Chime CEO Sees Healthy Consumer Activity

Bloomberg

Watch Chime CEO Sees Healthy Consumer Activity - Bloomberg on Dailymotion

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00:00How do you digest this sort of market move now you're a public company?

00:05Well, thanks for having me on, guys. It's great to be with you again. I remember being with you

00:08on our IPO day. Yeah, look, we're a recently issued stock. We've had two quarters now where

00:15the team's done an amazing job executing. We just announced 29% revenue growth year over year,

00:2321% growth in our member base. We added 400,000 new active members. And we're approving our

00:31profitability profile at the same time. So we feel like we're executing really, really well.

00:38And I think it's incumbent upon us as a newly minted public company to just continue to educate

00:43our investor base on the enormous opportunity ahead of us. There's about 200 million Americans

00:49that make up to $100,000 a year that are not well served by the incumbents. And so as a newly

00:55minted public company, there's always a little bit of volatility in the stock. But I think it's

01:00incumbent on us right now just to continue to execute. And if we do that, I think the share

01:04price will take care of itself. It is a macro picture that perhaps you fight here. We're

01:09suddenly worrying about fourth quarter. We're worried about a consumer, particularly perhaps

01:13a less affluent consumer that is really the area you're trying to serve right now. What are you seeing

01:18in your customer base? Well, we actually are serving the 70% of America that makes up to $100,000 a year.

01:27So this is a very large segment of the population. And if you look at our member base, the fastest

01:33growth that we're seeing is in the 75 to 100K earning segment. And I think that's because of

01:38some of these new products we just launched, like our Chime card, our new Chime card, which is

01:42a rewards card that gives 1.5% cash back on everyday spend and 3.5% on your savings account.

01:51But I think it is true that there's a bit of a malaise over a lot of consumer stocks that they,

01:58maybe investors feel like are going to have a lot of pressure given the tightening of the economy.

02:04As it relates to what we're seeing, we see a very healthy consumer. We don't see an uptick in

02:10unemployment or unemployment benefits coming to our accounts. We actually are seeing an increase

02:14in discretionary spend across our member base. And people are going out there. We're seeing double

02:21digit increases in places like Costco, Amazon. We're seeing people go to restaurants more. We're

02:30seeing people use DoorDash, Uber Eats, paying for convenience. So we're not seeing the pressure

02:36that I think some companies may be experiencing out there. We see a fairly healthy consumer, actually.

02:44Chris, can you talk about how you're getting new customers to use more than one product? I think

02:50what's interesting is you are letting new clients who might not have a sort of direct deposit set up

02:56with you experiment with my pay, for example. Are you seeing evidence that they then go on to use

03:02other things? Absolutely. We continue to see. If you look at our cohorts, and we have this in the

03:08supplemental portion of our earnings, you can see that as our cohorts age, they continue to not only

03:15adopt products at a faster clip early in the relationship, but they also continue to throughout

03:20the life cycle. And over the course of, you know, these are primary recurring direct deposit

03:26relationships that we've really honed in in our business model of being able to cultivate. And that

03:32leads to many, many years of recurring revenue and more engagement over time. And as a result of that,

03:39you see expanding average revenue per active member. But yes, it's true. We're, you know, we're doing

03:44everything we can also to make our accounts easier to use right out of the gate. And we've seen a lot of

03:50success with getting people to fund accounts, and then eventually convert a direct deposit later.

03:56Chris, quickly to finish, what's the next new product frontier for Chime?

04:02Well, we announced on the call, a great development for us is which is that we converted all of our

04:09processing onto our own internally built tech stack called Chime Core. This is a huge unlock,

04:14not just a significant cost savings advantage for us, but also it will unleash a new era of innovation

04:21for us. We announced a number of new features that we're looking to launch over the course of the next

04:26year. We just launched our Chime card that I explained earlier. We're going to launch joint accounts,

04:33custodial accounts, investment services, and importantly, we're going to continue to add more tiers

04:38so that our more premium members, those that engage with us the most and higher earning consumers get

04:47even more when they bank and do their every day payments with Chime. So you should expect to hear

04:52more on that front as well.

04:54Okay.

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