Latest news with #ChrisBritt
Yahoo
4 days ago
- Business
- Yahoo
Chime reports first earnings since IPO
The neobank fintech Chime released its first earnings report since the company went public earlier this summer. Revenue for the quarter was $528 million, a 37% increase from $384 million a year earlier. Chime CEO Chris Britt attributed the revenue growth on the company earnings call to "an acceleration relative to our seasonally strong Q1, when tax refund activity [drove] higher levels of re-engaged active members, purchase volume and revenue." Even though the company's main product line involves money management through digital high-yield savings and checking accounts, Britt emphasized to investors on the company earnings call that Chime is not a bank. "Our member deposits reside in regulated FDIC insured accounts at our partner banks," he said. Chief Financial Officer Matt Newcomb asserted that the lack of brick-and-mortar locations serves as a competitive advantage for the neobank. "In contrast to incumbent banks, the [digital] platform allows us to efficiently scale our services over a growing active member base without needing to make massive investments in infrastructure or people," he said in the earnings call. Chime currently serves 8.7 million active members, or consumers who have initiated a money movement transaction on the platform within the last month. According to the earnings report, 67% of those consumers rely on Chime for their primary financial relationship, a term the company defines as describing a consumer "who made 15 or more purchases using their Chime cards in the past calendar month or who had at least one qualifying direct deposit of $200 or more through Chime." A William Blair analyst report said that "investors should build Chime positions and see the company rapidly standing up a traditional bank alternative focused on spending, savings, and short-term liquidity products. … We see Chime as the top destination for individuals making up to $100,000 seeking to switch direct deposit relationships." The fintech's net income came out to -$923 million for the quarter, and diluted earnings per share came out to -$7.29 for the quarter. Chime gives employees a "double-trigger" stock option as part of their compensation plans, and those stocks vested due to the IPO. The stock-based compensation expenses and related payroll taxes resulted in a one-time operating expense of $928 million for the company. Chime's stock went down by 14% in trading on Friday. Chime's successful IPO opening day in June set the stage for other fintechs considering or starting IPOs this year. The company also signaled a soft reopening of the IPO window for the U.S. market when it became the first fintech to file after the uncertainty of April's tariff announcements, particularly after Klarna delayed its IPO due to tariff-induced market volatility at the time. Chime also debuted a series of consumer and back-end technology products within the last year, including $500 "instant loans" and an in-house processor referred to by the company as ChimeCore. In May 2024, Chime was ordered by the CFPB to pay out $4.5 million in fines and remedies for failing to give consumers timely refunds when their accounts were closed. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 days ago
- Business
- Yahoo
Chime CEO Says User Growth 'Seasonal'
Chime CEO Chris Britt says the company's user growth is more seasonal than investors realize. Britt talks about the fintech company's first earnings report as a public company and responds to the share price drop in a conversation with Caroline Hyde on "Bloomberg Tech."
Bloomberg
4 days ago
- Business
- Bloomberg
Chime CEO Says User Growth 'Seasonal'
Chime CEO Chris Britt says the company's user growth is more seasonal than investors realize. Britt talks about the fintech company's first earnings report as a public company and responds to the share price drop in a conversation with Caroline Hyde on 'Bloomberg Tech.' (Source: Bloomberg)
Forbes
4 days ago
- Business
- Forbes
Why Chime's Stock Is Down 13%, Even Though Its Earnings Beat Expectations
Chime CEO Chris Britt on the company's first day of trading as a public company in June 2025. Its stock rose 37% on its first day of trading. Bloomberg In any first earnings call for a public company, the bar is high–investors hope to see a company's numbers sail past expectations. During San Francisco digital bank Chime's inaugural call last night, it announced revenue and profit that exceeded Wall Street analysts' predictions. But this morning, the stock fell by 13% in early trading, dragging down its share price below $30 and its market value to $11 billion. Chime went public on June 12 at $27 per share. Chime's second quarter revenue for 2025 was $528 million, up 37% from the year prior. Analysts surveyed by FactSet had expected $503 million on average. Its adjusted earnings before taxes, depreciation and amortization, a common Wall Street profit metric also known as adjusted EBITDA, was $16 million, beating the $4.7 million analysts had expected. There's likely some investor disappointment that the company didn't beat Wall Street's expectations by an even wider margin. But the bigger issue is future growth. Chime only added 100,000 new active customers from the prior quarter, edging its total monthly active user base up to 8.7 million. Given Chime's heavy spending on marketing and sales and continued efforts to bring more customers in the door, 'We were hoping for a little more upside,' Deutsche Bank analyst Nate Svensson wrote in a research note. Seasonality always plays a big role in Chime's second quarter results. Over the past two years, its second quarter growth has been notably slower than that of other quarters, while first quarter expansion has been much faster. That's because tax refunds tend to be a big boost for Chime's customers, many of whom are everyday Americans earning about $50,000 a year, CEO Chris Britt has said. Have a story tip? Contact Jeff Kauflin at jkauflin@ or on Signal at jeff.273. Chime's revenue forecast for the full year of 2025 of $2.14 billion to $2.16 billion may have also underwhelmed investors. That marks growth of about 29% versus 2024, slightly lower than the year-prior pace of 31%. It also implies that Chime's fourth quarter 2025 revenue will be up about 19%, estimates Piper Sandler analyst Patrick Moley, which is down from 25% fourth quarter growth from 2024. Additionally, some analysts asked questions about Chime's 'Day One' strategy of trying to bring in more customers by lifting requirements for them to sign up. Historically, Chime has been extremely successful convincing customers to set up direct deposit of their paychecks into their Chime accounts. It has made that a requirement to access features like SpotMe, which gives customers up to $200 in free cash advances. Today, more than half of Chime's 8.7 million monthly active customers have direct deposit set up, essentially making Chime their primary bank. That makes them lucrative for Chime, since they use their Chime cards for many of their purchases, and Chime's primary business model is to make money on interchange, the 1% to 2% fees merchants pay to accept credit and debit cards. With its Day One approach, Chime is experimenting with loosening those restrictions to get more customers in the door, with the hope of converting them over time. When asked about it, CEO Chris Britt said, 'There isn't going to be a single path to converting people to direct deposit, which is always our number one goal. We know that some people are going to want to date the best before they get married. And so we feel really good about this strategy. And I think you're seeing it in the numbers." The brightest spot in Chime's earnings was MyPay, a feature that gives customers free paycheck advances of $20 to $500, charging a $2 fee only for instant transfers (otherwise, the advance is free and arrives within 24 hours). Chime launched MyPay about a year ago, and it has already reached $300 million in annualized revenue, the company said. Credit loss rates, or the percentage of the small loans that people don't pay back, fell from 1.6% in the first quarter of 2025 to 1.4% in the second quarter, a faster decrease than the company had expected. That's also a much lower default rate than what's typical for credit cards or buy-now, pay-later loans. The company's long-term goal is to bring MyPay default rates down to 1%. One analyst also asked Chime about whether it will be hurt by the new fees that JPMorgan Chase is planning to charge data aggregators like Plaid, which could get passed on to Plaid's fintech customers. Plaid facilitates connections between bank accounts and fintechs to allow for features like money transfers and balance checks. Britt said the fees won't affect Chime, because most of its active customers use Chime as their primary bank. So they don't need to connect to outside bank accounts as often as other major fintechs. 'We really don't see this idea of charging for access as having any sort of negative impact on our side at all,' Britt said.
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)
