Melpomenem
Dave (NASDAQ: DAVE) property an increase of 9.3% in trading Monday after its CEO appeared on CNBC saying the company has enough cash to be profitable a year from now.
“We think we have enough money to make a profit,” CEO Jason Wilk he said in a recent interview with Searching Alpha.
In Q2 2022, the consumer banking company changed its strategy to reduce spending on advertising to focus on profitability rather than growth.
For example, fintech had ~40% Y/Y non-GAAP revenue growth in Q3. “But we could be growing at 100%+ if we wanted to and be profitable at the same time. We wouldn’t have a lot of money on the road there,” Wilk said.
Dave (DAVE) raised ~$230M when it went public last year, before the stock market crashed. As of September 30, 2022, it had approximately $225M in cash and cash equivalents, cash, and short-term cash on its balance sheet.
Dave (DAVE) is making progress in reducing cash burn. Q3 revenue was at ~$27M, and they announced that they expect Q2 to be even more revenue-generating. Its plan is to reach 2024, when it is expected to be “very profitable.”
The company’s ExtraCash business providing short-term loans to members and its Dave’s credit card business are doing well, he said. To promote growth, Dave (DAVE) designed the card to be “a natural part of the product that everyone can access.” And when its members use the card, the company makes more money from Mastercard (MA).
Meanwhile, Wilk’s biggest challenge is keeping his team motivated as the company’s stock has fallen 97% in the past year.
“Obviously, our valuations have changed dramatically, mainly in our view because investors who invest in larger companies will take their money off the table until interest rates decline,” Wilk said. part of my job is just talking to the team because I don’t think anyone believes that our country is the most important in the market, because the business is still doing well. “
SA contributor Leo Imasuen looks at how the market is reacting to Dave (DAVE) despite its growing membership.
