Chime Financial : Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

About this update from Chime Financial, Inc.

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" included in our Annual Report on Form 10-K for the year ended December 31, 2025 ("2025 Form 10-K"). 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 months ended March 31, 2026 and 2025 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 nearly 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 10.2 million Active Members as of March 31, 2026. 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. 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 March 31, (in millions, except for Average Revenue per Active Member) 2026 2025 Purchase Volume $ 38,709 $ 34,540 Active Members 10.2 8.6 Average Revenue per Active Member (ARPAM) $ 263 $ 251 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, Instant Loans, sending or receiving funds with Pay Anyone, outbound instant transfers, and other types of 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. 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 or repaying a MyPay advance or an Instant Loan. 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. 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. 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 March 31, (in thousands, except percentages) 2026 2025 Gross profit $ 580,313 $ 458,326 Gross margin 90 % 88 % Adjusted for: Transaction and risk losses 88,905 109,145 Transaction profit $ 491,408 $ 349,181 Transaction margin 76 % 67 % 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 income to adjusted EBITDA for each of the periods indicated: Three Months Ended March 31, (in thousands, except percentages) 2026 2025 Net income $ 53,456 $ 12,939 Net margin 8 % 2 % Adjusted for: Depreciation and amortization expense 7,665 7,258 Other (income) expense, net (1) (7,748) (5,354) Provision for income taxes 455 1,552 Stock-based compensation expense and related payroll tax 64,816 8,696 Adjusted EBITDA $ 118,644 $ 25,091 Adjusted EBITDA margin 18 % 5 % __________________ (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 fee. Interchange-based fees from credit card transactions tend to be higher than interchange-based fees from debit card transactions, resulting in higher payments revenue recognized from the same amount of Purchase Volume. Card networks set the rates for interchange fees, which are generally determined as a percentage of the underlying transaction value plus a fixed amount per transaction, and may be influenced by competitive and regulatory factors. 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 MyPay, ATMs, outbound instant transfers, third-party partnerships, SpotMe, cash deposits, Instant Loans, and high-yield savings accounts. MyPay 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 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. Outbound instant transfers allow members to instantly transfer funds from their Chime account to an external account at a fixed rate. Revenue is recognized at a point in time on a gross basis when the transfer of funds is settled. 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. SpotMe is 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. Our Instant Loans product allows members to borrow funds that are repaid in equal installments over a set period of time. Instant Loans have a fixed interest rate with no late fees or compound interest. Our bank partner is the legal lender of the Instant Loan product. We earn revenue related to Instant Loans based on the interest charged to members, net of fees paid to the bank partner, at an amount that approximates fair value. 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. 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 relating to our internally-developed payment processor and ledger, ChimeCore. Costs associated with ChimeCore primarily consist of gateway processing costs, which are generally based on a fixed amount per transaction, which varies by transaction type, and cloud infrastructure and hosting costs. Prior to November 2025, we relied on a third-party processor to perform transaction authorization, settlement, payments, adjustments, and other account-level processing, as well as to maintain member account information and provide transaction reporting. Fees paid to the third-party processor were generally based on a fixed amount per transaction, subject to volume-based discounts. Transaction processing and bank partner costs also include amortization of internal-use software related to supporting revenue-generating platforms. 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, in which the 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 such as inbound and outbound transfers are authorized, processed, and settled. These fees are generally based on Purchase Volume, the total number of transactions in the period, and other money movement volume 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, 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 stabilize 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, Instant Loans, 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 allowance for credit losses 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. 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. 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. 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 prospective and existing members with certain qualifying conditions, and other promotional activities. 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. 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. Results of Operations The following table summarizes our unaudited condensed consolidated statements of operations data for each of the periods indicated: Three Months Ended March 31, (in thousands, except share and per share amounts) 2026 2025 Revenue $ 647,387 $ 518,744 Cost of revenue (1) 67,074 60,418 Gross profit 580,313 458,326 Operating expenses: Transaction and risk losses 88,905 109,145 Member support and operations (2) 95,399 78,609 Sales and marketing (2) 165,431 132,573 Technology and development (2) 109,780 77,882 General and administrative (2) 70,467 47,173 Depreciation and amortization (1) 4,168 3,807 Total operating expenses 534,150 449,189 Income from operations 46,163 9,137 Other income, net 7,748 5,354 Income before income taxes 53,911 14,491 Provision for income taxes 455 1,552 Net income 53,456 12,939 Undistributed earnings attributable to preferred stockholders - (12,939) Net income attributable to common stockholders $ 53,456 $ - Net income per share attributable to common stockholders: Basic $ 0.14 $ - Diluted $ 0.13 $ - Weighted average number of common shares outstanding used to compute net income per share attributable to common stockholders: Basic 381,636,920 65,868,810 Diluted 400,476,567 65,868,810 __________________ (1) Total depreciation and amortization includes amounts as follows: Three Months Ended March 31, (in thousands) 2026 2025 Depreciation and amortization recorded in cost of revenue $ 3,497 $ 3,451 Depreciation and amortization recorded as operating expense 4,168 3,807 Total depreciation and amortization $ 7,665 $ 7,258 (2) Amounts include stock-based compensation and related payroll tax as follows: Three Months Ended March 31, (in thousands) 2026 2025 Member support and operations $ 8,936 $ 1,124 Sales and marketing 4,593 483 Technology and development 27,425 3,703 General and administrative 23,862 3,386 Total stock-based compensation expense and related payroll tax $ 64,816 $ 8,696 Comparison of the three months ended March 31, 2026 and 2025 Revenue Three Months Ended March 31, Change Change (in thousands, except percentages) 2026 2025 ($) % Payments revenue $ 432,644 $ 375,312 $ 57,332 15 % Platform-related revenue 214,743 143,432 71,311 50 % Total revenue $ 647,387 $ 518,744 $ 128,643 25 % Total revenue for the three months ended March 31, 2026 increased by $128.6 million, or 25%, year over year, primarily driven by the growth of our total Active Members and the associated increase in Purchase Volume, a shift in payment mix toward credit from debit, as well as the continued growth of MyPay and outbound instant transfers. Payments revenue Payments revenue increased by $57.3 million, or 15%, for the three months ended March 31, 2026 compared to the same period in 2025. For the three months ended March 31, 2026, this increase primarily reflected a $57.6 million, or 54%, increase in revenue from interchange-based fees from credit card transactions compared to the same period in 2025. The increase in payments revenue was driven by a $4.2 billion, or 12%, increase in Purchase Volume for the three months ended March 31, 2026 compared to the same period in 2025. For the three months ended March 31, 2026 and 2025, interchange-based fees from debit card transactions represented 41% and 52% of revenue, with debit card transactions representing 77% and 84% of Purchase Volume. For the three months ended March 31, 2026 and 2025, interchange-based fees from credit card transactions represented 25% and 21% of revenue, with credit card transactions representing 23% and 16% of Purchase Volume. The increase in Purchase Volume was driven, in part, by a 1.6 million, or 19%, increase in Active Members as of March 31, 2026 compared to March 31, 2025. 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 months ended March 31, 2026 increased $71.3 million, or 50%, year over year. For the three months ended March 31, 2026, the increase was primarily driven by a $39.5 million increase year over year from MyPay driven by our new variable pricing plan adopted in the first quarter of 2026 and increased MyPay transaction volume from continued adoption. Additionally, we recognized an increase of $15.5 million year over year in revenue for outbound instant transfer fees, which launched in the first quarter of 2025. We also recognized $14.1 million in Instant Loan revenue during the three months ended March 31, 2026, which launched at the end of the first quarter of 2025. Cost of revenue Three Months Ended March 31, Change Change (in thousands, except percentages) 2026 2025 ($) % Cost of revenue $ 67,074 $ 60,418 $ 6,656 11 % Cost of revenue for the three months ended March 31, 2026 increased $6.7 million, or 11%, year over year driven by a $12.2 million increase in card and ATM network expenses, net of incentives, partially offset by a a $5.5 million decrease in transaction processing and bank partner costs. The $12.2 million increase in card and ATM network expenses was driven by the increase in Active Members and from Active Members engaging more frequently with our products, including instant transfers. The $5.5 million decrease in transaction processing and bank partner costs was driven by cost savings following our migration from our third-party transaction processor to ChimeCore, which occurred in the fourth quarter of 2025, partially offset by growth in Active Members and related growth in Purchase Volume. Operating expenses Three Months Ended March 31, Change Change (in thousands, except percentages) 2026 2025 ($) % Transaction and risk losses $ 88,905 $ 109,145 $ (20,240) (19) % Member support and operations 95,399 78,609 16,790 21 % Sales and marketing 165,431 132,573 32,858 25 % Technology and development 109,780 77,882 31,898 41 % General and administrative 70,467 47,173 23,294 49 % Depreciation and amortization 4,168 3,807 361 9 % Total operating expenses $ 534,150 $ 449,189 $ 84,961 19 % Operating expenses increased by $85.0 million, or 19%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 driven by the following changes: Transaction and risk losses Transaction and risk losses for the three months ended March 31, 2026 decreased by $20.2 million, or 19%, year over year, driven by a decrease of $18.4 million in losses related to MyPay due to improvements in loss rates. Losses related to SpotMe and other member negative balances also decreased by $12.4 million, primarily due to isolated fraud incidents in the prior-year period. These decreases were partially offset by an increase of $7.2 million in transaction and risk losses related to our Instant Loans product, which fully launched in March 2025. Member support and operations Member support and operations expenses for the three months ended March 31, 2026 increased by $16.8 million, or 21%, year over year driven by an increase in stock-based compensation and related payroll tax of $7.8 million 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 $5.4 million in third-party member support and loss prevention costs in the three months ended March 31, 2026, associated with an increase in Active Members. Sales and marketing Sales and marketing for the three months ended March 31, 2026 increased by $32.9 million, or 25%, year over year driven by an increase of $25.7 million in marketing and promotional activities in the three months ended March 31, 2026 compared to the prior year. Additionally, there was an increase in stock-based compensation and related payroll tax of $4.1 million as the liquidity-based vesting condition for certain stock-based awards was met upon our IPO. Technology and development Technology and development expenses for the three months ended March 31, 2026 increased by $31.9 million, or 41%, year over year primarily driven by an increase in stock-based compensation and related payroll tax of $23.7 million 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 months ended March 31, 2026 increased by $23.3 million, or 49%, year over year, primarily driven by an increase in stock-based compensation and related payroll tax of $20.5 million as the liquidity-based vesting condition for certain stock-based awards was met upon our IPO in the second quarter of 2025. Other income, net Three Months Ended March 31, Change Change (in thousands, except percentages) 2026 2025 ($) % Other income, net $ 7,748 $ 5,354 $ 2,394 45 % Other income, net for the three months ended March 31, 2026 increased by $2.4 million, or 45%, year over year, primarily attributable to an increase of $1.8 million in interest income due to higher balances on interest-bearing assets following our IPO. Liquidity and Capital Resources Sources and Uses of Funds As of March 31, 2026, our principal sources of liquidity were our cash and cash equivalents of $607.7 million, investments in marketable securities of $403.6 million, and $443.6 million in borrowing capacity under our revolving credit facility. 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 March 31, 2026, 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. During the three months ended March 31, 2026, we repurchased 4.1 million shares of our common stock for an aggregate purchase price of $85.7 million. In May 2026 we announced that our board of directors approved an additional share repurchase authorization pursuant to which we may repurchase up to $200.0 million of our outstanding Class A common stock. 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, Instant Loans, and SpotMe, the expansion of sales and marketing activities, potential merger and acquisition activity, and other strategic initiatives. Cash Flows The following table shows the generation and use of cash for the periods indicated: Three Months Ended March 31, (in thousands) 2026 2025 Cash flows provided by (used in): Operating activities $ 87,479 $ (25,751) Investing activities $ 127,305 $ 6,701 Financing activities $ (73,357) $ (126) Cash Flows from Operating Activities Cash provided by (used in) operating activities was $87.5 million for the three months ended March 31, 2026, compared to $(25.8) million in the three months ended March 31, 2025. The increase of $113.2 million consists of an increase of $77.5 million in changes in working capital and a $40.5 million increase in net income, partially offset by a decrease of $4.8 million in non-cash adjustments. The increase of $77.5 million in changes in working capital for the three months ended March 31, 2026 compared to the prior year was primarily driven by an increase of settlements related to our product obligation primarily due to the growth of MyPay revenue, the timing of upfront payments received related to our network incentive obligation, the timing of vendor payments, and the receipt of a tenant improvement allowance for a new office lease in the first quarter of 2026. The decrease of $4.8 million in non-cash adjustments for the three months ended March 31, 2026 compared to the prior year was primarily driven by a $55.3 million decrease in change in fair value of program obligation attributable to the growth of MyPay and Instant Loan revenue, improved MyPay loss rates, and decrease in SpotMe and other negative balances transaction and risk losses. This was partially offset by a $52.0 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. Cash Flows from Investing Activities Cash provided by investing activities was $127.3 million for the three months ended March 31, 2026, primarily due to $1,248.9 million in repayments of loans held for investment and $182.3 million in proceeds from maturities of marketable securities, offset by $1,296.4 million in purchases of loans held for investment. Cash provided by investing activities was $6.7 million for the three months ended March 31, 2025, primarily due to $1,117.5 million in repayments of loans held for investment and $72.2 million in proceeds from maturities of marketable securities, offset by $1,139.7 million in purchases of loans held for investment and $3.2 million in capitalization of internal-use software. Cash Flows from Financing Activities For the three months ended March 31, 2026, cash used in financing activities was $73.4 million, primarily due to $85.7 million from repurchases of common stock, partially offset by $13.9 million in proceeds from the exercise of stock options. For the three months ended March 31, 2025, cash used in financing activities was $126.0 thousand, consisting of $0.8 million from payment of debt issuance costs related to our credit facility, nearly entirely offset by proceeds from the exercise of stock options. 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, and shares reserved for charitable donations. As of March 31, 2026, our fully diluted share count was as follows: Class A and B common stock issued and outstanding 382,604,119 Stock options outstanding 24,659,086 Service-based RSUs outstanding 27,131,365 PSUs outstanding 8,203,929 Shares reserved for charitable donations 2,889,173 Total fully diluted share count 445,487,672 For further information see Note 12, "Common Stock and Stockholders' Equity" and Note 14, "Net Income Per Share" included in this Quarterly Report in "Notes to Condensed Consolidated Financial Statements". Commitments Leases As of March 31, 2026, we had future minimum operating lease payments under non-cancelable leases of $168.8 million related to leases we have recognized on our condensed consolidated balance sheet which are due over a weighted average period of 8.1 years. Of the non-cancelable lease payments, $11.9 million is payable in the remainder of 2026. For additional discussion on our operating leases, see Note 17 - Commitments and Contingencies within the notes to our condensed consolidated financial statements. Purchase Commitments Our non-cancellable purchase commitments are primarily related to our cloud infrastructure services and various marketing partnerships. As of March 31, 2026, we had non-cancellable purchase obligations of $252.1 million, of which $98.1 million is due in the remainder of 2026. 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 during the three months ended March 31, 2026, as compared to those disclosed in "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates" in our 2025 Form 10-K. 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.

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