Dave Discloses Inquiries and Subpoenas in 3 States, Says Products Comply With Law

Key Facts

Dave disclosed in its quarterly report that it faces inquiries from banking regulators in Connecticut and Maryland, along with subpoenas from authorities in Maryland and New York concerning its financial products and services. The requests focus on earned wage access products, their fees and marketing, as well as the company's relationship with its banking partner and communications with customers. The company said the matters are ongoing and that it believes its practices and products in the three states complied with the law. At the same time, it warned that defending or resolving the matters could result in significant costs or monetary penalties, with a potentially material effect on its results and operations. The disclosure came alongside the release of third-quarter results, which showed growth in net operating revenue and a year-on-year decline in net income.

Dave said the banking regulator in Connecticut asked about licensing, state rules, the company's relationship with its banking partner and earned wage access products. It also received an inquiry from the banking regulator in Maryland concerning licensing and local rules. In Maryland, the attorney general also requested information about earned wage access products and related matters, including marketing practices, fees and the banking partnership. These requests show that the scope of the review extends to how the product is offered and priced, and the framework under which it operates, rather than just one aspect of the company's business. The disclosure did not say that every authority in the three states had issued a subpoena; it distinguished between inquiries from banking regulators and subpoenas issued by other authorities.

In New York, the company said it received a subpoena from the Department of Financial Services seeking documents and information about products and services it had offered in the state since 2021. The requested materials, according to the disclosure, include marketing materials, applications, consumer communications, terms and fees. It also received a separate subpoena from the New York attorney general concerning products and services it had offered since 2023, with requests related to advertising, fees and communications with its members. The difference between the two periods reflects the scope of information each authority is collecting: the financial department's request starts in 2021, while the attorney general's request covers a period beginning in 2023. These requests place the company's consumer practices and product fees among the matters under review by state authorities.

Part of the regulatory exposure relates to ExtraCash, an earned wage access product, and how this type of product is classified when licensing and interest rules are applied. Dave said banking guidance issued in Connecticut and Maryland in 2023 could treat certain traditional earned wage access products as small loans in certain circumstances. That could mean optional fees and tips are counted as finance charges when calculating interest limits, according to the company. It added that it does not believe ExtraCash is covered by these changes, but acknowledged uncertainty about whether they apply. This uncertainty puts state rules and the calculation of fees at the center of the inquiries disclosed by the company, without establishing that a violation occurred.

Financially, Dave's net operating revenue in the third quarter of 2026 rose 31% year on year to 198 million dollars, while net income fell 31% to 64 million dollars. Adjusted gross profit, a non-GAAP measure, increased 33% to 138 million dollars, and adjusted EBITDA rose 39% to 82 million dollars, equivalent to a margin of 41%. The company said its non-GAAP gross profit margin was 70%, compared with 69% a year earlier and 72% in the previous quarter. The chief financial and operating officer attributed about 100 basis points of the sequential decline to Coastal's funding costs. The figures show revenue growth and higher adjusted profitability alongside lower net income and a margin decline from the previous quarter.

At the operating level, ExtraCash transactions in the third quarter rose 23% year on year to 2.5 billion dollars, while the 28-day delinquency rate improved to 2.09% from 2.15% in the year-earlier period. Spending on the Dave debit card rose 5% to 533 million dollars. Based on these results, the company raised its fiscal 2026 net operating revenue guidance to a range of 746–750 million dollars, from 725–735 million previously. It also raised its adjusted EBITDA forecast to 327–330 million dollars, compared with prior guidance of 315 to 325 million. The revisions reflect the company's higher annual outlook despite the decline in reported quarterly net income; the figures remain guidance issued by the company for the fiscal year.

On the banking partnership, Dave said it entered into a second amendment to its program agreement with Coastal Community Bank on 3 November 2026. Under the amendment, up to 325 million dollars of ExtraCash receivables will remain on the bank's balance sheet, as will up to 25 million dollars of credit card receivables. This arrangement comes amid regulatory disclosures that include questions about Dave's relationship with its banking partner, although the company did not link the amendment to the subpoenas in its report. For the fourth quarter, it said it expects the 28-day delinquency rate to be below 2.00% and loss rates to improve from the previous quarter. It also expects its non-GAAP gross profit margin to exceed the second-quarter level.

Dave plans to expand the rollout of Dave Flex more broadly in 2027, a credit card product with a "buy now, pay in four installments" structure, according to its third-quarter results. The planned timing comes as the company's products, pricing and marketing face inquiries and subpoenas in several states, while Dave says its practices complied with the law. The company's shares closed at 336.22 dollars on 4 November 2026, after closing at 314.72 dollars on 3 November. This shows the stock's closing prices in the two sessions before the report date, without the disclosure attributing a direct cause to the regulatory matters. The company says its fourth-quarter results and developments in the regulatory matters will remain tied to its business trajectory and potential risks.