CHYM — Q2 2026 Financial Report Analysis

Overview

Chime turned a profit for the second quarter in a row. Revenue rose 27% to $669.8 million in the three months to June 30, 2026, beating the company's own forecast of $633–643 million, and net income was $27.9 million, or $0.07 per diluted share. A year earlier Chime lost $923.4 million, but that loss came almost entirely from a one-time $928.1 million stock-compensation charge tied to its June 2025 stock-market listing (IPO), so the swing from loss to profit says little on its own. The clearer signal is growth plus cost control: revenue grew 27% while operating costs excluding stock compensation grew about 8%.

Chime is not a bank. It is a technology company that offers checking accounts, debit and credit cards, and small short-term cash advances through two partner banks (The Bancorp Bank and Stride Bank). It earns money mostly from interchange, the small fee a merchant's bank pays each time a member uses a Chime card, and from fees on products like MyPay (pay advances) and Instant Loans.

At a glance

• Revenue +27% to $669.8 million, ahead of the $633–643 million Chime forecast in May, which led it to raise its full-year revenue outlook to $2.725–2.745 billion.
• 10.4 million Active Members, up 20%: Chime added about 200,000 in a quarter that is usually slow, which it attributes to the launch of Chime Prime, a tier for members depositing $3,000 or more a month.
• Operating margin of 3.2% (the share of revenue left after running the business, before interest and tax). The GAAP profit is still thin: $71.2 million of stock compensation absorbs most of what the core business earns.

Key metrics

n/m = not meaningful: the prior-year figures include a one-time $928.1 million IPO-related stock-compensation charge, so a percentage change from a loss of that size is not useful.

What drove the quarter

Card spending shifted toward credit, which pays Chime more. Payments revenue rose $63.9 million (17%), and almost all of that came from credit-card interchange, which grew $63.7 million, or 62%. Credit transactions were 27% of Purchase Volume, up from 16% a year earlier. That matters because, as the 10-Q explains, credit-card interchange pays a higher rate than debit, so the same dollar of member spending earns Chime more. Purchase Volume itself grew 17% to $38.0 billion, helped by the 20% rise in Active Members.

The faster-growing half of revenue is lending-like products. Platform-related revenue rose 48% to $239.7 million and is now 36% of total revenue, up from 31%. The 10-Q breaks down the $77.7 million increase:

• MyPay +$37.1 million, "driven by our new variable pricing plan adopted in the first quarter of 2026 and increased MyPay transaction volume." MyPay lets members draw part of their paycheck early. The earnings release puts quarterly MyPay originations at $4.5 billion, with the loss rate down to 0.9%.
• Instant Loans +$19.7 million: originations of these small installment loans rose nearly 70% from the first quarter to $300 million.
• Outbound instant transfer fees +$14.9 million.

Costs grew far slower than revenue once the IPO charge is set aside. Total operating expenses fell 59% on paper, but that is the IPO stock-compensation charge dropping out: stock compensation and the related payroll tax were $71.2 million this quarter versus $928.1 million a year ago. Excluding it, operating expenses were about $502 million versus about $464 million, an 8% increase against 27% revenue growth. Two lines did grow for real. Marketing and promotion spending rose $16.3 million, and member onboarding costs rose $10.0 million "attributable to activation expenses associated with Chime Prime." Cost of revenue grew only 12%: the company credits savings from moving card processing onto its own system, ChimeCore, in late 2025, partly offset by higher card and ATM network fees.

Credit and fraud losses grew slower than revenue. "Transaction and risk losses" (losses on MyPay advances, Instant Loans, overdrawn accounts, and disputed card transactions) rose 5% to $103.3 million, falling to 15.4% of revenue from 18.6%. MyPay losses fell $13.0 million on better loss rates, while Instant Loan losses rose $9.9 million with volume and dispute losses rose $8.3 million because of "an increase in the rate of disputed transactions."

Takeaway: Chime's growth is shifting from debit-card swipes toward credit cards and short-term lending. Credit-card interchange rose 62% and platform revenue rose 48%, while debit interchange was roughly flat. That brings in more revenue per member, but it ties Chime's results more closely to credit losses and loan funding, at the same moment it has agreed to buy a bank.

What the headline numbers hide

• The GAAP profit is mostly a function of stock compensation. Adjusted EBITDA (earnings before interest, tax, depreciation and amortization, with stock compensation and some one-off items also added back) was $101.6 million, versus GAAP net income of $27.9 million. Of the roughly $74 million gap, $71.2 million is stock compensation, $7.6 million is depreciation and amortization, and $1.5 million is a stock donation to Chime's scholarship foundation, partly offset by $6.7 million of interest income. Stock compensation is a real cost to shareholders because it issues new shares, so the GAAP figure is the more conservative read.
• Buybacks mostly offset new share issuance. Chime repurchased 7.3 million shares for $136.3 million in the quarter, and $222.1 million (11.4 million shares) in the first half. Yet Class A plus Class B shares outstanding fell only from 379.9 million at December 31 to 378.7 million at June 30, because employee equity kept adding shares. In practice, most of the buyback money went to soaking up dilution rather than shrinking the share count.
• Cash flow looks stronger than profit, partly for timing reasons. Operating cash flow for the first half was $295.0 million against net income of $81.3 million. Most of the difference is non-cash stock compensation ($130.1 million), but the total was also helped by a $46.4 million release of product collateral and a $35.8 million drop in prepaid expenses, which may not repeat.
• More lending is moving onto Chime's own balance sheet. MyPay loans held on the balance sheet rose to $97.4 million from $71.6 million at year-end. In June, Chime also opened a warehouse credit line with Goldman Sachs (a loan facility secured by those receivables; $200 million committed, up to $500 million in total) and had borrowed $50 million on it by June 30. Both are small next to $1.06 billion of cash and marketable securities, but they mark a shift away from leaving all the credit risk with the partner banks.
• Part of MyPay's growth comes from price, not volume. The 10-Q credits the new variable pricing plan, alongside volume, for the MyPay revenue gain. Price-driven growth does not compound the way volume growth does, and it is the kind of change regulators watch closely in short-term credit products.
• The quarter was weaker than the first quarter on profit. Net income fell from $53.5 million in Q1 to $27.9 million. Revenue grew 3.5% from Q1, but losses rose from $88.9 million to $103.3 million, and member support costs rose from $95.4 million to $109.6 million with Chime Prime activations. Q1 is seasonally strong for Chime because members receive tax refunds into their accounts, so some of this is normal seasonality.
• The guidance raise is real. Q2 revenue of $669.8 million beat the top of May's $633–643 million forecast, and adjusted EBITDA of $101.6 million beat the $72–77 million forecast. Full-year guidance went to $2.725–2.745 billion revenue (from $2.66–2.69 billion) and $465–475 million adjusted EBITDA (from $416–431 million).

Events since the quarter ended

• Layoffs and a CFO change (August 5). On July 31 Chime committed to cutting about 10% of its workforce. It expects $16–20 million of cash restructuring charges in Q3, partly offset by a $9–12 million reversal of stock compensation on forfeited awards, for a net hit to Q3 net income of $6–9 million. CFO Matthew Newcomb stepped down effective August 7. President Mark Troughton is interim CFO while the company searches for a permanent one. Chime says the departure was not due to any disagreement.
• Agreement to buy Stride Bank (September 8). Chime agreed to buy Central Service Corporation, the parent of Stride Bank, N.A., for $590 million in cash. Stride is one of its two partner banks today. Chime says it will pay from cash on hand, expects "more than $100 million in net synergies" (cost savings and extra revenue) from no longer paying partner-bank fees and from cheaper funding, and expects the deal to add to EPS right away. Closing is expected in the first half of 2027, pending approval from the OCC and the Federal Reserve. Chime says it will keep assets below $10 billion "for the foreseeable future." That level matters because large US banks above $10 billion in assets face a cap on debit interchange fees, the fee that makes up most of Chime's revenue today.

Outlook

For Q3 2026, management guides to revenue of $680–690 million (25–27% growth) and adjusted EBITDA of $105–110 million (15–16% margin), excluding the restructuring charge. For the full year it guides to revenue of $2.725–2.745 billion (25–26% growth) and adjusted EBITDA of $465–475 million (17% margin).

Our read: growth is on track, and the cost base is under control. The Q3 guide implies another quarter of roughly 26% growth, and the layoffs should lower expenses from Q4. Three things will decide whether the GAAP profit gets less thin:

1. Credit losses. Watch whether losses stay near 15% of revenue as Instant Loans and MyPay grow and as dispute rates rise.
2. Whether Chime Prime keeps lifting ARPAM. Average revenue per member was $260 in Q2, slightly below Q1's seasonally boosted $263.
3. The Stride deal. It would turn a partner-bank fee into owned economics, but it also brings bank regulation, a $590 million cash outlay out of roughly $1.06 billion in cash and securities, and pressure to stay under the $10 billion asset threshold.

Q3 results are expected in early November 2026. The 10-Q will be the first filing to show the restructuring charge.