Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the notes related thereto which are included in Part I, Item 1. “Financial Statements” of this Quarterly Report on Form 10-Q. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Cautionary Note Regarding Forward-Looking Statements,” “Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission (the “SEC”) on March 2, 2026 (the “Annual Report”), and this Quarterly Report on Form 10-Q.
Company Overview
Dave was founded in 2017 to provide a faster, more transparent, and lower-cost alternative to traditional financial institutions for Americans living paycheck to paycheck. 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's financial challenges with confidence.
Since inception, over 20 million Members have signed up for the Dave app, with nearly 15 million having used at least one of our products. We have provided Members with over $24 billion in ExtraCash, offering critical liquidity when they need it most, and have donated over $25 million to charity and important causes.
Customers value our products, as demonstrated by more than 800,000 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.
Market Opportunity
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. A February 2026 PYMNTS report found that 67% of U.S. consumers were living paycheck to paycheck, up from 57% in 2021. This population pays approximately $43 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.
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.
Key Factors Affecting Operating Results
Our future operating results and cash flows depend on Member growth and activity, product expansion, competition, industry trends, and general economic conditions.
Member Acquisition and Engagement
Revenue growth depends on efficiently acquiring new Members and driving product cross-sell. During the three months ended March 31, 2026, customer acquisition cost improved to approximately $18 while payback periods have improved to nearly three months, our fastest on record, reflecting our focus on directing acquisition spend toward the highest return opportunities.
ARPU expansion is primarily driven by ExtraCash volume and the adoption of Dave Checking by Members. Dave Debit Card actives generate approximately 1.8x higher monthly ARPU than non-card users and 11 times the average monthly transaction volume, indicating materially higher engagement and lifetime value. Dave Debit Card spend was $534 million in the first quarter of 2026, a 9% 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% year-over-year in the first quarter of 2026.
Credit Performance
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 200 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.
Economic conditions, particularly unemployment and consumer spending, materially influence Members' settlement capacity. Our real-time underwriting continuously evaluates transaction-level data to detect changes in income, spending, and employment. However, severe economic deterioration could materially increase delinquencies and write-offs despite model refinements.
Funding and Interest Rate Sensitivity
ExtraCash 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.
In March 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. This partnership is expected to reduce our funding obligations and free up capital as we transition ExtraCash receivables to an off-balance-sheet structure. Coastal will earn an amount equal to a variable rate based on the federal funds rate plus a margin while such receivables are on Coastal's balance sheet. Elevated rates have increased borrowing costs, which will reduce ExtraCash unit economics.
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.
Competition
We compete with traditional banks and credit unions, neobanks such as Chime and Varo Bank, short-term credit and earned wage access providers such as Earnin, MoneyLion, and Brigit, and broader fintech platforms such as Affirm, Cash App, and Venmo. Many competitors possess greater financial resources, longer operating histories, and larger customer bases.
We believe we compete effectively based on: our superior 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.
Competitive pressures could increase marketing spend or reduce competitive positioning. Our long-term success depends on continued product differentiation and technological leadership. See "Item 1. Business" and "Item 1A. Risk Factors" included in our Annual Report for additional information.
Macroeconomic Conditions
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.
Our real-time underwriting adapts to changing conditions through continuous transaction-level analysis. However, severe macroeconomic deterioration, including recession, significant unemployment increases, or persistent inflation, could materially impact our business, financial condition, and results of operations.
Our business is subject to moderate seasonal trends, with ExtraCash demand and Dave Checking transaction volumes generally correlating to consumer spending cycles, including increased activity during the holiday season and around tax refund periods. These seasonal patterns may result in fluctuations in our quarterly and annual results of operations.
Regulatory Environment
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.
Recent Developments
On April 9, 2026 we reached a significant product development milestone with a controlled market launch of Dave Flex, a general purpose credit card integrating buy-now-pay-later functionality. The initial release has been extended to a limited subset of members
to establish a foundational dataset spanning card usage and transaction volume, credit quality and delinquency trends, repayment behavior, and overall member satisfaction and engagement. This data-driven approach reflects management's commitment to disciplined product scaling. We expect to leverage performance data from this phase to validate key economic assumptions, refine risk management frameworks, and determine the appropriate pace of subsequent expansion. Dave Flex remains in an early stage, and future results will depend on, among other factors, the outcomes observed during this initial testing period.
Key Components of Statements of Operations
Basis of Presentation
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 2 in the accompanying condensed consolidated financial statements of Dave included in this report.
During the second quarter of 2025, we revised the presentation of certain items within our condensed consolidated statement of operations. These changes have been applied retrospectively to all periods presented and did not impact previously reported net income or earnings per share.
Specifically:
•Financial network and transaction costs now appear as a separate line item within operating expenses (formerly included in other operating expenses).
•Advertising and marketing is now presented as advertising and activation under operating expenses and includes Member activation costs (activation costs were formerly included in processing and servicing costs and other operating expenses).
•Technology and infrastructure costs now appear as a separate line item within operating expenses (formerly included in other operating expenses).
Operating Revenues
Service based revenue, net
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. 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
Transaction based revenue, net primarily consists of interchange and ATM revenues from our Checking Product, net of interchange fees, ATM-related 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 and deposit referral fees that are recognized at the point in time the transactions occur, as the performance obligations are satisfied and the variable consideration is not constrained.
Operating Expenses
We classify our operating expenses into the following six categories:
Provision for credit losses
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 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.
Processing and servicing costs
Processing and servicing costs consist of fees paid to our processing partners for the recovery of ExtraCash, optional processing fees, optional tips, overdraft service fees and subscriptions. These expenses also include costs paid for services to connect Members’ bank accounts to our application. Except for processing and servicing costs associated with ExtraCash originations which are recorded net against revenue, all other processing and service costs are expensed as incurred.
Financial network and transaction costs
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.
Advertising and activation costs
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.
Compensation and benefits
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 manage routine customer service inquiries and support.
Technology and infrastructure
Technology and infrastructure costs are associated with third-party Software-as-a-Service (“SaaS”) solutions, including cloud-based platforms that support the development, maintenance, scalability, and security of our products and internal systems.
Other Operating Expenses
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, 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.
Other (Income) Expenses
Other (income) expenses consist of interest income, interest expense, changes in fair value of earnout liabilities and changes in fair value of warrant liabilities.
Provision for Income Taxes
Provision for income taxes reflects federal and state income taxes and changes in our valuation allowance against deferred tax assets.
Results of Operations
Comparison of the three months ended March 31, 2026 and 2025
Operating revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
|
Change |
|
(in thousands, except for percentages) |
|
March 31, |
|
|
$ |
|
|
% |
|
|
|
2026 |
|
|
2025 |
|
|
2026/2025 |
|
|
2026/2025 |
|
Service based revenue, net |
|
|
|
|
|
|
|
|
|
|
|
|
Processing and overdraft service fees, net |
|
$ |
133,588 |
|
|
$ |
83,448 |
|
|
$ |
50,140 |
|
|
|
60 |
% |
Tips |
|
|
- |
|
|
|
7,496 |
|
|
|
(7,496 |
) |
|
|
-100 |
% |
Subscriptions |
|
|
13,945 |
|
|
|
6,817 |
|
|
|
7,128 |
|
|
|
105 |
% |
Other |
|
|
54 |
|
|
|
90 |
|
|
|
(36 |
) |
|
|
-40 |
% |
Transaction based revenue, net |
|
|
10,827 |
|
|
|
10,128 |
|
|
|
699 |
|
|
|
7 |
% |
Total |
|
$ |
158,414 |
|
|
$ |
107,979 |
|
|
$ |
50,435 |
|
|
|
47 |
% |
Service based revenue, net—
Processing and Overdraft Service fees, net
Processing and overdraft service fees, net of processing and servicing costs associated with ExtraCash originations, totaled $133.6 million for the three months ended March 31, 2026, representing an increase of $50.1 million, or 60%, compared to $83.4 million for the three months ended March 31, 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 $1.5 billion to approximately $2.1 billion, a rise in the average ExtraCash amounts that increased from $192 to $212 period over period and increases to our fee structure that took place during February 2025. In addition, both the average processing and overdraft service fees increased modestly during the current period. We expect processing and overdraft service fees to continue to increase in line with growth in ExtraCash volume and Member engagement.
Tips
Tips decreased $7.5 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 primarily due to the elimination of the Member tipping option in February 2025.
Subscriptions
Subscription revenue totaled $13.9 million for the three months ended March 31, 2026, an increase of $7.1 million, or 105%, compared to $6.8 million for the three months ended March 31, 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.
Transaction based revenue, net
Transaction based revenue, net, was $10.8 million for the three months ended March 31, 2026, an increase of $0.7 million, or 7%, compared to $10.1 million for the three months ended March 31, 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 to fees earned from higher Members' funding and withdrawal-related transactions, maintenance fees on inactive accounts, and volume incentives from our card network partners. These increases were partially offset by a slight decrease in ATM revenue due to temporarily reduced fee rates, as well as a slight increase in interest due to Members.
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
|
Change |
|
(in thousands, except for percentages) |
|
March 31, |
|
|
$ |
|
|
% |
|
|
|
2026 |
|
|
2025 |
|
|
2026/2025 |
|
|
2026/2025 |
|
Provision for credit losses |
|
$ |
26,586 |
|
|
$ |
10,603 |
|
|
$ |
15,983 |
|
|
|
151 |
% |
Processing and servicing costs |
|
|
9,560 |
|
|
|
6,987 |
|
|
|
2,573 |
|
|
|
37 |
% |
Financial network and transaction costs |
|
|
7,752 |
|
|
|
7,039 |
|
|
|
713 |
|
|
|
10 |
% |
Advertising and activation costs |
|
|
14,260 |
|
|
|
11,930 |
|
|
|
2,330 |
|
|
|
20 |
% |
Compensation and benefits |
|
|
27,590 |
|
|
|
27,251 |
|
|
|
339 |
|
|
|
1 |
% |
Technology and infrastructure |
|
|
3,395 |
|
|
|
2,726 |
|
|
|
669 |
|
|
|
25 |
% |
Other operating expenses |
|
|
9,705 |
|
|
|
6,294 |
|
|
|
3,411 |
|
|
|
54 |
% |
Total |
|
$ |
98,848 |
|
|
$ |
72,830 |
|
|
$ |
26,018 |
|
|
|
36 |
% |
Provision for credit losses—The provision for credit losses was $26.6 million for the three months ended March 31, 2026, compared to $10.6 million for the three months ended March 31, 2025, resulting in an increase of $16.0 million, or 151%. This increase reflects period-over-period growth in ExtraCash volume, continued expansion of our Member base, and credit performance trends consistent with the portfolio's expected maturation and our strategic emphasis on optimizing unit-level profitability.
The year-over-year increase comprises two principal drivers. The provision for ExtraCash receivables aged over 120 days and those deemed uncollectible increased by $13.0 million, driven by higher receivable volumes and loss timing consistent with a growing Member base and maturing loan portfolio. Provision expense for ExtraCash receivables aged 120 days and under increased by $3.0 million, reflecting increased outstanding balances. 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 $192 to $212, and growth in total ExtraCash origination volume from approximately $1.5 billion to $2.1 billion for the three months ended March 31, 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.
The outstanding balance of ExtraCash receivables is subject to variability based on seasonal differences in Member activity across the trailing 120-day measurement period. Additionally, the calendar day on which a period ends can materially affect provision expense due to intra-week fluctuations in outstanding balances. This inherent timing effect, together with the seasonal pattern of origination and loss emergence, contributes to variability in our period-end provision for credit losses.
Historical loss rates utilized in our allowance for credit losses for the period ended March 31, 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 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 5 — ExtraCash Receivables, Net in the accompanying consolidated financial statements.
Processing and service costs—Processing and servicing costs totaled $9.6 million for the three months ended March 31, 2026, compared to $7.0 million for the three months ended March 31, 2025. The increase of $2.6 million, or 37%, was primarily driven by cost increases from ExtraCash origination volume from approximately $1.5 billion to $2.1 billion for the three months ended March 31, 2025 and 2026, respectively.
Financial network and transaction costs—Financial network and transaction costs totaled $7.8 million for the three months ended March 31, 2026, compared to $7.0 million for the three months ended March 31, 2025. The increase of $0.7 million, or 10%, was primarily driven by increases in debit card network fees and debit card processing costs due to a 9% 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 million for the three months ended March 31, 2026, compared to $11.9 million for the three months ended March 31, 2025. The increase of $2.3 million, or 20%, was primarily driven by our continued investment in Member acquisition and engagement, with spend refined to capitalize on seasonal trends and high-return
opportunities. Customer acquisition cost improved to approximately $18 while payback periods improved to nearly three months, reflecting disciplined allocation of marketing resources toward efficient growth.
Compensation and benefits—Compensation and benefits expenses totaled $27.6 million for the three months ended March 31, 2026, compared to $27.3 million for the three months ended March 31, 2025. The increase of $0.3 million, or 1%, was primarily attributable to the following:
•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 March 31, 2026.
•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 million for the three months ended March 31, 2026, compared to $2.7 million for the three months ended March 31, 2025. The increase of $0.7 million, or 25%, 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 million for the three months ended March 31, 2026, compared to $6.3 million for the three months ended March 31, 2025. The increase of $3.4 million, or 54%, 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 million related to expenditures for external consulting and compliance-related services in support of key operational and regulatory priorities, including the enhancement of internal controls, processes, and adherence to applicable reporting standards.
Other (income) expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
|
Change |
|
(in thousands, except for percentages) |
|
March 31, |
|
|
$ |
|
|
% |
|
|
|
2026 |
|
|
2025 |
|
|
2026/2025 |
|
|
2026/2025 |
|
Interest income |
|
$ |
(824 |
) |
|
$ |
(431 |
) |
|
$ |
(393 |
) |
|
|
91 |
% |
Interest expense |
|
|
1,729 |
|
|
|
1,758 |
|
|
|
(29 |
) |
|
|
-2 |
% |
Changes in fair value of earnout liabilities |
|
|
(3,190 |
) |
|
|
(398 |
) |
|
|
(2,792 |
) |
|
|
702 |
% |
Changes in fair value of public and private warrant liabilities |
|
|
(8,309 |
) |
|
|
352 |
|
|
|
(8,661 |
) |
|
|
-2461 |
% |
Total |
|
$ |
(10,594 |
) |
|
$ |
1,281 |
|
|
$ |
(11,875 |
) |
|
|
-927 |
% |
Interest income—Interest income totaled $0.8 million for the three months ended March 31, 2026, compared to $0.4 million for the three months ended March 31, 2025. The increase of $0.4 million, or 91%, 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 earnout liability—Changes in fair value of earnout liabilities resulted in benefit of $3.2 million for three months ended March 31, 2026, compared to a benefit of $0.4 million for the three months ended March 31, 2025. The increase of $2.8 million was primarily driven by a fair value adjustment related to the earnout shares liability, which is sensitive to fluctuations in our Class A common stock price. While our stock has generally appreciated over the last 12 months, a decrease in the price during the three months ended March 31, 2026 led to a remeasurement of the liability at a lower fair value, resulting in a benefit recognized during the period.
Changes in fair value of warrant liability—Changes in the fair value of our warrant liability resulted in a benefit of $8.3 million for the three months ended March 31, 2026, compared to a loss of $0.4 million for the three months ended March 31, 2025. The decrease of $8.7 million was primarily driven by fair value adjustments related to our public and private warrant liabilities, which 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 decrease in the DAVEW warrant price and our Class A common stock price during the first quarter of 2026, which led to a remeasurement of the liability at a lower fair value, resulting in a significant benefit recognized during the period.
Provision for income taxes
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
Change |
(in thousands, except for percentages) |
|
March 31, |
|
$ |
|
% |
|
|
2026 |
|
2025 |
|
2026/2025 |
|
2026/2025 |
Provision for income taxes |
|
$12,224 |
|
$5,056 |
|
$7,168 |
|
142% |
Total |
|
$12,224 |
|
$5,056 |
|
$7,168 |
|
142% |
Provision for income taxes for the three months ended March 31, 2026 increased by approximately $7.2 million, or 142%, compared to the three months ended March 31, 2025. The increase was primarily due to higher income reported for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.
Non-GAAP Financial Measures
In addition to our results determined in accordance with GAAP, we believe the following non-GAAP measure is useful in evaluating our operational performance. We use the following non-GAAP measure to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that the non-GAAP financial information may be helpful in assessing our operating performance and facilitates an alternative comparison among fiscal periods. The non-GAAP financial measure is not, and should not be viewed as, a substitute for GAAP reporting measures.
Adjusted EBITDA
"Adjusted EBITDA" is defined as net income adjusted for interest income or expense, provision for income taxes, depreciation and amortization, stock-based compensation, dormant account fees, legal settlement and litigation expenses, changes in fair value of earnout liabilities, changes in fair value of public and private warrant liabilities, and other discretionary or non-recurring items determined by management. Adjusted EBITDA is intended as a supplemental measure of our performance that is neither required by, nor presented in accordance with, GAAP.
We believe that the use of Adjusted EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with those of comparable companies, which may present similar non-GAAP financial measures to investors. However, you should be aware that when evaluating Adjusted EBITDA, we may incur future expenses similar to those excluded when calculating this measure. In addition, our presentation of this measure should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies, because not all companies calculate Adjusted EBITDA in the same fashion.
Because of these limitations, Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA on a supplemental basis. You should review the reconciliation of net income to Adjusted EBITDA below, and no single financial measure should be relied upon to evaluate our business.
The following table reconciles net income to Adjusted EBITDA for the three months ended March 31, 2026 and 2025:
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|
|
|
|
|
|
|
|
For the Three Months Ended |
|
(in thousands) |
|
March 31, |
|
|
|
2026 |
|
|
2025 |
|
Net income |
|
$ |
57,936 |
|
|
$ |
28,812 |
|
Interest expense, net |
|
|
905 |
|
|
|
1,327 |
|
Provision for income taxes |
|
|
12,224 |
|
|
|
5,056 |
|
Depreciation and amortization |
|
|
1,585 |
|
|
|
1,500 |
|
Stock-based compensation |
|
|
7,102 |
|
|
|
7,517 |
|
Legal settlement and litigation expenses |
|
|
1,067 |
|
|
|
- |
|
Changes in fair value of earnout liabilities |
|
|
(3,190 |
) |
|
|
(398 |
) |
Changes in fair value of public and private warrant liabilities |
|
|
(8,309 |
) |
|
|
352 |
|
Adjusted EBITDA |
|
$ |
69,320 |
|
|
$ |
44,166 |
|
Liquidity and Capital Resources
We have historically financed our operations through cash generated from operations, equity financings, borrowings under our credit facility, and proceeds from the Business Combination. In March 2026, we completed the private offering of the 2031 Notes, which significantly increased our available liquidity. Throughout 2025 and the three months ended March 31, 2026, we achieved consistent profitability and positive operating cash flow, which has strengthened our liquidity position and reduced our reliance on external financing.
As of March 31, 2026, our cash and cash equivalents, investments, and restricted cash totaled $177.8 million, compared to $123.2 million as of December 31, 2025. The increase was primarily driven by net proceeds received from the 2031 Notes offering and cash generated from operations, partially offset by $186.7 million in share repurchases, $17.3 million used to purchase capped call transactions, and $7.4 million in debt issuance costs.
Sources and Uses of Cash
Our primary sources of liquidity include:
•Cash generated from operations, including processing and overdraft service fees, subscription revenue, and transaction-based revenue;
•Proceeds from the issuance of the 2031 Notes; and
•Borrowings available under our Debt Facility with VPC.
Our primary uses of cash include:
•Funding ExtraCash originations;
•Operating expenses, including processing and servicing costs, financial network and transaction costs, advertising and activation costs, compensation and benefits, technology infrastructure, and other operating expenses;
•Share repurchases under our authorized repurchase program;
•Purchase of capped call transactions in connection with the 2031 Notes offering; and
•Interest related to our debt obligations.
Debt Facility
We maintain a credit facility (the 'Debt Facility') with Victory Park Management, LLC ('VPC' or 'Agent'). As of March 31, 2026, $75.0 million of term loans under the Debt Facility were outstanding. Interest payments on term loan borrowings are required on a monthly basis. See Note 10, Debt Facility, in the notes to our condensed consolidated financial statements for additional information regarding the terms of the Debt Facility.
As of June 30, 2025, we were not in compliance with the Minimum Receivable Loan-to-Value ratio covenant under the Debt Facility. The Agent provided a limited waiver of this covenant for that period. On July 14, 2025, we entered into the Fifth Amendment to the Financing Agreement, which, among other updates, removed the Loan-to-Value ratio covenant from the agreement entirely. As of March 31, 2026, we were in compliance with all covenants under the Debt Facility.
The Debt Facility matures in December 2026, at which time the full $75.0 million outstanding principal balance will become due. No principal repayments have been made since inception of the facility. We are evaluating our alternatives with respect to the Debt Facility, which may include refinancing, extending the maturity, repaying the balance in full from available cash and operating cash flows, or a combination thereof. As of March 31, 2026, our cash and cash equivalents, investments, and restricted cash totaled $177.8 million, and we generated $82.0 million of cash from operations during the three months ended March 31, 2026. Based on our current liquidity position and cash flow generation, we believe we will have sufficient resources to satisfy the obligation at maturity; however, there can be no assurance that refinancing or replacement financing, if pursued, will be available on acceptable terms or at all.
Convertible Notes
In March 2026, we completed a private offering of $200.0 million aggregate principal amount of 0% Convertible Senior Notes due 2031 (the "2031 Notes"), including the full exercise of the initial purchasers' option to purchase an additional $25.0 million of 2031 Notes. We received net proceeds of approximately $193.4 million after deducting initial purchasers' discounts and before deducting offering expenses. We used approximately $17.3 million of the net proceeds to fund the cost of capped call transactions entered into concurrently with the 2031 Notes offering, which are designed to reduce potential dilution to our Class A common stock upon conversion of the 2031 Notes, and approximately $70.5 million to repurchase 334,600 shares of our Class A common stock in privately negotiated transactions. The remaining net proceeds have been invested in U.S. Treasury money market funds and are expected to be used for general corporate purposes, including additional share repurchases under our Repurchase Program.
The 2031 Notes do not bear regular interest and mature on April 1, 2031, unless earlier repurchased, redeemed, or converted. We may redeem the 2031 Notes, in whole or in part, for cash on or after April 6, 2029, subject to certain stock price and liquidity conditions. Upon conversion, we are required to settle the principal amount in cash and may elect to settle any excess conversion value in cash, shares of our Class A common stock, or a combination thereof. Holders may require us to repurchase their notes for cash upon the occurrence of a fundamental change. As of March 31, 2026, none of the conditions permitting early conversion of the 2031 Notes had been met, and accordingly, the 2031 Notes were classified as long-term debt on our condensed consolidated balance sheet. See Note 8, Convertible Notes, for additional information.
Share Repurchase Program
In March 2025, our Board of Directors authorized a share repurchase program of up to $50.0 million (the "March 2025 Repurchase Plan"). In August 2025, the Board authorized a share repurchase program of up to $125.0 million, which replaced the March 2025 Repurchase Plan (the "August 2025 Repurchase Plan"). On February 27, 2026, the Board authorized a new share repurchase program of up to $300.0 million (the "Repurchase Program"), which replaced the August 2025 Repurchase Plan. Approximately $113.2 million remained available under the August 2025 Repurchase Plan at the time of its replacement.
During the three months ended March 31, 2026, we repurchased an aggregate of 912,622 shares of our Class A common stock for approximately $186.7 million under the Repurchase Program, consisting of 334,600 shares repurchased in privately negotiated transactions in connection with the 2031 Notes offering for approximately $70.5 million and 578,022 shares repurchased in open market transactions for approximately $116.2 million. As of March 31, 2026, approximately $113.3 million remained available for future repurchases under the Repurchase Program. The timing and amount of future repurchases, if any, will depend on market conditions, share price, legal requirements, and other factors. See Note 19, Treasury Shares, for additional information.
Assessment of Liquidity
We believe that our existing cash and cash equivalents, investments and restricted cash, together with cash generated from operations and borrowings available under our Debt Facility, will be sufficient to meet our working capital requirements, capital expenditure needs, share repurchases, debt service obligations, and other liquidity requirements for at least twelve months from the date of this Quarterly Report on Form 10-Q and for the foreseeable future.
The amount and timing of any future funding requirements will depend on many factors, including operating performance, growth initiatives, capital markets conditions, and our share repurchase activity. We may from time to time seek to raise additional capital through equity or debt financings. There can be no assurance that additional financing, if pursued, will be available on terms acceptable to us, or at all.
Material Cash Requirements
The following summarizes our material cash requirements as of March 31, 2026:
ExtraCash
We fund ExtraCash originations primarily through operating cash flow and, as needed, borrowings under the Debt Facility. In connection with our Program Agreement with Coastal, we expect to transition a portion of ExtraCash receivables to an arrangement in which Coastal retains legal ownership of the receivables on its balance sheet, which is expected to reduce our
funding obligations and improve capital efficiency over time. See 'Bank Partners' in Item 1 of our Annual Report for additional information.
Contractual Obligations
In the normal course of business, we enter into agreements with vendors and service providers that may include minimum purchase commitments or other payment obligations. We believe we will be able to fulfill these obligations through cash generated from operations and existing cash balances.
Debt Obligations
As of March 31, 2026, we had $75.0 million of term loans outstanding under the Debt Facility, which matures in December 2026. Interest payments are due monthly at a variable rate. See Note 10, Debt Facility, for additional information regarding repayment terms and maturities, and refer to 'Liquidity and Capital Resources — Debt Facility' above for a discussion of our alternatives with respect to the maturity of the Debt Facility.
Convertible Notes
As of March 31, 2026, we had $200.0 million aggregate principal amount of 2031 Notes outstanding, with a net carrying amount of $192.8 million. The 2031 Notes do not bear regular interest, and accordingly, we have no scheduled cash interest payment obligations under the 2031 Notes. The full principal balance of $200.0 million is due at maturity on April 1, 2031, unless the notes are earlier converted, redeemed, or repurchased.
Holders of the 2031 Notes may require us to repurchase all or a portion of their notes for cash upon the occurrence of a fundamental change, at a repurchase price equal to 100% of the principal amount, plus any accrued and unpaid interest. In addition, the 2031 Notes may become convertible prior to maturity upon satisfaction of certain market price or other conditions, in which case we would be required to settle the principal amount in cash and may elect to settle any excess conversion value in cash, shares of our Class A common stock, or a combination thereof. As of March 31, 2026, none of the conditions permitting early conversion had been met. See Note 8, Convertible Notes, for additional information.
Operating Lease Obligations
As of March 31, 2026, we had future minimum lease payments of approximately $0.4 million under our operating lease arrangements, all of which relate to related-party leases with PCJW Properties LLC. See Note 12, Leases, for additional information.
Off-Balance Sheet Arrangements
As of March 31, 2026, we did not have any off-balance sheet arrangements, as defined by SEC regulations, that have or are reasonably likely to have a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures, or capital resources.
As described in 'Item 1. Business — Bank Partners' of our Annual Report, under our Program Agreement with Coastal, we expect that a portion of ExtraCash receivables will be originated and retained on Coastal's balance sheet as existing Members migrate to Coastal, which we anticipate will be substantially finalized by the end of 2026. We will continue to evaluate and disclose the nature and impact of this arrangement as the transition progresses.
Additionally, we may use cash to acquire businesses and technologies. The nature of these potential transactions, however, makes it difficult to predict the amount and timing of such cash requirements.
Cash Flows Summary
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|
|
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(in thousands) |
|
For the Three Months Ended |
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Total cash provided by (used in): |
|
March 31, 2026 |
|
|
March 31, 2025 |
|
Operating activities |
|
$ |
82,026 |
|
|
$ |
45,247 |
|
Investing activities |
|
|
(10,139 |
) |
|
|
(28,057 |
) |
Financing activities |
|
|
(19,083 |
) |
|
|
(19,906 |
) |
Net increase (decrease) in cash and cash equivalents and restricted cash |
|
$ |
52,804 |
|
|
$ |
(2,716 |
) |
|
|
|
|
|
|
|
Cash Flows From Operating Activities
During the three months ended March 31, 2026, net cash provided by operating activities was $82.0 million, an increase of $36.8 million compared to $45.2 million for the three months ended March 31, 2025, primarily due to increases in operating revenues. Net
cash provided by operating activities included net income of $57.9 million, adjusted for significant noncash items including provision for credit losses of $26.6 million, stock-based compensation of $7.1 million, and depreciation and amortization of $1.6 million, partially offset by changes in fair value of earnout and warrant liabilities of $11.5 million. Changes in operating assets and liabilities increased cash by $0.2 million, primarily driven by an increase in income taxes payable of $10.1 million and increase in non-current liabilities of $0.5 million, partially offset by an increase in prepaid expenses and other current assets of $6.5 million, an increase in ExtraCash receivables, service-based revenue of $1.7 million, a decrease in accounts payable of $1.6 million, and a decrease in other current liabilities of $0.4 million.
During the three months ended March 31, 2025, net cash provided by operating activities increased compared to the three months ended March 31, 2024 due to increases in operating revenues and a reduction in various operating expenses across the organization. Net cash provided by operating activities for the three months ended March 31, 2025 included net income of $28.8 million, and excluding non-cash impacts, included an increase in ExtraCash receivables, service based revenue of $3.3 million and a decrease in accrued expenses of $4.5 million. These changes were offset by an increase in income taxes payable of $4.7 million and an increase in other non-current liabilities of $0.3 million.
Cash Flows From Investing Activities
During the three months ended March 31, 2026, net cash used in investing activities was $10.1 million, primarily consisting of $26.0 million in purchases of investments, $6.7 million in net ExtraCash originations and collections, and $1.5 million in payments for internally developed software costs, partially offset by $24.1 million from the sale and maturity of investments.
During the three months ended March 31, 2025, net cash used in investing activities was $28.1 million, primarily consisting of purchases of investments of $37.9 million, net ExtraCash originations and collections of $26.1 million and payments related to internally developed software costs and property and equipment of $1.4 million, partially offset by the sale and maturity of investments of $37.3 million.
Cash Flows From Financing Activities
During the three months ended March 31, 2026, net cash used in financing activities was $19.1 million, primarily consisting of $186.7 million in repurchases of Class A common stock, $17.3 million for the purchase of capped calls, and $8.2 million for the payment of taxes related to net share settlements of equity awards, partially offset by $193.1 million in net proceeds from the issuance of convertible notes.
During the three months ended March 31, 2025, net cash used in financing activities was $19.9 million, which consisted of the $13.3 million for payment for shares withheld related to net share settlements and $6.9 million related to repurchases of Class A common stock, offset by $0.3 million for proceeds received for stock option exercises.
Critical Accounting Estimates
Our condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements, as well as the reported revenues and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Our critical accounting estimates and assumptions are evaluated on an ongoing basis, including those related to the following:
(i)Allowance for credit losses; and
Actual results may differ from these estimates under different assumptions or conditions. We believe that the accounting estimates discussed below are critical to understanding our historical and future performance, as these estimates relate to the more significant areas involving management’s judgments and estimates. Please refer to Note 2 in our accompanying condensed consolidated financial statements for the periods ended March 31, 2026 and 2025 included in this Quarterly Report on Form 10-Q.
While our significant accounting estimates are described in the notes to our condensed consolidated financial statements, we believe that the following accounting estimates require a greater degree of judgment and complexity and are the most critical to understanding our financial condition and historical and future results of operations.
Allowance for Credit Losses
ExtraCash receivables from contracts with Members as of the balance sheet dates are recorded at their original receivable amounts reduced by an allowance for expected credit losses. We pool our ExtraCash receivables, all of which are short-term in nature and arise
from contracts with Members, based on shared risk characteristics to assess their risk of loss, even when that risk is remote. We use an aging method and historical loss rates as a basis for estimating the percentage of current and delinquent ExtraCash receivables balances that will result in credit losses. We consider whether the conditions at the measurement date and reasonable and supportable forecasts about future conditions warrant an adjustment to our historical loss experience. In assessing such adjustments, we primarily evaluate current economic conditions, expectations of near-term economic trends and changes in customer payment terms and collection trends. For the measurement dates presented herein, given our methods of collecting funds, and that we have not observed meaningful changes in our customers’ payment behavior, we determined that our historical loss rates remained most indicative of our lifetime expected losses. We immediately recognize an allowance for expected credit losses upon the origination of the ExtraCash receivable. Adjustments to the allowance each period for changes in the estimate of lifetime expected credit losses are recognized in operating expenses—provision for credit losses in the consolidated statements of operations.
When we determine that an ExtraCash receivable is not collectible, the uncollectible amount is written-off as a reduction to both the allowance and the gross asset balance. Subsequent recoveries are recorded when received and are recorded as a recovery of the allowance for expected credit losses. Any change in circumstances related to a specific ExtraCash receivable may result in an additional allowance for expected credit losses being recognized in the period in which the change occurs.
Income Taxes
We follow ASC 740, Income Taxes (“ASC 740”), which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the condensed consolidated financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the period in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more-likely-than-not that the asset will not be realized.
The effective tax rate used for interim periods is the estimated annual effective tax rate, based on the current estimate of full year results, except that those taxes related to specific discrete events, if any, are recorded in the interim period in which they occur. The annual effective tax rate is based upon several significant estimates and judgments, including our estimated annual pre-tax income in each tax jurisdiction in which it operates, and the development of tax planning strategies during the year. In addition, our tax expense can be impacted by changes in tax rates or laws and other factors that cannot be predicted with certainty. As such, there can be significant volatility in interim tax provisions.
ASC 740 provides that a tax benefit from an uncertain tax position may be recognized when it is more-likely-than-not that the position will be sustained in a court of last resort, based on the technical merits. If more-likely-than-not, the amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized upon examination, including compromise settlements. For tax positions not meeting the more-likely-than-not threshold, no tax benefit is recorded. We have estimated $3.5 million and $3.3 million of uncertain tax positions as of March 31, 2026 and December 31, 2025, respectively, related to state income taxes and federal and state research and development tax credits.
Our policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense within the statement of operations.
We are subject to income tax in jurisdictions in which we operate, including the United States. For U.S. income tax purposes, we are taxed as a Subchapter C corporation.
We recognize deferred taxes for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes. We regularly assess the need for a valuation allowance against its deferred tax assets each quarter. In making that assessment, we consider both positive and negative evidence in the various jurisdictions in which it operates related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more likely than not that some or all of the deferred tax assets will not be realized. We maintained a valuation allowance against our deferred tax assets, net of deferred tax liabilities, at March 31, 2025. Based upon management’s assessment of all available evidence at March 31, 2025, we concluded that it was more-likely-than-not that the deferred tax assets, net of deferred tax liabilities, will not be realized. As of December 31, 2025, based on all available positive and negative evidence, having demonstrated sustained profitability, which is objective and verifiable, and taking into account anticipated future earnings, we concluded that it is more likely than not that its U.S. federal and state deferred tax assets will be realizable. As such, we released $58.7 million of our valuation allowance associated with the U.S. federal and state deferred tax assets during the year ended December 31, 2025. As of March 31, 2026, there is no valuation allowance against our deferred tax assets, net of deferred tax liabilities. We will continue to monitor the need for a valuation allowance against our deferred tax assets on a quarterly basis.
On June 27, 2025, California enacted legislation requiring financial institutions to utilize a single sales factor apportionment method, effective for tax years beginning in 2025. The new law decreased our California apportioned income and state income tax expense beginning in 2025 and was reflected in our condensed consolidated financial statements for the period ended March 31, 2026.
On July 4, 2025, new U.S. tax legislation H.R.1, known as the One Big Beautiful Bill Act ("OBBBA"), was enacted. The OBBBA introduces significant amendments to corporate taxation, including the modification of research and development (R&D) expense
capitalization, additional limitations on interest expense deductions, and provisions for accelerated depreciation of fixed assets. During the third quarter of 2025, we completed our assessment of the OBBBA and elected to accelerate the amortization of our previously capitalized and unamortized U.S. research and development costs over a one-year period as permitted under the new legislation. As a result of the election, there was a corresponding decrease to our deferred tax assets and income tax payable in 2025 resulting from the restoration of full expensing of U.S. research and experimentation expenditures. We also do not expect any ongoing material impact to our effective tax rate as a result of the OBBBA.
Recently Issued Accounting Standards
Refer to Note 2, “Significant Accounting Policies,” of our condensed consolidated financial statements included in this report for a discussion of the impact of recent accounting pronouncements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are exposed to market risk primarily through interest rate fluctuations on our Debt Facility, a delayed draw senior secured loan facility with total commitments of $150.0 million maturing in December 2026. The Debt Facility bears interest at a base rate plus 5.00% per annum, where the base rate is the greater of SOFR for a three-month tenor plus 3.00%, or a contractual floor. As of March 31, 2026 and December 31, 2025, we had $75.0 million outstanding under the Debt Facility at an effective interest rate of approximately 8.9% and 9.0%, respectively. See Note 10, Debt Facility, in the notes to our consolidated financial statements for additional information.
Because our variable-rate exposure is limited to the $75.0 million drawn on the facility, the impact of interest rate fluctuations on our results of operations is not significant. A hypothetical 200 basis point increase in SOFR would increase the remaining annual interest expense by approximately $1.1 million based on period-end balances, subject to the contractual base rate floor.
We do not use derivative instruments to hedge interest rate risk. Over time, our Program Agreement with Coastal Community Bank is expected to reduce our reliance on the Debt Facility as ExtraCash receivables transition to an off-balance-sheet structure, though we will become indirectly exposed to a Federal Funds Rate-based variable rate retained by Coastal. We do not have material exposure to foreign currency exchange rate risk or commodity price risk.
ExtraCash receivables are short-duration assets with an average term of approximately 12 days. Due to their quick turnover, the fair value of these receivables is not materially sensitive to changes in market interest rates. However, macroeconomic conditions, including the interest rate environment, can affect our Members' ability to repay ExtraCash advances. Our allowance for credit losses was $38.0 million and $37.6 million as of March 31, 2026 and December 31, 2025, respectively. We manage credit risk through CashAI, our proprietary AI-powered underwriting engine. See Note 5, ExtraCash Receivables, Net, in the notes to our condensed consolidated financial statements for additional discussion.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management has evaluated, with the participation of the Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2026.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.