```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].

Company Performance - Green Dot (GDOT) has returned approximately 5.9% year-to-date, outperforming the average return of 2.8% for the Business Services sector [4] - The Zacks Consensus Estimate for GDOT's full-year earnings has increased by 21.5% over the past three months, indicating a positive earnings outlook [3] - Green Dot is currently ranked 1 (Strong Buy) in the Zacks Rank system, reflecting improving analyst sentiment [3] Industry Comparison - Green Dot belongs to the Financial Transaction Services industry, which includes 35 companies and is currently ranked 41 in the Zacks Industry Rank [5] - The average return for stocks in the Financial Transaction Services industry is 5% year-to-date, indicating that GDOT is performing better than its peers [5] - In contrast, Mitie Group PLC. (MITFY), which is part of the Business - Services industry, has a year-to-date return of 31.8% and is ranked 33 in its industry [4][6] Sector Overview - The Business Services sector consists of 260 individual stocks and holds a Zacks Sector Rank of 1, indicating strong overall performance [2] - The Business Services industry has seen an average increase of 17.6% since the beginning of the year, showcasing positive momentum within the sector [6]

Core Insights - Green Dot Corporation (NYSE: GDOT) is highlighted for the first time in nearly a year and a half, indicating renewed interest in the company [2] - The focus is on small and mid-cap stocks that insiders are purchasing, suggesting potential investment opportunities based on insider activity [2] Company Overview - Green Dot Corporation operates in the FinTech sector, which has been experiencing significant changes and opportunities [2] - The Insiders Forum, which manages a portfolio of 12-25 top stocks, aims to outperform the Russell 2000 benchmark over time [2] Investment Strategy - The investment strategy emphasizes identifying attractively valued stocks with recent significant insider purchases, which may indicate confidence in the company's future performance [2] - The model portfolio has reportedly more than doubled the return of its benchmark since its launch, showcasing the effectiveness of the investment approach [1]

Core Insights - Investing in stocks based on valuation metrics, particularly the price-to-earnings (P/E) and price-to-sales (P/S) ratios, is a strategic approach to identify potential investment opportunities [1][3] - The P/S ratio is especially useful for evaluating unprofitable companies or those in early growth stages, as it reflects the value of revenue generated [3][4] Group 1: Price-to-Sales Ratio - A P/S ratio below 1 indicates that investors are paying less than a dollar for each dollar of revenue, making it a favorable investment [4] - The P/S ratio is preferred over the P/E ratio because sales figures are less susceptible to manipulation compared to earnings [5] - A company with high debt and a low P/S ratio may not be an ideal investment due to potential future financial obligations [5][6] Group 2: Screening Parameters - Companies should have a P/S ratio less than the median for their industry, a low P/E ratio, and a price above $5 to qualify as attractive investments [7][8] - Additional metrics such as Price/Book and Debt/Equity ratios should also be analyzed to ensure a comprehensive evaluation [6] Group 3: Company Highlights - JAKKS Pacific (JAKK) has a strong focus on innovation and partnerships, benefiting from acquisitions and a solid international presence, currently holding a Zacks Rank 2 and a Value Score of A [10][11] - Green Dot (GDOT) is positioned for growth with a strong balance sheet and partnerships with major companies like Walmart, also holding a Zacks Rank 2 and a Value Score of B [12][13] - Signet Jewelers (SIG) demonstrates strength in inventory management and strategic restructuring, leading to improved financial performance, currently holding a Value Score of A and a Zacks Rank 2 [14][15] - Gibraltar Industries (ROCK) focuses on operational improvements and has a solid growth outlook due to high demand in its Residential segment, currently holding a Value Score of B and a Zacks Rank 2 [16][17] - PCB Bancorp (PCB) is strategically expanding its services and optimizing its branch network, positioning itself for sustained growth, currently holding a Value Score of B and a Zacks Rank 2 [18][19]

Core Viewpoint - Value investing remains a preferred strategy for identifying strong stocks, focusing on companies believed to be undervalued based on fundamental analysis [2][6] Company Summary - Green Dot (GDOT) is currently rated as a Zacks Rank 1 (Strong Buy) and has an A grade for Value, indicating strong investment potential [4] - GDOT's current P/E ratio is 8.16, significantly lower than the industry average of 23.71, suggesting it may be undervalued [4] - Over the past 52 weeks, GDOT's Forward P/E has fluctuated between a high of 9.32 and a low of 4.21, with a median of 6.67 [4] - GDOT has a P/CF ratio of 7.87, which is also lower than the industry's average P/CF of 18.70, further indicating potential undervaluation [5] - The P/CF for GDOT has ranged from a high of 25.01 to a low of 4.91 over the past year, with a median of 10.48 [5] - Overall, GDOT is highlighted as one of the market's strongest value stocks due to its favorable earnings outlook and valuation metrics [6]

Financial Performance - Green Dot's first quarter earnings report was strong [1] Industry Trends - Embedded banking could increase Green Dot's stock price [1] - European rivals are experiencing rapid growth in embedded banking [1]