Chime Financial raised its third-quarter and full-year revenue guidance and agreed to buy nationally chartered bank Stride for $590 million in cash. Shares jumped as the deal moves Chime toward owning its own banking infrastructure, with completion targeted for the first half of 2027.
Chime Financial raised its third-quarter revenue guidance to $705 million, up from a prior range of $680 million to $690 million, and lifted its full-year outlook to $2.76 billion to $2.77 billion from $2.725 billion to $2.745 billion, with both figures slightly above consensus. The company also raised its adjusted EBITDA guidance to $117 million to $120 million for the quarter and $481 million to $489 million for the year.
Shares of Chime (CHYM) jumped 9.6% to 35.94 early Wednesday, signaling a breakout from a range it had held over the past month. The stock had already surged nearly 21% on Aug. 6 following its second-quarter earnings. It then retreated 4.3% to 32.31 on Tuesday while staying above its 21-day line.
Chime to buy its longtime banking partner
Chime also said it will buy Stride for $590 million in cash, a nationally chartered bank that has served as its banking partner for several years. Once the deal closes, Stride will become a wholly owned subsidiary of Chime and be renamed Chime Bank. Chime expects more than $100 million in net synergies from the deal, which it says will be immediately accretive to earnings per share.
The company said owning the bank directly would remove partner-bank fees, lower funding costs and improve unit economics. Chime CEO and co-founder Chris Britt said the fintech firm's approach would not change with the acquisition. According to Retail Banker International: "Our member-aligned, technology-driven strategy will remain the same."
Deal targets first-half 2027 close
The transaction is targeted to close in the first half of 2027 and requires approval from the Office of the Comptroller of the Currency and the Federal Reserve's Board of Governors, along with other customary closing conditions. Chime, which serves more than 10 million active members through its payments-focused digital model, said the acquisition would let it serve customers in all 50 states and widen its addressable market.
Sources: Investor's Business Daily, Retail Banker International
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