Okay, why don't we jump in? Guys, thank you so much for being here. Again, I'm Darrin Peller, covering payments and IT services at Wolfe Research. Really happy to have Chime with us, a company we helped with their IPO last year. I was just talking to Matt, who's the CFO of the company, and really fun stock for us to cover, given it's such a cool story around integrating and really impacting the lives of many consumers, not only on really across spectrums. Really helping low to mid-income consumers in particular with having banking products that they otherwise probably wouldn't be able to get.
You're seeing it show up in the results as we're seeing more and more attach on more products, more growth on the user base, and it's really showing up based on the value you're offering. Anyway, with that, really happy to have you here.
Thank you for having me.
Thanks for being here with us. Again, just you're pretty new to the public markets, and while some of you, some of the audience may know you guys, a quick update and overview of the business and strategy would probably be helpful.
Sounds good. We think about ourselves as the digital disruptor for banking and payments for mainstream Americans, and we define that as the nearly 200 million people in this country making up to 100K per year. This is not the unbanked. This is the unhappily banked we refer to them. Look, this is the population that's largely been overlooked by the incumbent banking ecosystem. In contrast, we're leading the charge towards digital banking that is helpful, easy, and free for our members. I think the proof is in the pudding. This is not our data. J.D. Power just came out with a survey showing that 13% of all checking accounts opened in the U.S. on a monthly basis are at Chime.
That puts us in the number one spot, 40% higher than the number two player, and that's Chase. At the same time, this is not just any sort of active account. This is disproportionately a primary financial relationship. That is what makes our world go round. Earning the direct deposit relationship. That is a fundamentally deeper, longer lasting, more engaged customer relationship than, you know, I think a lot of fintechs out there that are focused on more point solutions. We also are attacking this opportunity as a technology company, now fully on our own technology system top to bottom.
Yep
Called Chime Core, that's drastically improving our product velocity. Got a bunch of new tailwinds for us this year that we're excited about across Chime Card, Instant Loans, scaling MyPay. Look, we're three quarters in as a public company. I think the market's clearly trying to sort out the winners and losers from an AI perspective. We think we're firmly in the former category, and hopefully, you know, our model's really proving itself. We're calling for, you know, 20%+ growth this year. Again, multiple tailwinds coming off of last year on top of a pretty ambitious product roadmap. We're showing that we can drive growth across multiple dimensions at the same time, more actives, deeper levels of engagement and ARPM. This is a transactions-based model driven by our members' non-discretionary spend that's very resilient.
It's also a low risk credit model since we own direct deposits. Simultaneously, we're driving a lot of operating leverage. 57% incremental adjusted EBITDA margin in Q4. Our guide's calling for something similar this year and GAAP profitability for the first time.
Great. Very helpful. Look, just maybe discuss the mainstream brand you're building. Who's your target customer, right? I think there's always a bit of a confusion as to whether or not it's truly, you know, low income or mid income or what, but maybe help us understand where you're going after.
I do think that there is a bit of a misconception that we target the unbanked or the underbanked. Again, this is the unhappily banked. Chime members are dropping their account at Wells Fargo, Chase, B of A and switching, making the switch, to Chime. This is mainstream America, the 200 million people making up to $100K per year. This is nurses, teachers, police officers, restaurant workers, retail workers. Really the heart and soul, I would say, of America. I'm gonna tell this anecdote. We were on our IPO roadshow not too long ago. The first day, first meeting, we were checking in at the desk downstairs at a building kinda like this.
Mm-hmm.
We pulled out our wallets to give them our IDs. The guy behind the security desk said, "I see that Chime card." We're like, "Oh, you bank at Chime?" His response verbatim was, "Checking and savings, baby." That is the type of response you get from Chime members about their bank account, and I think that really speaks to, you know, the opportunity here to serve everyday folks that aren't being well served by the incumbent ecosystem. I think it's not hard to see why. The incumbent banking ecosystem really incentivizes them to target the highest end of the market. It's a balance sheet driven business. They need big deposit customers and customers they're gonna go sell a jumbo mortgage to. That's their customer base. For the rest of the population, they've overlooked them.
The CEO of our nation's leading consumer bank, largest consumer bank, admitted in a shareholder letter last year that he's underwater on the majority of accounts that he serves. Literally, the cost to serve is more than the revenue that he earns from them. That is our opportunity. We're providing the segment of the market with a suite of services and monetizing at 70% transaction margin. That in and of itself is I think why we are establishing ourselves as the leading brand in this country. Time has named Chime the number one bank brand overall. It's not just awareness, it's consideration. We're now number one in consideration and primary account intent. We've been named the best online checking account experience, the best bank experience by NerdWallet recently. Again, the proof is in the numbers.
We're opening more checking accounts than any other financial institution in this country.
Yeah. It's incredible when you think about that relative to Chase and some of the biggest banks, that you guys are able to actually open up that many new bank accounts every year. When we look at your fourth quarter call, it was an extremely strong result, beating on top line and bottom line. Guide came in above as well. Just help us understand and frame the top two to three priorities for 2026 coming off the momentum right now?
Yeah. Look, I think first, we had a great 2025. Three-quarters of beat and raise. We migrated to our own system, Chime Core. We scaled MyPay, a new product, to north of $400 million of annualized revenue run rate at 60% transaction margin one year from launch. We launched a bunch of new products across Chime Card, Instant Loans, Chime+, Chime Workplace. We saw tremendous data traction on that, on profitability towards the end of the year as well. We feel like we're entering 2026 already with a number of great tailwinds on our business. On top of that, we've got a pretty, I think, ambitious roadmap for this year across new products and go-to-market.
The first priority is really continuing to make Chime the most rewarding place for everyday Americans to bank. This is gonna start this year with the launch of a premium membership tier. This will be in Q2. We're gonna give our best and higher earning customers even more rewards, even higher APY, exclusive cashback and perks. We're gonna do that while maintaining similar take rates. We're also gonna expand into other areas of our members' financial lives. We're gonna launch investing products this summer. We're also going to launch joint and custodial accounts, a key need that we've heard.
Right
From a lot of our members. That's priority one. Priority two is accelerating our enterprise business. We launched this business not too long ago, and the thesis is essentially bringing the best of Chime to the employer so that they can offer a holistic financial wellness suite to their employees. I think we're kinda changing the way that this industry is working and the way that we're doing that. We're not a monoline EWA provider that can only monetize via that product. This is a full suite of services that we're offering truly for free. We're off to a great start. This year is all about, you know, accelerating that, signing up new employers.
The third priority is AI, and it's both continuing to embed AI across our business and the way that we operate to drive efficiency, but also to continue to push the envelope on the consumer-facing side. This summer, we're also going to launch the next generation of our consumer AI offering, which we call Jade. You can expect this to transition from what was historically mostly a reactive kinda customer support tool.
Yep
into a much more proactive kind of copilot. We're actually helping make recommendations and, hopefully driving, you know, better financial decisions for our members.
Yeah. I mean, you already have extraordinarily strong success with getting more attach on a lot of products. Your product velocity, as you just went through, has been very strong. Last year and now into this year, you just launched a bunch. I mean, I think it's fair to say that Chime Core is a big part of the reason why you can do that. Can you just explain that for a minute and what that is and how it's helping?
Yes. Chime Core is our proprietary payments ledger, payments processor and ledger, account of record. We made the decision a few years ago to build that in-house. As of Q4, we officially transitioned 100% of our portfolio over to Chime Core. That puts us in a pretty unique position. We are essentially connecting the payments network all the way to the end consumer. I think that's pretty unique in our industry, whereas most are really relying on outsourced, you know, third-party solutions for this part of the technology stack. This gives us two advantages. The first, cost savings.
Yep
This is gonna all-in lower our processing cost by about 60%. Our cost to serve advantage relative to incumbents is something like a third to a fifth already. This is building on that for sure. With this final stage of our migration, we drove about a 200 basis point uplift to our gross profit margin in Q4, quarter over quarter. Really the bigger benefit here is the one that you're alluding to, which is product velocity. We don't have to go get in the queue of a third-party software release cycle. We don't have to negotiate and build things on the specs of a third party. We don't have to coordinate across multiple third parties.
We can own our own destiny now, and that's drastically speeding up the way that we can develop products. I think the prime example of this is Chime Card, which is the first new product that we've built entirely on Chime Core, and it's off to a great start.
Yeah. I mean, speaking of Chime Card, we're pretty impressed by the strong traction to date. If you could just talk about why you're excited about this opportunity and what we're seeing?
Yeah. Chime Card is our new secured cashback rewards credit card. We are really excited about this as a multi-year growth lever for us. Chime Card earns about 2x the take rate compared to debit volume. Maybe, you know, taking a step back on this, I think when we think about rewards cards, we probably often think about the Chase Sapphire Reserve, the Amex Platinums of the world. Incredible products really geared towards the highest end of the market. If you look at the landscape of rewards offerings for mainstream America, there's not a lot there.
Right.
Chime Card offers our members 1.5% cash back on rotating categories of everyday type spend, so gas, groceries, this sort of thing. Look, this is coming on top of all the other benefits you get from being a Chime member. 3% savings rate on your savings account, 7x the national average. Credit building services that help you build your credit by 70 points on average. Access to free overdraft, access to on-demand pay, a bigger free ATM network than the three biggest banks combined. Like, nobody in this country is providing that suite of services for everyday Americans. We've seen really strong traction of this so far. I think where we're seeing the biggest traction is among new cohorts in particular.
Mm-hmm.
If you sign up for a Chime account now, you will see the Chime Card is sort of front and center. That's sort of the default option. You can always get a debit card. But what we're seeing is that over 50% of new actives are adopting this. They're using it for over 70% of their spend. And that's really what's driven a big part of the growth so far. Again, what's nice about this is as these new cohorts continue to fill in the portfolio, take a bigger and bigger portion, this is gonna be a multi-year tailwind for us.
When I think of Chime, I mean, the economics of it right now are primarily debit card attached to the account. Also MyPay has grown into the material part, which is for everyone here, it's an earned wage access product that employees can get their pay within a day of-
Yep.
You know, within one day of doing the work more or less, right? Up to certain amounts. Now we're gonna have credit. Is this really gonna be a, you know, material needle mover in terms of economics? And if so, what kind of attach do you expect?
Um, on, on, on Chi-
On credit, yeah.
On Chime Card credit. Well, if you take a look at the combined credit mix.
On Chime Card, yeah.
If you look at the credit volume as a percentage of total volume, we took that from 16% in September when we launched it.
Mm-hmm.
To 21% in December. five points in three months. Probably fair to say we got a little low-hanging fruit.
Sure.
Of the existing, you know, member base, back book, that sort of thing. If you take a look at the new cohorts, their credit mix is 50%. That starts to give you a sense for maybe where this could go over time.
All right. That's great. Let's talk about MyPay, I mean, which is an area that I remember when we did your IPO not too long ago, obviously, we were, you know, excited about it, but I think the outcome has been even more considerable than we thought. Maybe just explain to the audience again what the product is, why it resonates. You've reached 1% loss rates.
Yeah.
Way faster than I thought. I think you expected to even, right?
Yep. Yep.
What does that mean for you guys now? It's what? 25-26% of your users that had that take advantage of it?
Yeah. MyPay is our earned wage access product. It allows our members to get access to up to 50% or $500 of their earned wages on demand. You can get access to that for free if you're prepared to wait 24 hours, or pay a small fee if you want it instantly. We rolled this out in the back half of 2024, and by Q4 of 2025, it had scaled to north of $400 million annualized revenue run rate, roughly 60% transaction margin. As you alluded to, a big part of that growth has been the strong progress we made on loss rates. We started the year at 1.7% loss rates, and end of the year reaching our steady-state target of 1%.
Right.
That was much faster than we had expected. This was a hell of a year for our risk teams.
Yeah.
We're really excited about, you know, the progress, you know, with this. I think what we're doing now is rather than just myopically being focused on solving for loss rates, we're really thinking about this as a broader growth platform for us. You know, how do we go and maximize the growth of overall transaction profit dollars of this product? One of the key things that we've heard from our members is they want access to more MyPay, and they want access to it earlier in their pay cycle. We've made a pricing change, essentially moving from a fixed dollar fee per instant advance to a variable percent-based fee per advance, which is gonna allow us and enable us to go address, you know, one of these key needs.
Now went into effect in January, right?
We implemented that over a series of steps.
Right. Some are global. Yeah.
A big part of it actually happened in Q4. You would've seen that already. Yes, the final stage, you know, happened in January.
So-
Look, and just maybe last point on this, I do wanna, you know, emphasize the progress that we made, you know, getting to this stage in Q4, essentially a year after launch. This is only possible because of the model that we have at Chime, the direct deposit relationship, right? This is a key, and I think really important thing to clarify about our business. This is not typical credit risk that you see in the consumer credit industry, in the sense that it is small dollar, very diffuse across our member base, very short duration. SpotMe repays in less than a week. MyPay repays in less than two weeks. Again, critically underwritten by direct deposit. We get paid back first. Again, we're doing significant volume here.
We're now at over $40 billion of annualized origination volume across our liquidity products, but the risk profile of it, I think, is quite unique in the industry.
Right. 2/3 of your users are direct deposit.
Yep.
Right? Which is a lot higher than the average, call it Neobank right out there, folks trying to compete. When we think about the elasticity and the price change, have you seen anything in terms of, I know it's still kinda early, but any elasticity on the price change in MyPay?
I think our hypothesis on that was that there would be a relatively price inelastic population and change. I think that is largely bearing fruit and is true.
Okay.
Look, I think where we've priced this product is still far and away the lowest cost in the market. We intend, you know, to keep it that way. I think it's delivering great value to our members. It is still early. We do see, we do wanna see a couple more pay cycles. I would say MyPay is also a bit of a seasonal product in the sense that Q1 is a big tax refund driven, you know, strong payments volume, strong net adds, but MyPay is a little bit counter to that. We don't see quite as much usage of our liquidity products in Q1 as we do in other quarters. Yeah, so far, you know, we're pretty pleased with the progress.
You've been growing your user base really well. I mean, it's been up in the high teens for some time now, mid- to high teens at least. Now you're talking about enterprise, right? Where you're basically trying to work with employers to allow them to offer your accounts, Chime accounts to their employees, so they get all the benefits you're talking about, including MyPay, right? So help us understand what that could mean for the business. You know, what's the progress been like so far? What kind of trajectory should we expect? Because that could be really additive to your user growth rates?
Yeah. I think when we're asked, you know, what are we most excited about if you look over sort of medium long term in terms of member growth, this for sure rises to the top.
Sure.
We're really excited about this channel, going and offering the best of Chime to employees through the employer. As I mentioned earlier, I think what we're doing is kinda changing the way that this industry has been served, at least so far. The players in this industry so far have gone to market with a monoline EWA product. It's been quite successful I think. I think the challenge with that model is you can only monetize.
Sure
... via the EWA product. In many cases, the fee structures on these are quite high. Sometimes members in sort of the top quartile are paying $70 a month on EWA fees. What we're doing is quite different. We're going to market with a broad set of services that is free, and I think that's resonated a lot with employer partners. We've seen really strong response from the market on this. We're continuing to build our pipeline. The pipeline is strong. We're continuing to add to the employers that are live with Chime Enterprise. We do have real Chime customers now coming through this channel. It's not super material just yet. The adoption rates have been great.
The monetization of these customers as well as the retention has actually been better than what we see in our direct to consumer channel. Yeah, this year is all about scale. We're pumped about the pipeline and hope to have some announcements on that front in the near future.
I think if the market saw an acceleration in customer growth based on this, it would be a pretty big win for you guys and the stock. All right. You noted pretty good health of the consumer in terms of trends remaining strong in fourth quarter. There's a lot going on in the world, so I'd love to hear. You have a really good visibility on certain types of customers in the U.S. in particular, and so what are you seeing so far spending-wise and just consumer-wise in Q1?
Yeah. There's been obviously a lot of headlines, a lot of concern about the health of the consumer. We feel like our message here is a bit of a boring one in that we continue to see very consistent.
Yeah
... trends. At the spend level, we see very consistent trends in spend per member for our tenured cohorts, for our direct deposit members. We're seeing growth, continued growth across both non-discretionary and discretionary categories. We're seeing growth across income segments too. Account balances meanwhile are up year-over-year. There's obviously been some noise on the jobs front. We have not seen an uptick in unemployment deposits coming into the Chime system. We would see that as their primary bank accounts. We saw that in COVID, in droves. We've not seen an uptick. We continue to see very consistent usage of our liquidity products at even lower loss rates. Look, these are not signs of a, you know, very stressed consumer.
Sure.
We're continuing to see pretty resilient trends.
All right. It's great to hear. We've heard that from others too. It's good to hear. AI obviously is a hot topic. Just maybe help us understand how you're leveraging it and, you know, opportunity or risk?
Yeah. We firmly believe that this is gonna be an accelerant to our business. Look, I think there are many companies that have built businesses around automating kinda workflows. That is not what we built. We built an end-to-end tech platform, again, directly connected to the payment networks all the way to the end consumer.
Mm-hmm.
We think AI is really going to accelerate our business. I think again, because we have this technology platform, it's enabling us to leverage this in ways that certainly incumbents who rely on third-party systems are gonna struggle to. We're leveraging both. You know, leveraging it both across the way that we operate internally and for our consumers. Maybe just to tick through each of those. On the internal side, I think it's fair to say we put the most points on the board so far is in our customer support and operations side of things. We are reducing the number of times our members have to contact us. We've automated a big portion of those customer interactions. We launched a GenAI chatbot and voice bot last year. It is crazy.
Members want to talk to the robot instead of the human now. We are all conditioned to calling customer service, hitting zero, I wanna talk to a human. You can still do that, by the way, at Chime, but people prefer to talk to the robot now. We were listening to some live customer calls, and this one at the end, a Chime member, real life Chime member said, "Hey, you're a great AI" at the end. Like, he was literally talking to the bot that way. Not only is it making us more efficient, it's actually improving.
Customer Service
Customer satisfaction. Across the rest of the business, we're also leveraging it. You know, our engineers have basically been given Iron Man suits. I think it is changing the nature of how we organize product development teams into smaller squads, enabling us to take more shots on goal. In marketing, we've doubled creative output while completely eliminating third-party production agencies. We're using this in fraud and risk to reduce our fraud rates. We're even, you know, using this across G&A functions.
Right.
Legal contract review, compliance, automating invoice review on our team. Really seeing this, you know, continue to change the way we work across the business. On the consumer-facing side, as I mentioned, we are gonna launch the next generation of our consumer-facing AI product, Jade. This again was a much more like reactive, "Hey, let me ask you a question with a support type of functionality historically." We're changing this into much more of a proactive copilot. The vision here is to help our members spend better, save more, borrow responsibly.
Mm-hmm.
Build their credit, you know, invest in the future. I think the hypothesis for us here is that, you know, the financial education gap in this country that's so big, is the problem that it is in part because it's so divorced from when you actually make a financial decision. We sit at the center of our members' lives. We sit at that moment of truth when your direct deposit hits your account, and what are you gonna do with it? We feel like we've got a right to play here and help our members, in a way that, you know, many others who don't have this depth of engagement, have. Stay tuned. We're dogfooding this with current employees at the moment, but this will come out pretty soon.
You've been moving in the right direction pretty fast on profitability. Just remind us your targets again from a profitability standpoint and what the key drivers are. A lot of it is operating leverage, high incremental margins.
Yeah.
I know, but help us understand?
Look, I think the first thing I have to say to explain our profitability trajectory is to point to our cohort behavior. When you have a business that is largely a recurring set of transaction volume, that we monetize at close to 70% transaction margin, and you're scaling that, over a pretty much fixed expense base.
Mm-hmm.
There's an enormous amount of, you know, operating leverage in that model. I think that's really what's driving the, you know, strong growth for us this year for sure. I think there's a few other things that are contributing to our profitability growth this year. Most certainly the Chime Card uplift, the higher take rates is flowing through. That's a benefit. We're also benefiting from lower MyPay losses this year. Finally, we're benefiting from a full year of cost savings on the processing side.
Chime Core, yeah.
now that we've migrated to Chime Core.
Yeah.
Yeah, that's what's helped us grow incremental adjusted EBITDA margin into the high 50s% as of Q4. Our guide for this year calls for very similar levels. I think that gives us a lot of credibility to a, you know, long-term target.
That's great.
of 35% or higher.
Guys, we're gonna take questions from the audience after this. Last one for you. It's been, you know, it'll be a year since your IPO in June, and so just reflections from what you've seen now over the past few quarters as a public company and, you know, what would you want to see by the end of 2026 to say this was a year of success?
Yeah. It's been an interesting market for us to navigate as our first few quarters as a public company. We're three quarters in. We've beat and raised three times. I hope we've demonstrated that we can execute on multiple dimensions of growth.
Yep.
At the same time. We are the market share leader in new account openings in this country. That's gonna continue to power very strong and steady growth in our core business. We've drastically increased our product velocity. That's given us a number of top-line tailwinds entering this year, again, across Chime Card, Instant Loans, MyPay. You know, we again have a 70% transaction margin business. It's very steady, and we're making a ton of progress on the profitability side as well. We're quite excited about the setup for this year. We also got an ambitious product roadmap to execute on, and hopefully can kind of continue the run.
Okay. Guys, any questions? We have about four minutes left. I think there's one in the front over here first.
Again, Matt, thanks for taking the time. I appreciate it. Just a question on Block recently changed their pricing for instant deposit. Have you seen any type of impact on your business? You also mentioned that the pricing on MyPay is fairly inelastic. Do you have room to maneuver it? The question was just around Block's recent change on pricing of instant deposit, whether you've seen an impact on your business. Then secondly, you mentioned the pricing on MyPay is fairly inelastic. How much room on pricing do you have there?
Yeah. On the first question, no, we haven't seen an impact on our business, from that perspective of anything noticeable, I guess. I think that's a simple one. On the MyPay side, you know, even with this new pricing change, to clarify, historically, the way this worked was, you could get access to your earned wages on demand, for free if you waited 24 hours or for a $2 fee if you wanted it instantly. Our new pricing structure maintains that free option, but now rather than the fixed $2 fee, it's a variable percent-based model. 3% base fee with a $2 minimum and a $5 cap. That is gonna result in higher monetization for us.
We are still far and away the lowest cost provider, we believe in the market on this front. I think there's a lot of daylight between where we've priced this product and others in the market. We have no plans to change that anytime soon. We believe that providing our members the best value is what earns us the right to serve our members, not just this year, but for many, many years, as you can see in our cohorts. That's a very deliberate part of our strategy.
Thanks. I think there's one in the back.
Hey, Matt. We've seen you sign some partners with the Chime Enterprise, but as you offer products such as MyPay for free, do you expect this to be dilutive to ARPM at all? Just any way that you're thinking about combating that?
Yeah, it's a great question. As I mentioned earlier, we're offering really the full suite of Chime's products to employees through the employer, including a kinda souped-up version of MyPay. The direct-to-consumer version of MyPay allows our members access up to $500 or 50% of their earned wages on demand. The employer product allows up to 100% of our members' earned wages for free. The reason that we can do that is that we are directly connected into the payroll system. We have the data. It's a fundamentally different risk profile compared to our direct-to-consumer channel. You're correct in that we don't see. We don't have the same monetization on that product specifically. That being said, we do have live customers. They're coming in.
We're seeing strong adoption rates among employees. It's a smallish number today, but what we're actually seeing is that those customers' ARPM is higher, and their retention is better.
Wow.
Than what we see in the direct-to-consumer channel. Early days, I gotta appropriately caveat that, but, you know, good signs so far.
Great.
Yeah.
All right, guys. Why don't we stop there? Matt, thank you very much for joining us today. For everyone in the room, we have Mastercard's president up next at, I think, 2:35 P.M. Stay tuned for that.