Green Dot (GDOT) Up 15.2% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Green Dot Corporation reported strong third-quarter 2025 results, with both earnings and revenues exceeding expectations, leading to a positive stock performance in the past month [2][12]. Financial Performance - Quarterly EPS was 6 cents, surpassing the consensus estimated loss of 11 cents, and improved by 53.9% year-over-year [2]. - Revenues reached $491.9 million, beating the Zacks Consensus Estimate by 1% and increasing by 20% year-over-year [2]. Segmental Revenues - B2B Services revenues grew by 32% to $364.2 million, driven by a BaaS partner and stability in the BaaS portfolio [3]. - Money Movement Services revenues declined by 6% to $29.8 million, affected by a slight dip in Money Processing, although Tax Processing saw revenue growth [3]. - Consumer Services segment revenues were $88.3 million, down 10% year-over-year, primarily due to challenges in the Retail channel, partially offset by the launch of PLS [4]. Key Metrics - Gross dollar volume increased by 18% to $39.5 million, while purchase volume fell by 5.1% to $4.74 billion [5]. - Active accounts rose by 0.9% year-over-year to 3.51 million [5]. Operating Results - Adjusted EBITDA totaled $23.57 million, a decrease of 17% year-over-year, with the adjusted EBITDA margin dropping by 220 basis points to 4.8% [6]. Balance Sheet & Cash Flow - Green Dot ended the quarter with $1.64 billion in unrestricted cash and cash equivalents, up from $1.59 billion at the end of Q4 2024, and had no long-term debt [7]. - The company generated $201.03 million in cash from operating activities [7]. Guidance - For 2025, Green Dot expects total operating revenues to be between $2 billion and $2.1 billion, with adjusted EPS guidance of $1.31-$1.44, an increase from the previous range of $1.28-$1.42 [8]. - Adjusted EBITDA is anticipated to be between $165 million and $175 million, up from the previous guidance of $160 million to $170 million [8]. Market Position - Green Dot has a Zacks Rank of 3 (Hold), indicating an expectation of in-line returns in the coming months [12]. - The stock has a subpar Growth Score of D, but a strong Momentum Score of A, and an aggregate VGM Score of B [11].