“These folks are signing up for direct deposit at a faster clip, and a greater percentage of them are doing $3,000 or more of deposit in order to qualify for Chime Prime,” CEO Chris Britt said in the analyst Q&A on Wednesday’s (Nov. 4) earnings call.
Prime membership makes customers eligible for Instant Loans. Chime originated $381 million through the product in the third quarter, up about 30% from the prior quarter. President and Interim Chief Financial Officer Mark Troughton attributed much of that growth to Prime. He also said first-time borrowing by Prime members pushed the loss rate to 6.3% and that he expects another small increase this quarter. Annualized loss rates for repeat borrowers were up to 50% lower than for first-time borrowers.
Direct deposit gives Chime a view of the money coming in and going out when it decides how much to lend. Management said recurring deposits also put Chime in a better position to collect repayment. Troughton said higher earners want more room to borrow and that Chime has scope to raise limits selectively.
Chime added about 500,000 net active members in the quarter, bringing the total to 10.9 million, up 20% from a year earlier. Growth in direct depositors accelerated for a third straight quarter. Troughton said acquisition costs fell from the prior quarter and pointed to improvements in how Chime allocates marketing spending. He said bundling products in Plus and Prime was also getting new members to use savings and borrowing products sooner.
Increasing Engagement
Investor presentation materials showed revenue per active member rising as groups of customers stayed with the company. Prime members generate more than twice the revenue of the average active member.
Revenue rose 32% year over year to $718 million, up from 27% growth in the second quarter. MyPay and Instant Loans led a 52% rise in platform revenue. Chime doubled MyPay’s maximum advance to $1,000, with the highest limits going overwhelmingly to Prime members. MyPay covers gaps between paydays. Instant Loans run three to 12 months and tend to cover larger expenses, Troughton said.
Employers give Chime another route to workers’ paychecks. It expanded its Workday partnership and plans to launch a pay card. Troughton said the employer business already brings in members and should make a meaningful contribution in 2027. Chime is also testing an unsecured line of credit with Prime members and expects to roll out an unsecured credit card next year. Its AI work includes Jade, a personal finance assistant, and tools that would let members decide what outside AI agents can access or do in their accounts.
Chime raised its fourth-quarter revenue outlook to $757 million to $767 million, up 27% to 29% from a year earlier. Shares were up 6% in after-hours trading on Wednesday.
