Chime beats revenue estimates in first earnings since blowout US IPO

By Manya Saini

(Reuters) -Chime beat Wall Street estimates for second-quarter revenue on Thursday, driven by strong demand for its digital banking and financial services, in its first results following a blockbuster U.S. listing.

Younger customers in the U.S., disillusioned with fees and limited flexibility at large banks, have increasingly turned to digital-first startups that offer low-cost banking, early direct deposits and higher-yield savings accounts.

Chime's revenue rose 37% to $528 million in the three months ended June 30. Analysts on average had expected $495.2 million, according to estimates compiled by LSEG.

The company went public in June in a blockbuster U.S. initial public offering that raised hopes of a lasting rebound in investor demand for high-growth tech listings. The stock is up 25% from its IPO price.

Its shares were last down marginally in volatile after-market trading.

"This was a breakout first quarter as a public company for Chime, driven by accelerating year-over-year growth, expanding margins, and continued product execution," Co-founder and CEO Chris Britt said.

Average revenue per active member grew 12% to $245 in the quarter, the company said.

Chime offers a suite of no-fee financial products through its bank partners, including a secured credit card to help users build credit, short-term liquidity tools like early pay access and small-dollar loans, and a deposit sweep program that distributes funds across regional banks.

The company says its payments-based banking model is better suited to serve everyday Americans, who often have limited credit histories and rely more heavily on debit transactions than traditional lending products.

Purchase volume - the total dollar value of transactions using Chime-branded debit or credit cards - rose 18% in the quarter to $32.4 billion.

The rise in volume underscores resilience in consumer spending, with users continuing to rely on debit cards for everyday expenses such as groceries, gas and bills - a trend that has held firm despite broader economic uncertainty.

Gross profit came in at $461 million in the quarter versus $333.7 million, a year earlier.

(Reporting by Manya Saini in Bengaluru; Editing by Sriraj Kalluvila)

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