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).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241107073773/en/
Investor Relations: IR@greendot.com Media
Relations: PR@greendotcorp.com
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