Chime beats revenue estimates in first earnings since blowout US IPO
Younger customers in the U.S., disillusioned with fees and limited flexibility at large banks, have increasingly turned to digital-first startups that offer low-cost banking, early direct deposits and higher-yield savings accounts.
Chime's revenue rose 37 per cent to $528 million in the three months ended June 30. Analysts on average had expected $495.2 million, according to estimates compiled by LSEG.
The company went public in June in a blockbuster U.S. initial public offering that raised hopes of a lasting rebound in investor demand for high-growth tech listings. The stock is up 25 per cent from its IPO price.
"This was a breakout first quarter as a public company for Chime, driven by accelerating year-over-year growth, expanding margins, and continued product execution," Co-founder and CEO Chris Britt said.
Average revenue per active member grew 12 per cent to $245 in the quarter, the company said.
Chime offers a suite of no-fee financial products through its bank partners, including a secured credit card to help users build credit, short-term liquidity tools like early pay access and small-dollar loans, and a deposit sweep program that distributes funds across regional banks.
The company says its payments-based banking model is better suited to serve everyday Americans, who often have limited credit histories and rely more heavily on debit transactions than traditional lending products.
Purchase volume - the total dollar value of transactions using Chime-branded debit or credit cards - rose 18 per cent in the quarter to $32.4 billion.
The rise in volume underscores resilience in consumer spending, with users continuing to rely on debit cards for everyday expenses such as groceries, gas and bills - a trend that has held firm despite broader economic uncertainty.
Gross profit came in at $461 million in the quarter versus $333.7 million, a year earlier.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
38 minutes ago
- Straits Times
Singapore stocks end in the red amid geopolitical uncertainties; STI down 0.4%
Sign up now: Get ST's newsletters delivered to your inbox The wary mood sent the Straits Times Index down 0.4 per cent or 18.32 points to 4,239.83. SINGAPORE – The local share rally went slightly off the rails on Aug 8 as investors took stock of geopolitical uncertainties and looked ahead to corporate results. The wary mood sent the Straits Times Index (STI) down 0.4 per cent or 18.32 points to 4,239.83 with losers trumping gainers 344 to 190 on trade of 1.3 billion securities worth $2 billion. Earnings reports took centre stage over broader themes such as tarrifs and interest rates, said Singapore Exchange market strategist Geoff Howie. 'Earnings momentum is expected to build in Singapore next week,' he added, while also noting that Aug 12 will be pivotal, with markets closely watching for US inflation data and the expiry of the 90-day pause on US-China tariffs. DBS was the STI's top gainer, adding 2 per cent to a record $50.74, after reporting a rise in second-quarter earnings on Aug 7. Sembcorp led the losers, diving 13.9 per cent to $6.72 after a dip in first-half earnings. The other local banks slipped: OCBC fell 1.7 per cent to $16.79; and UOB closed 0.3 per cent lower at $35.70 Regional markets were mixed after a similar session on Wall Street overnight. The gainers included Japan's Nikkei 225, up 1.9 per cent, while Malaysian shares advanced 0.5 per cent. But South Korea's Kospi declined 0.6 per cent and the Hang Seng in Hong Kong dropped 0.9 per cent. Top stories Swipe. Select. Stay informed. Singapore PM Wong calls on S'poreans to band together for nation to remain exceptional in National Day message Singapore Four foreign leaders to attend NDP 2025 at the Padang Singapore NDP 2025: No ticket, no problem – here are some spots to soak up National Day vibes Business Singapore's digital banks trim deposit rates, mirroring moves by incumbent players Singapore Non-invasive depression treatment TMS has helped engineer get his life back Life S'pore's nightlife isn't dead yet: A nightlife reporter's 6 favourite places to drink Singapore Ex-lawyer convicted of cheating, forgery charges involving more than $8 million Singapore Chief Justice names law graduate who wanted anonymity after being denied Bar admission Despite the uneven finish, Asian markets turned in a bullish performance this week, said Mr Kai Wang, Asia equity market strategist at Morningstar. He noted that most of this week's top contributors were tech or Internet stocks, suggesting that markets remain driven by AI trends. This may be reflected in the US market as well given some of the robust earnings growth US tech giants.
CNA
38 minutes ago
- CNA
Analysis:Trump call to oust Intel CEO Tan could sidetrack chipmaker's turnaround
Intel CEO Lip-Bu Tan is already facing an uphill battle in turning around the ailing chipmaker. Now, U.S. President Donald Trump's demand that Tan resign over his ties to Chinese firms will only distract him from that task, two investors and a former senior employee said. Trump said on Thursday that Tan was "highly conflicted" due to his Chinese connections. Reuters reported exclusively in April that Tan had invested in hundreds of Chinese firms, some of which were linked to the Chinese military. Tan may now have to mount an effort to reassure Trump that he remains the right person to revive the storied American chipmaker, pulling his focus away from the cost cuts he's trying to implement. "It is distracting," said Ryuta Makino, analyst at Intel investor Gabelli Funds, which, according to LSEG data, owns more than 200,000 shares in Intel. "I think Trump will make goals for Intel to spend more, and I don't think Intel has the capabilities to spend more, like what Apple and Nvidia are doing." AI chip market leader Nvidia and iPhone-maker Apple have committed hundreds of billions of dollars to expand domestic manufacturing, which, according to Trump, will bring jobs back home. Until recently, Intel had emerged as one of the biggest beneficiaries of the 2022 CHIPS Act, as former CEO Pat Gelsinger laid out plans to build advanced chipmaking factories. Tan, however, has significantly pared back such ambitions, as the company's goal of rivaling Taiwanese chipmaker TSMC's contract manufacturing chops have fallen short. Tan said last month that he would slow construction work on new factories in Ohio and planned to build factories only when he saw demand for Intel's chips, a move that is likely to further strain relations with Trump. The company, its board and Tan were making significant investments aligned with Trump's America First agenda, Intel said in a statement on Thursday, without any mention of Trump's demand. The statement was "bland", said David Wagner, a portfolio manager at Intel shareholder Aptus Capital Advisors, which owns Intel stock through index funds. "Either defend your leader, which will be the beginning of a difficult road ahead, or consider making a change," Wagner said. Having this play out over a few months is not something that Intel can afford, he said. Tan himself released a statement late on Thursday. "The United States has been my home for more than 40 years. I love this country and am profoundly grateful for the opportunities it has given me. I also love this company," he said, adding that the board was "fully supportive of the work we are doing to transform our company." "BUILT ON TRUST" Tan, a chip industry veteran, took the helm at Intel about six months ago, after the board ousted previous boss Pat Gelsinger over years of missteps and burgeoning losses. The company's shares are largely flat this year after losing nearly two-thirds of their value last year. Tan was the CEO of chip-design software maker Cadence Design from 2008 through December 2021. Cadence last month agreed to plead guilty and pay more than $140 million to resolve charges for selling its products to a Chinese military university believed to be involved in simulating nuclear blasts, Reuters reported. The sales to Chinese entities occurred under his leadership. Reuters reported on Wednesday that U.S. Republican Senator Tom Cotton sent a letter to Intel's board chair with questions about Tan's ties to Chinese firms and the criminal case involving Cadence. "There has been a lot of misinformation circulating about my past roles," Tan said in his statement on Thursday. "I have always operated within the highest legal and ethical standards. My reputation has been built on trust," he said. It is not illegal for U.S. citizens to hold stakes in Chinese companies unless those companies have been added to the U.S. Treasury's Chinese Military-Industrial Complex Companies List, which explicitly bans such investments. Reuters in April had found no evidence that Tan at the time was invested directly in any company on that list. But Trump's remarks have now forced the limelight on an issue that could erode investor confidence. "If you add in another layer of government scrutiny, and everybody looking into how the company is doing whatever it's doing ... that just makes it harder," said a former senior executive at Intel, who was familiar with the company's strategy under Gelsinger. The source, who declined to be named, was let go as part of Gelsinger's workforce reduction drive last year. Tan's strategy is to "get rid of all of the non-productive parts of the company and really focus on a key few products," the person said. "If (Tan) leaves, it's going to just prolong whatever Intel has to do and needs to do really quickly."
CNA
38 minutes ago
- CNA
Trade Desk tumbles after CEO warns of tariff impact on large brand advertisers
Shares of cloud-based ad tech firm Trade Desk fell by a third during premarket trading on Friday, after CEO Jeff Green warned about ongoing tariff uncertainty pressuring some of the world's largest advertisers. Trade Desk's stock move looked set to wipe out over $12 billion from the company's market valuation, if losses hold. Changing trade policies have led to concerns about soft ad spending as companies are holding back on launching new campaigns, particularly in sectors directly affected by tariffs. Trade Desk, which specializes in helping advertisers buy and optimize digital ad campaigns, has concentrated on large global advertisers. This focus has made the company more vulnerable to wider economic pressures, in contrast to competitors who rely more on small and medium-sized businesses, Green said on Thursday. "In an unusual development, TTD decelerated and grew slower than Meta's 22 per cent, which marked an acceleration, prompting worries that closed gardens are growing faster than the open Internet," said Rosenblatt Securities analyst Barton Crockett. "TTD is also meaningfully exposed to large brands, which are facing tariff pressures." The company expects the current quarter's revenue to be at least $717 million, largely in line with expectations from analysts compiled by LSEG. At least seven analysts lowered their price targets on the stock following the results, bringing the median target to $84, as per data compiled by LSEG.
