Analysts: Chime a superior value prop compared to banks

• Key insights: Chime in the second quarter blew past Wall Street’s expectations and posted its second quarter of GAAP profitability.
• What’s at stake: The neobank’s payments-centric business model, which shuns traditional fee-based banking, continues to resonate with consumers and challenge incumbent banks. 
• Expert quote: “Next-gen digital finance companies offer a superior value proposition compared with traditional banks, including leading user experience; a breadth of spending, investing, savings, and rewards options; and crucial short-term liquidity products.” — Andrew Jeffrey, William Blair. 

Chime’s move upmarket is paying off. 

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The neobank in the second quarter blew past Wall Street’s expectations and posted its second quarter of GAAP profitability, as strong uptake for its new rewards program, Chime Prime, helped lure more monthly active users to its platform and drive payment volume. 

It’s the latest sign of success for the company’s payment-centric business model, which shuns traditional fee-based banking and continues to resonate with consumers and challenge incumbent banks. 

“We see Chime as a digital finance leader whose value proposition is resonating loudly with lower-income consumers with increasing appeal to consumers earning more than $75,000 per year,” William Blair analyst Andrew Jeffrey said in a research note. “Next-gen digital finance companies offer a superior value proposition compared with traditional banks, including leading user experience; a breadth of spending, investing, savings, and rewards options; and crucial short-term liquidity products.” 

Chime Prime, which provides direct-deposit users with cash back and other rewards, was a large driver of growth during the quarter, co-founder and CEO Chris Britt said on the company’s earnings call with analysts. 

Active members grew 20% year over year to 10.4 million, with 1.7 net new active members joining over the last 12 months. Purchase volume increased 17% year over year to $38 billion. 

“Chime Prime is encouraging members to expand their relationship with us with more members than ever making Chime their primary financial partner,” Britt said. “And because Prime members spend more, have higher product attach rates, and are more likely to adopt our Chime card, they generate substantially higher [average revenue per active member], more than double the average Chime member.” 

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Chime is also hoping that its latest product, Chime Invest, will give its customers more reason to make Chime their primary financial relationship. 

Britt said the company is planning new products for Chime Prime, including a revolving, unsecured line of credit later in the third quarter. 

“We see enormous growth potential in expanded loan eligibility, limits and duration as we extend our lending footprint into higher income segments with larger liquidity needs,” Britt said. 

Shares of Chime were up 23.2%, or $6.02, to $31.94 as of 3:12 p.m. in New York on Thursday, which would mark the company’s highest closing price since Aug. 7, 2025, according to S&P Capital IQ. 

“2Q vindicated Chime’s move to appeal to the higher-income cohorts with Chime Prime,” Keefe Bruyette & Woods analyst Sanjay Sakhrani said in a research note. “The company saw strong volume growth, a pick-up in take rates, and management is expecting some more leverage on rewards costs in 2H as a result of lower gas prices (which is a 5% category).” 

Artificial intelligence-spurred staffing cuts, which took place last week and affected about 10% of Chime’s employees, contributed to raised revenue guidance for the year, which is now expected to be between $2.725 billion and $2.745 billion, representing year-over-year revenue growth of 25% to 26%.

Chime’s Chief Financial Officer Matt Newcomb will also be stepping down, effective Aug. 7. Chime’s president, Mark Troughton, will take over as CFO.