Latest news with #Chime-branded
The Star
5 days ago
- Business
- The Star
Chime beats revenue estimates in first earnings since blowout US IPO
FILE PHOTO: A screen displays the company logo for Chime, a financial technology company, during the company's IPO at the Nasdaq MarketSite in New York City, U.S., June 12, 2025. REUTERS/Kylie Cooper/File Photo (Reuters) -Chime beat Wall Street estimates for second-quarter revenue on Thursday, driven by strong demand for its digital banking and financial services, in its first results following a blockbuster U.S. listing. 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% 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% from its IPO price. Its shares were last down marginally in volatile after-market trading. "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% 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% 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. (Reporting by Manya Saini in Bengaluru; Editing by Sriraj Kalluvila)
Yahoo
06-06-2025
- Business
- Yahoo
Chime Is Planning to IPO at an $11.2 Billion Valuation. 3 Things Investors Need to Know -- Is the Stock a Buy?
After years of investor speculation about when digital bank Chime would go public, it's finally preparing to do so. With a set of low-cost banking products, Chime caters to segments of the U.S. population that have been underbanked or unbanked. These 10 stocks could mint the next wave of millionaires › After years of anticipation, Chime is planning to go public at an $11.2 billion valuation in an offering that will attempt to raise $832 million of capital. Chime, which will list on the Nasdaq Stock Exchange under the ticker "CHYM," will issue as many as 32 million shares at an initial price that is expected to be between $24 and $26 per share, although things could change after management does its "road show," during which it will pitch itself to potential investors to try and drum up excitement. Chime has positioned itself as a more accessible bank for Americans earning up to $100,000. While the once-lofty valuations of many fintech companies have come down considerably the last couple of years, the promise of deregulation under the Trump administration could provide some tailwinds for the sector. Here are three things investors should know about Chime and whether the stock is a buy. While the terms "unbanked" and "under-banked" are interestingly not mentioned in the company's registration statement, Chime rose to prominence by catering to Americans in those categories. Unbanked refers to people who do not use a bank or financial institution. Underbanked refers to people who may have traditional banking accounts, but who also often end up using less-mainstream options such as check-cashing services and payday lenders, which charge considerably more for their services than traditional financial institutions. Chime tried to change the game for these underserved populations by offering low-cost bank accounts, early access to direct-deposit money, fee-free overdraft protection up to $200, secured credit cards with no annual fees, late fees, or interest on missed payments, and other savings and perks. Getting people who are underserved by traditional banks into such products helps them improve their credit scores as well. Chime has partnered with several banks with federal deposit insurance coverage to undergird its operation. All of its products are bundled into a sleek tech platform and a powerful app, where applicants can sign up easily online, access more than 45,000 ATMs with no fees, and take advantage of other customizable features to better manage their finances. Its offerings have proved compelling. Chime now has 8.6 million active members, defined as people who have initiated one transaction to move money on Chime in the past calendar month. Management also reported that 67% of its active members use Chime as their primary banking relationship, which it defines as making at least 15 purchases with their Chime-branded debit or credit cards in the past calendar month, or who had at least one qualifying direct deposit of $200 or more in the past calendar month. Since 2022, Chime's annual revenue has significantly increased and is now starting to sniff profitability. In 2024, it generated $1.67 billion in revenue and booked a roughly $25.3 million net loss. Revenue increased nearly 31% year over year, while its losses narrowed The company generated profit in the first quarters of both 2024 and 2025. The first quarter is believed to be the best seasonal period for Chime. Chime is different from a traditional bank in that interest-rate spread revenue from lending is not a key component of its business. Rather, the majority of revenue comes from the interchange fees it earns when customers use their debit and credit cards. This is more efficient from a capital perspective, but it requires a lot of volume for the model to work profitably. Payments revenue in 2024 made up 76% of total revenue; the remainder came from platform-related revenue, which consists of fees on ATMs used outside of the company's network, fees for providing liquidity in advance, fees on deposits net of interest paid to members, and third-party affiliate revenue. One thing investors might not be so crazy about is the amount of money Chime has been spending on marketing: Its sales and marketing outlay was close to $520 million in 2024. However, management said that it estimates the average yearly cost to serve a retail deposit customer at one of the three largest banks in the U.S. is three times higher than Chime's cost, and for mid-sized and regional banks, it's five times higher. With most of its revenue coming from interchange fees, one key way that Chime can grow is by adding new members and increasing the payment volume on its various branded cards. Looking at the number of people in the U.S. who earn less than $100,000 a year and multiplying that by its current average revenue per active member, Chime estimates that its serviceable addressable market is worth $86 billion. By rolling out new products to meet the financial needs of its target customers, Chime thinks it can increase that to $312 billion. Chime also says it plans to stick with its asset-light model, which likely means that it doesn't plan to expand too much into the lending arena. Interestingly, the company has developed a proprietary cloud-native payment processor and ledger called ChimeCore to process some of its payments, transfers, deposits, withdrawals, and other financial transactions. This in-house system will allow Chime to spend less on legacy system maintenance and more on product innovation. It also gives the company more autonomy and the ability to roll out new products more quickly than if it outsourced payment processing. There is a lot that impresses me about Chime, starting with the number of active members who use it as their primary bank. Its technological capabilities are another big plus, especially when you think about ChimeCore, which is certainly ahead of what many traditional banks are doing. It has also increased revenue rapidly and seems to be on the brink of profitability. Some of the drawbacks I see are the high level of marketing spending and its reliance on lower-cost customers. While Chime has done a good job of serving this segment and innovating, it's hard to make a lot of money from this group, especially without lending. That leads me to my next question: Where does Chime go next? Sure, it has a strong brand and has increased its membership rapidly, but how does it continue to stand out? For instance, Chime was one of the first to offer advanced access to funds from pending paychecks, but now, most banks do it. Interchange revenue is good in that it's capital-efficient, but the downside is it relies on continued growth and can take a hit if consumer spending declines, which it would in a recession. The $11 billion valuation the company is seeking feels a bit rich right now. But the stock could become compelling if its valuation declines a bit, if Chime's cost to acquire members falls, or if the bank introduces interesting new products that could materially drive revenue higher. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $368,035!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $38,503!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $668,538!* Right now, we're issuing 'Double Down' alerts for three incredible companies, available when you join , and there may not be another chance like this anytime soon.*Stock Advisor returns as of June 2, 2025 The Motley Fool has a disclosure policy. Chime Is Planning to IPO at an $11.2 Billion Valuation. 3 Things Investors Need to Know -- Is the Stock a Buy? was originally published by The Motley Fool Sign in to access your portfolio
Business Times
02-06-2025
- Business
- Business Times
Digital banking startup Chime targets US$11.2 billion valuation in US IPO
[BENGALURU] Digital banking startup Chime Financial said on Monday (Jun 2) it was targeting a valuation of up to US$11.2 billion on a fully diluted basis in its long-awaited New York initial public offering, underscoring the growing momentum in the new listings market. San Francisco, California-based Chime and some of its existing shareholders are seeking to raise up to US$832 million by offering 32 million shares priced between US$24 and US$26 apiece. Chime is offering 25.9 million shares in the offering, while certain shareholders, including venture capital firm Cathay Innovation, are putting up 6.1 million shares. The US IPO market has sprung back to its feet after a disappointing April as equities rebounded amid easing volatility, paving the way for companies to go public after tariff-driven chaos shut the window for weeks. Recent listings, including retail trading platform eToro, have been well-received by investors. Analysts say the stage is set for a broader IPO pickup, but stability needs to last longer before the window fully reopens. 'Momentum is building after the tariff-related volatility. Right now, investors want to see fundamentally strong companies with attractive valuations,' said Matt Kennedy, senior strategist at Renaissance Capital, a provider of IPO-focused research and ETFs. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Chime, founded in 2012, offers banking products such as checking and high-yield savings accounts through its app. The company mainly generates revenue when its members spend using Chime-branded debit and credit cards. Chime raised US$750 million in a 2021 funding round at a US$25 billion valuation. Its major backers include Yuri Milner's DST Global, private equity firm General Atlantic and investment firm ICONIQ. Fintech revival? Financial technology listings have slowed down since the pandemic-era boom as interest rates rose and inflation surged. Swedish fintech giant Klarna paused its US IPO plans earlier this year as tariffs rattled global markets. A successful IPO for Chime could pave the way for other fintech companies that have recently considered tapping public markets. Chime's IPO valuation target represents prudence in giving buyers a decent discount to encourage participation, said Samuel Kerr, head of equity capital markets at Mergermarket. 'As the largest deal to test the market since 'Liberation Day,' Chime will be a fascinating case study.' Morgan Stanley, Goldman Sachs and JPMorgan are the lead underwriters for the IPO offering. Chime will list on the Nasdaq under the symbol 'CHYM'. Chime plans to use a portion of its IPO proceeds to settle tax obligations related to employee-restricted stock units. REUTERS
Yahoo
14-05-2025
- Business
- Yahoo
US fintech firm Chime files for IPO
San Francisco based fintech company Chime Financial has filed a registration statement with the US Securities and Exchange Commission for its initial public offering (IPO) of Class A common stock. The fintech company has applied to list on the Nasdaq stock exchange under the ticker "CHYM." The number of shares and the price range for the proposed offering have not been disclosed. The company intends to use the net proceeds from the IPO for general corporate purposes, such as working capital, operating expenses, and capital expenditures. It may also allocate a portion of the proceeds to potential acquisitions or investments in complementary businesses, products, services, or technologies, although no specific agreements are in place. The lead book-running managers for the IPO are Morgan Stanley, Goldman Sachs & Co., and J.P. Morgan, with Barclays serving as an additional book-running manager. The underwriting team for IPO comprises Evercore ISI, UBS Investment Bank, Deutsche Bank Securities, Piper Sandler, and Wolfe | Nomura Alliance as bookrunners. William Blair, Canaccord Genuity, Keefe, Bruyette & Woods, A Stifel Company, First Citizens Capital Securities, and Texas Capital Securities are co-managers. Chime's services include fee-free mobile banking, facilitated through partnerships with Stride Bank and The Bancorp Bank. Chime reported a revenue increase to $1.67bn for the year ending 2024, compared with $1.28bn in the previous year. The company, which was valued at $25bn in 2021, has been in the news for confidentially filing for an IPO in December last year. As of 31 March 2025, the company had over 8.6 million active members, with two-thirds using Chime as their primary financial service provider. In the first quarter of 2025, these active members engaged in an average of 54 transactions per month, with three-quarters of these transactions being purchases made with Chime-branded debit and credit cards. The company's investors include Menlo Ventures, Forerunner Ventures, Sequoia Capital, Coatue Management, and Acrew Capital. "US fintech firm Chime files for IPO " was originally created and published by Retail Banker International, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
