Chime Financial Inc.
03/06/2026 | Press release | Distributed by Public on 03/06/2026 05:02
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
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 Annual Report on Form 10-K, and should be read in conjunction with our consolidated financial statements and notes elsewhere in this Annual Report. 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." 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 9.5 million Active Members as of December 31, 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.
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
|
Year Ended December 31, |
|||||||||||||||||
| (in millions, except for Average Revenue per Active Member) | 2025 | 2024 | 2023 | ||||||||||||||
| Purchase Volume | $ | 133,680 | $ | 115,152 | $ | 92,396 | |||||||||||
|
Active Members(1)
|
9.5 | 8.0 | 6.6 | ||||||||||||||
|
Average Revenue per Active Member (ARPAM)(1)
|
$ | 257 | $ | 245 | $ | 212 | |||||||||||
(1)Presented as of the fourth quarter of each year.
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, 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 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.
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 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:
|
Year Ended December 31, |
|||||||||||||||||
| (in thousands, except percentages) | 2025 | 2024 | 2023 | ||||||||||||||
| Gross profit | $ | 1,923,723 | $ | 1,465,758 | $ | 1,058,718 | |||||||||||
| Gross margin | 88 | % | 88 | % | 83 | % | |||||||||||
| Adjusted for: Transaction and risk losses | 407,323 | 219,687 | 152,375 | ||||||||||||||
| Transaction profit | $ | 1,516,400 | $ | 1,246,071 | $ | 906,343 | |||||||||||
| Transaction margin | 69 | % | 74 | % | 71 | % | |||||||||||
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 have also made an adjustment for one-time costs associated with ceasing the use of our third-party payment processor.
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:
|
Year Ended December 31, |
|||||||||||||||||
| (in thousands, except percentages) | 2025 | 2024 | 2023 | ||||||||||||||
| Net loss | $ | (1,009,936) | $ | (25,344) | $ | (203,202) | |||||||||||
| Net margin | (46) | % | (2) | % | (16) | % | |||||||||||
| Adjusted for: | |||||||||||||||||
| Depreciation and amortization expense | 30,000 | 25,370 | 12,937 | ||||||||||||||
|
Other (income) expense, net(1)
|
(30,874) | (39,465) | (32,817) | ||||||||||||||
|
Provision for income taxes
|
831 | 2,610 | 234 | ||||||||||||||
|
Stock-based compensation expense and related payroll tax
|
1,092,844 | 29,845 | 26,035 | ||||||||||||||
|
Stock-based charitable contribution expense
|
11,168 | - | - | ||||||||||||||
|
Certain legal and regulatory charges(2)
|
- | - | 7,500 | ||||||||||||||
|
Third-party processor termination costs(3)
|
32,564 | - | - | ||||||||||||||
| Adjusted EBITDA | $ | 126,597 | $ | (6,984) | $ | (189,313) | |||||||||||
| Adjusted EBITDA margin | 6 | % | - | % | (15) | % | |||||||||||
__________________
(1)Relates primarily to interest income, which consists of interest and dividends earned on our cash and cash equivalents and marketable securities.
(2)Relates to the CFPB Consent Order and related redress payments and the DFPI Consent Order.
(3)Consists of one-time costs incurred in connection with ceasing the use of our third-party payment processor.
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 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 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 the our third-party and internally-developed payment processors. Through 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. In November 2025, we completed our migration to ChimeCore, our proprietary payment processor and ledger. Costs associated with ChimeCore primarily include hosting and software-related expenses. 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, 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 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. Following the launch of MyPay in 2024 and Instant Loans in 2025, 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. 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 consolidated statements of operations data for each of the periods indicated:
|
Year Ended December 31, |
|||||||||||||||||
| (in thousands, except share and per share amounts) | 2025 | 2024 | 2023 | ||||||||||||||
| Revenue | $ | 2,186,770 | $ | 1,673,269 | $ | 1,278,455 | |||||||||||
|
Cost of revenue(1)
|
263,047 | 207,511 | 219,737 | ||||||||||||||
| Gross profit | 1,923,723 | 1,465,758 | 1,058,718 | ||||||||||||||
| Operating expenses: | |||||||||||||||||
|
Transaction and risk losses
|
407,323 | 219,687 | 152,375 | ||||||||||||||
|
Member support and operations(2)
|
457,978 | 286,856 | 272,755 | ||||||||||||||
|
Sales and marketing(2)
|
635,384 | 519,760 | 443,806 | ||||||||||||||
|
Technology and development(2)
|
934,925 | 309,575 | 259,001 | ||||||||||||||
|
General and administrative(2)
|
512,113 | 177,229 | 154,945 | ||||||||||||||
|
Depreciation and amortization(1)
|
15,979 | 14,850 | 11,621 | ||||||||||||||
| Total operating expenses | 2,963,702 | 1,527,957 | 1,294,503 | ||||||||||||||
|
Loss from operations
|
(1,039,979) | (62,199) | (235,785) | ||||||||||||||
| Other income, net | 30,874 | 39,465 | 32,817 | ||||||||||||||
|
Loss before income taxes
|
(1,009,105) | (22,734) | (202,968) | ||||||||||||||
|
Provision for income taxes
|
831 | 2,610 | 234 | ||||||||||||||
|
Net loss
|
$ | (1,009,936) | $ | (25,344) | $ | (203,202) | |||||||||||
|
Net loss per share, basic and diluted
|
$ | (4.27) | $ | (0.39) | $ | (3.22) | |||||||||||
|
Weighted average number of common shares outstanding used to compute net loss per share, basic and diluted
|
236,270,347 | 64,910,056 | 63,104,219 | ||||||||||||||
__________________
(1)Total depreciation and amortization includes amounts as follows:
|
Year Ended December 31, |
|||||||||||||||||
| (in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Depreciation and amortization recorded in cost of revenue | $ | 14,021 | $ | 10,520 | $ | 1,316 | |||||||||||
| Depreciation and amortization recorded as operating expense | 15,979 | 14,850 | 11,621 | ||||||||||||||
| Total depreciation and amortization | $ | 30,000 | $ | 25,370 | $ | 12,937 | |||||||||||
(2)Amounts include stock-based compensation and related payroll tax as follows:
|
Year Ended December 31, |
|||||||||||||||||
| (in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Member support and operations | $ | 142,207 | $ | 3,620 | $ | 5,000 | |||||||||||
| Sales and marketing | 53,170 | 1,356 | 1,192 | ||||||||||||||
| Technology and development | 616,557 | 12,423 | 10,645 | ||||||||||||||
| General and administrative | 280,910 | 12,446 | 9,198 | ||||||||||||||
|
Total stock-based compensation expense and related payroll tax
|
$ | 1,092,844 | $ | 29,845 | $ | 26,035 | |||||||||||
Comparison of the Years Ended December 31, 2025 and December 31, 2024
Revenue
|
Year Ended December 31, |
Change | Change | |||||||||||||||||||||
| (in thousands, except percentages) | 2025 | 2024 | ($) | % | |||||||||||||||||||
| Payments revenue | $ | 1,500,563 | $ | 1,276,601 | $ | 223,962 | 18 | % | |||||||||||||||
| Platform-related revenue | 686,207 | 396,668 | 289,539 | 73 | % | ||||||||||||||||||
| Total revenue | $ | 2,186,770 | $ | 1,673,269 | $ | 513,501 | 31 | % | |||||||||||||||
Total revenue for the year ended December 31, 2025 increased by $513.5 million, or 31%, 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 in 2024 and outbound instant transfers in 2025.
Payments revenue
Payments revenue increased by $224.0 million, or 18%, for the year ended December 31, 2025 compared to the same period in 2024.
For the year ended December 31, 2025, this increase reflected a $146.3 million, or 16%, increase in revenue from interchange-based fees from debit card transactions and a $77.6 million, or 22%, 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 $18.5 billion, or 16%, increase in Purchase Volume for the year ended December 31, 2025 compared to the same period in 2024. For the years ended December 31, 2025 and 2024, interchange-based fees from debit card transactions represented 49% and 55% of revenue, with debit card transactions representing 83% and 84% of Purchase Volume. For the years ended December 31, 2025 and 2024, interchange-based fees from credit card transactions represented 20% and 21% of revenue, with credit card transactions representing 17% and 16% of Purchase Volume.
The increase in Purchase Volume was driven, in part, by a 1.5 million, or 19%, increase in Active Members as of December 31, 2025 compared to December 31, 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 year ended December 31, 2025 increased $289.5 million, or 73%, year over year. For the year ended December 31, 2025, the increase was primarily driven by a $212.5 million increase year over year from the full launch of MyPay in July 2024. Additionally, we recognized $38.0 million in revenue for outbound instant transfer fees, which launched in the first quarter of 2025, in the year ended December 31, 2025.
Cost of revenue
|
Year Ended December 31, |
Change | Change | |||||||||||||||||||||
| (in thousands, except percentages) | 2025 | 2024 | ($) | % | |||||||||||||||||||
| Cost of revenue | $ | 263,047 | $ | 207,511 | $ | 55,536 | 27 | % | |||||||||||||||
Cost of revenue for the year ended December 31, 2025 increased $55.5 million, or 27%, year over year driven by a $35.8 million increase in card and ATM network expenses, net of incentives, and a $19.8 million increase in transaction processing and bank partner costs. The $35.8 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 $19.8 million increase in transaction processing and bank partner costs was driven by the increase in Active Members and related increase in Purchase Volume. Additionally, the increase in transaction processing and bank partner costs included a $3.5 million increase in the amortization of internal-use software relating to revenue generating platforms such as ChimeCore and MyPay.
Operating expenses
|
Year Ended December 31, |
Change | Change | |||||||||||||||||||||
| (in thousands, except percentages) | 2025 | 2024 | ($) | % | |||||||||||||||||||
| Transaction and risk losses | $ | 407,323 | $ | 219,687 | $ | 187,636 | 85 | % | |||||||||||||||
| Member support and operations | 457,978 | 286,856 | 171,122 | 60 | % | ||||||||||||||||||
| Sales and marketing | 635,384 | 519,760 | 115,624 | 22 | % | ||||||||||||||||||
| Technology and development | 934,925 | 309,575 | 625,350 | 202 | % | ||||||||||||||||||
| General and administrative | 512,113 | 177,229 | 334,884 | 189 | % | ||||||||||||||||||
| Depreciation and amortization | 15,979 | 14,850 | 1,129 | 8 | % | ||||||||||||||||||
| Total operating expenses | $ | 2,963,702 | $ | 1,527,957 | $ | 1,435,745 | 94 | % | |||||||||||||||
Operating expenses increased by $1,435.7 million, or 94%, for the year ended December 31, 2025 compared to the year ended December 31, 2024 driven by the following changes:
Transaction and risk losses
Transaction and risk losses for the year ended December 31, 2025 increased by $187.6 million, or 85%, year over year, driven by the full launch of MyPay in July 2024, which accounted for $121.5 million of the increase, and an increase of $29.3 million in losses related to SpotMe and other member negative balances due to higher SpotMe volume and isolated fraud incidents in 2025, when compared to the same periods in 2024. Additionally, we fully launched our Instant Loans product in March 2025, which contributed $24.7 million in transaction and risk losses.
Member support and operations
Member support and operations expenses for the year ended December 31, 2025 increased by $171.1 million, or 60%, year over year driven by an increase in stock-based compensation and related payroll tax of $138.6 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 $11.6 million in the year ended December 31, 2025 due to physical card production and fulfillment costs due to the increased volume of cards issued.
Sales and marketing
Sales and marketing for the year ended December 31, 2025 increased by $115.6 million, or 22%, year over year driven by an increase in stock-based compensation and related payroll tax of $51.8 million as the liquidity-based vesting condition for certain stock-based awards was met upon our IPO. Additionally, there was an increase of $51.4 million in marketing and promotional activities in the year ended December 31, 2025 compared to the prior year.
Technology and development
Technology and development expenses for the year ended December 31, 2025 increased by $625.4 million, or 202%, year over year primarily driven by an increase in stock-based compensation and related payroll tax of $604.1 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 year ended December 31, 2025 increased by $334.9 million, or 189%, year over year, primarily driven by an increase in stock-based compensation and related payroll tax of $268.5 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 expenses also includes $32.6 million in one-time termination costs related to ceasing the use of our third-party processor. Additionally, we recognized $11.2 million of stock-based charitable contribution for Chime Scholars Foundation in the year ended December 31, 2025.
Other income, net
|
Year Ended December 31, |
Change | Change | |||||||||||||||||||||
| (in thousands, except percentages) | 2025 | 2024 | ($) | % | |||||||||||||||||||
| Other income, net | $ | 30,874 | $ | 39,465 | $ | (8,591) | (22) | % | |||||||||||||||
Other income, net for the year ended December 31, 2025 decreased by $8.6 million, or 22%, year over year, primarily attributable to a decrease of $4.0 million in interest income due to reduced yields on corporate cash and cash equivalents and marketable securities and an increase of $1.3 million in letter of credit fees and unused commitment fees related to the revolving credit agreement entered into in March 2025.
Comparison of the Years Ended December 31, 2024 and December 31, 2023
A discussion of our results for fiscal year 2024 compared to fiscal year 2023 can be found in our IPO prospectus, filed with the SEC on June 12, 2025, under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations - Comparison of the Years Ended December 31, 2023 and 2024."
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 December 31, 2025, our principal sources of liquidity were our cash and cash equivalents of $466.3 million and investments in marketable securities of $587.8 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 December 31, 2025, we had $443.6 million in borrowing capacity under our revolving credit facility. Refer to Note 12 - Indebtednesswithin the notes to our consolidated financial statements in this Annual 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 December 31, 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, 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:
|
Year Ended December 31, |
|||||||||||||||||
| (in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Cash flows provided by (used in): | |||||||||||||||||
| Operating activities | $ | 52,780 | $ | 64,140 | $ | (156,594) | |||||||||||
| Investing activities | $ | (289,688) | $ | 45,659 | $ | 167,012 | |||||||||||
| Financing activities | $ | 367,668 | $ | 456 | $ | 842 | |||||||||||
Cash Flows from Operating Activities
Cash provided by operating activities was $52.8 million for the twelve months ended December 31, 2025, compared to $64.1 million in the twelve months ended December 31, 2024. The decrease of $11.4 million in cash
provided by operating activities consists of a $984.6 million increase in net loss, a decrease of $130.1 million in changes in working capital, offset by an increase of $1,103.3 million in non-cash adjustments.
The decrease of $130.1 million in changes in working capital for the twelve months ended December 31, 2025 compared to the prior year was driven by upfront incentives received from card networks in the first quarter of 2024, an increase in product collateral, increases in realized transaction dispute losses, and the timing of vendor invoices.
The increase of $1,103.3 million in non-cash adjustments for the twelve months ended December 31, 2025 compared to the prior year was primarily driven by a $1,041.1 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 $44.1 million increase in provision for credit losses for the twelve months ended December 31, 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 $289.7 million for the twelve months ended December 31, 2025, primarily due to $4,940.1 million in purchases of loans held for investment and $735.0 million in purchases of marketable securities, offset by $4,892.9 million in repayments of loans held for investment, $264.7 million in proceeds from maturities of marketable securities and $256.5 million from sales of marketable securities.
Cash provided by investing activities was $45.7 million for the twelve months ended December 31, 2024, primarily due to $1,729.5 million in repayments of loans held for investment, $508.3 million in proceeds from maturities of marketable securities, $193.2 million in proceeds from sales of marketable securities, offset by $1,859.9 million in purchases of loans held for investment, $497.6 million in purchases of marketable securities, $13.3 million related to a business acquisition, and $9.7 million in capitalization of internal-use software.
Cash Flows from Financing Activities
For the twelve months ended December 31, 2025, cash provided by financing activities was $367.7 million, primarily due to $770.6 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 $349.4 million.
For the twelve months ended December 31, 2024, cash provided by financing activities was $456.0 thousand, consisting of $1.4 million in proceeds from exercise of stock options, nearly entirely offset by repurchases of common stock.
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 December 31, 2025, our fully diluted share count was as follows:
| Class A and B common stock issued and outstanding | 379,933,372 | ||||
| Stock options outstanding | 25,680,942 | ||||
| Service-based RSUs outstanding | 20,874,834 | ||||
| PSUs outstanding | 8,269,297 | ||||
| Shares reserved for charitable donations | 2,889,173 | ||||
| Total fully diluted share count | 437,647,618 | ||||
For further information see Note 13, "Redeemable Convertible Preferred Stock, Common Stock, and Stockholders' Equity (Deficit)" and Note 15, "Net Loss Per Share" included in this Annual Report on Form 10-K in "Notes to Consolidated Financial Statements".
Commitments
Leases
As of December 31, 2025, we had future minimum operating lease payments under non-cancelable leases of $172.6 million related to leases we have recognized on our consolidated balance sheet which are due over a weighted average period of 8.3 years. Of the non-cancelable lease payments, $15.7 million is payable in the next 12 months. For additional discussion on our operating leases, see Note 18 - Commitments and Contingencieswithin the notes to our consolidated financial statements.
Purchase Commitments
Our non-cancellable purchase commitments are primarily related to our cloud infrastructure services. As of December 31, 2025, we had non-cancellable purchase obligations of $218.8 million, of which $108.9 million is due in the next 12 months. Additionally, in January 2026, we entered into a binding letter of intent committing us to spend $45.0 million under a commercial agreement over the next five years.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with GAAP. GAAP requires us to make certain estimates and judgments that affect the amounts reported in our financial statements. We base our estimates on historical experience, anticipated future trends, and other assumptions we believe to be reasonable under the circumstances. Because these accounting policies require significant judgment, our actual results may differ materially from our estimates.
We believe that of our significant accounting policies, which are described in Note 2 to our consolidated financial statements, the following accounting policies involve a greater degree of judgment and complexity. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition, results of operations, and cash flows.
Revenue Recognition
The application of accounting principles under GAAP related to the recognition and measurement of revenue requires us to make judgments and estimates. When dealing with customer arrangements involving third parties, significant judgment is needed to determine whether we act as the principal, reporting revenue on a gross basis, or as the agent, reporting revenue on a net basis. As part of this assessment, we evaluate whether we obtain control of the specified goods or services before transferring them to the customer. Any changes in these judgments and estimates could impact the amount of revenue recognized.
Product Obligation
Our product obligation represents expected remaining future cash flows at period end relating to our off-balance sheet receivables from MyPay, Instant Loans, SpotMe, as well as other instances where a member's account is overdrawn, and is payable to our bank partners. This obligation is accounted for as a derivative, initially measured at fair value and subsequently marked-to-market at each reporting period. Since there are no readily observable inputs, product obligation is classified as a Level 3 liability in the fair value hierarchy. Estimating its fair value requires significant judgment and involves use of unobservable inputs, such as the discount rate and expected loss rate. See Note 2 - Basis of Presentation and Summary of Significant Accounting Policiesand Note 4 - Fair Value Measurementwithin the notes to our consolidated financial statements.
Accrued Transaction Dispute Losses
We establish an accrual for estimated losses due to transaction disputes, which represent a potential loss due to member-initiated transaction disputes or due to processing a fraudulent transaction. The accrual is estimated based on available data as of the reporting date, including expected disputes on processed transactions, and historical loss rates. Additions to the accrual are reflected in transaction and risk losses in the consolidated statements of operations
while realized losses are offset against the accrual. The accrual for estimated transaction dispute losses is included within accrued and other current liabilities in the consolidated balance sheets. See Note 2 - Basis of Presentation and Summary of Significant Accounting Policiesand Note 11 - Significant Balance Sheet Componentswithin the notes to our consolidated financial statements.
Allowance for Expected Credit Losses
The amount of the allowance for expected credit losses represents management's estimate of expected credit losses over the remaining expected life of our financial assets measured at amortized cost considering available information from internal and external sources. The allowance for expected credit losses is primarily related to expected losses on our loans held for investment.
The allowance for expected credit losses on loans held for investment reflects our estimate of uncollectible balances resulting from credit losses and is based on the determination of the amount of lifetime expected credit losses inherent in the loans held for investment as of the reporting date. We measure the allowance for expected credit losses based on a discounted cash flow method, which estimates future cash flows using the roll rate method. The primary area of judgment is the expected loss rates, including how indicative historical losses are of future losses.
Business Combinations
We allocate the fair value of the purchase price to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value of the purchase price over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values, management makes significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to the cost and time associated with recreating acquired technology, useful lives, and discount rates. Management's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results might differ from estimates.
Stock-based Compensation
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. Upon consummation of the IPO, we recorded cumulative stock-based compensation expense for the portion of the requisite service period satisfied as of the IPO date.
Common Stock Valuations
Prior to our IPO, our board of directors exercised reasonable judgment and considered numerous objective and subjective factors to determine the best estimate of fair value of our common stock. These factors included:
•observed secondary sales of common and redeemable convertible preferred stock;
•evaluation of our principal market;
•contemporaneous valuations performed at periodic intervals by unrelated third-party specialists;
•rights, preferences, and privileges of our redeemable convertible preferred stock relative to those of our common stock;
•our actual operating and financial performance;
•likelihood of achieving a liquidity event, such as an initial public offering or a sale of the Company given prevailing market conditions and the nature and history of its business;
•market multiples of comparable companies in its industry;
•our stage of development;
•industry information such as market size and growth;
•illiquidity of stock-based awards involving securities in a private company; and
•macroeconomic conditions.
In estimating the value of our common stock, we evaluated any secondary transactions involving our capital stock. In our evaluation of those transactions, we considered the facts and circumstances of each transaction to determine the extent to which they represented a fair value exchange and assigned the transactions an appropriate weighting in the valuation of our common stock. Factors considered include the number of different buyers and sellers, transaction volume, timing relative to the valuation date, whether the transactions occurred between willing and unrelated parties, and whether the transactions involved investors with access to our financial information.
Historically, we have also used both the income and the market approach valuation methods to determine the enterprise value of our business. The income approach estimates fair value based on the expectation of future cash flows that a company will generate. These future cash flows are discounted to their present values using a discount rate based on the venture capital rates of return and is adjusted to reflect the risks inherent in our cash flows. The market approach estimates fair value based on a comparison of the subject company to comparable public companies in a similar line of business. From the comparable companies, a representative market value multiple is determined and then applied to the subject company's financial forecasts to estimate the value of the subject company.
In allocating the enterprise value of our business among the various classes of stock prior, we primarily used the option pricing method ("OPM") and to a lesser extent, the probability-weighted expected return method ("PWERM"). The OPM models each class of stock as a call option with a unique claim on our assets. The PWERM estimates the fair value of common stock based on an analysis of future values for the enterprise.
After the allocation to the various classes of stock, a discount for lack of marketability ("DLOM"), is applied to arrive at a fair value of the common stock. A DLOM is meant to account for the lack of marketability of a stock that is not traded on public exchanges.
Application of these approaches involves the use of estimates, judgments, and assumptions that are highly complex and subjective, such as those regarding our expected future revenue, expenses and future cash flows, discount rates, market multiples, the selection of comparable companies, and the probability of possible future events. Changes in any or all of these estimates and assumptions or the relationships between those assumptions
impact our valuations as of each valuation date and may have a material impact on the valuation of our common stock.
Subsequent to our IPO, the fair value of the our common stock is based on the closing price of our Class A common stock on the grant date, so these valuation approaches are no longer necessary.
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 Policieswithin the notes to our consolidated financial statements.
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