Core Insights - Green Dot Corporation (GDOT) reported strong second-quarter 2025 results, with earnings and revenues exceeding the Zacks Consensus Estimate [1][9] - Quarterly earnings per share (excluding non-recurring items) reached 40 cents, surpassing estimates by over 100% and improving 60% year-over-year [1][9] - Revenues totaled $501.2 million, beating estimates by 1.1% and increasing 23.1% year-over-year [1][9] Segmental Revenues - B2B Services revenues rose 38.3% in Q2 2025 to $348.7 million, driven by a key BaaS partner and stability in the BaaS portfolio [2][9] - Money Movement Services revenues decreased 4% year-over-year to $50.85 million, affected by a slight decline in Money Processing, although Tax Processing saw revenue growth [2] - Consumer Services segment revenues were $93.1 million, down 3.64% year-over-year, primarily due to challenges in the Retail channel, partially offset by the launch of PLS [3] Key Metrics - GDOT's gross dollar volume increased 20% year-over-year to $38.55 billion, while purchase volume fell 0.4% to $4.99 billion [4] - The company reported 3.48 million active accounts, a 2.1% increase year-over-year [4] Operating Results - Adjusted EBITDA for the quarter was $45.43 million, reflecting a 34% year-over-year increase, although the adjusted EBITDA margin decreased by 70 basis points to 9.1% [5] Balance Sheet & Cash Flow - At the end of Q2, GDOT had $2.3 billion in unrestricted cash and cash equivalents, up from $1.59 billion at the end of Q4 2024, with no long-term debt [6] - The company generated $177.7 million in cash from operating activities, with capital expenditures amounting to $109.3 million [6] Guidance - GDOT provided 2025 guidance for total operating revenues between $2 billion and $2.1 billion, with the midpoint aligning with the Zacks Consensus Estimate [7] - Adjusted earnings per share guidance was raised to a range of $1.28-$1.42, up from $1.14-$1.28, while adjusted EBITDA is expected to be between $160 million and $170 million [8]

Core Insights - Green Dot (GDOT) reported quarterly earnings of $0.4 per share, significantly exceeding the Zacks Consensus Estimate of $0.17 per share, and up from $0.25 per share a year ago, representing an earnings surprise of +135.29% [1] - The company achieved revenues of $501.16 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.09% and increasing from $402.56 million year-over-year [2] - Green Dot has outperformed consensus EPS estimates three times over the last four quarters and has topped revenue estimates four times in the same period [2] Future Outlook - The immediate price movement of Green Dot's stock will largely depend on management's commentary during the earnings call and the sustainability of earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is -$0.08 on revenues of $489.1 million, while for the current fiscal year, the estimate is $1.22 on revenues of $2.05 billion [7] - The Zacks Rank for Green Dot is currently 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Industry Context - The Financial Transaction Services industry, to which Green Dot belongs, is currently ranked in the top 30% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - Adjusted revenue increased by 24% year-over-year, while adjusted EBITDA rose by 34%, both exceeding expectations [7][18] - Non-GAAP EPS reached $0.40 per share, representing a 60% year-over-year increase [18] Business Line Data and Key Metrics Changes - The B2B segment, which includes the BaaS channel, saw revenue growth of nearly 40%, driven by a significant BaaS partner and overall growth in the BaaS portfolio [19][20] - The Rapid Employer Services division experienced revenue declines due to decreased active accounts and volumes, particularly in the staffing industry [21] - The Money Movement segment's tax processing business outperformed expectations, while the money processing business saw a modest decline in revenue due to an 8% decrease in transactions [25][26] Market Data and Key Metrics Changes - The retail channel remains under pressure, but revenue and active account declines are moderating, largely due to the partnership with PLS [28][29] - Active accounts in the consumer segment have stabilized, but the overall revenue in the consumer segment is projected to decline in the low double digits [36] Company Strategy and Development Direction - The company is focused on optimizing the profitability of its balance sheet while maintaining a conservative risk profile, with an emphasis on generating deposit growth [10][11] - New partnerships, such as with Samsung and Credit Sesame, are expected to drive future growth and enhance the embedded finance platform [12][18] - The company is realigning resources to support scalable long-term success, particularly in the Rapid division and earned wage access (EWA) market [17][37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to capitalize on opportunities in the embedded finance market, despite challenges in certain segments [39][41] - The company anticipates continued growth in the B2B segment, with a backlog of partners to launch in the BaaS business [36][37] - Adjusted guidance for 2025 includes non-GAAP revenue expectations of $2 billion to $2.1 billion and adjusted EBITDA of $160 million to $170 million [32][33] Other Important Information - The company has made significant investments in technology infrastructure and compliance to support growth and operational stability [40][41] - A $70 million non-cash charge was recorded due to an incentive payment related to the Walmart partnership, which continues to provide strong economic returns [31] Q&A Session Summary Question: Can you talk about the journey of leveraging the bank and balance sheet to improve profitability? - Management indicated they are in the early stages of repositioning the portfolio and will continue to make adjustments throughout the year [43][44] Question: Any update on the strategic review of alternatives? - The strategic review is ongoing, with no significant updates available at this time [48][49] Question: Can you provide more detail on the shift towards earned wage access? - The company is focusing its sales resources on EWA, targeting a different buyer and leveraging existing sales expertise [52][54] Question: Can you elaborate on the competitive takeaway with Credit Sesame? - The sales cycle for the Credit Sesame partnership was typical, around six months to a year, with the ARC platform's capabilities being a key factor in winning the deal [58][60]

Q2 2025 Financial Performance - Non-GAAP Revenue increased by 24% to $501 million[5,19] - Adjusted EBITDA increased by 34% to $45 million[5,19] - Non-GAAP EPS increased by 60% to $040[5,20] Segment Performance - B2B Services revenue increased by 38% to $3487 million[21] - Consumer Services revenue decreased by 4% to $931 million[21] - Money Movement revenue decreased by 4% to $508 million[21] - B2B Services segment profit increased by 47%[21] - Consumer Services segment profit decreased by 4%[21] - Money Movement segment profit decreased by 3%[21] Key Metrics - Active accounts increased by 2%[6,28] - B2B Services active accounts increased by 10%[30,50] - Consumer Services active accounts declined by 5%[30,41] 2025 Guidance and Outlook - Projected Non-GAAP Revenue is $20 billion-$21 billion, representing approximately 20% growth at the midpoint[62,64] - Projected Adjusted EBITDA is $160 million-$170 million[62] - Projected Non-GAAP EPS is $128-$142[62]

[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Green Dot Corporation's unaudited consolidated financial statements as of June 30, 2025, detailing assets, liabilities, equity, and cash flows, with a **$47.0 million** net loss for the quarter [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to **$5.58 billion**, driven by a rise in unrestricted cash to **$2.31 billion**, with total liabilities at **$4.66 billion** and equity at **$920.9 million** Consolidated Balance Sheet Highlights (in thousands of US dollars) | Account | June 30, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Unrestricted cash and cash equivalents | $2,312,518 | $1,592,391 | | Investment securities available-for-sale | $1,537,658 | $2,008,650 | | Total assets | $5,583,464 | $5,434,282 | | **Liabilities & Equity** | | | | Deposits | $4,096,701 | $4,010,520 | | Total liabilities | $4,662,582 | $4,560,697 | | Total stockholders' equity | $920,882 | $873,585 | | Total liabilities and stockholders' equity | $5,583,464 | $5,434,282 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) For Q2 2025, total operating revenues increased **23.8%** to **$504.2 million**, but the company reported a wider net loss of **$47.0 million**, primarily due to increased 'Other (expense), net' Consolidated Statements of Operations Highlights (in thousands of US dollars, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $504,176 | $407,121 | $1,063,050 | $859,109 | | Operating income (loss) | $13,399 | $(23,667) | $74,144 | $(13,113) | | Net loss | $(47,025) | $(28,715) | $(21,252) | $(23,965) | | Diluted loss per common share | $(0.85) | $(0.54) | $(0.39) | $(0.45) | [Consolidated Statements of Comprehensive Income And Loss](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20And%20Loss) In Q2 2025, the company reported a comprehensive loss of **$34.9 million**, including a net loss of **$47.0 million** offset by **$12.1 million** in other comprehensive income from unrealized gains Consolidated Statements of Comprehensive Income and Loss (in thousands of US dollars) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(47,025) | $(28,715) | $(21,252) | $(23,965) | | Other comprehensive (loss) income | $12,079 | $18,414 | $59,792 | $17,735 | | Comprehensive (loss) income | $(34,946) | $(10,301) | $38,540 | $(6,230) | [Consolidated Statements of Changes in Stockholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) Total stockholders' equity increased to **$920.9 million** as of June 30, 2025, primarily due to **$59.8 million** in other comprehensive income, offsetting a **$21.3 million** net loss - For the six months ended June 30, 2025, stockholders' equity increased from **$873.6 million** to **$920.9 million**, mainly due to **$59.8 million** in other comprehensive income offsetting the **$21.3 million** net loss[17](index=17&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash from operating activities was **$177.7 million**, investing activities provided **$501.7 million**, and financing activities provided **$40.8 million**, leading to **$2.31 billion** in unrestricted cash Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30, in thousands of US dollars) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $177,701 | $120,674 | | Net cash provided by investing activities | $501,664 | $7,783 | | Net cash provided by financing activities | $40,762 | $502,258 | | **Net increase in unrestricted cash** | **$720,127** | **$630,715** | | Unrestricted cash, end of period | $2,312,562 | $1,317,217 | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes detail accounting policies, revenue disaggregation, investment portfolio, and segment performance, highlighting a **$70 million** incentive payment related to the Walmart agreement recorded as an equity loss - In April 2025, the company amended its agreement with Walmart, extending the term to January 2033, with the TailFin Labs joint venture making a one-time **$70 million** incentive payment recorded as an equity loss[55](index=55&type=chunk) - A single BaaS partner generated approximately **63%** and **59%** of total operating revenues for the three and six months ended June 30, 2025, respectively, indicating significant partner concentration[118](index=118&type=chunk) Segment Profit (in thousands of US dollars) | Segment | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Consumer Services | $33,094 | $34,449 | $66,726 | $67,708 | | B2B Services | $27,980 | $19,078 | $55,132 | $37,361 | | Money Movement Services | $34,112 | $35,291 | $110,938 | $101,138 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results, noting a **24%** revenue increase driven by B2B Services, a wider Q2 net loss due to a **$70 million** Walmart incentive payment, and ongoing exploration of strategic alternatives - Total operating revenues increased by **24%** for both the three and six months ended June 30, 2025, driven by **38%** and **40%** growth in the B2B Services segment respectively[137](index=137&type=chunk)[139](index=139&type=chunk) - Other expense increased significantly due to a **$70 million** incentive payment by the TailFin Labs joint venture for the Walmart MoneyCard agreement extension[146](index=146&type=chunk) - In March 2025, the company initiated a process to explore potential strategic alternatives, with no assurances regarding outcome or timing[150](index=150&type=chunk) [Consolidated Key Metrics](index=35&type=section&id=Consolidated%20Key%20Metrics) In Q2 2025, Gross Dollar Volume grew **20.0%** to **$38.5 billion**, and active accounts increased **2.1%** to **3.48 million**, though purchase volume and cash transfers declined Consolidated Key Metrics (in millions, except percentages) | Metric (in millions) | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Gross dollar volume | $38,545 | $32,130 | 20.0% | | Number of active accounts | 3.48 | 3.41 | 2.1% | | Purchase volume | $4,991 | $5,012 | (0.4)% | | Number of cash transfers | 7.52 | 8.15 | (7.7)% | | Number of tax refunds processed | 3.73 | 4.20 | (11.1)% | [Segment Results](index=43&type=section&id=Segment%20Results) Segment performance varied, with B2B Services profit growing **46.7%** due to BaaS programs, while Consumer Services profit declined **3.9%**, and Money Movement Services profit fell **3.3%** - **Consumer Services:** Segment profit decreased by **3.9%** in Q2 2025 YoY, with active accounts declining **5.1%** and gross dollar volume falling **2.2%**[202](index=202&type=chunk)[205](index=205&type=chunk) - **B2B Services:** Segment profit grew **46.7%** in Q2 2025 YoY, driven by a **23.1%** increase in gross dollar volume and a **9.7%** increase in active BaaS accounts[207](index=207&type=chunk)[211](index=211&type=chunk) - **Money Movement Services:** Segment profit declined **3.3%** in Q2 2025 YoY, impacted by an **11.1%** decrease in tax refunds and a **7.7%** drop in cash transfers[213](index=213&type=chunk)[215](index=215&type=chunk) [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, primary liquidity was **$2.3 billion** in unrestricted cash, with **$177.7 million** generated from operations, and both entities are 'well-capitalized' under regulatory standards - Primary liquidity source as of June 30, 2025, was **$2.3 billion** in unrestricted cash and cash equivalents[222](index=222&type=chunk) - In 2024 and 2025, the company issued **$65 million** in senior unsecured notes maturing in 2029 with a fixed rate of **8.75%**[230](index=230&type=chunk) Capital Ratios as of June 30, 2025 | Entity / Ratio | Actual Ratio | Regulatory Minimum | 'Well-capitalized' Minimum | | :--- | :--- | :--- | :--- | | **Green Dot Corporation** | | | | | Tier 1 leverage | 14.0% | 4.0% | n/a | | Total risk-based capital | 48.1% | 8.0% | 10.0% | | **Green Dot Bank** | | | | | Tier 1 leverage | 7.7% | 4.0% | 5.0% | | Total risk-based capital | 35.7% | 8.0% | 10.0% | [Quantitative and Qualitative Disclosures about Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risks are interest rate, inflation, and credit/liquidity, with recent Federal Reserve rate cuts expected to negatively impact net interest income due to BaaS partner agreements - The company is exposed to interest rate risk, with recent Federal Reserve rate cuts expected to have a net negative impact due to interest-sharing agreements with BaaS partners[242](index=242&type=chunk) - Inflation risk is believed to be largely offset by higher interest yields on cash/investments and increased interchange revenue from higher consumer spending[245](index=245&type=chunk) - Credit and liquidity risks are managed through a restrictive investment policy and by monitoring settlement exposure with retail distributors and partners[246](index=246&type=chunk)[247](index=247&type=chunk)[248](index=248&type=chunk) [Controls and Procedures](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective[249](index=249&type=chunk) - There were no material changes in internal control over financial reporting during the three months ended June 30, 2025[250](index=250&type=chunk) [PART II – OTHER INFORMATION](index=53&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings in the ordinary course of business, with detailed information provided in Note 17 of the financial statements - For information regarding legal proceedings, the report refers to Note 17 — Commitments and Contingencies in the Notes to Consolidated Financial Statements[254](index=254&type=chunk) [Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors) This section details significant risks, including uncertainties from strategic alternatives, heavy reliance on key partners, intense competition, fraud potential, operational risks, and extensive regulatory oversight, including a recent Consent Order - The company's exploration of strategic alternatives, announced in March 2025, creates uncertainty and could adversely affect the business and stock price[255](index=255&type=chunk) - A single BaaS partner accounted for **63%** of total operating revenues in Q2 2025, and Walmart accounted for **8%**, representing significant concentration risk[256](index=256&type=chunk) - As a bank holding company, Green Dot is subject to extensive regulation, including a July 2024 Consent Order with the Federal Reserve Board and a **$44 million** civil money penalty for compliance risk management[292](index=292&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=67&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company reported no unregistered sales of equity securities during the period - There were no unregistered sales of equity securities in the quarter[325](index=325&type=chunk) [Other Information](index=67&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement during the fiscal quarter ended June 30, 2025 - No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement during the quarter[326](index=326&type=chunk) [Exhibits](index=68&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including amendments to the Walmart MoneyCard Program Agreement and CEO/CFO certifications - Exhibits filed with the report include amendments to the Walmart MoneyCard agreement and officer certifications pursuant to the Sarbanes-Oxley Act[328](index=328&type=chunk)

```markdown Green Dot Second Quarter 2025 Results [Financial Highlights](index=1&type=section&id=Financial%20Highlights) Green Dot reported strong Q2 2025 results, with a 24% year-over-year increase in both GAAP and Non-GAAP total operating revenues. Non-GAAP net income and EPS saw significant growth of 66% and 60% respectively. This performance, driven by momentum in its Banking as a Service (BaaS) division and balance sheet optimization, led the company to raise its full-year 2025 guidance - The company is experiencing growing momentum and demand for its Banking as a Service (BaaS) platform, highlighted by new and expanded partnerships with companies like Samsung and Credit Sesame[1](index=1&type=chunk)[2](index=2&type=chunk) Q2 2025 Consolidated Financial Results Summary (YoY) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | **GAAP Results** | | | | | Total operating revenues | $504.2M | $407.1M | 24% | | Net loss | $(47.0M) | $(28.7M) | 64% | | Diluted loss per common share | $(0.85) | $(0.54) | 57% | | **Non-GAAP Results** | | | | | Non-GAAP total operating revenues | $501.2M | $402.6M | 24% | | Adjusted EBITDA | $45.4M | $34.0M | 34% | | Non-GAAP net income | $22.2M | $13.4M | 66% | | Non-GAAP diluted EPS | $0.40 | $0.25 | 60% | [Key Business Metrics](index=2&type=section&id=Key%20Business%20Metrics) In Q2 2025, consolidated gross dollar volume increased to $38.5 billion, up 9% from Q2 2024. The B2B Services segment was a key driver, with a 10% YoY increase in active accounts to 1.81 million. Conversely, the Consumer Services segment saw a 5% decline in active accounts to 1.67 million Key Metrics Comparison (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | **Consolidated** | | | | | Gross dollar volume | $38,545 M | $32,130 M | +19.9% | | Number of active accounts | 3.48 M | 3.41 M | +2.1% | | **Consumer Services** | | | | | Number of active accounts | 1.67 M | 1.76 M | -5.1% | | **B2B Services** | | | | | Gross dollar volume | $34,620 M | $28,116 M | +23.1% | | Number of active accounts | 1.81 M | 1.65 M | +9.7% | [Segment Performance](index=9&type=section&id=Segment%20Performance) The B2B Services segment was the primary growth engine in Q2 2025, with revenue increasing 38% YoY to $348.7 million and segment profit rising 47% to $28.0 million. The Consumer Services segment experienced a slight decline in both revenue and profit, while Money Movement Services remained relatively stable Segment Revenue and Profit (Q2 2025 vs Q2 2024) | Segment (in thousands) | Q2 2025 Revenue | Q2 2024 Revenue | Q2 2025 Profit | Q2 2024 Profit | | :--- | :--- | :--- | :--- | :--- | | Consumer Services | $93,099 | $96,620 | $33,094 | $34,449 | | B2B Services | $348,650 | $252,056 | $27,980 | $19,078 | | Money Movement Services | $50,848 | $52,963 | $34,112 | $35,291 | 2025 Financial Guidance [Updated Full-Year Outlook](index=3&type=section&id=Updated%20Full-Year%20Outlook) Green Dot raised its full-year 2025 guidance for Adjusted EBITDA and Non-GAAP EPS, citing strong first-half performance and anticipated contributions from balance sheet optimization. The Non-GAAP total operating revenue guidance remains unchanged Updated Full-Year 2025 Guidance | Metric | Previous Guidance | Updated Guidance | | :--- | :--- | :--- | | Non-GAAP Total Operating Revenues | $2.0 billion - $2.1 billion | $2.0 billion - $2.1 billion (Unchanged) | | Adjusted EBITDA | $150 million - $160 million | $160 million - $170 million (Raised) | | Non-GAAP EPS | $1.14 - $1.28 | $1.28 - $1.42 (Raised) | Full-Year 2025 Non-GAAP EPS Guidance Components (in millions) | Component | Low Range | High Range | | :--- | :--- | :--- | | Adjusted EBITDA | $160.0 | $170.0 | | Depreciation and amortization* | $(62.0) | $(62.0) | | Net interest expense | $(6.0) | $(6.0) | | Non-GAAP pre-tax income | $92.0 | $102.0 | | Tax impact** | $(20.2) | $(22.4) | | **Non-GAAP net income** | **$71.8** | **$79.6** | Consolidated Financial Statements (Unaudited) [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, Green Dot's total assets stood at $5.58 billion, a slight increase from $5.43 billion at year-end 2024. The growth was primarily driven by a significant increase in unrestricted cash and cash equivalents to $2.31 billion. Total liabilities rose to $4.66 billion, mainly due to an increase in deposits Key Balance Sheet Items (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Unrestricted cash and cash equivalents | $2,312,518 | $1,592,391 | | Total assets | $5,583,464 | $5,434,282 | | Deposits | $4,096,701 | $4,010,520 | | Total liabilities | $4,662,582 | $4,560,697 | | Total stockholders' equity | $920,882 | $873,585 | [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) For Q2 2025, total operating revenues increased 24% YoY to $504.2 million, primarily due to higher 'Card revenues and other fees'. However, a significant increase in processing expenses and a large 'Other (expense), net' of $74.7 million resulted in a GAAP net loss of $47.0 million, which was wider than the $28.7 million loss in Q2 2024 Q2 Statement of Operations Summary (in thousands) | Account | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Total operating revenues | $504,176 | $407,121 | 24% | | Total operating expenses | $490,777 | $430,788 | 14% | | Operating income (loss) | $13,399 | $(23,667) | N/A | | Net loss | $(47,025) | $(28,715) | 64% | | Diluted loss per share | $(0.85) | $(0.54) | 57% | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2025, net cash provided by operating activities was $177.7 million, an increase from $120.7 million in the same period of 2024. Investing activities provided a net cash inflow of $501.7 million, largely from the sale of available-for-sale securities. Financing activities provided $40.8 million, resulting in a net increase in cash of $720.1 million for the period Six Months Ended June 30 Cash Flow Summary (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $177,701 | $120,674 | | Net cash provided by investing activities | $501,664 | $7,783 | | Net cash provided by financing activities | $40,762 | $502,258 | | **Net increase in unrestricted cash** | **$720,127** | **$630,715** | Reconciliation of GAAP to Non-GAAP Measures [Reconciliation of Net Loss to Adjusted EBITDA](index=11&type=section&id=Reconciliation%20of%20Net%20Loss%20to%20Adjusted%20EBITDA) This section details the adjustments made to reconcile the GAAP Net Loss to the Non-GAAP metric of Adjusted EBITDA. For Q2 2025, a Net Loss of $(47.0) million was adjusted for items such as losses in equity method investments ($75.9 million), depreciation & amortization, and stock-based compensation to arrive at an Adjusted EBITDA of $45.4 million Q2 2025 Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Description | Amount | | :--- | :--- | | Net loss | $(47,025) | | Interest expense, net | $1,631 | | Income tax (benefit) | $(15,898) | | Depreciation and amortization | $16,078 | | Stock-based compensation & related taxes | $5,759 | | Amortization of acquired intangible assets | $5,199 | | Losses in equity method investments | $75,856 | | Other adjustments | $3,825 | | **Adjusted EBITDA** | **$45,425** | [Reconciliation of Net Loss to Non-GAAP Net Income](index=10&type=section&id=Reconciliation%20of%20Net%20Loss%20to%20Non-GAAP%20Net%20Income) This reconciliation adjusts the GAAP Net Loss to calculate Non-GAAP Net Income by adding back non-cash or non-recurring expenses. For Q2 2025, the GAAP Net Loss of $(47.0) million was adjusted for items like losses in equity method investments and stock-based compensation, and their tax effects, resulting in a Non-GAAP Net Income of $22.2 million Q2 2025 Reconciliation of Net Loss to Non-GAAP Net Income (in thousands) | Description | Amount | | :--- | :--- | | Net loss | $(47,025) | | Stock-based compensation & related taxes | $5,759 | | Amortization of acquired intangible assets | $5,199 | | Losses in equity method investments | $75,856 | | Income tax effect of adjustments | $(21,586) | | Other adjustments | $4,035 | | **Non-GAAP net income** | **$22,238** | [Reconciliation of Forward-Looking Guidance](index=12&type=section&id=Reconciliation%20of%20Forward-Looking%20Guidance) The company provides reconciliations for its full-year 2025 Non-GAAP guidance to the most directly comparable GAAP measures. This includes projecting a GAAP Net Loss in the range of $(51.4) million to $(44.3) million, which reconciles to the guided Adjusted EBITDA range of $160 million to $170 million FY 2025 Guidance Reconciliation: Net Loss to Adjusted EBITDA (in millions) | Metric | Low Range | High Range | | :--- | :--- | :--- | | Net loss | $(51.4) | $(44.3) | | Adjustments | $211.4 | $214.3 | | **Adjusted EBITDA** | **$160.0** | **$170.0** | FY 2025 Guidance Reconciliation: Net Loss to Non-GAAP Net Income (in millions) | Metric | Low Range | High Range | | :--- | :--- | :--- | | Net loss | $(51.4) | $(44.3) | | Adjustments | $123.2 | $123.9 | | **Non-GAAP net income** | **$71.8** | **$79.6** | Other Information [About Green Dot](index=5&type=section&id=About%20Green%20Dot) Green Dot Corporation is a financial technology platform and registered bank holding company that provides banking and payment solutions. Its portfolio includes brands such as GO2bank, the Green Dot Network (GDN) with over 95,000 retail locations, the Arc embedded finance platform, rapid! wage and disbursement solutions, and the Santa Barbara TPG tax division - Green Dot delivers a wide range of financial products through its brands, including GO2bank for consumers, Arc for embedded finance, rapid! for wage access, and SBTPG for tax refund processing[16](index=16&type=chunk) [Forward-Looking Statements and Non-GAAP Measures](index=4&type=section&id=Forward-Looking%20Statements%20and%20Non-GAAP%20Measures) The report contains forward-looking statements, including the 2025 financial guidance, which are subject to risks and uncertainties. The company also uses non-GAAP financial measures like Adjusted EBITDA and Non-GAAP Net Income to supplement its GAAP results, believing they provide useful information to investors regarding underlying business trends - The earnings release includes forward-looking statements concerning financial guidance and future events, which are subject to various risks detailed in the company's SEC filings[12](index=12&type=chunk) - Green Dot utilizes non-GAAP financial measures to provide insight into its core operating performance by excluding items like stock-based compensation, amortization of acquired intangibles, and certain legal expenses[13](index=13&type=chunk)[14](index=14&type=chunk) ```

Core Insights - Green Dot (GDOT) and SoFi Technologies (SOFI) are competing U.S.-listed fintech firms in the digital banking sector, with Green Dot focusing on prepaid debit cards and Banking-as-a-Service (BaaS) solutions, while SoFi operates a full-stack digital banking platform offering various financial services [1][2] Green Dot's Case - Green Dot aims for long-term growth through strategic innovation and partnerships, issuing prepaid cards under its brand and co-branded offerings like Walmart MoneyCard [3] - The company leverages its proprietary technology and FDIC-insured banking license to provide BaaS, offering white-label solutions to major corporations such as Walmart, Uber, and Apple [4][5] - Green Dot's asset-light balance sheet allows for higher interchange margins and reduced reliance on interest income, enhancing operational efficiency and scalability [5] SoFi's Case - SoFi employs a land-and-expand strategy, attracting a growing customer base through a diverse range of financial services, which encourages partners to integrate their offerings [6] - The firm has extended its $2 billion Loan Platform Business agreement with Fortress Investment Group, focusing on personal loans and shifting towards fee-based revenues for more flexibility [7] - SoFi launched new credit cards to enhance its consumer finance footprint, with projections indicating 87% growth in EPS and 26% growth in sales for 2025 [8][10] Financial Estimates - Zacks Consensus Estimates indicate SoFi's 2025 sales will grow by 26% to $3.29 billion, with EPS expected to rise by 87% to $0.28 [10][12] - In contrast, Green Dot's 2025 sales are projected to increase by 20% to $2.05 billion, but EPS is expected to decline by 11% [13][15] Valuation Comparison - Green Dot is considered undervalued with a forward P/E of 7.65X compared to its median of 10.51X, while SoFi's higher forward P/E of 53.2X reflects strong investor confidence in its growth potential [16] Conclusion - SoFi is positioned as the stronger fintech player due to its aggressive growth strategy, national bank charter, and expanding product suite, while Green Dot's declining EPS outlook may limit its momentum [17]

Core Insights - Green Dot Corporation (GDOT) is currently trading at a low valuation of 7.99 times forward earnings, significantly below the industry average of 22.05 times, which may attract value investors seeking turnaround opportunities [1][3][8] - The market may be underestimating GDOT's potential in the fintech sector, particularly in banking-as-a-service and prepaid cards for underbanked consumers, indicating a possible upside if the company stabilizes its financials and executes growth initiatives [3][4] - GDOT's current ratio is 0.58, compared to the industry's 1.15, highlighting recent liquidity issues that raise concerns about the company's near-term financial health [4][5] Financial Performance - GDOT's stock has increased by 44% over the past three months, outperforming the industry's 6% rally, indicating positive market sentiment despite underlying concerns [11] - The Zacks Consensus Estimate for GDOT's earnings has remained unchanged over the past 30 days, and the stock currently holds a Zacks Rank 3 (Hold) [13] Competitive Landscape - SoFi Technologies (SOFI) trades at a much higher valuation of 54.51 times forward earnings, supported by strong revenue diversification and improving profitability, which justifies its premium [9] - Block (XYZ) trades at 23.53 times forward earnings, benefiting from its dual ecosystem of Cash App and Square, showcasing consistent innovation that keeps it ahead of weaker peers like GDOT [10]

Core Insights - Green Dot Corporation (GDOT) shares have increased by 46% over the past three months, significantly outperforming the industry growth of 9%, indicating a potential recovery after a challenging year [1][7]. Company Performance - Green Dot is focused on long-term growth through strategic innovation and partnerships, particularly in issuing prepaid cards and providing Banking-as-a-Service (BaaS) solutions [4][6]. - The company has established partnerships with major corporations like Walmart, Uber, and Apple, which allows it to integrate its financial products into their ecosystems, thus accessing large customer bases [5][6]. - GDOT maintains a strong balance sheet with $1.8 billion in cash and cash equivalents and generated $108.7 million in operating cash flow in the last quarter, indicating financial flexibility for growth initiatives [8]. Strategic Focus - Green Dot's asset-light balance sheet supports higher interchange margins and reduces reliance on interest income, enhancing operational efficiency [6]. - The company has never declared dividends and focuses on reinvesting earnings into growth, which may appeal to long-term investors but could deter income-focused investors [9]. Valuation and Risks - GDOT trades at a forward earnings multiple of 8.15, significantly lower than the industry average of 22.72, reflecting investor concerns about economic conditions and strategic alternatives [10]. - Projected earnings per share (EPS) for 2025 is $1.22, representing an 11% decline year-over-year, contributing to a cautious outlook among analysts [12][14]. Analyst Recommendations - Despite the recent stock rally and attractive valuation, a "Hold" recommendation is suggested due to near-term concerns such as declining earnings and macroeconomic sensitivity [14].

Core Viewpoint - Green Dot (GDOT) is a pro-consumer bank holding company that has shown strong performance over the past six months and is expected to maintain this momentum in the near term, making it a compelling addition to investment portfolios [1]. Performance Overview - GDOT's stock has returned 19.2% over the past six months, significantly outperforming the industry growth of 7.3% and the S&P 500 composite's rise of 5.5% [2]. - The company has a Zacks Rank of 1 (Strong Buy) and a VGM Score of A, indicating strong investment potential [3]. Earnings and Growth Prospects - GDOT has a solid earnings surprise history, exceeding the Zacks Consensus Estimate in two of the last four quarters, with an average earnings surprise of 5.6% [4]. - Current-year earnings estimates are at $1.22, reflecting a 9.9% growth over the past 60 days, while next year's earnings are projected to increase by 10.8% [4]. - Earnings estimates for 2025 and 2026 have risen nearly 10%, indicating expected double-digit growth [6]. Strategic Partnerships and Innovations - The partnership with Samsung enhances the Samsung Wallet with "Tap to Transfer" functionality, allowing users to send money quickly, thereby improving convenience and cross-platform compatibility [6]. - Green Dot's user-centric expansion strategy, combined with its Banking-as-a-Service (BaaS) model, allows it to power financial products for major brands like Walmart, Uber, and Apple, generating steady revenues from interchange fees and deposits [8]. Competitive Positioning - Green Dot's asset-light balance sheet differentiates it from other BaaS providers, enabling higher margins and reduced reliance on interest income, positioning the company strongly in the embedded finance space [8].