Green Dot(GDOT) - 2025 Q2 - Quarterly Results

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)