Digital Banks Surge in Q2 as BNPL Hits a Credit Reporting "Snag"

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The second quarter of 2025 highlighted robust growth for many companies on our watch list, with digital banking platforms reporting significant revenue acceleration and user growth. Concurrently, the Buy Now, Pay Later (BNPL) market continued its expansion into physical retail while grappling with challenges related to credit reporting. Broader consumer credit trends indicate stabilization, although high interest rates continue to be a concern.

Digital Finance Platforms Show Strength in Q2

Several fintech companies reported strong Q2 2025 results, with many raising their full-year outlooks.

Chime (CHYM), in its first quarter as a public company, reported a 37% year-over-year revenue increase to $528 million, driven by a 23% growth in active members, reaching 8.7 million. While Chime posted a substantial net loss of $923 million due to IPO-related expenses, Adjusted EBITDA was $16 million. Chime Investor Relations

Dave (DAVE) demonstrated accelerated momentum, with revenue surging 64% YoY to $131.7 million—its fastest growth rate in over five years. The company attributed this to ARPU expansion and growth in Monthly Transacting Members. Adjusted EBITDA increased 236% to $50.9 million, leading Dave to raise its 2025 guidance. Dave Investor Relations

Green Dot (GDOT) also raised its 2025 guidance, reporting a 24% increase in non-GAAP revenue to $501.2 million. The company cited strong momentum in its Banking-as-a-Service (BaaS) division, highlighting new partnerships with Samsung and Credit Sesame. Green Dot Investor Relations

NerdWallet (NRDS) reported a 24% year-over-year revenue increase to $186.9 million for the quarter. This growth was primarily driven by strong performance in its insurance, banking, and loans verticals. However, the company faced challenges in its credit card and small and mid-sized business (SMB) segments, which saw declines due to lower organic search traffic.

To address these issues and drive future growth, NerdWallet highlighted progress across its key strategic pillars. The company is working to diversify its audience by launching new newsletters for travel and SMB owners, with its travel newsletter attracting a readership that is 75% new to the platform. Additionally, NerdWallet is enhancing its SMB services with a human-assisted sales concierge and expanding its lending operations. The company also grew its registered user base by 26% year-over-year to 28 million members, focusing on increasing user engagement through its redesigned app. Business Wire

Block (SQ) reported a slight 1.7% YoY decline in revenue to $6.05 billion, but gross profit rose 14% to $2.54 billion. The company raised its full-year profit forecast. Block Investor Relations

BNPL Expands Offline Amid Credit Reporting Friction

The BNPL sector continues to evolve, marked by strategic expansion and ongoing debates over credit integration.