Chime Financial, Inc. 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section presents management’s perspective on our financial condition and results of operations. The following discussion and analysis is intended to highlight and supplement data and information presented elsewhere in this Quarterly Report on Form 10-Q, and should be read in conjunction with our interim unaudited condensed consolidated financial statements and notes elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and the related notes and the discussion under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" for the year ended December 31, 2024 included in the final prospectus dated June 11, 2025 and filed with the SEC pursuant to Rule 424(b)(4) on June 12, 2025 (the “Final Prospectus”). This discussion contains forward-looking statements that involve risks and uncertainties. Factors that could cause or contribute to such differences include those identified below and those discussed elsewhere, particularly in the sections titled “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” Financial data as of and for the three and nine months ended September 30, 2025 and 2024 has been derived from our unaudited condensed consolidated financial statements appearing at the beginning of this Quarterly Report on Form 10-Q. Our historical results are not necessarily indicative of the results that may be expected for any period in the future. Chime is a technology company, not a bank. Banking services are provided by The Bancorp Bank, N.A. or Stride Bank, N.A.; Members FDIC. We are not a Member of the FDIC, and FDIC-insured accounts are provided by our bank partners. Overview We created Chime to help everyday people make progress in their financial lives. For too long, millions of Americans, including the 75% of the adult population that earn up to $100,000 annually, have struggled with bank relationships that are not always aligned with their best interests. So we set out to create a new approach. We are an asset-light technology company that has pioneered a business model that succeeds when we earn and maintain our members’ trust. Through our direct relationships with FDIC-insured bank partners, we deliver products that address the most critical financial needs of everyday people across spending, saving, accessing liquidity, and building credit, all while avoiding punitive fees. Through our broad suite of products, we have built trusted relationships with 9.1 million Active Members as of September 30, 2025. The majority of our Active Members rely on Chime to serve as their primary financial relationship, which we believe are the most valuable relationships in consumer financial services. As our members’ central financial hub, Chime becomes the platform through which members consistently deposit their paychecks and conduct their everyday spend, creating durable and long-lasting relationships with high engagement and exceptional member satisfaction. Our proprietary technology platform and our digital-first approach give us both a radical cost-to-serve advantage and greater innovation velocity compared to traditional banks. We believe these advantages will improve over the long term as we continue to scale. This structural advantage is complemented with a payments-based business model that is aligned with our members: we primarily generate revenue when members spend using a Chime-branded debit or credit card, based on fees paid via the card networks, rather than fees paid to us by our members. Importantly, our members typically use Chime-branded debit and credit cards for non-discretionary expenses, such as food, groceries, gas, and utilities, which makes our payments revenue more resilient to changes in economic conditions. Recurring paycheck deposits through our platform also provide a first-in-line repayment position for Chime-branded liquidity products. This enables us to offer our members access to valuable, short-term credit and liquidity products at scale when our members need it most, while maintaining low loss rates. We are bold in our ambition to build a generational consumer brand that empowers everyday Americans to make progress in their financial journeys. 33 Recent Developments On June 13, 2025, we closed our IPO of 36,800,000 shares of Class A common stock at a public offering price of $27.00. 30,700,765 shares of Class A common stock were sold by us, including 4,800,000 shares pursuant to the exercise of the option granted to the underwriters to purchase additional shares, and 6,099,235 shares of Class A common stock were sold by selling stockholders. We received net proceeds from the IPO of $770.6 million after deducting underwriting discounts and offering costs. In connection with the IPO, 32,182,289 shares of our Class A common stock owned by Christopher Britt, our co-founder, Chief Executive Officer and Chairman, and Ryan King, our co-founder and a member of our board of directors (our “Co-Founders”) and their related entities were exchanged for an equivalent number of shares of Class B common stock. Key Metrics and Non-GAAP Financial Measures We review several operating and financial metrics, including the key metrics set forth below, to help us evaluate our business and growth trends, establish budgets, evaluate the effectiveness of our investments, and assess operational efficiencies. Our definitions for such key metrics may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics or may use other financial measures to evaluate their performance, all of which could reduce the usefulness of our key metrics as comparative measures. Key Metrics Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2025 2024 2025 2024 Purchase Volume $ 32,305 $ 27,986 $ 99,275 $ 84,734 Purchase Volume We define Purchase Volume as the total dollar value of member purchase transactions using Chime-branded debit or credit cards during a given period, net of any adjustments or refunds. Purchase Volume is a key driver of payments revenue, because the interchange fees upon which our payments revenue is based are generally determined as a percentage of the underlying transaction value plus a fixed amount per transaction based upon rates set by the card networks. Purchase Volume is also a key indicator of aggregate member engagement. Purchase Volume does not include other types of transaction volumes such as deposits, ATM withdrawals, SpotMe and MyPay advances, sending or receiving funds with Pay Anyone, and ACH or direct debit transfers. Purchase Volume exhibits seasonality, most prominently in the first quarter of each year due to increased spending following our members’ receipt of tax refunds. Three Months Ended September 30, (in millions, except for Average Revenue per Active Member) 2025 2024 Active Members 9.1 7.5 Average Revenue per Active Member (ARPAM) $ 245 $ 231 Active Members We define an Active Member as a member who has initiated a money movement transaction on our platform in the last calendar month of the applicable period. Member-initiated money movement transactions include, but are not limited to, purchases with Chime-branded debit or credit cards, funding a member account, withdrawing funds from an ATM, sending or receiving funds with Pay Anyone, or taking a MyPay advance. Active Members are a key indicator of the scale of our engaged member base. The number of Active Members exhibits modest seasonality, with a slight increase typically occurring in the first quarter of a year, when our members often receive tax refunds through their Chime account, which has resulted in increased money movement transactions, including a larger number of members re-engaging with us on an Active basis. 34 Average Revenue per Active Member (“ARPAM”) We define Average Revenue per Active Member (“ARPAM”) as revenue generated in the calendar quarter multiplied by four and divided by the average of the number of Active Members at the end of the prior quarter and the end of the current quarter. ARPAM is a key indicator of our ability to monetize member engagement, as it captures both the impact of payments revenue from Purchase Volume as well as the monetization of products that contribute to platform-related revenue. Since ARPAM historically has largely been driven by Purchase Volume, the seasonality exhibited by Purchase Volume, which occurs most prominently in the first quarter of each year due to increased spending following our members’ receipt of tax refunds, has resulted in quarterly fluctuation of ARPAM. Non-GAAP Financial Measures To supplement our condensed consolidated financial statements prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to facilitate analysis of our financial trends and for internal planning and forecasting purposes. We use transaction profit, transaction margin, adjusted EBITDA, and adjusted EBITDA margin in conjunction with GAAP measures to evaluate our operating performance, formulate business plans, prepare budgets and forecasts, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources. We believe that our non-GAAP financial measures provide useful information to investors, analysts and others about our business and financial performance, enhance their overall understanding of our performance and can assist in providing a more consistent and comparable overview of our financial performance across periods. Our definitions may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Further, these metrics have certain limitations in that they do not include the impact of certain expenses that are reflected on our consolidated statements of operations. Thus, our non-GAAP financial measures should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordance with GAAP. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view our non-GAAP financial measures in conjunction with their respective most directly comparable financial measure calculated in accordance with GAAP. Transaction Profit and Transaction Margin We define transaction profit as gross profit less transaction and risk losses. We define transaction margin as transaction profit divided by revenue. We believe that transaction profit and transaction margin are key measures of the incremental profit generated by member transactions. The following table presents a reconciliation of gross profit to transaction profit: Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except percentages) 2025 2024 2025 2024 Gross profit $ 474,118 $ 368,355 $ 1,393,473 $ 1,046,590 Gross margin 87 % 87 % 88 % 87 % Adjusted for: Transaction and risk losses 97,053 55,159 304,445 126,197 Transaction profit $ 377,065 $ 313,196 $ 1,089,028 $ 920,393 Transaction margin 69 % 74 % 68 % 77 % 35 Adjusted EBITDA and Adjusted EBITDA Margin We define adjusted EBITDA as net income (loss), adjusted for (i) depreciation and amortization expense, (ii) other income (expense), net, (iii) provision (benefit) for income taxes, (iv) stock-based compensation expense including related payroll tax, and (v) certain expenses that do not reflect our core operations and may vary significantly from period to period, including restructuring charges, impairment charges, stock-based charitable expense, and certain legal and regulatory charges, as applicable. We define adjusted EBITDA margin as adjusted EBITDA divided by revenue. We believe that adjusted EBITDA and adjusted EBITDA margin are key measures of our operating performance, and management uses these measures to formulate business plans, prepare budgets and forecasts, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources. We have increased our adjusted EBITDA margin as a result of Active Member and Purchase Volume growth, realized operating leverage through increased scale, and from efficiently managing our operating costs. The following table presents a reconciliation of net loss to adjusted EBITDA for each of the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except percentages) 2025 2024 2025 2024 Net loss $ (54,722) $ (22,026) $ (965,159) $ (5,738) Net margin (10) % (5) % (61) % — % Adjusted for: Depreciation and amortization expense 7,514 6,897 22,183 18,248 Other (income) expense, net (1) (10,268) (10,817) (21,837) (31,230) Provision for income taxes 280 2,199 785 1,915 Stock-based compensation expense and related payroll tax 85,953 10,134 1,022,711 21,728 Stock-based charitable contribution expense — — 11,168 — Adjusted EBITDA $ 28,757 $ (13,613) $ 69,851 $ 4,923 Adjusted EBITDA margin 5 % (3) % 4 % — % __________________ (1) Relates primarily to interest income, which consists of interest and dividends earned on our cash and cash equivalents and marketable securities. Components of our Results of Operations Revenue Payments Revenue We recognize payments revenue based on interchange fees generated from purchase transactions made by members using their Chime-branded debit and credit cards. Our bank partners, as issuing banks, collect the interchange fees from these transactions, and pass amounts onto us based on these fees. Our payments revenue reflects the gross amount of the interchange fees. Interchange fees are generally determined as a percentage of the underlying transaction value plus a fixed amount per transaction based upon rates set by the card networks. To deliver payment services to members, we contract with our bank partners to provide Chime members with access to deposit products and services such as full-featured, FDIC-insured checking accounts, debit cards, and secured credit cards. Platform-Related Revenue We earn platform-related revenue from other products offered to our members that provide additional convenience, financial management tools, and access to liquidity. These products include access to ATMs, MyPay, outbound instant transfers, high yield savings, third-party partnerships, SpotMe, and cash deposits. 36 We offer our members access to over 45,000 fee-free ATMs. Each time members withdraw money at certain ATMs that are not in our network of fee-free ATMs, we charge them a fixed ATM fee in accordance with the terms and conditions in the member agreements. As we maintain control of the integrated transaction processing services before delivery to our members, we record revenue on a gross basis. We offer our members access to MyPay, which enables members to receive money in advance of payday up to a predetermined limit for free within 24 hours, or instantly for a flat fee. We recognize the instant transfer fee net of fees paid to bank partners that are related to the product as revenue. We record on-balance sheet MyPay receivables as loans held for investment, net on the consolidated balance sheets and accrue instant transfer fee revenue for these loans using the effective interest rate method. For the off-balance sheet MyPay receivables that are retained by either of the bank partners, we recognize revenue based on the instant transfer fee, net of fees paid to bank partners, at an amount that approximates fair value. We also offer our members the ability to instantly transfer funds from their Chime account to an external account at a fixed rate. The Company is the principal in these arrangements, as it controls the transfer service before it is provided to the member. In partnership with its bank partners, card networks, and processors, the Company's performance obligation is to authorize and make funds instantly available in the member's external designated account. Revenue is recognized at a point in time on a gross basis when the transfer of funds is completed. Fees are remitted to the Company through its bank partners, generally collected monthly in arrears. We offer our members access to high yield savings accounts with no minimum deposit requirements. Member savings account balances are held in interest bearing deposit accounts offered through our bank partners. Under the terms of our applicable contractual agreements with each bank partner, member deposits are either placed in the community deposit sweep program or held by our bank partners. The earned interest is passed to us which we recognize as revenue, net of the interest paid to our members. Under the terms of our applicable contractual agreements, the interest rate paid to members by Bancorp is determined by us and the interest rate paid to members by Stride is determined by agreement between us and Stride. We also generate revenue from third-party partnership agreements through products where we receive payment from partners that offer products and services to members on the Chime app, such as Experian Boost, which provides an opportunity for members to raise their FICO scores by paying eligible bills through Chime, and our Offers Marketplace, where members can receive discounts on life, renters, pet, and car insurance, utilities, wireless plans, and other third-party products. We offer our members access to SpotMe, a fee-free overdraft protection product that allows enrolled members to overdraw their account up to a predetermined limit free of charge. Members may tip Chime, at their discretion, for the use of the feature once the overdraft is repaid and may rescind the tip during the specified refundable period as defined in the member agreement. We defer the recognition of revenue until the expiration of the refundable period. Members can deposit cash into their accounts for free at certain retail locations or for a fee at other retail locations. Through contracts with third party cash deposit networks, we earn revenue upon each qualifying cash deposit outside our free network at a rate that varies depending on the cash deposit network and retailer. We do not have the primary responsibility for fulfilling members’ cash deposit requests and we recognize revenue net of fees paid to our third-party cash deposit networks upon settlement of the cash deposit in the members’ accounts. Cost of Revenue Cost of revenue consists primarily of transaction processing and bank partner costs, and card and ATM network expenses, net of incentives. Transaction Processing and Bank Partner Costs Transaction processing and bank partner costs include expenses incurred related to our third-party processor, which processes transactions and provides a ledger for member accounts . These third-party processor costs are generally equal to a fixed amount per transaction coupled with a large-volume discount factor. Transaction processing and bank partner costs also include hosting, processing, and software costs, including the amortization of 37 internal-use software, related to ChimeCore, our proprietary payment processor and ledger that launched in 2024, and the internal-use software supporting the MyPay product and others. Our third-party processor, which processed transactions and provided a ledger for member accounts prior to the launch of ChimeCore, continued to do so for member accounts not yet migrated to ChimeCore through September 30, 2025. Additionally, transaction processing and bank partner costs include payments to bank partners, including fees paid for serving as our card issuing bank and for card network sponsorship. These expenses are predominantly based on a specified percentage of the Purchase Volume at each respective bank partner, which percentage generally decreases with scale. Card and ATM Network Expenses, Net of Incentives We pay card and ATM networks for providing the worldwide networks through which card payment, ATM transactions, and other money movements are authorized, processed, and settled. These fees are generally based on the Purchase Volume and the total number of transactions in the period, and vary by network and transaction type. As part of our overall agreements with card networks, we also have marketing and incentive arrangements that provide us with certain incentives on a periodic basis, including quarterly and annual incentives based on transaction volumes in the period, contract signing bonus, and other marketing incentives. We record these incentives as a reduction to the cost of revenue as they are earned. Our cost of revenue will be impacted by our growth as well as our ability to drive efficiencies in transaction processing and bank partner costs, including through our transition of transaction processing to ChimeCore, as well as card and ATM costs, net of incentives. In absolute dollars, we expect that cost of revenue will fluctuate from period to period in the near term and increase in the long term. As a percentage of revenue, we expect cost of revenue will fluctuate from period to period in the near term and decline in the long term as we scale. Gross Profit Gross profit consists of our total revenue minus total cost of revenue. Operating Expenses Transaction and Risk Losses Transaction and risk losses primarily consist of losses relating to liquidity products both on- and off-balance sheet, overdrawn member accounts, and transaction dispute losses. Losses relating to our off-balance sheet receivables that are retained by bank partners and relate to MyPay and SpotMe, as well as other instances where a member’s account is overdrawn, are estimated at each period end and recognized on our consolidated balance sheets as our product obligation. This obligation is measured at fair value, using a discounted cash flow model to calculate the present value of future cash flows, estimated for the discount rate and expected loss rates based on current period data and historical trends. Changes in fair value of the product obligation related to credit exposure are recorded as transaction and risk losses for the period. Our credit obligations relating to MyPay receivables we purchase, which are reflected on our balance sheet as loans held for investment, are recorded as a provision for credit losses within transaction and risk losses. Transaction dispute losses result from member-initiated disputes with merchants or due to processing fraudulent transactions. We estimate the provision for transaction dispute losses each period based on current period data points and historical trends related to loss rates. Our transaction and risk losses will be impacted by the expansion of existing liquidity products and the introduction of new liquidity products offered through our platform. Following the launch of MyPay in 2024, our transaction and risk losses have increased. In absolute dollars, we expect that transaction and risk losses will fluctuate from period to period in the near term and increase in the long term compared to the third quarter of 2025. As a percentage of revenue, we expect that transaction and risk losses will fluctuate from period to period in the near term and in the long term compared to the third quarter of 2025. 38 Member Support and Operations Member support and operations expenses include the costs of the third-party vendors we use for certain member support and loss prevention services, the costs of physical card issuance, software to help manage member interactions, and member onboarding and account verification expenses. Member support and operations also includes personnel-related expenses including salaries, employee benefit costs, and stock-based compensation for employees engaged in member support, risk, and operations functions, and allocated overhead. In absolute dollars, we expect that member support and operations expenses will fluctuate from period to period in the near term and increase in the long term as we continue to grow our Active Member base. As a percentage of revenue, we expect that member support and operations expenses will fluctuate from period to period in the near term and decrease in the long term as we scale and continue to drive operational efficiencies, including through the use of AI and automation. Sales and Marketing Sales and marketing expenses consist primarily of general marketing and promotional activities, including advertising costs associated with the production and communication of advertisements in various media outlets, referral bonuses given to members who refer another member to Chime with certain qualifying conditions, and other marketing incentives. Sales and marketing expenses also include personnel-related expenses including salaries, employee benefit costs, and stock-based compensation for employees engaged in sales and marketing functions and allocated overhead. In absolute dollars, we expect that sales and marketing expenses will generally increase from period to period in the near term and increase in the long term as we continue to invest in member acquisition. As a percentage of revenue, we expect that sales and marketing expenses will fluctuate from period to period in the near term and decrease in the long term as we scale and continue to drive operational efficiencies, including through the use of AI and automation. Technology and Development Technology and development expenses primarily consist of personnel-related expenses including salaries, employee benefit costs, and stock-based compensation for employees engaged in the engineering, product management, data, and design functions and allocated overhead, as well as certain costs for cloud infrastructure, and other costs to support and improve our platform. In absolute dollars, we expect that technology and development expenses will generally increase from period to period in the near term and increase in the long term as we continue to make investments in product innovation. As a percentage of revenue, we expect that technology and development expenses will fluctuate from period to period in the near term and decrease in the long term as we scale and continue to drive operational efficiencies, including through the use of AI and automation. General and Administrative General and administrative expenses primarily consist of personnel-related expenses, including salaries, employee benefit costs, and stock-based compensation for employees engaged in the security, legal, compliance, human resources and finance functions, and allocated overhead. General and administrative also includes professional services fees, business software, and legal and regulatory settlements. 39 We expect to incur additional general and administrative expenses as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC and the Nasdaq listing standards, additional corporate and director and officer insurance expenses, greater investor relations expenses and increased legal, audit and consulting fees. We also expect to increase the size of our general and administrative function to support our increased compliance requirements and the growth of our business . In absolute dollars, we expect that general and administrative expenses will generally increase from period to period in the near term and increase in the long term. As a percentage of revenue, we expect that general and administrative expenses will fluctuate from period to period in the near term and decrease in the long term as we scale. Depreciation and Amortization Depreciation and amortization expenses primarily consist of amortization of our capitalized software and depreciation on our property and equipment. Other Income, Net Other income, net primarily includes interest income, which consists of interest and dividends earned on our cash and cash equivalents and marketable securities. Provision for Income Taxes The provision for income taxes consists primarily of income taxes in certain federal, state, local, and foreign jurisdictions in which we conduct business. Our effective tax rate will vary depending on the relative proportion of foreign to domestic income, use of tax credits, changes in the valuation of our deferred tax assets and liabilities, and changes in tax laws. 40 Results of Operations The following table summarizes our unaudited condensed consolidated statements of operations data for each of the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except share and per share amounts) 2025 2024 2025 2024 Revenue $ 543,519 $ 421,871 $ 1,590,412 $ 1,198,057 Cost of revenue (1) 69,401 53,516 196,939 151,467 Gross profit 474,118 368,355 1,393,473 1,046,590 Operating expenses: Transaction and risk losses 97,053 55,159 304,445 126,197 Member support and operations (2) 83,658 70,054 365,364 207,943 Sales and marketing (2) 153,608 143,123 471,187 378,191 Technology and development (2) 123,942 80,400 823,578 230,701 General and administrative (2) 76,575 46,645 403,415 127,535 Depreciation and amortization (1) 3,992 3,618 11,695 11,076 Total operating expenses 538,828 398,999 2,379,684 1,081,643 Loss from operations (64,710) (30,644) (986,211) (35,053) Other income, net 10,268 10,817 21,837 31,230 Loss before income taxes (54,442) (19,827) (964,374) (3,823) Provision for income taxes 280 2,199 785 1,915 Net loss $ (54,722) $ (22,026) $ (965,159) $ (5,738) Net loss per share attributable to common stockholders, basic and diluted $ (0.15) $ (0.34) $ (5.10) $ (0.09) Weighted average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic and diluted 371,829,972 65,149,191 189,227,164 64,757,159 __________________ (1) Total depreciation and amortization includes amounts as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2025 2024 2025 2024 Depreciation and amortization recorded in cost of revenue $ 3,522 $ 3,279 $ 10,488 $ 7,172 Depreciation and amortization recorded as operating expense 3,992 3,618 11,695 11,076 Total depreciation and amortization $ 7,514 $ 6,897 $ 22,183 $ 18,248 (2) Amounts include stock-based compensation and related payroll taxes as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2025 2024 2025 2024 Member support and operations $ 10,172 $ 776 $ 133,882 $ 2,849 Sales and marketing 4,128 473 48,014 973 Technology and development 40,270 4,418 584,189 8,674 General and administrative 31,383 4,467 256,626 9,232 Total stock-based compensation expense and related payroll tax $ 85,953 $ 10,134 $ 1,022,711 $ 21,728 41 Comparison of the three and nine months ended September 30, 2025 and September 30, 2024 Revenue Three Months Ended September 30, Change Change Nine Months Ended September 30, Change Change (in thousands, except percentages) 2025 2024 ($) % 2025 2024 ($) % Payments revenue $ 363,156 $ 312,250 $ 50,906 16 % $ 1,104,569 $ 937,525 $ 167,044 18 % Platform-related revenue 180,363 109,621 70,742 65 % 485,843 260,532 225,311 86 % Total revenue $ 543,519 $ 421,871 $ 121,648 29 % $ 1,590,412 $ 1,198,057 $ 392,355 33 % Total revenue for the three and nine months ended September 30, 2025 increased by $121.6 million, or 29%, and $392.4 million, or 33%, year over year, primarily driven by the growth of our total Active Members and the associated increase in Purchase Volume as well as the launch of MyPay. Payments revenue Payments revenue increased by $50.9 million, or 16%, and $167.0 million, or 18%, for the three and nine months ended September 30, 2025 compared to the same period in 2024. For the three months ended September 30, 2025, this increase reflected a $34.7 million, or 15%, increase in revenue from interchange-based fees from debit card transactions and a $16.2 million, or 19%, increase in revenue from interchange-based fees from credit card transactions compared to the same period in 2024. The increase in payments revenue was driven by a $4.3 billion, or 15%, increase in Purchase Volume for the three months ended September 30, 2025 compared to the same period in 2024. For the three months ended September 30, 2025 and 2024, interchange-based fees from debit card transactions represented 48% and 53% of revenue, with debit card transactions representing 84% of Purchase Volume in both periods. For the three months ended September 30, 2025 and 2024, interchange-based fees from credit card transactions represented 19% and 21% of revenue, with credit card transactions representing 16% of Purchase Volume in both periods. For the nine months ended September 30, 2025, this increase reflected a $120.0 million, or 18%, increase in revenue from interchange-based fees from debit card transactions and a $47.0 million, or 18%, increase in revenue from interchange-based fees from credit card transactions compared to the same period in 2024. The increase in payments revenue was driven by a $14.5 billion, or 17%, increase in Purchase Volume for the nine months ended September 30, 2025 compared to the same period in 2024. For the nine months ended September 30, 2025 and 2024, interchange-based fees from debit card transactions represented 50% and 56% of revenue, with debit card transactions representing 84% of Purchase Volume in both periods. For the nine months ended September 30, 2025 and 2024, interchange-based fees from credit card transactions represented 20% and 22% of revenue, with credit card transactions representing 16% of Purchase Volume in both periods. The increase in Purchase Volume was driven, in part, by a 1.6 million, or 21%, increase in Active Members as of September 30, 2025 compared to September 30, 2024. Increasing the number of Active Members on our platform helps drive Purchase Volume, which increases the interchange-based fees generated and the payments revenue that we recognize. Platform-related revenue Platform-related revenue for the three and nine months ended September 30, 2025 increased $70.7 million, or 65%, and $225.3 million, or 86%, year over year. For the three and nine months ended September 30, 2025, the increase was primarily driven by a $47.4 million and $173.2 million increase year over year from the full launch of MyPay in July 2024. Additionally, we recognized $11.1 million and $22.7 million in revenue for outbound instant transfer fees, which launched in the first quarter of 2025, in the three and nine months ended September 30, 2025. 42 Cost of revenue Three Months Ended September 30, Change Change Nine Months Ended September 30, Change Change (in thousands, except percentages) 2025 2024 ($) % 2025 2024 ($) % Cost of revenue $ 69,401 $ 53,516 $ 15,885 30 % $ 196,939 $ 151,467 $ 45,472 30 % Cost of revenue for the three months ended September 30, 2025 increased $15.9 million, or 30%, year over year driven by a $9.3 million increase in card and ATM network expenses, net of incentives, and a $6.6 million increase in transaction processing and bank partner costs, both primarily driven by the increase in Active Members and related increase in Purchase Volume, and an increased level of activity from existing members engaging more frequently with our products. Cost of revenue for the nine months ended September 30, 2025 increased $45.5 million, or 30%, year over year driven by a $24.3 million increase in card and ATM network expenses, net of incentives, and a $21.2 million increase in transaction processing and bank partner costs, both primarily driven by the increase in Active Members and related increase in Purchase Volume, and an increased level of activity from existing members engaging more frequently with our products. Additionally, the increase in transaction processing and bank partner costs included a $3.3 million increase in the amortization of internal-use software relating to revenue generating platforms such as ChimeCore and MyPay. Operating expenses Three Months Ended September 30, Change Change Nine Months Ended September 30, Change Change (in thousands, except percentages) 2025 2024 ($) % 2025 2024 ($) % Transaction and risk losses $ 97,053 $ 55,159 $ 41,894 76 % $ 304,445 $ 126,197 $ 178,248 141 % Member support and operations 83,658 70,054 13,604 19 % 365,364 207,943 157,421 76 % Sales and marketing 153,608 143,123 10,485 7 % 471,187 378,191 92,996 25 % Technology and development 123,942 80,400 43,542 54 % 823,578 230,701 592,877 257 % General and administrative 76,575 46,645 29,930 64 % 403,415 127,535 275,880 216 % Depreciation and amortization 3,992 3,618 374 10 % 11,695 11,076 619 6 % Total operating expenses $ 538,828 $ 398,999 $ 139,829 35 % $ 2,379,684 $ 1,081,643 $ 1,298,041 120 % Operating expenses increased by $139.8 million, or 35%, and $1,298.0 million, or 120%, for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024 driven by the following changes: Transaction and risk losses Transaction and risk losses for the three months ended September 30, 2025 increased $41.9 million, or 76%, year over year. The increase was driven by a $24.8 million increase in losses related to MyPay as the product continues to scale, a $5.7 million increase in transaction dispute losses, and an increase of $3.9 million in losses related to SpotMe and other member negative balances as a result of higher SpotMe volume driven by the growth in Active Members. Transaction and risk losses for the nine months ended September 30, 2025 increased by $178.2 million, or 141%, year over year driven by the full launch of MyPay in July 2024, which contributed $128.3 million, and an increase of $22.1 million in losses related to SpotMe and other member negative balances due to higher SpotMe volume and isolated fraud incidents in the first quarter of 2025, when compared to the same periods in 2024. 43 Member support and operations Member support and operations expenses for the three and nine months ended September 30, 2025 increased by $13.6 million, or 19%, and $157.4 million, or 76%, year over year driven by an increase in stock-based compensation and related payroll tax of $9.4 million and $131.0 million in the three and nine months ended September 30, 2025 as the liquidity-based vesting condition for certain stock-based awards was met upon our IPO in the second quarter of 2025. Additionally, there was an increase of $1.8 million and $10.4 million in the three and nine months ended September 30, 2025 due to physical card production and fulfillment costs due to the increased volume of cards issued. Sales and marketing Sales and marketing expenses for the three months ended September 30, 2025 increased by $10.5 million, or 7%, year over year driven by an increase in stock-based compensation and related payroll tax of $3.7 million in the three months ended September 30, 2025 as the liquidity-based vesting condition for certain stock-based awards was met upon our IPO in the second quarter of 2025. Additionally, there was an increase of $3.1 million in marketing and promotional activities and an increase of $2.1 million in personnel-related expenses primarily attributable to increased headcount in the three months ended September 30, 2025 compared to the prior year. Sales and marketing for the nine months ended September 30, 2025 increased by $93.0 million, or 25%, year over year driven by an increase in stock-based compensation and related payroll tax of $47.0 million in the nine months ended September 30, 2025 as the liquidity-based vesting condition for certain stock-based awards was met upon our IPO. Additionally, there was an increase of $37.2 million in marketing and promotional activities in the nine months ended September 30, 2025 compared to the prior year. Technology and development Technology and development expenses for the three and nine months ended September 30, 2025 increased by $43.5 million, or 54%, and $592.9 million, or 257%, year over year primarily driven by an increase in stock-based compensation and related payroll tax of $35.9 million in the three months ended September 30, 2025 and $575.5 million in the nine months ended September 30, 2025 as the liquidity-based vesting condition for certain stock-based awards was met upon our IPO in the second quarter of 2025. General and administrative General and administrative expenses for the three and nine months ended September 30, 2025 increased by $29.9 million, or 64%, and $275.9 million, or 216%, year over year, primarily driven by an increase in stock-based compensation and related payroll tax of $26.9 million in the three months ended September 30, 2025 and $247.4 million in the nine months ended September 30, 2025 as the liquidity-based vesting condition for certain stock-based awards was met upon our IPO in the second quarter of 2025. Other income, net Three Months Ended September 30, Change Change Nine Months Ended September 30, Change Change (in thousands, except percentages) 2025 2024 ($) % 2025 2024 ($) % Other income, net $ 10,268 $ 10,817 $ (549) (5) % $ 21,837 $ 31,230 $ (9,393) (30) % Other income, net for the three months ended September 30, 2025 decreased by $0.5 million, or 5%, year over year, primarily attributable to letter of credit fees and unused commitment fees related to the revolving credit agreement entered into in March 2025. 44 Other income, net for the nine months ended September 30, 2025 decreased by $9.4 million, or 30%, year over year, primarily attributable to a decrease of $6.1 million in interest income due to lower average balance totals and reduced yields on corporate cash and cash equivalents and marketable securities and an increase of $1.2 million in letter of credit fees and unused commitment fees related to the revolving credit agreement entered into in March 2025. Liquidity and Capital Resources Sources and Uses of Funds Since inception, prior to our IPO, we have financed our operations primarily through the net proceeds we have received from the issuances of preferred stock and our revenue. As of September 30, 2025, our principal sources of liquidity were our cash and cash equivalents of $445.0 million and investments in marketable securities of $633.7 million. On June 13, 2025, we closed our IPO of our Class A common stock. The total net proceeds received were approximately $770.6 million after deducting underwriting discounts, commissions and offering expenses payable by us. As of September 30, 2025, we had $443.6 million in borrowing capacity under our revolving credit facility. Refer to Note 10 - Indebtedness within the notes to our condensed consolidated financial statements in this Quarterly Report for further information. Our bank partners also retain accounts and receivables related to Chime-branded credit and liquidity products on their balance sheet, and pursuant to the Bancorp MSA, Bancorp committed to retain certain receivables on its balance sheet in an amount, not to exceed, on an aggregate basis, 200% of its tier 1 capital, with such amount in connection with liquidity products excluding Credit Builder not to exceed 125% of its tier 1 capital (each as measured on the last day of each calendar quarter). Bancorp’s tier 1 capital includes common shareholders’ equity, certain qualifying perpetual preferred stock and minority interests in equity accounts of consolidated subsidiaries, less intangibles. Based on Bancorp’s tier 1 capital as of September 30, 2025, the amount of this commitment would have been approximately $1.7 billion (with such amount in connection with liquidity products excluding Credit Builder not to exceed approximately $1.1 billion). Bancorp has the right to limit originations under this commitment in the event the forecasted performance of the liquidity products offered under this commitment is expected to result in significant unrecoverable losses. Specifically, Bancorp has the right to limit originations under this commitment during periods when a specified threshold is projected to be exceeded relating to the forecasted ratio of (i) projected losses less projected revenue from the liquidity products offered under this commitment to (ii) the sum of our cash, our marketable securities, and certain assets held at Bancorp. In November 2025, our board of directors approved a share repurchase program with authorization to purchase up to $200.0 million of our Class A common stock at management’s discretion. Repurchases may be made from time to time through open market purchases, privately negotiated transactions or other means, subject to market conditions, applicable legal requirements, and other relevant factors. Open market purchases may be structured to occur in accordance with the requirements of Rule 10b-18 of the Exchange Act. We may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of our Class A common stock under this authorization. The timing and actual number of shares repurchased may depend on a variety of factors, including legal requirements, price, and economic and market conditions. The program does not obligate us to repurchase any particular amount of Class A common stock and may be suspended or discontinued at any time at our discretion without prior notice, subject to all applicable securities laws. We believe that our current available cash and cash equivalents and investments in marketable securities will be sufficient to meet our working capital needs for at least the next twelve months. Our future capital requirements and the adequacy of available funds will depend on many factors, including, but not limited to our growth, our ability to attract and retain Active Members, the timing and extent of spending to support our efforts to develop our platform, the growth of liquidity products, including MyPay and SpotMe, the expansion of sales and marketing activities, potential merger and acquisition activity, and other strategic initiatives. 45 Cash Flows The following table shows the generation and use of cash for the periods indicated: Nine Months Ended September 30, (in thousands) 2025 2024 Cash flows provided by (used in): Operating activities $ 20,227 $ 45,909 Investing activities $ (344,483) $ (4,786) Financing activities $ 432,958 $ (43) Cash Flows from Operating Activities Cash provided by operating activities was $20.2 million for the nine months ended September 30, 2025, compared to $45.9 million in the nine months ended September 30, 2024. The decrease of $25.7 million in cash provided by operating activities consists of a $959.4 million increase in net loss, a decrease of $132.3 million in changes in working capital, and offset by an increase of $1,066.1 million in non-cash adjustments. The decrease of $132.3 million in changes in working capital for the nine months ended September 30, 2025 compared to the prior year was driven by upfront incentives received from card networks in the first quarter of 2024, an increase in the annual bonus paid, increases in realized transaction dispute losses, and the timing of vendor invoices. The increase of $1,066.1 million in non-cash adjustments for the nine months ended September 30, 2025 compared to the prior year was primarily driven by a $981.9 million increase in stock-based compensation expense as the liquidity-based vesting condition for certain equity awards was met in connection with our IPO in the second quarter of 2025. Additionally, there was a $50.2 million increase in provision for credit losses for the nine months ended September 30, 2025 compared to the same period in 2024 driven by the launch of MyPay in July 2024. Cash Flows from Investing Activities Cash used by investing activities was $344.5 million for the nine months ended September 30, 2025, primarily due to $3,616.9 million in purchases of loans held for investment and $665.3 million in purchases of marketable securities, offset by $3,547.7 million in repayments of loans held for investment, $256.5 million from sales of marketable securities and $147.2 million in proceeds from maturities of marketable securities. Cash used in investing activities was $4.8 million for the nine months ended September 30, 2024, primarily due to $735.2 million in purchases of loans held for investment, $361.2 million in purchases of marketable securities, and $11.0 million related to a business acquisition, offset by $649.7 million in repayments of loans held for investment and $436.2 million in proceeds from maturities of marketable securities. Cash Flows from Financing Activities For the nine months ended September 30, 2025, cash provided by financing activities was $433.0 million, primarily due to $771.2 million from the issuance of common stock in connection with our IPO, net of offering costs paid, partially offset by taxes paid related to the net share settlement of restricted stock units of $348.1 million. For the nine months ended September 30, 2024, cash used by financing activities was $43.0 thousand, consisting of $1.0 million in repurchases of common stock, nearly entirely offset by proceeds from the exercise of stock options. 46 Dilution We calculate our fully diluted share count on an unweighted basis taking our total outstanding share count in addition to unexercised stock options, outstanding restricted stock units, outstanding PSUs, shares reserved for charitable donations and warrants to purchase common stock. As of September 30, 2025, our fully diluted share count was as follows: Class A and B common stock issued and outstanding 374,417,665 Stock options outstanding 31,822,783 Service-based RSUs outstanding 22,521,395 PSUs outstanding 8,269,297 Shares reserved for charitable donations 2,889,173 Total fully diluted share count 439,920,313 For further information see Note 11, “Redeemable Convertible Preferred Stock, Common Stock, and Stockholders’ Equity (Deficit)" and Note 13, “Net Loss Per Share” included in this Quarterly Report on Form 10-Q in “Notes to Condensed Consolidated Financial Statements”. Commitments Leases As of September 30, 2025, we had future minimum operating lease payments under non-cancelable leases of $177.6 million related to leases we have recognized on our consolidated balance sheet which are due over a weighted average period of 8.4 years. Of the non-cancelable lease payments, $5.0 million is payable in the remainder of 2025. For additional discussion on our operating leases, see Note 16 – Commitments and Contingencies within the notes to our unaudited condensed consolidated financial statements. Purchase Commitments Our non-cancellable purchase commitments are primarily related to our cloud infrastructure services and third-party payment processor. As of September 30, 2025, we had non-cancellable purchase obligations of $267.1 million, with $51.8 million to be paid in the remainder of 2025 and the remaining amounts thereafter. Critical Accounting Policies and Estimates Our condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q are prepared in accordance with GAAP. The preparation of condensed consolidated financial statements in accordance with GAAP requires us to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the financial statements, as well as the reported amounts of revenue and expenses during the period presented. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows could be affected. There have been no material changes to our critical accounting policies and estimates as described in our Final Prospectus, except as described below. 47 Stock-based Compensation RSUs Stock-based compensation expense for RSUs with service-based and liquidity-based vesting conditions is recognized on an accelerated attribution method over the requisite service period, which is generally four years, and only if liquidity-based vesting conditions are considered probable to be satisfied. The liquidity-based vesting condition was satisfied upon the effective date of our Registration Statement on Form S-1 filed in connection with our IPO. On that date, we recorded cumulative stock-based compensation expense using the accelerated attribution method for RSUs subject to the liquidity-based vesting condition for which the service-based vesting condition had been fully or partially satisfied. The remaining unrecognized stock-based compensation expense related to the RSUs will be recorded over their remaining requisite service periods. Performance-based PSUs We granted restricted stock units with a service condition, a liquidity condition, and other operational performance-based vesting conditions. The awards are measured at fair value of the underlying common stock on the date of grant. Upon consummation of the IPO, we recorded cumulative stock-based compensation expense using the accelerated attribution method for those awards that are expected to vest based on the probability of achieving the performance criteria. We will record the remaining unrecognized expense over the remainder of the expected achievement period for the performance conditions of the awards. Market-based PSUs We granted restricted stock units with a service condition, a liquidity condition, and a stock price hurdle market-based vesting condition. The awards are measured at fair value on the date of grant using a Monte Carlo valuation model which incorporates various assumptions including expected stock price volatility, expected term, risk-free interest rates, expected date of a qualifying event, and expected Company valuation amounts. We record stock-based compensation expense for such awards using the accelerated attribution method over the requisite service period. We determine the requisite service period by comparing the derived service period to achieve the market-based vesting condition and the explicit time-based service period, using the longer of the two service periods as the requisite service period. Recent Accounting Pronouncements For a discussion of recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted, see Note 2 – Basis of Presentation and Summary of Significant Accounting Policies within the notes to our unaudited condensed consolidated financial statements.