Dave (DAVE) 21st Annual Needham Technology, Media, & Consumer Conference summary

Business overview and customer base

• Operates as a leading neobank with 14 million customers, focusing on underserved Americans with limited access to traditional credit products.

• Core customers are typically in their twenties and thirties, have lower credit scores, and are early in their income journey.

• Offers digital-first services with a cost to serve of $40 per user, significantly lower than traditional banks.

• Uses proprietary cash flow-based underwriting instead of FICO, enabling efficient short-term credit decisions.

• Achieved over 180 million credit originations, with loss rates dropping from 10% to nearly 1%.

Product differentiation and competitive landscape

• Main product, ExtraCash, provides short-term liquidity up to $500 between paychecks, with transparent fees and no need to overdraw accounts.

• Charges $5 per $100 borrowed, compared to up to $34 per instance at traditional banks.

• Customer acquisition cost is under $20, much lower than competitors, due to easy bank account connectivity.

• Offers higher average transaction sizes and lower fees than both incumbent banks and neobank peers.

• Focuses on maximizing credit access and wallet share for its customer base.

Funding structure and financial impact

• Transitioning ExtraCash receivables to an off-balance sheet structure with Coastal Community Bank, reducing funding obligations.

• About 75%-80% of receivables will move to Coastal’s balance sheet, freeing up $250 million in cash.

• Plans to use freed cash to pay down debt and pursue share buybacks, enhancing capital return.

• New funding arrangement will lower interest expenses and improve free cash flow generation.

• Expects gross margin to expand from 72% to mid-70s through the year as the new structure is implemented.