The stock of banking services provider Dave (NASDAQ: DAVE) really took it on the chin Thursday, “thanks” to a quarterly earnings report that led to a pronounced sell-off. The fintech’s shares closed the day more than 15% in the red.
Dave’s double-digit dance
This, despite Dave’s second-quarter revenue growing 30% year over year to $170.8 million. The company noted that this was its ninth consecutive quarter of at least 30% growth. Management attributed this quarter’s improvement to rises in its preferred customer metric, monthly transacting members (MTM), and average revenue per user (ARPU).
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Net income not under generally accepted accounting principles (non-GAAP, or adjusted) also saw substantial improvement. It rose by 39% to $56.4 million, or $4.12 per share.
Despite the double-digit growth numbers, Dave’s quarter was mixed. While it handily beat the average analyst estimate of $3.42 per share for adjusted profitability, it narrowly missed the consensus of $170.9 million.
Regardless, it raised its full-year 2026 guidance. It’s now anticipating revenue of $725 million to $735 million, which would be at least 31% higher than the 2025 number. That range is up from the preceding forecast of $710 million to $720 million.
Similarly, per-share adjusted net income guidance was raised to $17 to $17.50 for the year; the previous estimate was $16.25 to $17.25.
Lofty expectations
While those growth rates would be the envy of many a company in the financial sector, Dave’s were down from those of previous quarters. Meanwhile, the company’s stock was hot enough to notch a new all-time high last month, so likely only a blowout, double-beat quarter would have moved it north on earnings day.
Additionally, Dave indicated that it plans to ramp up its marketing in the second half of the year; if this proves to be a sustained, substantial effort, it will affect profitability and possibly bring those still-tasty growth rates down.
I’d consider the very aggressive Thursday sell-off an opportunity to buy a young, ambitious fintech at a discount, at a time when it’s poised for plenty more growth.
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