Chime Financial Q4 FY25 earnings call CHYM

Chime completed its multiyear migration to ChimeCore, its homegrown transaction processor and ledger, in Q4 FY25, making it 100% on its own tech stack. This strengthens its cost advantage, reducing cost to serve to roughly 1/3 of large banks and 1/5 of regional banks, and transaction processing costs by an estimated 60%. The migration also drove a 200 basis point increase in gross margin, contributing to a long-term target of 90%.

The Chime Card, a secured cash-back credit card built entirely on ChimeCore, is driving strong engagement, with over half of new cohort members adopting it and using it for over 70% of their Chime spend. This has increased credit spend as a percent of overall purchase volume from 16% in September to 21% in December, providing a multiyear tailwind to revenue growth as it earns nearly 2x the take rate of debit cards.

MyPay, the on-demand payroll product, scaled to over $400 million in revenue run rate in Q4 FY25, generating a transaction margin of nearly 60%. Loss rates stabilized at the target of 1% in Q4, significantly faster than planned. With a new variable pricing model, Chime aims to scale both access and profitability, optimizing MyPay for greater transaction profit while maintaining its position as the low-cost product.

Chime Workplace, an employer financial wellness offering with MyPay at work, saw early traction in FY25, onboarding first customers and channel partners like Workday and UKG. The company enters FY26 with strong momentum and a growing pipeline, aiming to expand to more employers and establish enterprise as an evergreen customer acquisition channel, noting higher monetization and retention from these members.

Chime is deeply embedding AI across its operations and member experience. AI has reduced cost to serve by nearly 30% and increased RPM by 23% over the past three years, while improving customer satisfaction. It has also driven step-change efficiency in customer support, reduced fraud rates by 30% since 2023, and boosted internal productivity, including a 30% reduction in disputes decision time with over 99% accuracy.

Chime added approximately 500,000 net new active members in Q4 FY25, reaching 9.5 million total, and expects to add 1.4 million in FY26. The quality of new cohorts is strengthening, with record high direct deposit conversions and faster product attach, leading to improved transaction profit payback periods of 5-6 quarters and an LTV to CAC over 8x.

Instant Loans, an installment loan product for larger, episodic needs, originated approximately $400 million in FY25, with 10% of active members having an open loan by Q4. The product is expected to scale further in FY26, with unit economics improving significantly as the portfolio matures, showing up to 50% lower loss rates for repeat borrowers compared to first-time borrowers.

Q1 is a seasonally strong period for Chime due to tax refund season, which is expected to be magnified in FY26 by larger than usual tax refunds from the 'one big beautiful bill act.' While the timing of^📎 refunds is later, they are tracking higher, contributing to seasonally higher purchase volume, ARPM, transaction margin, and net new active member additions.