Green Dot Corporation (NYSE:GDOT) Q2 2022 Earnings Conference Call August 4, 2022 6:00 PM ET Company Participants Tim Willi - Senior Vice President & Investor Relations Dan Henry - President & Chief Executive Officer George Gresham - Chief Financial Officer & Chief Operating Officer Conference Call Participants Ramsey El-Assal - Barclays Andrew Schmidt - Citi Andrew Jeffrey - Truist Securities George Sutton - Craig-Hallum Bob Napoli - William Blair Mike Grondahl - Northland Securities Operator Good day and ...

Q2 2022 Results August 4th, 2022 1 Green Dot Corporation 1 Green Dot Corporation – Confidential – Confidential Safe Harbor Statement As a reminder, our comments may include forward-looking statements and expectations regarding future results and performance. Please refer to the cautionary language in the earnings release and in Green Dot's filings with the Securities and Exchange Commission, including our most recent Form 10-K and 10-Q, for additional information concerning factors that could cause actual r ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 __________________________________________________ FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-34819 (Exact name of Registrant as specified in its charter) Delaware ...

Green Dot Corporation (NYSE:GDOT) Q1 2022 Earnings Conference Call May 5, 2022 6:00 PM ET Company Participants Tim Willi - Senior Vice President of Investor Relations & Corporate Development Dan Henry - President & Chief Executive Officer George Gresham - Chief Financial Officer & Chief Operating Officer Conference Call Participants Damian Wille - Barclays Andrew Jeffrey - Truist Securities George Sutton - Craig-Hallum Capital Mike Grondahl - Northland Capital Markets Andrew Schmidt - Citigroup Inc. Operato ...

Regulatory Compliance and Capital Management - As of December 31, 2021, Green Dot Corporation and Green Dot Bank's regulatory capital ratios were above the well-capitalized standards and met the capital conservation buffer requirements[67]. - Green Dot Corporation and Green Dot Bank qualified for and opted to use the community bank leverage ratio framework, maintaining a Tier 1 leverage ratio greater than 9%[67]. - The capital conservation buffer is currently at its fully phased-in level of 2.5%[75]. - Green Dot Bank's deposits are insured by the DIF up to the standard maximum deposit insurance amount of $250,000 per depositor[88]. - The FDIC has authority to raise or lower assessment rates on insured deposits, which may affect Green Dot Bank's deposit insurance premiums[88]. - Green Dot Bank's CRA compliance is evaluated under a strategic plan focused on community development lending and investment, particularly in Utah and Juab Counties[86]. - Federal banking regulators may require BHCs to maintain capital substantially in excess of mandated minimum levels based on economic conditions and risk profiles[65]. - Green Dot Corporation is required to serve as a source of financial and managerial strength to Green Dot Bank, potentially necessitating capital injections during financial distress[77]. - The Federal Reserve may prohibit or limit the payment of dividends if deemed unsafe or unsound, impacting capital distributions[73]. - Green Dot Bank's relationships with third-party banks are subject to regulatory scrutiny, requiring enhanced due diligence and compliance actions[89]. Financial Performance - Operating revenues from Walmart accounted for approximately 24.0% of total operating revenues for the year ended December 31, 2021[120]. - The company reported total operating revenues of $1,433.2 million for the year ended December 31, 2021, an increase of 14.3% from $1,253.8 million in 2020[353]. - Card revenues and other fees amounted to $788.8 million, up 32.8% from $593.9 million in 2020[353]. - Cash processing revenues decreased to $245.5 million from $293.2 million in 2020, reflecting a decline of 16.2%[353]. - Interchange revenues increased to $380.0 million, a rise of 8.4% compared to $351.8 million in 2020[353]. - The company's net income for 2021 was $47.5 million, representing a 105.5% increase from $23.1 million in 2020[353]. - Basic earnings per common share rose to $0.87 in 2021, compared to $0.43 in 2020, marking a 102.3% increase[353]. - Total assets increased to $4,725.5 million as of December 31, 2021, up from $4,115.3 million in 2020, reflecting a growth of 14.8%[351]. - Total liabilities rose to $3,654.8 million in 2021, compared to $3,105.4 million in 2020, an increase of 17.7%[351]. - The company’s total stockholders' equity increased to $1,070.7 million in 2021, up from $1,009.8 million in 2020, a growth of 6.0%[351]. Operational Challenges - The company shifted to a remote workforce strategy for most U.S. personnel during the COVID-19 pandemic, which has impacted operations and may lead to increased costs[116]. - The COVID-19 pandemic has caused increased transaction losses and higher call center costs, adversely affecting business operations[116]. - The company has taken steps to strengthen its liquidity position to pursue strategic priorities amid potential credit access challenges[118]. - The company faces risks from fraudulent activities that could lead to reputational damage and increased regulatory scrutiny, adversely affecting financial results[132]. - Economic conditions, including recessions, may reduce consumer spending and negatively impact the number of accounts and transactions processed[139]. - The company must effectively manage and scale its technology to avoid increased costs and system failures that could harm business operations[140]. - The company is transitioning to in-house processing, which may cause service disruptions and affect customer satisfaction[145]. - System interruptions or failures could lead to contract terminations and reduced operating revenue, impacting overall business performance[146]. - The company relies on third-party vendors for critical services, and disruptions in these services could adversely affect operations, especially during peak tax season[152]. Legal and Regulatory Risks - The company is subject to various federal and state privacy and data security laws, including the Gramm-Leach-Bliley Act, which mandates safeguarding customer information[95]. - The California Privacy Rights Act (CPRA) will impose additional obligations related to personal information starting January 1, 2023[97]. - Compliance with evolving privacy and data protection laws is crucial, as failure to do so could result in substantial fines and damage to reputation[151]. - Regulatory compliance is essential, as failure to adhere to laws could negatively impact business operations and financial results[158]. - The company is currently involved in litigation with Republic Bank regarding a proposed acquisition, which could result in significant financial implications[167]. - The company faces potential adverse impacts from regulatory changes, including increased compliance costs and operational challenges due to new legislation or guidance[161]. Strategic Initiatives and Market Position - The company launched GO2bank in January 2021 to target the low- and moderate-income market, but the success of new products is uncertain and may not yield significant revenues for years[124]. - The tax refund processing services segment relies heavily on a small number of tax preparation partners, and any loss of these partners could significantly harm revenue[122]. - Seasonal fluctuations impact operating revenues, with the first half of the year typically generating higher revenues due to tax refund processing services[126]. - The electronic payments industry is highly competitive, with new entrants offering low-cost alternatives, which could negatively impact the company's market share and revenues[129]. - The prepaid financial services industry may face a decline in consumer attractiveness compared to traditional financial services, potentially impacting operating revenues[141]. - The company’s ability to retain and attract long-term users is critical for future revenue growth, with potential fluctuations in account usage and retention impacting financial performance[125]. Human Resources and Employee Management - The company has approximately 1,200 full-time employees globally, with 74% based in the United States and 26% in China[105]. - The company is committed to improving diversity, equity, and inclusion (DEI) within its workforce and is conducting a DEI analysis in 2022[112]. - The company has implemented a comprehensive benefits program, including a 401(k) plan with company match and enhanced leave offerings[109]. - The company’s future success depends on its ability to attract and retain key personnel, which is challenged by competitive job market dynamics[177]. Financial Management and Investments - The company has established internal controls over financial reporting to ensure the reliability of financial statements in accordance with U.S. GAAP[184]. - The company is exposed to credit and liquidity risks associated with financial institutions holding its cash and cash equivalents, but manages these risks through a strict investment policy[327]. - The company performs initial credit reviews and monitors partner exposure to mitigate credit risk associated with settlement assets[328]. - The company may incur unanticipated liabilities or suffer harm to its business if it fails to successfully integrate acquired businesses or technologies[182]. - The company made an investment of $35,000,000 in TailFin Labs, LLC during 2021[360]. - The provision for loan losses increased to $24,978,000 in 2021 from $859,000 in 2020, indicating a significant rise in expected credit losses[360]. - The company repurchased $100,000,000 of Class A common stock in 2021[360]. - A quarter-point change in interest rates would result in a $0.3 million change in annual interest expense if the credit agreement is drawn to its maximum capacity[323]. - The company actively monitors interest rate exposure and may enter into derivative financial instruments to manage risks, although it does not engage in trading or speculative purposes[324]. - The company believes inflation will not materially affect its business, but acknowledges potential risks if borrowing rates rise significantly[325].

Financial Data and Key Metrics Changes - The company reported GAAP revenue growth of 14% and GAAP EPS more than doubled to $0.85 for Q4 2021 [8] - Non-GAAP revenue for Q4 2021 was $321 million, up 17% year-over-year, while adjusted EBITDA was $34 million, consistent with the prior year [25][32] - Non-GAAP EPS for Q4 2021 declined 13% to $0.27 due to an increase in the non-GAAP effective tax rate [26] Business Line Data and Key Metrics Changes - In the Consumer Services segment, revenue grew by $6.5 million or 4% to $161 million, with segment profit also increasing by 4% to $54 million [27] - The B2B Services segment saw significant growth, with gross dollar volume, purchase volume, and active accounts increasing by 48%, 30%, and 15% respectively, leading to a revenue increase of $45 million or 58% to $122 million [29] - The Money Movement segment experienced a revenue decline of $8 million or 17% due to the decision not to renew a low-margin reload partner [30] Market Data and Key Metrics Changes - The company estimates that customers received approximately $7 billion in government-related benefits, which significantly impacted gross dollar volume [34] - The expiration of unemployment benefits contributed to a 17% decline in gross dollar volume and active accounts in Q4 2021 [28] Company Strategy and Development Direction - The company is focused on a technology transformation that includes consolidating processing activities, implementing modern risk management tools, and creating a cloud-native stack [36][37] - The management emphasized the importance of their own bank as a differentiator and plans to enhance monetization through technology improvements [21] - The company aims to leverage its extensive network of over 90,000 locations to enhance customer engagement and brand marketing [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to adapt and grow despite industry challenges and the impact of stimulus roll-offs [9][23] - The company expects modest contributions to EBITDA in 2022, with more significant impacts anticipated in 2023 [55] - Full year 2022 non-GAAP revenue is expected to be in the range of $1.39 billion to $1.43 billion, with adjusted EBITDA between $225 million and $235 million [46] Other Important Information - The company announced a $100 million share repurchase program to be executed throughout 2022 [48] - An Investor Day is planned for November 2022 to share strategy and expectations for future growth [48] Q&A Session Summary Question: Investment in the business and growth focus - Management indicated that while investments will continue, modest EBITDA contributions are expected in the latter half of 2022, with more significant returns anticipated in 2023 [54][55] Question: Appetite for strategic combinations - Management prefers organic growth but remains open to opportunistic acquisitions if interesting assets become available [57] Question: Health of new customer acquisition in Consumer Services - The focus is on quality customer acquisition, particularly those committing to direct deposit, with customer acquisition costs remaining within target bounds [61][62] Question: Technology transformation and product rollout - Management confirmed that the technology transformation will not inhibit new product development, with parallel efforts ongoing [64] Question: Federal funds rate impact on business - Management confirmed that guidance assumes modest federal funds rate hikes, which will impact cash balances at the bank [70][72] Question: Share repurchase strategy - The share repurchase will be executed methodically over the year, with potential for more aggressive actions if share prices become dislocated [73] Question: Demand for earn wage access products - Management expressed optimism about the traction of earn wage access products, leveraging existing PayCard clients [78] Question: Walmart relationship and future developments - Management reaffirmed a strong partnership with Walmart, emphasizing the value of their long-term relationship [82]

THIRD QUARTER 2021 EARNINGS November 4, 2021 SAFE HARBOR STATEMENT Green Dot Corporation – Confidential 1 As a reminder, our comments may include forward-looking statements and expectations regarding future results and performance. Please refer to the cautionary language in the earnings release and in Green Dot's filings with the Securities and Exchange Commission, including our most recent Form 10-K and 10-Q, for additional information concerning factors that could cause actual results to differ materially ...

Financial Data and Key Metrics Changes - Consolidated non-GAAP revenue increased by 18% year-over-year, reaching $329 million [4][20] - Adjusted EBITDA rose by 37%, totaling $46 million, with a margin expansion of 200 basis points [4][20] - Non-GAAP EPS increased by 72%, reaching $0.43 [4][20] - Operating cash flow generated year-to-date was $147 million, with a cash balance of $153 million at quarter-end [21] Business Segment Data and Key Metrics Changes - **Consumer Segment**: Revenue grew by $17 million (11%) and profit increased by $8 million (17%), despite a decline in gross dollar volume by 18% [23] - **B2B Segment**: Revenue increased by $41 million (53%), with gross dollar volume, purchase volume, and active accounts growing by 57%, 24%, and 14% respectively [24] - **Money Movement Segment**: Revenue declined by $11 million (19%), but profit grew by $1 million (4%) due to growth in ancillary tax processing services [26] Market Data and Key Metrics Changes - Active accounts and direct deposit active accounts in the Consumer Segment declined by 15% and 9% respectively, attributed to changes in unemployment benefits and tax refund timing [22][23] - The B2B segment saw significant growth, indicating a strong demand for banking-as-a-service (BaaS) offerings [24] Company Strategy and Development Direction - The company is focused on investing in infrastructure to create a scalable platform and enhance customer service [5][31] - Strategic partnerships with major retailers like Walmart and new product offerings are aimed at expanding market reach and customer acquisition [6][8][56] - The company plans to continue investing in its modern banking platform and customer service to drive long-term growth [28][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's ability to serve underserved consumers and small businesses, emphasizing the importance of digital banking solutions [31] - The company anticipates that investments made in 2021 will yield benefits in 2022 and beyond, particularly in reducing processing costs [29][30] Other Important Information - The company will not proceed with the acquisition of TRS, but remains committed to enhancing its tax processing business [15] - The introduction of GO2bank is a key initiative aimed at improving customer engagement and service quality [6][47] Q&A Session Summary Question: Insights on B2B segment KPIs - Management noted that while active accounts may have decreased sequentially, year-over-year growth remains strong, with gross dollar volume being a critical metric [34][36] Question: Republic deal and cash deployment plans - Management expressed disappointment regarding the TRS transaction but emphasized that it was not critical to long-term growth; plans for excess cash deployment are still under consideration [37][38] Question: Benefits of self-processing and cost savings - Management indicated that transitioning to self-processing will lead to fixed cost reductions and improved margins, particularly in 2023 [40][42] Question: Active accounts and customer quality - Management highlighted that while active accounts have declined, the quality and profitability of remaining accounts have improved, with a focus on enhancing customer offerings [45][47] Question: Collaboration with Walmart - Management confirmed a renewed commitment to grow the Walmart MoneyCard customer base and enhance embedded payment solutions [52][56] Question: Growth mix in BaaS platform - Management expects near-term growth to come from existing partners, with a strong pipeline for new partnerships in the future [60][64]

[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section provides an overview of Green Dot Corporation's financial performance, condition, and related disclosures for the period [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Green Dot Corporation's unaudited consolidated financial statements, highlighting asset growth and increased net income [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to $4.39 billion, driven by cash and investments, while liabilities and equity also rose Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **$4,391,349** | **$4,115,267** | | Unrestricted cash and cash equivalents | $1,804,826 | $1,491,842 | | Investment securities available-for-sale | $1,188,216 | $970,969 | | **Total Liabilities** | **$3,309,410** | **$3,105,435** | | Deposits | $2,959,386 | $2,735,116 | | **Total Stockholders' Equity** | **$1,081,939** | **$1,009,832** | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Operating revenues and net income significantly increased for both the quarter and nine-month periods ending September 30, 2021 Operating Results (in thousands, except per share data) | Metric | Q3 2021 | Q3 2020 | Nine Months 2021 | Nine Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $339,499 | $291,070 | $1,102,358 | $969,479 | | Operating income (loss) | $8,830 | $(2,650) | $74,618 | $61,589 | | Net income (loss) | $7,335 | $(2,992) | $58,003 | $47,147 | | Diluted EPS | $0.13 | $(0.06) | $1.04 | $0.87 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow was $147.2 million, with significant cash provided by financing activities offsetting investing outflows Cash Flow Summary - Nine Months Ended Sep 30 (in thousands) | Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $147,234 | $198,851 | | Net cash used in investing activities | $(399,655) | $(105,938) | | Net cash provided by financing activities | $564,696 | $983,001 | | **Net increase in cash** | **$312,275** | **$1,075,914** | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Detailed notes explain accounting policies, segment realignment, significant revenue concentrations, and subsequent legal events - The company realigned its operations into **three reportable segments** in Q1 2021: Consumer Services, B2B Services, and Money Movement Services[118](index=118&type=chunk) - Revenues from Walmart constituted **23% of total operating revenues** for both the three and nine months ended September 30, 2021[117](index=117&type=chunk) - The agreement to acquire Tax Refund Solutions (TRS) was terminated due to lack of Federal Reserve approval, resulting in a **$5 million termination fee** and a subsequent lawsuit from Republic Bank[127](index=127&type=chunk)[128](index=128&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results, highlighting revenue growth from digital payments and stimulus, alongside rising expenses and a strong capital position [Consolidated Financial Results and Trends](index=29&type=section&id=Consolidated%20Financial%20Results%20and%20Trends) Total operating revenues increased significantly in Q3 2021 and for the nine months, driven by Consumer and B2B Services Consolidated Financial Results (in thousands) | Metric | Q3 2021 | Q3 2020 | % Change | | :--- | :--- | :--- | :--- | | Total operating revenues | $339,499 | $291,070 | 16.6% | | Total operating expenses | $330,669 | $293,720 | 12.6% | | Net income (loss) | $7,335 | $(2,992) | N/A | - Revenue growth was supported by a fundamental shift to electronic payments and economic stimulus funds[136](index=136&type=chunk) - Money Movement Services revenue decreased by **19% in Q3 2021**, primarily due to a **22% decrease in cash transfers**[139](index=139&type=chunk) [Consolidated Key Metrics](index=32&type=section&id=Consolidated%20Key%20Metrics) Gross Dollar Volume increased by 13.5%, while active accounts, purchase volume, and cash transfers experienced declines Consolidated Key Metrics - Q3 2021 vs Q3 2020 | Metric | Q3 2021 | Q3 2020 | % Change | | :--- | :--- | :--- | :--- | | Gross Dollar Volume (in millions) | $16,404 | $14,453 | 13.5% | | Number of Active Accounts (in millions) | 5.37 | 5.72 | (6.1)% | | Purchase Volume (in millions) | $7,356 | $7,600 | (3.2)% | | Cash Transfers (in millions) | 10.05 | 12.81 | (21.5)% | [Segment Results](index=39&type=section&id=Segment%20Results) B2B Services revenue grew significantly, Consumer Services revenue increased, and Money Movement Services revenue decreased Segment Profit - Q3 2021 vs Q3 2020 (in thousands) | Segment | Q3 2021 | Q3 2020 | % Change | | :--- | :--- | :--- | :--- | | Consumer Services | $60,084 | $51,494 | 16.7% | | B2B Services | $18,501 | $16,372 | 13.0% | | Money Movement Services | $18,718 | $17,974 | 4.1% | - B2B Services segment revenue grew **53.3% in Q3 2021**, driven by organic growth in BaaS programs[190](index=190&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) - Consumer Services segment revenue increased **11.2% in Q3 2021**, despite declining active accounts, due to new feature adoption and lower reward accruals[185](index=185&type=chunk)[186](index=186&type=chunk)[187](index=187&type=chunk) [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with $1.8 billion in cash and $1.2 billion in investments, supported by an undrawn credit facility - Primary liquidity sources include **$1.8 billion in unrestricted cash** and **$1.2 billion in available-for-sale investment securities**[202](index=202&type=chunk) - The company has a **$100 million revolving credit facility** with no outstanding borrowings as of September 30, 2021[207](index=207&type=chunk) - Management believes current liquidity is sufficient to meet capital needs for at least the next 12 months[203](index=203&type=chunk) [Capital Requirements for Bank Holding Companies](index=44&type=section&id=Capital%20Requirements%20for%20Bank%20Holding%20Companies) Both Green Dot Corporation and Green Dot Bank are categorized as 'well capitalized', exceeding all regulatory capital requirements Capital Ratios as of September 30, 2021 | Entity / Ratio | Actual Ratio | Regulatory Minimum | "Well-capitalized" Minimum | | :--- | :--- | :--- | :--- | | **Green Dot Corporation** | | | | | Common equity Tier 1 capital | 64.8% | 4.5% | n/a | | Total risk-based capital | 65.9% | 8.0% | 10.0% | | **Green Dot Bank** | | | | | Common equity Tier 1 capital | 50.4% | 4.5% | 6.5% | | Total risk-based capital | 51.6% | 8.0% | 10.0% | - Both Green Dot Corporation and Green Dot Bank were categorized as **'well capitalized'** as of September 30, 2021[216](index=216&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate fluctuations, with credit and liquidity risks managed through restrictive investment policies - The company's primary market risk is **interest rate risk**, with near-zero short-term rates potentially impacting net interest income[219](index=219&type=chunk) - Credit and liquidity risks are managed through restrictive investment policies and monitoring of partner creditworthiness[223](index=223&type=chunk)[224](index=224&type=chunk) - The company does not engage in derivative financial instruments for trading or speculative purposes[218](index=218&type=chunk)[221](index=221&type=chunk) [Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective, with no material changes to internal controls over financial reporting - The CEO and CFO concluded that disclosure controls and procedures were **effective** as of September 30, 2021[225](index=225&type=chunk) - There were **no material changes** in internal control over financial reporting during Q3 2021[226](index=226&type=chunk) [PART II – OTHER INFORMATION](index=48&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, unregistered equity sales, and exhibits [Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) This section details ongoing legal proceedings, including a class action lawsuit and litigation over a terminated acquisition - The company is a defendant in a class action lawsuit alleging misleading statements regarding business strategy and financial performance[109](index=109&type=chunk) - Republic Bank filed a lawsuit against Green Dot claiming breach of contract over the terminated Tax Refund Solutions (TRS) acquisition agreement[128](index=128&type=chunk)[283](index=283&type=chunk) [Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including pandemic impacts, revenue concentration, competition, fraud, and regulatory oversight [COVID-19 Risks](index=48&type=section&id=COVID-19%20RISKS) The COVID-19 pandemic poses ongoing risks including operational disruptions, workforce effectiveness, and increased costs - The pandemic has led to a remote workforce and office closures, potentially impacting workforce effectiveness and resulting in impairment charges[231](index=231&type=chunk) - Increased costs, including higher call center expenses and disputed transaction losses, may continue to adversely affect financial results[233](index=233&type=chunk) [Business Risks](index=48&type=section&id=RISKS%20RELATED%20TO%20OUR%20BUSINESS) Business risks include heavy reliance on Walmart, intense competition, potential for fraudulent activities, and customer overdraft losses - **23% of operating revenues** are derived from products sold at Walmart, making the relationship critical[236](index=236&type=chunk) - Intense competition from established financial institutions and 'challenger' banks could erode market share and pressure margins[245](index=245&type=chunk)[247](index=247&type=chunk) - Significant fraud incidents could lead to reputational damage, regulatory sanctions, and financial losses[249](index=249&type=chunk)[250](index=250&type=chunk) [Operational Risks](index=52&type=section&id=RISKS%20RELATED%20TO%20OUR%20OPERATIONS) Operational risks include reliance on computer systems, data security breaches, and dependency on third-party vendor performance - The business depends on uninterrupted computer systems, with failures potentially causing service interruptions and reputational harm[260](index=260&type=chunk)[263](index=263&type=chunk) - Data security breaches could lead to liability, litigation, regulatory action, and reputational damage[264](index=264&type=chunk)[265](index=265&type=chunk) - Reliance on third-party vendors for critical functions poses risks if their performance is inadequate[268](index=268&type=chunk) [Regulatory and Legal Risks](index=55&type=section&id=REGULATORY%20AND%20LEGAL%20RISKS) Extensive regulatory oversight, changes in payment network rules, and ongoing litigation pose significant regulatory and legal risks - As a bank holding company, Green Dot is subject to extensive Federal Reserve supervision, with non-compliance risking enforcement actions[272](index=272&type=chunk) - Revenue from interchange fees is dependent on payment network rates and vulnerable to future regulation[280](index=280&type=chunk)[281](index=281&type=chunk) - Litigation and regulatory proceedings, including the Republic Bank lawsuit, could result in significant fines or penalties[283](index=283&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=62&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[301](index=301&type=chunk) [Other Information](index=62&type=section&id=Item%205.%20Other%20Information) The company reported no other information required to be disclosed under this item - None[302](index=302&type=chunk) [Exhibits](index=63&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL financial data - Exhibits include certifications from the Principal Executive Officer and Principal Financial Officer under Sarbanes-Oxley Act sections[304](index=304&type=chunk) - The filing includes financial statements formatted in Inline XBRL[304](index=304&type=chunk)

Non-GAAP Financial Measures - Green Dot uses non-GAAP financial measures to supplement its GAAP consolidated financial statements, excluding primarily non-cash expenses and charges[3] - These measures are not GAAP alternatives and may not be comparable to other organizations' measures[3] - Green Dot believes these measures help investors evaluate operating performance by eliminating items not indicative of core operations[3] - Management uses non-GAAP measures for planning, resource allocation, strategy evaluation, compensation metrics, and board communications[3] - Adjusted EBITDA is used to measure operating performance without regard to non-operating items, income taxes, depreciation, stock-based compensation, and other charges[3] Reconciliation of Operating Revenues - Total operating revenues for Q1 2020 were $362.2 million, decreasing to $284.3 million in Q4 2020, and increasing to $393.5 million in Q1 2021 and $369.4 million in Q2 2021[2] - After net revenue adjustments, non-GAAP total operating revenues were $346.5 million in Q1 2020, $274.5 million in Q4 2020, $379.8 million in Q1 2021, and $357.9 million in Q2 2021[2] Reconciliation of Net Income - Net income was $46.8 million in Q1 2020, a loss of $(24.0) million in Q4 2020, $25.7 million in Q1 2021, and $24.9 million in Q2 2021[2] - Non-GAAP net income was $60.4 million in Q1 2020, $17.3 million in Q4 2020, $46.1 million in Q1 2021, and $37.8 million in Q2 2021[2] Adjusted EBITDA and Margin - Adjusted EBITDA was $92.1 million in Q1 2020, $33.7 million in Q3 2020, $34.8 million in Q4 2020, $73.4 million in Q1 2021, and $62.9 million in Q2 2021[2] - Adjusted EBITDA margin was 27% in Q1 2020, 12% in Q3 2020, 13% in Q4 2020, 19% in Q1 2021, and 18% in Q2 2021[2]