Why Chime Financial Took a Nosedive Today – And What It Means for Fintech

Chime Financial just faceplanted on Wall Street. Here’s why the neobank darling is bleeding value while crypto eats its lunch.

The rug pull nobody saw coming

Analysts are scrambling after Chime’s stock cratered 18% in early trading. The 'consumer-friendly' fintech now looks suspiciously like another overhyped disruptor—complete with vaporware growth projections.

Regulatory target practice

Insiders whisper the CFPB is circling like a hawk. When your entire business model relies on overdraft fees dressed up as 'empowerment,' eventually the jig is up.

Crypto’s hostile takeover

Meanwhile, decentralized finance protocols hit $12B in daily volume. Chime’s millennial base would rather ape into shitcoins than park cash in another faux-revolutionary bank account.

Chime’s crash proves traditional fintech is becoming irrelevant—the future is trustless, borderless, and built on-chain. But hey, at least they tried.

Chime's first earnings report was strong

In the second quarter, Chime saw revenue grow 37% to $528 million, including 19% payments revenue growth and 113% growth in platform-related revenue. Platform revenue comes from extra products and services Chime offers beyond its main transaction revenue, including financial management tools, access to liquidity, and ATMs.

Chime did have a massive $923 million net loss, but that was due to a one-time stock-based compensation expense associated with its IPO. Absent that, Chime WOULD have made a $5 million profit on $16 million of adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization).

Management also gave full-year guidance that was above analyst expectations, forecasting 2025 revenue between $2.135 billion and $2.155 billion and adjusted EBITDA between $84 million and $94 million, good for a 4% EBITDA margin. The consensus estimates for the year were for $2.105 billion and $71 million, respectively.

Image source: Getty Images.

But the impressive results weren't enough for Wall Street

Basically, there wasn't too much wrong with Chime's earnings, except for the fact the stock had already rallied on the post-IPO enthusiasm. Even after today's drop, shares trade at 5 times this year's revenue guidance and over 110 times this year's EBITDA guidance. That's not a crazy valuation for a high-growth company, but it's also not exactly cheap. Chime will have to keep proving itself, it seems.

That said, last night's earnings report was a strong start to Chime's public life.