Dave Inc. — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023. This filing reports annual results; it does not provide clear standalone fourth-quarter financial results. Dave operates a digital financial-services platform, including 0% interest ExtraCash advances, Dave Banking, budgeting, job referrals and paid surveys.
Financial performance and liquidity
| Metric | FY2023 | FY2022 | Change |
|---|---|---|---|
| Revenue | $259.1 million | $204.8 million | +26% |
| Net loss | $48.5 million | $128.9 million | Loss narrowed by $80.4 million |
| Adjusted EBITDA (non-GAAP) | $(10.1) million | $(87.1) million | Improved by $77.0 million |
| Cash from operating activities | $33.8 million | $(44.9) million | Improved by $78.6 million |
| Cash used in investing activities | $14.4 million | $285.6 million | Lower outflow |
| Cash from financing activities | $0.02 million | $321.8 million | FY2022 included substantial financing proceeds |
Operating expenses were $301.3 million, down 11% year over year. The resulting operating loss was approximately $42.2 million; the derived operating margin was approximately -16%. Net loss margin was approximately -19%, and Adjusted EBITDA margin was approximately -4% (both derived from reported figures). The filing does not present a gross profit or gross margin measure.
Service-based revenue was $232.2 million (90% of revenue), up 23%; transaction-based revenue was $26.9 million (10%), up 68%. Processing-fee revenue rose 43% to $152.5 million, while optional tips fell 8% to $56.9 million. Marketing expense declined 30% to $48.4 million, and provision for credit losses fell 12% to $58.4 million.
At year-end, cash and cash equivalents were $41.8 million, marketable securities $1.0 million, and investments $113.2 million—approximately $155.9 million combined. Restricted cash was an additional $1.3 million. Total assets were $294.0 million and stockholders’ equity was $87.1 million. Debt included $75.0 million outstanding under the debt facility and $105.5 million of convertible debt. Current liabilities were $25.6 million. Management said existing cash should fund planned operations for at least 12 months from the filing date.
Changes and operating trends
- Revenue growth reflected increased transacting Members, advance volume and average advance size. Advance volume increased to approximately $3.63 billion from $2.71 billion; average advance size rose to $152 from $134.
- Average 28-day ExtraCash delinquency declined to 2.51% in 2023 from 3.65% in 2022. Management attributed improved collections to underwriting and risk-control changes. Allowance for credit losses ended the year at $20.3 million, after $75.3 million of write-offs and $12.7 million of recoveries during the year.
- Marketing and compensation costs declined, while other operating expenses rose 3%, including higher legal, checking-product, fraud and technology costs.
- Operating cash flow turned positive, while investing outflows were substantially lower than in 2022. FY2022 financing inflows included $195.0 million of PIPE proceeds and $100.0 million from the FTX note.
Outlook, risks and unusual items
- No specific revenue, earnings or other financial guidance is provided. Management expects continued investment in product development, Member growth, Dave Banking cross-sell and new products; it also cites seasonality, with service revenue typically weakest in the first quarter.
- In September 2023, the debt facility commitment was increased to $150 million and maturity extended to December 2026; $75 million was drawn at year-end. The amendment raised the minimum cash, cash-equivalents or marketable-securities covenant to $15 million. Dave reported compliance with covenants at year-end.
- On January 29, 2024, Dave repurchased the FTX Ventures note, with a $105.5 million year-end balance, for $71.0 million in cash. This subsequent event reduces the reported debt balance only after year-end.
- Dave is cooperating with FTC staff following a civil investigative demand issued since January 2023 concerning cash-advance and online financial-service practices. The filing also describes pending consumer lawsuits, state regulatory inquiries and a California DFPI memorandum of understanding. Outcomes and potential costs are uncertain.
- The company disclosed material weaknesses in internal control over financial reporting for 2023 and 2022, and management concluded disclosure controls were ineffective at December 31, 2023. Remediation efforts are ongoing. The financial statements received an unqualified audit opinion; the auditor did not opine on internal-control effectiveness.
- Key risks include evolving regulation of cash advances and bank partnerships, dependence on Evolve Bank and third-party processors, advance repayment and fraud risk, cybersecurity and privacy exposure, competition, and the possibility of needing additional capital. The filing also identifies a past 2020 data breach and related settlements.
- Reported results include $26.7 million of stock-based compensation and a $0.3 million benefit from changes in warrant and earnout fair values. Dave completed a 1-for-32 reverse stock split in January 2023.
Important facts for investors to verify
- Whether Dave sustains positive operating cash flow and improves profitability, given the continuing GAAP net loss and negative Adjusted EBITDA.
- Whether the $71.0 million FTX note repurchase, completed after year-end, materially changes cash, debt and future interest expense.
- Credit-loss trends, write-offs, allowance adequacy and the sustainability of improved delinquency and collections performance as advance volumes grow.
- Developments in the FTC inquiry, consumer litigation, state licensing matters and rules affecting cash advances and consumer financial data.
- Progress in remediating the material weaknesses and establishing effective financial-reporting controls.
- Compliance with the $15 million debt-facility liquidity covenant and continued access to Evolve Bank and other essential service providers.