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GDOT Green Dot Corporation

10.65
-0.03 (-0.28%)
21 Dec 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type
Green Dot Corporation NYSE:GDOT NYSE Common Stock
  Price Change % Change Share Price High Price Low Price Open Price Shares Traded Last Trade
  -0.03 -0.28% 10.65 11.01 10.51 10.55 1,736,525 01:00:00

Green Dot Reports Third Quarter 2024 Results

07/11/2024 9:05pm

Business Wire


Green Dot (NYSE:GDOT)
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From Oct 2024 to Dec 2024

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Company Introduces "Arc by Green Dot" Iterating Focus on Embedded Finance Market

Green Dot Corporation (NYSE: GDOT), a leading digital bank and fintech that delivers seamless banking and payment tools for consumers and businesses, today reported financial results for the quarter ended September 30, 2024.

“It was a solid quarter of execution, and we are excited about the launch of our embedded finance brand, Arc by Green Dot, signifying our commitment to this sizable market where we believe ample opportunity for long-term growth exists,” said George Gresham, Chief Executive Officer of Green Dot. “While our GAAP net loss was larger than last year, we returned to adjusted EBITDA growth in the quarter, which we believe is evidence of our progress on efforts to position Green Dot as a market leader with predictable financial performance and operational excellence.”

Consolidated Results Summary

 

Three Months Ended September 30,

 

 

 

Nine Months Ended September 30,

 

 

 

2024

 

2023

 

% Change

 

2024

 

2023

 

% Change

 

(In thousands, except per share data and percentages)

 

 

GAAP financial results

 

 

 

 

 

 

 

 

 

 

 

Total operating revenues

$

409,743

 

 

$

353,029

 

 

16

%

 

$

1,268,852

 

 

$

1,135,285

 

 

12

%

Net (loss) income

$

(7,840

)

 

$

(6,265

)

 

25

%

 

$

(31,805

)

 

$

30,325

 

 

(205

)%

Diluted (loss) earnings per common share

$

(0.15

)

 

$

(0.12

)

 

25

%

 

$

(0.60

)

 

$

0.58

 

 

(203

)%

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP financial results1

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP total operating revenues1

$

406,019

 

 

$

348,571

 

 

16

%

 

$

1,255,998

 

 

$

1,122,078

 

 

12

%

Adjusted EBITDA1

$

28,315

 

 

$

23,735

 

 

19

%

 

$

121,545

 

 

$

145,147

 

 

(16

)%

Adjusted EBITDA/Non-GAAP total operating revenues (adjusted EBITDA margin)

 

7.0

%

 

 

6.8

%

 

0.2

%

 

 

9.7

%

 

 

12.9

%

 

(3.2

)%

Non-GAAP net income1

$

6,988

 

 

$

7,442

 

 

(6

)%

 

$

51,814

 

 

$

77,889

 

 

(33

)%

Non-GAAP diluted earnings per share1

$

0.13

 

 

$

0.14

 

 

(7

)%

 

$

0.96

 

 

$

1.49

 

 

(36

)%

Unencumbered cash at the holding company was approximately $75 million as of September 30, 2024.

Key Metrics

The following table shows Green Dot's quarterly key business metrics for each of the last seven calendar quarters on a consolidated basis and by each of its reportable segments. Please refer to Green Dot’s latest Annual Report on Form 10-K for a description of the key business metrics, as well as additional information regarding how Green Dot organizes its business by segment.

 

2024

 

2023

 

Q3

 

Q2

 

Q1

 

Q4

 

Q3

 

Q2

 

Q1

 

(In millions)

Consolidated *

 

 

 

 

 

 

 

 

Gross dollar volume

$

33,473

$

32,130

$

30,755

 

$

26,355

$

24,836

$

24,724

$

23,289

Number of active accounts

 

3.46

 

3.41

 

3.51

 

 

3.57

 

3.67

 

3.71

 

3.84

Purchase volume

$

4,887

$

5,012

$

5,274

 

$

5,273

$

5,362

$

5,734

$

6,145

Consumer Services

 

 

 

 

 

 

 

 

Gross dollar volume

$

3,983

$

4,014

$

4,500

 

$

4,290

$

4,619

$

5,122

$

5,677

Number of active accounts

 

1.78

 

1.76

 

1.93

 

 

2.05

 

2.16

 

2.35

 

2.41

Direct deposit active accounts

 

0.44

 

0.45

 

0.46

 

 

0.49

 

0.52

 

0.59

 

0.60

Purchase volume

$

2,904

$

3,036

$

3,339

 

$

3,312

$

3,553

$

3,984

$

4,344

B2B Services

 

 

 

 

 

 

 

 

Gross dollar volume

$

29,490

$

28,116

$

26,255

 

$

22,065

$

20,217

$

19,602

$

17,612

Number of active accounts

 

1.68

 

1.65

 

1.58

 

 

1.52

 

1.51

 

1.36

 

1.43

Purchase volume

$

1,983

$

1,976

$

1,935

 

$

1,961

$

1,809

$

1,750

$

1,801

Money Movement

 

 

 

 

 

 

 

 

Number of cash transfers

 

8.22

 

8.15

 

7.77

 

 

8.19

 

8.31

 

8.66

 

8.70

Number of tax refunds processed

 

0.19

 

4.20

 

9.28

 

 

0.16

 

0.20

 

3.87

 

9.91

* Represents the sum of Green Dot's Consumer Services and B2B (as defined herein) Services segments.

“It was a solid quarter and we are seeing the benefits of our efforts to improve our cost structure, support existing customers and launch new partners such as PLS,” said Jess Unruh, Chief Financial Officer of Green Dot. “While our retail division has seen improved performance, it is falling short of the improvement that we had expected, which is impacting our guidance for the rest of the year. Nonetheless, I am encouraged by the fact that our revised guidance still points to improved momentum as we exit the year.”

2024 Financial Guidance

Green Dot has updated its most recent financial outlook for 2024. Green Dot’s outlook is based on a number of assumptions that management believes are reasonable at the time of this earnings release. In particular, its outlook reflects several considerations, including but not limited to the current macro-economic environment, the effect of inflation and interest rates, the impact of previously disclosed non-renewals of certain partnerships and programs, the company's decision to wind down many of its legacy cardholder programs in support of GO2bank, negative trends within certain channels of its business, investment in strategic initiatives and compliance programs, and cost reduction initiatives. Additionally, the civil money penalty and related expenses associated with Green Dot's consent order previously disclosed are expressly excluded from its non-GAAP measures and related financial outlook. Information regarding potential risks that could cause the actual results to differ from these forward-looking statements is set forth below and in Green Dot's filings with the Securities and Exchange Commission.

Total Non-GAAP Operating Revenues2

  • Green Dot now expects its guidance range for its full year non-GAAP total operating revenues2 to be between $1.65 billion and $1.70 billion, or up approximately 13% year over year at the mid-point.

Adjusted EBITDA2

  • Green Dot now expects its full year adjusted EBITDA2 range to be between $164 million and $166 million, or down approximately 3% year over year at the mid-point.

Non-GAAP EPS2

  • Green Dot now expects its full year non-GAAP EPS2 range to be between $1.33 and $1.36, or down 17% year over year at the mid-point.

The components of Green Dot's non-GAAP EPS2 guidance range are as follows:

 

Range

 

Low

 

High

 

(In millions, except per share data)

Adjusted EBITDA

$

164.0

 

 

$

166.0

 

Depreciation and amortization*

 

(63.5

)

 

 

(63.5

)

Net interest expense

 

(5.3

)

 

 

(5.3

)

Non-GAAP pre-tax income

$

95.2

 

 

$

97.2

 

Tax impact**

 

(22.8

)

 

 

(23.3

)

Non-GAAP net income

$

72.4

 

 

$

73.9

 

Diluted weighted-average shares issued and outstanding

 

54.2

 

 

 

54.2

 

Non-GAAP earnings per share

$

1.33

 

 

$

1.36

 

*

Excludes the impact of amortization of acquired intangible assets

**

Assumes a non-GAAP effective tax rate of approximately 24% for full year.

1

Reconciliations of total operating revenues to non-GAAP total operating revenues, net income to adjusted EBITDA, net income to non-GAAP net income, and diluted earnings per share to non-GAAP diluted earnings per share, respectively, are provided in the tables immediately following the unaudited consolidated financial statements. Additional information about the Company's non-GAAP financial measures can be found under the caption “About Non-GAAP Financial Measures” below.

2

For additional information, see reconciliations of forward-looking guidance for these non-GAAP financial measures to their respective, most directly comparable projected GAAP financial measures provided in the tables immediately following the reconciliation of Net Income to Adjusted EBITDA.

Conference Call

Green Dot's management will host a conference call to discuss third quarter 2024 financial results today at 5:00 p.m. ET. The conference call can be accessed live from Green Dot's investor relations website at http://ir.greendot.com/. Green Dot uses this website as a tool to disclose important information about the company to investors and comply with its disclosure obligations under Regulation Fair Disclosure. A replay of the webcast will be available at the same website following the call. The replay will be available until Thursday, November 14, 2024.

Forward-Looking Statements

This earnings release contains forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, among other things, statements in the quotes of Green Dot's executive officers and under the heading "2024 Financial Guidance," and other future events that involve risks and uncertainties. Actual results may differ materially from those contained in the forward-looking statements contained in this earnings release, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from those projected include, among other things, Green Dot’s ability to achieve the expected cost savings and other benefits from its processor conversions, impacts from and changes in general economic conditions on Green Dot’s business, results of operations and financial condition, shifts in consumer behavior towards electronic payments, the timing and impact of revenue growth activities, Green Dot's dependence on revenues derived from Walmart or other large partners, the timing and impact of non-renewals or terminations of agreements with other large partners, impact of competition, Green Dot's reliance on retail distributors for the promotion of its products and services, demand for Green Dot's new and existing products and services, continued and improving returns from Green Dot's investments in strategic initiatives, Green Dot's ability to operate in a highly regulated environment, including with respect to any restrictions imposed on its business, changes to governmental policies or rulemaking or enforcement priorities affecting financial institutions or to existing laws or regulations affecting Green Dot's operating methods or economics, Green Dot's reliance on third-party vendors, changes in credit card association or other network rules or standards, changes in card association and debit network fees or products or interchange rates, instances of fraud developments in the financial services industry that impact debit card usage generally, business interruption or systems failure, economic, political and other conditions may adversely affect trends in consumer spending and Green Dot's involvement in litigation or investigations. These and other risks are discussed in greater detail in Green Dot's Securities and Exchange Commission filings, including its most recent annual report on Form 10-K available on Green Dot's investor relations website at ir.greendot.com and on the SEC website at www.sec.gov. All information provided in this release and in the attachments is as of November 7, 2024, and Green Dot assumes no obligation to update this information as a result of future events or developments, except as required by law.

About Non-GAAP Financial Measures

To supplement Green Dot's consolidated financial statements presented in accordance with accounting principles generally accepted in the United States of America (GAAP), Green Dot uses measures of operating results that are adjusted for, among other things, non-operating net interest income and expense; other non-interest investment income earned by its bank; income tax benefit and expense; depreciation and amortization, including amortization of acquired intangibles; certain legal settlement gains and charges; stock-based compensation and related employer payroll taxes; changes in the fair value of contingent consideration; transaction costs from acquisitions; amortization attributable to deferred financing costs, impairment charges; extraordinary severance expenses; earnings or losses from equity method investments; changes in the fair value of loans held for sale; commissions and certain processing-related costs associated with Banking as a Service ("BaaS") products and services where Green Dot does not control customer acquisition; realized gains on investment securities; other charges and income not reflective of ongoing operating results; and income tax effects. This earnings release includes non-GAAP total operating revenues, adjusted EBITDA, non-GAAP net income, and non-GAAP diluted earnings per share. These non-GAAP financial measures are not calculated or presented in accordance with, and are not alternatives or substitutes for, financial measures prepared in accordance with GAAP, and should be read only in conjunction with Green Dot's financial measures prepared in accordance with GAAP. Green Dot's non-GAAP financial measures may be different from similarly-titled non-GAAP financial measures used by other companies. Green Dot believes that the presentation of non-GAAP financial measures provides useful information to management and investors regarding underlying trends in its consolidated financial condition and results of operations. Green Dot's management regularly uses these supplemental non-GAAP financial measures internally to understand, manage and evaluate Green Dot's business and make operating decisions. For additional information regarding Green Dot's use of non-GAAP financial measures and the items excluded by Green Dot from one or more of its historic and projected non-GAAP financial measures, investors are encouraged to review the reconciliations of Green Dot's historic and projected non-GAAP financial measures to the comparable GAAP financial measures, which are attached to this earnings release, and which can be found by clicking on “Financial Information” in the Investor Relations section of Green Dot's website at http://ir.greendot.com/.

About Green Dot

Green Dot Corporation (NYSE: GDOT) is a financial technology and registered bank holding company committed to giving all people the power to bank seamlessly, affordably, and with confidence. Green Dot’s technology platform enables it to build products and features that address the most pressing financial challenges of consumers and businesses, transforming the way they manage and move money and making financial empowerment more accessible for all.

Green Dot offers a broad set of financial products to consumers and businesses including debit, checking, credit, prepaid, and payroll cards, as well as robust money processing services, such as tax refunds, cash deposits and disbursements. Its flagship digital banking platform GO2bank offers consumers simple and accessible mobile banking designed to help improve financial health over time. The company’s banking platform services business enables a growing list of the world’s largest and most trusted consumer and technology brands to deploy customized, seamless, value-driven money management solutions for their customers.

Founded in 1999, Green Dot has served more than 33 million customers directly and many millions more through its partners. The Green Dot Network of more than 90,000 retail distribution locations nationwide, more than all remaining bank branches in the U.S. combined, enables it to operate primarily as a “branchless bank.” Green Dot Bank is a subsidiary of Green Dot Corporation and member of the FDIC. For more information about Green Dot’s products and services, please visit www.greendot.com.

GREEN DOT CORPORATION

CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

September 30, 2024

 

December 31, 2023

 

(unaudited)

 

 

Assets

(In thousands, except par value)

Current assets:

 

 

 

Unrestricted cash and cash equivalents

$

1,453,549

 

 

$

682,263

 

Restricted cash

 

44

 

 

 

4,239

 

Investment securities available-for-sale, at fair value

 

43,257

 

 

 

33,859

 

Settlement assets

 

587,106

 

 

 

737,989

 

Accounts receivable, net

 

84,635

 

 

 

110,141

 

Prepaid expenses and other assets

 

49,459

 

 

 

69,419

 

Income tax receivable

 

1,322

 

 

 

 

Total current assets

 

2,219,372

 

 

 

1,637,910

 

Investment securities available-for-sale, at fair value

 

2,120,803

 

 

 

2,203,142

 

Loans to bank customers, net of allowance for credit losses of $17,778 and $11,383 as of September 30, 2024 and December 31, 2023, respectively

 

33,380

 

 

 

30,534

 

Prepaid expenses and other assets

 

193,791

 

 

 

221,656

 

Property, equipment, and internal-use software, net

 

181,386

 

 

 

179,376

 

Operating lease right-of-use assets

 

3,801

 

 

 

5,342

 

Deferred expenses

 

1,226

 

 

 

1,546

 

Net deferred tax assets

 

128,263

 

 

 

117,139

 

Goodwill and intangible assets

 

403,265

 

 

 

420,477

 

Total assets

$

5,285,287

 

 

$

4,817,122

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

95,043

 

 

$

119,870

 

Deposits

 

3,837,906

 

 

 

3,293,603

 

Obligations to customers

 

215,588

 

 

 

314,278

 

Settlement obligations

 

50,821

 

 

 

57,001

 

Amounts due to card issuing banks for overdrawn accounts

 

84

 

 

 

225

 

Other accrued liabilities

 

94,844

 

 

 

91,239

 

Operating lease liabilities

 

2,118

 

 

 

3,369

 

Deferred revenue

 

7,181

 

 

 

6,343

 

Line of credit

 

 

 

 

61,000

 

Income tax payable

 

2,497

 

 

 

6,262

 

Total current liabilities

 

4,306,082

 

 

 

3,953,190

 

Other accrued liabilities

 

1,217

 

 

 

1,895

 

Operating lease liabilities

 

2,068

 

 

 

2,687

 

Notes payable

 

43,675

 

 

 

 

Total liabilities

 

4,353,042

 

 

 

3,957,772

 

 

 

 

 

Stockholders’ equity:

 

 

 

Class A common stock, $0.001 par value; 100,000 shares authorized as of September 30, 2024 and December 31, 2023; 53,751 and 52,816 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

 

54

 

 

 

53

 

Additional paid-in capital

 

400,769

 

 

 

375,980

 

Retained earnings

 

738,499

 

 

 

770,304

 

Accumulated other comprehensive loss

 

(207,077

)

 

 

(286,987

)

Total stockholders’ equity

 

932,245

 

 

 

859,350

 

Total liabilities and stockholders’ equity

$

5,285,287

 

 

$

4,817,122

 

GREEN DOT CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2024

 

2023

 

2024

 

2023

 

(In thousands, except per share data)

Operating revenues:

 

 

 

 

 

 

 

Card revenues and other fees

$

310,372

 

 

$

253,407

 

 

$

878,002

 

 

$

735,380

 

Cash processing revenues

 

34,897

 

 

 

36,256

 

 

 

198,447

 

 

 

191,925

 

Interchange revenues

 

48,397

 

 

 

54,968

 

 

 

148,950

 

 

 

178,950

 

Interest income, net

 

16,077

 

 

 

8,398

 

 

 

43,453

 

 

 

29,030

 

Total operating revenues

 

409,743

 

 

 

353,029

 

 

 

1,268,852

 

 

 

1,135,285

 

Operating expenses:

 

 

 

 

 

 

 

Sales and marketing expenses

 

52,626

 

 

 

56,495

 

 

 

167,948

 

 

 

194,530

 

Compensation and benefits expenses

 

61,795

 

 

 

59,168

 

 

 

189,967

 

 

 

192,934

 

Processing expenses

 

228,227

 

 

 

162,375

 

 

 

631,789

 

 

 

460,555

 

Other general and administrative expenses

 

70,027

 

 

 

81,830

 

 

 

295,193

 

 

 

238,324

 

Total operating expenses

 

412,675

 

 

 

359,868

 

 

 

1,284,897

 

 

 

1,086,343

 

Operating (loss) income

 

(2,932

)

 

 

(6,839

)

 

 

(16,045

)

 

 

48,942

 

Interest expense, net

 

1,577

 

 

 

239

 

 

 

4,306

 

 

 

2,121

 

Other expense, net

 

(3,705

)

 

 

(802

)

 

 

(10,045

)

 

 

(6,050

)

(Loss) income before income taxes

 

(8,214

)

 

 

(7,880

)

 

 

(30,396

)

 

 

40,771

 

Income tax (benefit) expense

 

(374

)

 

 

(1,615

)

 

 

1,409

 

 

 

10,446

 

Net (loss) income

$

(7,840

)

 

$

(6,265

)

 

$

(31,805

)

 

$

30,325

 

 

 

 

 

 

 

 

 

Basic (loss) earnings per common share:

$

(0.15

)

 

$

(0.12

)

 

$

(0.60

)

 

$

0.58

 

Diluted (loss) earnings per common share

$

(0.15

)

 

$

(0.12

)

 

$

(0.60

)

 

$

0.58

 

Basic weighted-average common shares issued and outstanding:

 

53,722

 

 

 

52,367

 

 

 

53,373

 

 

 

52,127

 

Diluted weighted-average common shares issued and outstanding:

 

53,722

 

 

 

52,367

 

 

 

53,373

 

 

 

52,436

 

GREEN DOT CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

 

Nine Months Ended September 30,

 

2024

 

2023

 

(In thousands)

Operating activities

 

 

 

Net (loss) income

$

(31,805

)

 

$

30,325

 

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

 

 

 

Depreciation and amortization of property, equipment and internal-use software

 

47,732

 

 

 

42,306

 

Amortization of intangible assets

 

16,295

 

 

 

18,593

 

Provision for uncollectible overdrawn accounts from purchase transactions

 

15,509

 

 

 

7,356

 

Provision for loan losses

 

22,471

 

 

 

21,404

 

Stock-based compensation

 

24,059

 

 

 

27,732

 

Losses in equity method investments

 

11,931

 

 

 

9,286

 

Amortization of discount on available-for-sale investment securities

 

(1,614

)

 

 

(1,724

)

Impairment of long-lived assets

 

4,944

 

 

 

 

Other

 

(1,810

)

 

 

(3,128

)

Changes in operating assets and liabilities:

 

 

 

Accounts receivable, net

 

9,997

 

 

 

1,081

 

Prepaid expenses and other assets

 

16,024

 

 

 

8,385

 

Deferred expenses

 

320

 

 

 

12,946

 

Accounts payable and other accrued liabilities

 

(24,534

)

 

 

(15,505

)

Deferred revenue

 

157

 

 

 

(19,363

)

Income tax receivable/payable

 

(4,803

)

 

 

(7,859

)

Other, net

 

(478

)

 

 

613

 

Net cash provided by operating activities

 

104,395

 

 

 

132,448

 

 

 

 

 

Investing activities

 

 

 

Purchases of available-for-sale investment securities

 

(11,845

)

 

 

 

Proceeds from maturities of available-for-sale securities

 

154,682

 

 

 

131,559

 

Proceeds from sales and calls of available-for-sale securities

 

273

 

 

 

197

 

Payments for property, equipment and internal-use software

 

(52,168

)

 

 

(55,501

)

Net changes in loans

 

(24,366

)

 

 

(21,562

)

Investment in TailFin Labs, LLC

 

(35,000

)

 

 

(35,000

)

Proceeds from other investments

 

55,088

 

 

 

 

Other investing activities

 

(846

)

 

 

(1,273

)

Net cash provided by investing activities

 

85,818

 

 

 

18,420

 

 

 

 

 

Financing activities

 

 

 

Borrowings on notes payable

 

44,551

 

 

 

 

Borrowings on revolving line of credit

 

238,000

 

 

 

153,000

 

Repayments on revolving line of credit

 

(299,000

)

 

 

(161,000

)

Proceeds from exercise of options and ESPP purchases

 

2,719

 

 

 

3,415

 

Taxes paid related to net share settlement of equity awards

 

(1,988

)

 

 

(3,500

)

Net changes in deposits

 

547,477

 

 

 

(238,417

)

Net changes in settlement assets and obligations to customers

 

46,013

 

 

 

(8,776

)

Deferred financing costs

 

(894

)

 

 

 

Net cash provided by (used in) financing activities

 

576,878

 

 

 

(255,278

)

 

 

 

 

Net increase (decrease) in unrestricted cash, cash equivalents and restricted cash

 

767,091

 

 

 

(104,410

)

Unrestricted cash, cash equivalents and restricted cash, beginning of period

 

686,502

 

 

 

819,845

 

Unrestricted cash, cash equivalents and restricted cash, end of period

$

1,453,593

 

 

$

715,435

 

 

 

 

 

Cash paid for interest

$

9,896

 

 

$

3,615

 

Cash paid for income taxes

$

6,003

 

 

$

17,100

 

 

 

 

 

Reconciliation of unrestricted cash, cash equivalents and restricted cash at end of period:

 

 

 

Unrestricted cash and cash equivalents

$

1,453,549

 

 

$

711,399

 

Restricted cash

 

44

 

 

 

4,036

 

Total unrestricted cash, cash equivalents and restricted cash, end of period

$

1,453,593

 

 

$

715,435

 

GREEN DOT CORPORATION

REPORTABLE SEGMENTS (UNAUDITED)

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2024

 

2023

 

2024

 

2023

Segment Revenue

(In thousands)

Consumer Services

$

98,046

 

 

$

118,204

 

 

$

295,278

 

 

$

387,128

 

B2B Services

 

276,402

 

 

 

199,206

 

 

 

769,658

 

 

 

551,150

 

Money Movement Services

 

31,854

 

 

 

32,089

 

 

 

187,967

 

 

 

180,304

 

Corporate and Other

 

(283

)

 

 

(928

)

 

 

3,095

 

 

 

3,496

 

Total segment revenues

 

406,019

 

 

 

348,571

 

 

 

1,255,998

 

 

 

1,122,078

 

BaaS commissions and processing expenses (8)

 

4,346

 

 

 

5,168

 

 

 

14,492

 

 

 

15,346

 

Other income (9)

 

(622

)

 

 

(710

)

 

 

(1,638

)

 

 

(2,139

)

Total operating revenues

$

409,743

 

 

$

353,029

 

 

$

1,268,852

 

 

$

1,135,285

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2024

 

2023

 

2024

 

2023

Segment Profit

(In thousands)

Consumer Services

$

39,389

 

 

$

42,426

 

 

$

107,097

 

 

$

139,450

 

B2B Services

 

27,736

 

 

 

18,883

 

 

 

65,097

 

 

 

58,808

 

Money Movement Services

 

12,717

 

 

 

12,850

 

 

 

113,855

 

 

 

103,650

 

Corporate and Other

 

(51,527

)

 

 

(50,424

)

 

 

(164,504

)

 

 

(156,761

)

Total segment profit *

 

28,315

 

 

 

23,735

 

 

 

121,545

 

 

 

145,147

 

Reconciliation to (loss) income before income taxes

 

 

 

 

 

 

 

Depreciation and amortization of property, equipment and internal-use software

 

15,473

 

 

 

14,720

 

 

 

47,732

 

 

 

42,307

 

Stock based compensation and related employer taxes

 

8,210

 

 

 

7,966

 

 

 

24,429

 

 

 

28,255

 

Amortization of acquired intangible assets

 

5,246

 

 

 

5,648

 

 

 

16,295

 

 

 

18,593

 

Impairment charges

 

8

 

 

 

 

 

 

8,528

 

 

 

 

Legal settlements and related expenses

 

869

 

 

 

545

 

 

 

32,896

 

 

 

1,964

 

Other expense

 

1,441

 

 

 

1,695

 

 

 

7,710

 

 

 

5,086

 

Operating (loss) income

 

(2,932

)

 

 

(6,839

)

 

 

(16,045

)

 

 

48,942

 

Interest expense, net

 

1,577

 

 

 

239

 

 

 

4,306

 

 

 

2,121

 

Other expense, net

 

(3,705

)

 

 

(802

)

 

 

(10,045

)

 

 

(6,050

)

(Loss) income before income taxes

$

(8,214

)

 

$

(7,880

)

 

$

(30,396

)

 

$

40,771

 

* Total segment profit is also referred to herein as adjusted EBITDA in its non-GAAP measures. Additional information about the Company's non-GAAP financial measures can be found under the caption “About Non-GAAP Financial Measures."

Green Dot's segment reporting is based on how its Chief Operating Decision Maker (“CODM”) manages its businesses, including resource allocation and performance assessment. Its CODM (who is the Chief Executive Officer) organizes and manages the businesses primarily on the basis of the channels in which its product and services are offered and uses net revenue and segment profit to assess profitability. Segment profit reflects each segment's net revenue less direct costs, such as sales and marketing expenses, processing expenses, third-party call center support and transaction losses. Green Dot’s operations are aggregated amongst three reportable segments: 1) Consumer Services, 2) Business to Business ("B2B") Services and 3) Money Movement Services.

The Corporate and Other segment primarily consists of net interest income, certain other investment income earned by Green Dot's bank, interest profit sharing arrangements with certain BaaS partners (a reduction of revenue), eliminations of inter-segment revenues and expenses, and unallocated corporate expenses, which include Green Dot's fixed expenses, such as salaries, wages and related benefits for its employees, professional services fees, software licenses, telephone and communication costs, rent, utilities, and insurance that are not considered when Green Dot's CODM evaluates segment performance. Non-cash expenses such as stock-based compensation, depreciation and amortization of long-lived assets, impairment charges and other non-recurring expenses that are not considered by Green Dot's CODM when it is evaluating overall consolidated financial results are excluded from its unallocated corporate expenses. Green Dot does not evaluate performance or allocate resources based on segment asset data, and therefore such information is not presented.

GREEN DOT CORPORATION

Reconciliation of Total Operating Revenues to Non-GAAP Total Operating Revenues (1)

(Unaudited)

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2024

 

2023

 

2024

 

2023

 

(In thousands)

Total operating revenues

$

409,743

 

 

$

353,029

 

 

$

1,268,852

 

 

$

1,135,285

 

BaaS commissions and processing expenses (8)

 

(4,346

)

 

 

(5,168

)

 

 

(14,492

)

 

 

(15,346

)

Other income (9)

 

622

 

 

 

710

 

 

 

1,638

 

 

 

2,139

 

Non-GAAP total operating revenues

$

406,019

 

 

$

348,571

 

 

$

1,255,998

 

 

$

1,122,078

 

Reconciliation of Net (Loss) Income to Non-GAAP Net Income (1)

(Unaudited)

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2024

 

2023

 

2024

 

2023

 

(In thousands, except per share data)

Net (loss) income

$

(7,840

)

 

$

(6,265

)

 

$

(31,805

)

 

$

30,325

 

Stock-based compensation and related employer payroll taxes (3)

 

8,210

 

 

 

7,966

 

 

 

24,429

 

 

 

28,255

 

Amortization of acquired intangible assets (4)

 

5,246

 

 

 

5,648

 

 

 

16,295

 

 

 

18,593

 

Transaction and related acquisition costs (4)

 

 

 

 

 

 

 

 

 

 

(3

)

Amortization of deferred financing costs (5)

 

54

 

 

 

36

 

 

 

126

 

 

 

108

 

Impairment charges (5)

 

8

 

 

 

 

 

 

8,528

 

 

 

 

Legal settlements and related expenses (5)

 

869

 

 

 

545

 

 

 

32,896

 

 

 

1,964

 

Losses in equity method investments (5)

 

4,472

 

 

 

1,675

 

 

 

11,931

 

 

 

9,286

 

Change in fair value of loans held for sale (5)

 

(9

)

 

 

(172

)

 

 

(244

)

 

 

(1,101

)

Extraordinary severance expenses (6)

 

635

 

 

 

984

 

 

 

6,072

 

 

 

3,415

 

Other income, net (5)

 

48

 

 

 

10

 

 

 

(4

)

 

 

(461

)

Income tax effect (7)

 

(4,705

)

 

 

(2,985

)

 

 

(16,410

)

 

 

(12,492

)

Non-GAAP net income

$

6,988

 

 

$

7,442

 

 

$

51,814

 

 

$

77,889

 

Diluted (loss) earnings per common share

 

 

 

 

 

 

 

GAAP

$

(0.15

)

 

$

(0.12

)

 

$

(0.60

)

 

$

0.58

 

Non-GAAP

$

0.13

 

 

$

0.14

 

 

$

0.96

 

 

$

1.49

 

 

 

 

 

 

 

 

 

Diluted weighted-average common shares issued and outstanding

 

 

 

 

 

 

 

GAAP

 

53,722

 

 

 

52,367

 

 

 

53,373

 

 

 

52,436

 

Non-GAAP

 

54,690

 

 

 

52,736

 

 

 

53,931

 

 

 

52,436

 

Reconciliation of GAAP to Non-GAAP Diluted Weighted-Average

Shares Issued and Outstanding

(Unaudited)

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2024

 

2023

 

2024

 

2023

 

(In thousands)

Diluted weighted-average shares issued and outstanding

53,722

 

52,367

 

53,373

 

52,436

Anti-dilutive shares due to GAAP net loss

968

 

369

 

558

 

Non-GAAP diluted weighted-average shares issued and outstanding

54,690

 

52,736

 

53,931

 

52,436

GREEN DOT CORPORATION

Supplemental Detail on Diluted Weighted-Average Common Shares Issued and Outstanding

(Unaudited)

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2024

 

2023

 

2024

 

2023

 

(In thousands)

Class A common stock outstanding as of September 30:

53,751

 

 

52,415

 

 

53,751

 

 

52,415

 

Weighting adjustment

(29

)

 

(48

)

 

(378

)

 

(288

)

Dilutive potential shares:

 

 

 

 

 

 

 

Service based restricted stock units

913

 

 

246

 

 

530

 

 

173

 

Performance-based restricted stock units

10

 

 

67

 

 

4

 

 

75

 

Employee stock purchase plan

45

 

 

56

 

 

24

 

 

61

 

Diluted weighted-average shares issued and outstanding

54,690

 

 

52,736

 

 

53,931

 

 

52,436

 

Reconciliation of Net (Loss) Income to Adjusted EBITDA (1)

(Unaudited)

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2024

 

2023

 

2024

 

2023

 

(In thousands)

Net (loss) income

$

(7,840

)

 

$

(6,265

)

 

$

(31,805

)

 

$

30,325

 

Interest expense, net (2)

 

1,577

 

 

 

239

 

 

 

4,306

 

 

 

2,121

 

Income tax expense

 

(374

)

 

 

(1,615

)

 

 

1,409

 

 

 

10,446

 

Depreciation and amortization of property, equipment and internal-use software (2)

 

15,473

 

 

 

14,720

 

 

 

47,732

 

 

 

42,307

 

Stock-based compensation and related employer payroll taxes (2)(3)

 

8,210

 

 

 

7,966

 

 

 

24,429

 

 

 

28,255

 

Amortization of acquired intangible assets (2)(4)

 

5,246

 

 

 

5,648

 

 

 

16,295

 

 

 

18,593

 

Transaction and related acquisition costs (2)(4)

 

 

 

 

 

 

 

 

 

 

(3

)

Impairment charges (2)(5)

 

8

 

 

 

 

 

 

8,528

 

 

 

 

Legal settlements and related expenses (2)(5)

 

869

 

 

 

545

 

 

 

32,896

 

 

 

1,964

 

Losses in equity method investments (2)(5)

 

4,472

 

 

 

1,675

 

 

 

11,931

 

 

 

9,286

 

Change in fair value of loans held for sale (2)(5)

 

(9

)

 

 

(172

)

 

 

(244

)

 

 

(1,101

)

Extraordinary severance expenses (2)(6)

 

635

 

 

 

984

 

 

 

6,072

 

 

 

3,415

 

Other income, net (2)(5)

 

48

 

 

 

10

 

 

 

(4

)

 

 

(461

)

Adjusted EBITDA

$

28,315

 

 

$

23,735

 

 

$

121,545

 

 

$

145,147

 

 

 

 

 

 

 

 

 

Non-GAAP total operating revenues

$

406,019

 

 

$

348,571

 

 

$

1,255,998

 

 

$

1,122,078

 

Adjusted EBITDA/Non-GAAP total operating revenues (adjusted EBITDA margin)

 

7.0

%

 

 

6.8

%

 

 

9.7

%

 

 

12.9

%

GREEN DOT CORPORATION

Reconciliation of Forward Looking Guidance for Non-GAAP Financial Measures to

Projected GAAP Total Operating Revenues (1)

(Unaudited)

 

 

 

FY 2024

 

Range

 

Low

 

High

 

(In millions)

Total operating revenues

$

1,669

 

 

$

1,719

 

Adjustments (8)(9)

 

(19

)

 

 

(19

)

Non-GAAP total operating revenues

$

1,650

 

 

$

1,700

 

Reconciliation of Forward Looking Guidance for Non-GAAP Financial Measures to

Projected GAAP Net Loss (1)

(Unaudited)

 

 

 

FY 2024

 

Range

 

Low

 

High

 

(In millions)

Net loss

$

(27.3

)

 

$

(24.9

)

Adjustments (10)

 

191.3

 

 

 

190.9

 

Adjusted EBITDA

$

164.0

 

 

$

166.0

 

 

 

 

 

Non-GAAP total operating revenues

$

1,700

 

 

$

1,650

 

Adjusted EBITDA/Non-GAAP total operating revenues (adjusted EBITDA margin)

 

9.6

%

 

 

10.1

%

Reconciliation of Forward Looking Guidance for Non-GAAP Financial Measures to

Projected GAAP Net Loss(1)

(Unaudited)

 

 

 

FY 2024

 

Range

 

Low

 

High

 

(In millions, except per share data)

Net loss

$

(27.3

)

 

$

(24.9

)

Adjustments (10)

 

99.7

 

 

 

98.8

 

Non-GAAP net income

$

72.4

 

 

$

73.9

 

Diluted earnings (loss) per share

 

 

 

GAAP

$

(0.51

)

 

$

(0.46

)

Non-GAAP

$

1.33

 

 

$

1.36

 

 

 

 

 

Diluted weighted-average shares issued and outstanding

 

 

 

GAAP

 

53.6

 

 

 

53.6

 

Anti-dilutive shares due to GAAP net loss

 

0.6

 

 

 

0.6

 

Non-GAAP

 

54.2

 

 

 

54.2

 

(1)

To supplement Green Dot’s consolidated financial statements presented in accordance with GAAP, Green Dot uses measures of operating results that are adjusted to exclude various, primarily non-cash, expenses and charges. These financial measures are not calculated or presented in accordance with GAAP and should not be considered as alternatives to or substitutes for operating revenues, operating income, net income or any other measure of financial performance calculated and presented in accordance with GAAP. These financial measures may not be comparable to similarly-titled measures of other organizations because other organizations may not calculate their measures in the same manner as Green Dot does. These financial measures are adjusted to eliminate the impact of items that Green Dot does not consider indicative of its core operating performance. You are encouraged to evaluate these adjustments and the reasons Green Dot considers them appropriate.

Green Dot believes that the non-GAAP financial measures it presents are useful to investors in evaluating Green Dot’s operating performance for the following reasons:

  • adjusted EBITDA is widely used by investors to measure a company’s operating performance without regard to items, such as non-operating net interest income and expense, income tax benefit and expense, depreciation and amortization, stock-based compensation and related employer payroll taxes, changes in the fair value of contingent consideration, transaction costs, impairment charges, extraordinary severance expenses, certain legal settlement and related expenses, earnings or losses from equity method investments, changes in the fair value of loans held for sale, and other charges and income that can vary substantially from company to company depending upon their respective financing structures and accounting policies, the book values of their assets, their capital structures and the methods by which their assets were acquired;
  • securities analysts use adjusted EBITDA as a supplemental measure to evaluate the overall operating performance of companies; and
  • Green Dot records stock-based compensation from period to period, and recorded stock-based compensation expenses and related employer payroll taxes, net of forfeitures, of approximately $8.2 million and $8.0 million for the three months ended September 30, 2024 and 2023, respectively. By comparing Green Dot’s adjusted EBITDA, non-GAAP net income and non-GAAP diluted earnings per share in different historical periods, investors can evaluate Green Dot’s operating results without the additional variations caused by stock-based compensation expense and related employer payroll taxes, which may not be comparable from period to period due to changes in the fair market value of Green Dot’s Class A common stock (which is influenced by external factors like the volatility of the public markets and the financial performance of Green Dot’s peers) and is not a key measure of Green Dot’s operations.

Green Dot’s management uses the non-GAAP financial measures:

  • as measures of operating performance, because they exclude the impact of items not directly resulting from Green Dot’s core operations;
  • for planning purposes, including the preparation of Green Dot’s annual operating budget;
  • to allocate resources to enhance the financial performance of Green Dot’s business;
  • to evaluate the effectiveness of Green Dot’s business strategies;
  • to establish metrics for variable compensation; and
  • in communications with Green Dot’s board of directors concerning Green Dot’s financial performance.

Green Dot understands that, although adjusted EBITDA and other non-GAAP financial measures are frequently used by investors and securities analysts in their evaluations of companies, these measures have limitations as an analytical tool, and you should not consider them in isolation or as substitutes for an analysis of Green Dot’s results of operations as reported under GAAP. Some of these limitations are:

  • that these measures do not reflect Green Dot’s capital expenditures or future requirements for capital expenditures or other contractual commitments;
  • that these measures do not reflect changes in, or cash requirements for, Green Dot’s working capital needs;
  • that these measures do not reflect non-operating interest expense or interest income;
  • that these measures do not reflect cash requirements for income taxes;
  • that, although depreciation and amortization are non-cash charges, the assets being depreciated or amortized will often have to be replaced in the future, and these measures do not reflect any cash requirements for these replacements; and
  • that other companies in Green Dot’s industry may calculate these measures differently than Green Dot does, limiting their usefulness as comparative measures.
 

(2)

Green Dot does not include any income tax impact of the associated non-GAAP adjustment to adjusted EBITDA, as the case may be, because each of these adjustments to the non-GAAP financial measure is provided before income tax expense.

(3)

This expense consists primarily of expenses for restricted stock units (including performance-based restricted stock units) and related employer payroll taxes. Stock-based compensation expense is not comparable from period to period due to changes in the fair market value of Green Dot’s Class A common stock (which is influenced by external factors like the volatility of public markets and the financial performance of Green Dot’s peers) and is not a key measure of Green Dot’s operations. Green Dot excludes stock-based compensation expense from its non-GAAP financial measures primarily because it consists of non-cash expenses that Green Dot does not believe are reflective of ongoing operating results. Green Dot also believes that it is not useful to investors to understand the impact of stock-based compensation to its results of operations. Further, the related employer payroll taxes are dependent upon volatility in Green Dot's stock price, as well as the timing and size of option exercises and vesting of restricted stock units, over which Green Dot has limited to no control. This expense is included as a component of compensation and benefits expenses on Green Dot's consolidated statements of operations.

(4)

Green Dot excludes certain income and expenses that are the result of acquisitions. These acquisition-related adjustments include items such as transaction costs, the amortization of acquired intangible assets, changes in the fair value of contingent consideration, settlements of contingencies established at time of acquisition and other acquisition related charges, such as integration charges and professional and legal fees, which result in Green Dot recording expenses or fair value adjustments in its GAAP financial statements. Green Dot analyzes the performance of its operations without regard to these adjustments. In determining whether any acquisition-related adjustment is appropriate, Green Dot takes into consideration, among other things, how such adjustments would or would not aid in the understanding of the performance of its operations. These items are included as a component of other general and administrative expenses on Green Dot's consolidated statements of operations, as applicable for the periods presented.

(5)

Green Dot excludes certain income and expenses that are not reflective of ongoing operating results. It is difficult to estimate the amount or timing of these items in advance. Although these events are reflected in Green Dot's GAAP financial statements, Green Dot excludes them in its non-GAAP financial measures because Green Dot believes these items may limit the comparability of ongoing operations with prior and future periods. These adjustments include items such as amortization attributable to deferred financing costs, impairment charges related to long-lived assets, earnings or losses from equity method investments, legal settlements and related expenses, changes in the fair value of loans held for sale, realized gains on investment securities and other income and expenses, as applicable for the periods presented. In determining whether any such adjustment is appropriate, Green Dot takes into consideration, among other things, how such adjustments would or would not aid in the understanding of the performance of its operations. Each of these adjustments, except for amortization of deferred financing costs, earnings and losses from equity method investments, fair value changes on loans held for sale, and realized gains on investment securities, which are all included below operating income, are included within other general and administrative expenses on Green Dot's consolidated statements of operations.

(6)

During the three and nine months ended September 30, 2024, Green Dot recorded charges of $0.6 million and $6.1 million, respectively, related to extraordinary severance expenses, which were paid out in connection with reductions in force and other extraordinary involuntary terminations of employment. Although severance expenses may arise throughout the fiscal year, Green Dot believes the nature of these extraordinary costs are not indicative of its core operating performance. This expense is included as a component of compensation and benefits expenses on Green Dot's consolidated statements of operations.

(7)

Represents the tax effect for the related non-GAAP measure adjustments using Green Dot's year to date non-GAAP effective tax rate. It also excludes both the impact of excess tax benefits related to stock-based compensation and the IRC §162(m) limitation that applies to performance-based restricted stock units expense as of September 30, 2024.

(8)

Represents commissions and certain processing-related costs associated with BaaS products and services where Green Dot does not control customer acquisition. This adjustment is netted against Green Dot's B2B Services revenues when evaluating segment performance.

(9)

Represents other non-interest investment income earned by Green Dot Bank. This amount is included along with operating interest income in Green Dot's Corporate and Other segment since the yield earned on these investments are generated on a recurring basis and earned similarly to its investment securities available for sale.

(10)

These amounts represent estimated adjustments for items such as income taxes, depreciation and amortization, employee stock-based compensation and related employer taxes, amortization attributable to deferred financing costs, impairment charges, extraordinary severance expenses, earnings and losses from equity method investments, changes in the fair value of loans held for sale, legal settlements and related expenses and other income and expenses. Employee stock-based compensation expense includes assumptions about the future fair value of the Company’s Class A common stock (which is influenced by external factors like the volatility of public markets and the financial performance of the Company’s peers).

 

Investor Relations: IR@greendot.com Media Relations: PR@greendotcorp.com

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