, and our AI systems may encounter unexpected technical difficulties, limitations or errors, including inaccuracies in data processing or flawed algorithms, which could compromise the reliability and effectiveness of our products and services based on AI. In addition, our competitors or other third parties may incorporate AI into their products more quickly or more successfully than us, which could impair our ability to compete effectively.

We currently rely on a singletwo bank partner,partners, andbut ifintend to eventually rely on one bank partner. If our present or any future key banking relationships are terminated and we are not able to secure or successfully migrate client portfolios to a new bank partner or partners, or oura bank partner becomes subject to regulatory restrictions or other operational disruptions, our business would be adversely affected.

We currently rely on agreements with Evolve Bankand & Trust (“Evolve”),Coastal, our onlytwo bank partner,partners, to provide ExtraCash and other deposit accounts, debit card services and other transaction services to us and our Members. In June 2024, Evolve became subject to a consent order issued by its primary regulator, the Board of Governors of the Federal Reserve System (“Federal Reserve Board”), that imposes restrictions on Evolve’s operations and risk management practices. The recent bankruptcy of Synapse Financial Technologies, Inc. (“Synapse”), also affected the ability of customers of financial technology companies that used Synapse as a service provider to access funds placed at Synapse’s partner banks, including Evolve, for a number of months. We recently announced that we have entered into a Program Agreement with Coastal Community Bank to become a sponsor for our banking and ExtraCash products. Our Members will begin onboarding to Coastal Community Bank as soon as Q2 2025.

These agreements and corresponding regulations and supervisory expectations governing banks and financial institutions may give Evolve or Coastal Community Bank substantial discretion in approving certain aspects of our business practices, including our application and qualification procedures for Members and require us to comply with certain legal requirements. Our current or future bank partner’s discretionary actions or interpretations of our obligations under these agreements could impose material limitations to, or have a material adverse effect on, our business, financial condition and results of operations. In addition, any disruptions or restrictions on our bank partner’s operations could have an adverse effect on our business, financial condition and results of operations. For example, in May 2024, Evolve experienced a cybersecurity incident that resulted in the leak of certain customer information, including the information of some of our Members.

If our relationshiprelationships with our bank partnerpartners isare terminated or if one of our bank partnerpartners is unable to provide the necessary services to us, we would need to find another financial institution to provide those services, which could be difficultdifficult, require a long lead time, and be expensive. Transitioning Members’ accounts from one bank partner to another, including the anticipated transition from Evolve to Coastal Community Bank,Coastal, raises the risk of financial losses as a result of operational errors, including but not limited to, loss or disclosure of Member data and records, software defects, service disruption, employee misconduct, security breaches, or other similar actions or errors as well as from disputes or negotiations with an existing or prospective bank partner. Transitioning Members’ accounts from one bank partner to another also entails risk of disruption to our business from differences in the manner in which the new bank partner provides products and services to Members, including the new bank partner’s credit underwriting, regulatory compliance practices, and customer service practices and difficulties operating with more than one bank partner during any transition. The occurrence of any such events or any such changes in our bank partner’s practices could cause financial losses to our business and our Members, loss of trust, damage to our reputation, or termination of our agreements with strategic partners, each of which could result in loss of Members; loss or delayed market acceptance and sales of our products or services; legal claims against us, including from our existing or prospective bank partner; regulatory enforcement action; or diversion of resources, including through increased service expenses or financial concessions and increased insurance costs. If we are unable to find a replacement financial institution to provide the services we receive from our bank partner,partners, we would not be able to offer ExtraCash, service our deposit accounts, debit cards and other services, which would have a material adverse effect on our business, financial condition and results of operations. Furthermore, our financial results could be adversely affected if our costs associated with using our bank partnerpartners materially change or if any penalty or claim for damages is imposed as a result of our breach of our agreements with our bank partner.partners.

Our Members benefit from deposit insurance with respect to funds that we placeplaced on their behalf at our bank partner partners—or that our bank partnerpartners placesmay place with other banks through reciprocal deposit arrangements—in accordance with FDIC pass-through deposit insurance requirements, which apply to funds placed and held at an FDIC-insured bank through a third party. Under the pass-through insurance rules, funds owned by a principal or principals and deposited into one or more deposit accounts at an insured bank in the name of an agent, custodian or nominee, can be insured to the same extent as if the funds were deposited in the name of the principal or principals. For purposes of determining pass-through deposit insurance coverage at the time an insured bank fails, the FDIC may rely on records of those other than a failed insured bank to identify depositors and their insured deposits if such records are maintained in good faith and in the regular course of business, the deposited funds are in fact owned by the principal and not by the third party who set up the deposit account, and the insured bank’s account records and account titling indicate the agency or custodial nature of the account. If the regulatory pass-through insurance requirements are satisfied, each of our Members’ interest in deposits that we place on their behalf at our partner bankbanks is separately insured up to the statutory deposit insurance limit, currently $250,000 for deposits held in each deposit ownership category. If the pass-through insurance requirements are not satisfied due to operational failures by us or a third-party service provider, including our partner bank,banks, there would be less deposit insurance coverage with respect to funds that we place on behalf of our Members at our partner bankbanks; our Members could be harmed in the event of a failure of our bank partnerpartners; and we could be subject to enforcement actions, claims from third parties, including our consumers, and suffer economic harm that could have an adverse effect on our business. Further, negative publicity arising from our Members not benefiting from pass-through deposit insurance in the event of a failure of oura partner bank could be damaging to our reputation and may adversely impact use of our products and services, including our platform, and adversely affect our ability to attract new Members and business partners.

On October 2, 2024, the FDIC announced and published a proposed rulemaking that, if adopted, would increase requirements for certain custodial deposit accounts at insured banks, including requirements related to recordkeeping, internal controls, policies and procedures, as well as a requirement that the depository bank conduct daily reconciliations against the beneficial ownership records of the custodial deposit accounts. If the proposed rulemaking or a similar rulemaking is adopted, it may increase the operational costs and difficulty in placing our Member’s funds at our partner bankbanks and could result in operating difficulties, liabilities and expenses that harm our business.

In some cases, third-party vendors are the sole source, or one of a limited number of sources, of the services they provide to us. For example, we are solely reliant on our agreement with our cloud computing web services provider for the provision of cloud infrastructure services to support our platform. In addition, we primarily rely on a single third-party vendor to provide a number of issuing and processing services across several of our products.

While we oversee these service providers to help ensure they provide services in accordance with our agreements and regulatory requirements, we do not have control over the operations of any of our third-party service providers. In the event that a third-party service provider fails to perform for any reason, including negligence, willful misconduct or fraud, fire, natural disaster, power loss, telecommunication failures, software and hardware defects, terrorist attacks and similar events, our ability to process payments and perform other operational functions for which we currently rely on such third-party service providers will suffer and our business, cash flows and future prospects may be negatively impacted. For example, the recent bankruptcy of Synapse has affected the ability of customers of financial technology companies that used Synapse as a service provider to access funds placed at Synapse’s partner banks, including Evolve, for a number of months. While we were not directly affected by the bankruptcy of Synapse, the occurrence of similar failures by certain of our service providers could similarly cause financial losses to our business and our Members, loss of trust, damage to our reputation, or termination of our agreements with strategic partners, each of which could result in loss of Members; loss or delayed market acceptance and sales of our products or services; legal claims against us; regulatory enforcement action; or diversion of resources, including through increased service expenses or financial concessions and increased insurance costs. In addition, certain federal and state regulators have cited Synapse’s bankruptcy in connection with proposed regulatory initiatives. These initiatives, or similar actions by federal and state regulators, may increase compliance costs associated with our business or impact our relationships with our current partner bankbanks or any future partner bank, limit our ability to offer our Members deposit accounts through “for-benefit-of” arrangements with our partner bank,banks, or restrict the availability or marketing of pass-through deposit insurance for such accounts, which could adversely impact use of our products and services, including our platform, and adversely affect our ability to attract new Members and business partners.

Our recent rapid growth, including growth in our volume of payments,ExtraCash transactions and related revenue, may not be indicative of our future growth, and if we continue to grow rapidly, we may not be able to manage our growth effectively. Our rapid growth also makes it difficult to evaluate our future prospects and may increase the risk that we will not continue to be successful.

Our operating revenues increased fromwere $259.1 million in 2023 to2023, $347.1 million in 2024.2024, and $554.2 million in 2025. Although we have recently experienced significant growth in our revenue and transaction volume, even if our revenue continues to increase, we expect our growth rate will decline in the future as a result of a variety of factors, including the increasing scale of our business. Overall growth of our revenue depends on a number of factors, including our ability to:

Criminals are using increasingly sophisticated methods to engage in illegal activities using ExtraCash or deposit account products or Member information. Illegal activities involving products and services like ours often include malicious social engineering schemes, fraudulent payment or refund schemes, fabricated identities, account takeovers, identity theft and other fraudulent schemes. We rely upon third parties for transaction processing services, which subjects us and our Members to risks related to the vulnerabilities of those third parties. A single significant incident of fraud, or increases in the overall level of fraud, involving our products and services, have in the past and could in the future, result in operational losses and reputational damage to us. Such damage could reduce the use and acceptance of our products and services, cause our banking and strategic partners to cease doing business with us, or lead to greater regulation that would increase our compliance costs. Fraudulent activity could also result in the imposition of regulatory sanctions, including significant monetary fines, which could adversely affect our business, results of operations and financial condition. For example, in December 2024, the CFPB sued JPMorgan Chase, Bank of America, and Wells Fargo for failing to implement anti-fraud measures pertaining to their accountholders’ use of the third party peer-to-peer payment platform, Zelle. The CFPB complaint alleges that failing to investigate notices of unauthorized and incorrect transfers could result in risk under the Electronic Funds Transfer Act and Regulation E.

To address the challenges we face with respect to fraudulent activity of the nature outlined above and other fraudulent activities, we have implemented risk control mechanisms that have made it more difficult for all Members, including legitimate Members, to obtain and use our Dave Bankingbanking Product.products. We believe it is likely that our risk control mechanisms may continue to adversely affect the growth of our Dave Bankingbanking Productproducts for the foreseeable future and, as a result, negatively impact our operating revenues.

Our decisions to provide many of our products and services to Members are based partly on information that they provide to us or authorize us to receive. To the extent that these Members or third parties provide information to us in a manner that we are unable to verify, our decision-making process may not accurately reflect the associated risk. In addition, data provided by third-party sources is a component of our credit decision making and this data may contain inaccuracies. This may result in the inability to either approve otherwise qualified applicants or rejectedreject otherwise unqualified applicants through our platform or accurately analyze credit data, which may adversely impact our business and negatively impact our reputation.

Fraudulent activity involving Dave banking accounts may lead to fraudulent or baseless Member disputed transactions, for which Evolveeach of our bank partners as the card issuer, and we, under our agreementagreements with Evolve,our bank partners, are liable under banking regulations such as the EFTA and its implementing Regulation E, or under the rules set by the payment processing networks through which the card was issued, such as Visa or Mastercard. Our fraud detection and risk control mechanisms may not prevent all fraudulent or illegal activity, and the regulations and payment network rules may become more onerous, causing additional losses for us. To the extent we incur losses from disputed transactions, our business, results of operations and financial condition could be materially and adversely affected. Additionally, our Members can incur charges in excess of the funds available in their accounts, and we may become liable for these overdrafts. While we decline authorization attempts for amounts that exceed the available balance in a Member’s account, the application of payment network rules and the timing of the settlement of transactions, among other things, can result in overdrawn accounts.

Laws and regulationregulations governing overdrafts continuescontinue to evolve and may change. For example, on December 12, 2024, the CFPB proposedissued regulations that would impose additional obligations and restrict fees on overdraft accounts provided by certain financial institutions. IfWhile this proposalrule orwas disapproved pursuant to the Congressional Review Act on May 9, 2025, and thus did not take effect, if other changes to the laws and regulations governing overdrafts are enacted, our ExtraCash product and other aspects of our business could be adversely affected.

In the normal course of business, we collect, process, use and retain sensitive and confidential information regarding our Members and prospective Members, including data provided by and related to Members and their transactions, as well as other data of the counterparties to their payments. We also have arrangements in place with certain third-party service providers with which we share consumer information for servicing purposes. Information security risks in the financial services industry continue to increase generally, in part because of new technologies,technologies (including the development of AI), the use of the Internet and telecommunications technologies (including mobile devices) to conduct financial and other business transactions and the increased sophistication and activities of organized criminals, perpetrators of fraud, hackers, terrorists and other malicious third parties. In addition to cyberattacks and other security breaches involving the theft of sensitive and confidential information, hackers, terrorists, sophisticated nation-state and nation-state supported actors and other malicious third parties recently have engaged in attacks that are designed to disrupt key business services, such as consumer-facing applications and websites.

These cybersecurity challenges, including threats to our own IT infrastructure or that of our third-party providers, may take a variety of forms ranging from stolen bank accounts, email compromise, user fraud, account takeover, check fraud and cybersecurity attacks (including ransomware, unauthorized encryption, denial-of-service attacks, social engineering, unauthorized access, spam and other attacks) to “mega breaches” targeted against cloud-based services and other hosted software, which could be initiated by individual or groups of hackers or sophisticated cyber criminals. A cybersecurity incident or breach could result in disclosure of confidential information or intellectual property, or cause service interruptions and compromised data. The techniques used to obtain unauthorized access to or sabotage systems they change frequently and often are not detected until after an incident has occurred, so we may be unable to anticipate or prevent techniques used in the future. Our information technology and infrastructure, as well as those of our third-party service providers, have experienced breaches and may be subject or vulnerable in the future to breaches or attacks. For example, a third-party breach at our bank partner, Evolve, resulted in improper disclosure of certain of certain of our Members’ information, including their names, Social Security numbers, partner bank account numbers, date of birth, and contact information. Any future improper disclosure of our own confidential business information or the information of our Members could materially and adversely affect our business.

Our core principle, and the foundation on which we have built our company, is to deliver simple, transparent, and fair financial products. Therefore, we have made in the past, and may make in the future, decisions that we believe will benefit our Members and therefore provide long-term benefits for our business, even if our decision negatively impacts our short-term results of operations. For example, on February 20, 2025, we announced the completion of changes to our optional fee revenue model (tips and instant transfer fees) for ExtraCash. The optional fee model was replaced with a simplified 5% overdraft service fee structure including a $5 minimum and $15 maximum, starting with new customers in December 2024, and completely transitioned to existing customers as of February 19, 2025. Our decisions may negatively impact our short-term financial results or not provide the long-term benefits that we expect, in which case the success of our business and results of operations could be harmed.

We expect interchange revenues from fees charged to merchants by card networks for processing a debit or credit payment to represent a significant percentage of our total operating revenues as adoption of our Dave Bankingbanking Productproducts increases. The amount of interchange revenues that we earn is highly dependent on the interchange rates that the payment networks set and adjust from time to time.

The enactment of the Dodd-Frank Act required the Federal Reserve Board to implement regulations that have substantially limited interchange fees for many debit card issuers. While the interchange rates that may be earned by our partner banks and shared with us are currently exempt from the limitations imposed by the Dodd-Frank Act, there can be no assurance that future regulation or changes by the payment networks will not impact our interchange revenues substantially. If interchange rates decline, whether due to actions by the payment networks or future regulation, we would likely need to change our fee structure to offset the loss of interchange revenues. To the extent we change the pricing of our Dave Bankingbanking Product,products, we might find it more difficult to acquire new Members, to maintain or grow Dave banking debit card usage and to retain existing Members. As a result, our total operating revenues, operating results, prospects for future growth and overall business could be materially and adversely affected.

As a result of these continuing costs and expenses, we need to generate significant revenues to attain and maintain profitability and positive cash flow. To date, our operations have been supported by primarily through cash receipts from services 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. If we do not continue to increase our revenues, our business, results of operations and financial condition could be materially and adversely affected.

In March 2022, in response to inflationary conditions, the U.S. Federal Reserve began raising the federal funds interest rate and continued to do so through July 2023, with the federal funds interest rate remaining elevated compared to March 2022 rates as of February 2025. Elevated interest rates have had, and may continue to have, an adverse impact on the spending levels of consumers and their ability and willingness to borrow money. Higher interest rates often lead to higher payment obligations, which may reduce the ability of consumers to remain current on their obligations and, therefore, lead to increased delinquencies, defaults, consumer bankruptcies and charge-offs, and decreasing recoveries, all of which could have an adverse effect on our business.

We are exposed to many types of operational risk, including the risk of misconduct and errors by our employees, contractors and third-party service providers. Our business depends on our employees, contractors and third-party service providers to facilitate the operation of our business and process a large number of increasingly complex transactions, and if any of our employees, contractors or third-party service providers provide unsatisfactory service or take, convert or misuse funds, documents or data (including Member and/or internal documents or data), make an error, or fail to follow protocol (including when interacting with Members), we could lose Members, harm our reputation, be liable for damages, be subject to repurchase obligations and be subject to complaints, litigation, regulatory actions and penalties.

Any of these occurrences could result in our diminished ability to operate our business, potential liability to Members, inability to attract future Members, reputational damage, regulatory intervention, litigation, enforcement action and financial harm, which could negatively impact our business, financial condition and results of operations.

Furthermore, many of our senior management team have limited experience in managing a publicly-traded company. Their limited experience with the increasingly complex laws pertaining to public companies could be a significant disadvantage and an increasing amount of their time may be devoted to these activities, which will result in less time being devoted to the management and growth of the company’s operations. We may not have adequate personnel with the appropriate level of knowledge, experience and training in accounting policies, compliance practices or internal controls required of public companies. The development and implementation of the standards and controls and the hiring of experienced personnel necessary to achieve the level of accounting standards required of a public company may require expenditures greater than expected, and a delay could impact our ability to accurately and timely report our operating results, timely file required reports with the SEC and comply with Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”). On December 31, 2025, we ceased to be an emerging growth company. As a result, our independent registered public accounting firm must attest to the effectiveness of our internal control over financial reporting pursuant to Section 404. The process of compiling the system and processing documentation necessary to perform the evaluation needed to comply with Section 404 requires that we incur substantial expenses and expend significant management efforts. We have expanded our employee base to support our operations as a public company and it is possible that additional employees may need to be hired, which will increase our operating costs in future periods.

Dave identified material weaknesses in its internal control over financial reporting in its financial statements for the years ended December 31, 2023 and 2022. If Dave identifies additional material weaknesses in the future or otherwise fails to maintain effective internal control over financial reporting, it may not be able to accurately or timely report its financial condition or results of operations, which may adversely affect Dave’s business and share price.

In connection with the preparation and audits of our consolidated financial statements for the years ended December 31, 2023 and 2022, material weaknesses were identified in our internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of its annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

In connection with the preparation and audits of our consolidated financial statements for the years ended December 31, 2023 and 2022, material weaknesses were identified in our internal control over financial reporting. These material weaknesses were remediated as of December 31, 2024. We cannot provide assurance that the measures we have taken to date and may take in the future will prevent or avoid potential future material weaknesses. The effectiveness of our internal control over financial reporting is subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the possibility of human error and the risk of fraud. If we are unable to remediate the material weaknesses or identify additional material weakness in the future, our ability to record, process and report financial information accurately, and to prepare financial statements within the time periods required by the SEC, could be adversely affected which, in turn, may adversely affect our reputation and business and the market price of the Company’s Class A Common Stock. In addition, any such failures could result in litigation or regulatory actions by the SEC or other regulatory authorities, loss of investor confidence, delisting of our securities and harm to our reputation and financial condition, or diversion of financial and management resources from the operation of our business.

Natural disasters, pandemics, other catastrophic events or man-made disasters may cause damage or disruption to our operations, international commerce and the global economy, and thus could harm our business. We have a large employee presence in Los Angeles, California, and our data centers are located in the Midwest. The west coast of the United States contains active earthquake zones and the greater Los Angeles area has recently experienced major fires, including the significant damage and lasting effects of the January 2025 wildfires, and may experience major fires in the future. In the event of a major earthquake, hurricane or catastrophic event such as fire, power loss, telecommunications failure, political instability, civil unrest, war, or terrorist attack, we may be unable to continue our operations and may experience system interruptions, reputational harm, delays in our application development, lengthy interruptions in the availability of our products and services, breaches of data security, and loss of critical data, all of which could harm our business, operating results, and financial condition.

The current U.S. administration has signaledannounced theand/or potentialimplemented impositionsignificant ofnew tariffs and retaliatory tariffs against U.S. trading partners. Potential tariffsTariffs and trade restrictions may cause the prices of products to increase, which could reduce our Members’ disposable income, and adversely impact their spending, willingness to use ExtraCash, or ability to repay ExtraCash. This, in turn, could adversely affect our financial condition and results of operations.

The current U.S. administration ishas also proposingimplemented, and seekingis continuing to implementimplement, significant changes to the size and scope of the federal government. These changes may include reductions to government funding of various programs and agencies, alteration of the payment systems it uses, changes in policy direction, reduction and possible elimination of various federal agencies and bureaus and reduction of the overall federal government workforce. These changes, which may have a positive impact by reducing the overall federal deficit and reducing regulatory burden, may also have potential negative impacts, including impacts on the economy as a whole or different regions or segments of the economy. Accordingly, it is possible that such comprehensive changes may be materially adverse to our Members, business, financial condition and results of operation.

Recent macroeconomic factors, such as elevated interest rates, global events and market volatility, may cause the economy to enter into a period of slower economic growth or a recession, the length and severity of which cannot be predicted. Such uncertainty and negative trends in general economic conditions can have a significant negative impact on our ability to generate adequate revenue and to absorb expected and unexpected losses. Many factors, including factors that are beyond our control, may result in higher default rates by our Members and non-payment by our technology platform clients,Members, a decline in the demand for our products, and potentially impact our ability to make accurate credit assessments, lending decisions or technology platform client selections.assessments. Any of these factors could have a detrimental impact on our financial performance and liquidity.

The longevity and severity of aany downturn or recession will also place pressure on our business and strategy. The timing and extent of a downturn may require us to change, postpone or cancel our strategic initiatives or growth plans to pursue shorter-term sustainability. The longer and more severe an economic downturn, the greater the potential adverse impact on us.

There can be no assurance that economic conditions will be favorable for our business, that customer interest in our platform as a service will remain at current levels, or that default rates by Members will not increase. These impacts could limit our access to capital and negatively impact our profitability.

The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our consolidated financial statements and the notes related thereto which are included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. 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,” “Item 1A. Risk Factors” and elsewhere in this Annual Report on Form 10-K. On January 5, 2023, the Board of Directors approved an amendment to the Company’s certificate of incorporation to complete a 1-for-32 reverse stock split effective January 5, 2023. The effects of the reverse stock split have been reflected in the consolidated financial statements and the footnotes.

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

We have engineered a purpose-driven platform designed to deliver on our mission, making a significant impact across the stakeholder groups we serve. Since our inception, moreover than 1619 million Members have signed up for the Dave app, with over 1214 million having used at least one of our products. We have provided Members with moreover than $15$22 billion in ExtraCash, offering critical liquidity when they need it most.most, To further support our communities, weand have donated approximatelyover $23$25 million to charity and important causes since inception.causes.

Customers value our products, as demonstrated by more than 700,000750,000 App Store reviews with an average 4.8-star ratingrating. asDave ofhas Februaryearned 2025.multiple OurBest businessPlace modelto isWork builtrecognitions onfrom transparencyBuilt andIn customerover alignmentthe andpast buildingseveral relationshipsyears, withreflecting our Membersongoing thatinvestment drivein positivebecoming outcomesan forexceptional both them and our business.workplace.

The U.S. financial system has historically failed to address the needs of the millions of Americans who are living paycheck to paycheck. According to the Financial Health Network (“FHN”) in 2024,2025, approximately 180185 million AmericansAmericans, representing 69% of the U.S. population, are classified as financially “"coping”" or “vulnerable” representing over 70% of the U.S. population,"vulnerable," up from 66% in 2021. A December 2024 report by2025 PYMNTS alsoreport found that 65%67% of U.S. consumers were living paycheck to paycheck, up from 60%57% ain year earlier.2021. This marketpopulation includes both young and financially challenged individuals who have trouble managing cash flow, have minimal savings, regularly overdraft, and pay high fees for access to financial services. FHN research estimates there ispays approximately $38$43 billion of fees paid annually for access toin basic checking services, including account maintenance fees, overdraft fees and ATM fees and that financially vulnerable and coping populations pay over $200$225 billion in annual fees and interest for short-term credit.credit, according to FHN research. We believe these insights are supported by a Dave study of our Members which reveals that traditional financial institutions charge consumers between $350-$400 of fees annually for access to basic checking services. We also believe these trends underscore a growing need for better financial solutions and illustrate the depth ofestimate our total addressable market (“TAM”), which we estimate to be approximately 180185 million Americans thatwho do not have access to affordable and effective banking solutions.

We believe that these high costs are the result ofreflect the cost structure of incumbents. WithLegacy expensiveinstitutions with brick-and-mortar bank branch networks, antiquated technology, large employee bases, and inefficient customer acquisition strategies, legacy institutionsstrategies have significant costs to serve their customers,serve, which drivesthey thepass high price that customers haveon to pay for access to their services.customers. By leveraging world-class technology and harnessing the power of data and artificial intelligence, we believe thatAI, we have dramatically reduced theour costscost to serveserve, customersenabling in this market. Through this structural advantage, we are ableus to provide increased access to banking and credit products at lower costs,costs resulting inwith a much stronger value proposition to our Members.proposition.

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

Member GrowthAcquisition and ActivityEngagement

Industry Trends/General EconomicMacroeconomic Conditions

Service based revenue, net primarily consists of optional express processing fees, optional tips, overdraft 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. We discontinued optional tips and optional processing fees from our business model in February 2025.

Transaction based revenue, net primarily consists of interchange and ATM revenues from our Checking Product,Products, net of interchange andfees, ATM-related fees,fees and interest earned by Members. Also included in transaction based revenue are fees earned from funding and withdrawal-related transactions, maintenance fees on inactive accounts, volume support from a certain co-branded agreement, fees earned related to the Rewards Product for Members who make debit card spending transactions at participating merchantsagreement and deposit referral fees andthat are recognized at the point in time the transactions occur, as the performance obligations are satisfied and the variable consideration is not constrained.

We classify our operating expenses into the following fivesix categories:

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

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

Advertising and marketingactivation expenses primarily consist primarily of fees we paypaid to our advertising and marketing platform partners. We incur advertising, marketing and production-related expensespartners for online, social mediamedia, and television advertisingcampaigns, andas forwell partnerships andas promotional advertising.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 marketingactivation expensescosts are expensed as incurredincurred, althougheven though they typicallymay deliverprovide a benefitbenefits over an extended period.

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

Other operating expenses consist primarily ofinclude technologycharitable and infrastructure (third-party Software as a Service or “SaaS”), commitments to charity, checking product costs (program expenses, association fees, processor fees, losses from Member-disputed transactions, bank card fees and fraud),commitments, depreciation and amortization of property and equipment and intangible assets, legal fees,fees and settlements, rent, certain sales tax relatedtax-related costs, office related expenses, public relations costs,relations, professional services fees,services, travel and entertainment, and insurance. CostsThese associatedcosts withgenerally technology and infrastructure (third-party SaaS), depreciation and amortization of property and equipment and intangible assets, legal fees, rent, office related expenses, public relations costs, professional services fees, travel and entertainment, and insurance vary based uponreflect our investmentinvestments in infrastructure, business development, risk managementmanagement, and internal controlscontrols. As such, they may fluctuate based on strategic priorities and are generallynot notalways directly correlated with our operating revenuesrevenue or other transaction metrics.volume.

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

As of the date of this Form 10-Q, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 2, 2026, other than as noted below.below and in Part II, Item 1A “Risk Factors” of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.

The following discussion and analysis of the Company’sDave’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.

Since inception, over 2021 million Members have signed up for the Dave app, with nearlyover 15 million having used at least one of our products. We have provided Members with overnearly $24$27 billion in ExtraCash, offering critical liquidity when they need it most, and have donated over $25 million to charity and important causes.

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. AAccording February 2026to PYMNTS reportin found that2025, 67% of U.S. consumers were living paycheck to paycheck, up from 57% in 2021. ThisThe populationfinancially paysvulnerable and coping populations pay approximately $43$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.

Revenue growth depends on efficiently acquiring new Members and driving product cross-sell. During the three months ended MarchJune 31,30, 2026, customer acquisition costcosts improvedremained approximately flat compared to the three months ended June 30, 2025 at approximately $18$19, while payback periods have improved to nearlyunder threefour months,months. ourWe fastest on record, reflecting our focus on directingdirect acquisition spend toward the highesthighest-return returnopportunities, opportunities.managing customer acquisition cost and payback periods to preserve efficient unit economics as we scale.

ARPU expansion is primarily driven by ExtraCash volume and the adoption of Dave Checking by Members.Members, and ARPU continued to expand year-over-year in the second quarter of 2026. Dave Debit Card actives generate approximately 1.8x1.7 highertimes the monthly ARPU thanrelative to non-card users and 11 times the average monthly transaction volume, indicating materially higher engagement and lifetime value. Dave Debit Card spend was $534$530 million in the firstsecond quarter of 2026, a 9%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 105%87% year-over-year induring the firstthree quartermonths ofended 2026.June 30, 2026, over the three months ended June 30, 2025.

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 200215 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.

ExtraCashMember receivables funding costs are a material operating expense. Our variable-rate Debt Facility exposes us to interest rate risk, and elevated rates have increased borrowing costs, reducing ExtraCash unit economics.

InDuring Marchthe 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. ThisEffective partnershipJune is1, expected2026, tounder reducethe 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 free up capital as we transitionhold ExtraCasha receivablescommitment to anpurchase, off-balance-sheetand structure.provide a financial guarantee with respect to, those receivables. Coastal willearns earna an amountfee 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 areremain on Coastal'sits balance sheet.sheet, Elevatedand rateswe havemaintain increaseda borrowingdeposit costs,account whichat willCoastal reducein ExtraCashCoastal's unitname economics.(the "Cash Collateral Account") to secure our credit and fraud loss obligations.

We compete with traditional banks and credit unions,unions; neobanksdigital banking providers such as ChimeVaro Bank and Varo Bank,Chime; short-term credit and earned wage access providers such as Earnin, MoneyLion, and Brigit,Brigit; and broader fintech platforms such as Affirm, Klarna, Cash App, Venmo, Upstart, and Venmo.LendingClub. Many competitors possess greater financial resources, longer operating histories, and larger customer bases.

We believe we compete effectively based on: our superiordifferentiated value proposition of providing up to $500 in short-term credit (in the form of discretionary overdraft through a bank partner) with no interest, late fees, or credit check; proprietary underwriting technology through CashAI; strong customer satisfaction reflected in our App Store rating; an integrated product ecosystem driving higher engagement and lifetime value; and structural cost advantages through efficient, technology-driven operations.

Our business is sensitive to macroeconomic conditions. Interest rate changes directly impact funding costs and Members' settlement capacity. Unemployment affects Members' ability to repay ExtraCash. Consumer spending patterns and inflation influence cash flow and credit demand.

Currently, we conduct business through one operating segment which constitutes a single reportable segment. For more information about our basis of presentation, refer to Note 22, Significant Accounting Policies and Note 18, Segment Information, in theour accompanying condensed consolidated financial statements of Dave included in this report.

Service based revenue, net primarily consists of processing fees, optional tips, overdraft service fees and subscriptions charged to Members, net of processor-related costs associated with ExtraCash disbursements.disbursements, Service based revenue, netand also consists ofincludes lead generation fees from our Side Hustle advertising partners and revenue share from our surveysSurveys partner. WePrior discontinuedto February 2025, service based revenue, net also included optional tips and optional processing feesfees, fromwhich ourwe business modeldiscontinued in February 2025. The Company also earns installment and monthly participation fees on Dave Flex, which were immaterial for the periods presented.

We classify our operating expenses into the following sixseven categories:

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 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 offwritten-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.

Processing and servicing costs consist of fees paid to our processing partners for the recovery of ExtraCash, and, in periods prior to February 2025, optional processing fees,fees and optional tips, overdraft service fees and subscriptions. These expenses also include costs paid for services to connect Members’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 serviceservicing costs are expensed as incurred.

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.

Comparison of the three months ended MarchJune 31,30, 2026 and 2025

Processing and overdraft service fees, net of processing and servicing costs associated with ExtraCash originations, totaled $133.6$144.9 million for the three months ended MarchJune 31,30, 2026, representing an increase of $50.1$31.5 million, or 60%,28%, compared to $83.4$113.5 million for the three months ended MarchJune 31,30, 2025. The increase was primarily driven by an approximate 18%17% increase in average monthly transacting Members, an increase in total ExtraCash origination volume from approximately $1.5$1.8 billion to approximately $2.1$2.3 billion, a rise in the average ExtraCash amounts that increased from $192$206 to $212$215 period over periodperiod, andthe increaseschanges to our fee structure thatimplemented tookin placeFebruary 2025, and the removal of the maximum overdraft service fee (the "fee cap") for certain Member cohorts during February 2025. In addition, both the averagesecond quarter of 2026. Average processing and overdraft service fees also increased modestlyslightly duringperiod over period, in part reflecting the currentfee period.cap removal. We expect processing and overdraft service fees to continue to increase in line with growth in ExtraCash volume and Member engagement.

Subscription revenue totaled $13.9$15.1 million for the three months ended MarchJune 31,30, 2026, an increase of $7.1$7.0 million, or 105%,87%, compared to $6.8$8.1 million for the three months ended MarchJune 31,30, 2025. The increase was primarily attributable to the growth in the number of paying Members on our platform, as well as the increase in additionthe tomonthly subscription fee increases for new Members thatimplemented took place duringin June 2025.

Transaction based revenue, net, was $10.8$10.7 million for the three months ended MarchJune 31,30, 2026, an increase of $0.7$0.6 million, or 7%,6%, compared to $10.1$10.2 million for the three months ended MarchJune 31,30, 2025. The increase was primarily driven by interchange revenue resulting from the growth in Members engaging with our Checking Product and increased card spend and transaction volume, which rose approximately 9% period over period. Additionally, transaction based revenue, net increased primarily due tohigher fees earned from higher Members' funding and withdrawal-related transactions, maintenance fees on inactive accounts, and volume incentives from our card network partners. Net interchange revenue was relatively flat period over period, as growth in Members engaging with our Checking Product and an approximately 7% increase in card spend and transaction volume was substantially offset by related interchange costs. These increases were partially offset by a slight decrease in ATM revenue due to temporarilylower reducedATM feetransaction rates,volume asand well as a slight increasedecrease in interestdeposit duereferral to Members.fees.

The year-over-yearperiod-over-period increase compriseswas comprised of two principal drivers. The provision for ExtraCash receivables aged over 120 days and those deemed uncollectible increased by $13.0$9.1 million, driven by higher receivable volumes and loss timing consistent with a growing Member base and maturing loanMember receivables portfolio. Provision expense for ExtraCash receivables aged 120 days and under increaseddecreased by $3.0$5.6 million, reflecting increaseda 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 balances.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 18%approximate 17% increase in average transacting Members, an increase in average ExtraCash advance amounts from $192$206 to $212,$215, and growth in total ExtraCash origination volume from approximately $1.5$1.8 billion to $2.1$2.3 billion for the three months ended MarchJune 31,30, 2025 and 2026, respectively.

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 current expected credit loss ("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.

Historical loss rates utilized in our allowance for credit losses for the period ended MarchJune 31,30, 2026 remained relatively stable compared to the prior period, reflecting expected shifts in overall collections performance. These loss rates may be influenced by the timing of collections activity relative to period-end measurement dates and the composition of aged receivables outstanding at any given reporting date. Changes in these historical loss rates directly affect both the allowance for credit losses and the corresponding provision for credit losses. All uncollectible ExtraCash receivables are written offwritten-off against the allowance for credit losses, reducing the allowance accordingly.

For additional details regarding the aging composition of ExtraCash receivables and a complete roll-forward analysis of the allowance for credit losses, refer to the detailed tables presented in Note 55, — ExtraCashMember Receivables, Net in the accompanying consolidated financial statements.

Processing and serviceservicing costs—Processing and servicing costs totaled $9.6$10.3 million for the three months ended MarchJune 31,30, 2026, compared to $7.0$7.2 million for the three months ended MarchJune 31,30, 2025. The increase of $2.6$3.1 million, or 37%,44%, was primarily driven by cost increases from ExtraCash origination volume from approximately $1.5$1.8 billion to $2.1$2.3 billion for the three months ended MarchJune 31,30, 20252026 and 2026,2025, respectively.

Financial network and transaction costs—Financial network and transaction costs totaled $7.8$8.0 million for the three months ended MarchJune 31,30, 2026, compared to $7.0$7.2 million for the three months ended MarchJune 31,30, 2025. The increase of $0.7$0.8 million, or 10%, was primarily driven by increases in debit card network fees and debit card processing costs due to a 9%7% increase in transaction volume period over period, partially offset by decreases in ATM network fees.

Advertising and activation costs —Advertising and activation costs totaled $14.3$20.4 million for the three months ended MarchJune 31,30, 2026, compared to $11.9$15.5 million for the three months ended MarchJune 31,30, 2025. The increase of $2.3$4.9 million, or 20%,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. CustomerDuring the three months ended June 30, 2026, we increased new Member acquisition costyear-over-year while holding customer acquisition costs flat, at approximately $19. Payback periods also improved to approximatelyunder $18 while payback periods improved to nearly threefour months, reflecting disciplinedour allocationfocus ofon marketingdirecting resourcesacquisition spend toward efficientthe growth.highest return opportunities.

Compensation and benefits—Compensation and benefits expenses totaled $27.6$35.7 million for the three months ended MarchJune 31,30, 2026, compared to $27.3$26.4 million for the three months ended MarchJune 31,30, 2025. The increase of $0.3$9.3 million, or 1%,35%, was primarily attributable to the following:

an increase in temporary labor and contractor costs of $0.6$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 MarchJune 31,30, 2026.2026; and an increase in salaries, bonuses, benefits and insurance, and employer taxes of $0.5 million.

an increase in salaries, bonuses, benefits and insurance, and employer taxes of $0.1 million; offset by a decrease in stock-based compensation of $0.4 million, primarily due to reductions in stock-based compensation expense related to stock options and restricted stock units granted in prior years that have fully vested during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, partially offset by an increase in stock-based compensation expense related to performance-based restricted stock units granted during the period; and Technology and infrastructure—Technology and infrastructure expenses totaled $3.4$3.9 million for the three months ended MarchJune 31,30, 2026, compared to $2.7$2.9 million for the three months ended MarchJune 31,30, 2025. The increase of $0.7$1.0 million, or 25%,33%, 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.

Other operating expenses—Other operating expenses totaled $9.7$11.5 million for the three months ended MarchJune 31,30, 2026, compared to $6.3$6.2 million for the three months ended MarchJune 31,30, 2025. The increase of $3.4$5.3 million, or 54%,86%, was primarily attributable to the following:

an increase in legal expenses of $2.9 million, primarily attributable to higher litigation and settlement-related costs compared to the prior period; and an increase in professional service fees of $0.6$0.3 million related to expenditures for external consulting and compliance-related services in support of key operational and regulatory priorities,priorities; includingand thea enhancementcombined increase of internal$0.5 controls,million processes,in office-related expenses, and adherencedepreciation toand applicableamortization reporting standards.expenses.

Interest income—Interest income totaled $0.8$1.3 million for the three months ended MarchJune 31,30, 2026, compared to $0.4$0.6 million for the three months ended MarchJune 31,30, 2025. The increase of $0.4$0.7 million, or 91%,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.

Changes in fair value of warrantearnout liabilityliabilities—Changes in the fair value of ourthe warrantearnout liabilityliabilities resulted in a benefitloss of $8.3($11.2) million for the three months ended MarchJune 31,30, 2026, compared to a loss of $0.4($7.9) million for the three months ended MarchJune 31,30, 2025.2025, an increase of $3.3 million, or 42%. The decreaseearnout ofshares $8.7 million was primarily driven by fair value adjustments related to our public and private warrant liabilities, whichliabilities are remeasured each period based on changes in the DAVEW warrant price and our Class A common stock price. The warrant liability decreased in value during the current quarter due to a decreaseAppreciation in the DAVEW warrant price and our Class A common stock price during the first quarter ofincreased 2026,the whichfair led to a remeasurementvalue of the liabilityearnout atliabilities aand lower fair value, resultingresulted in a significantloss, benefitwhich was higher than the loss recognized duringin the prior year period.

Provision for income taxes for the three months ended MarchJune 31,30, 2026 increased by approximately $7.2$5.5 million, or 142%,224%, compared to the three months ended MarchJune 31,30, 2025. The increase was primarily due to higher taxable income reported for the three months ended MarchJune 31,30, 20262026, compared to the three months ended MarchJune 31,30, 2025.