Green Dot(US:GDOT)2020-02-20 01:21Financial Data and Key Metrics Changes - Green Dot generated Q4 consolidated non-GAAP total operating revenues of $238.4 million, with a 1% year-over-year growth [14][23] - EBITDA for Q4 was $21.8 million, and non-GAAP EPS was $0.14 per share [14][23] - For the full year 2019, non-GAAP revenue was $1.058 billion, adjusted EBITDA was $241 million, and non-GAAP EPS was $2.79 [32] Business Line Data and Key Metrics Changes - Non-GAAP revenues from the Account Services segment declined 6% year-over-year, primarily due to challenges in the Consumer Business [28] - The Processing and Settlement Services segment grew non-GAAP revenues by 33% year-over-year, with cash transfer volume growth accelerating to 11% and SimplyPaid disbursement volume growing 48% [30] - The Consumer Business faced challenges in acquiring new accounts to offset attrition, while the Platform Services Business exhibited strong growth [28][29] Market Data and Key Metrics Changes - The company launched 750 stores at checkout at Walgreens and a large deployment at Family Dollar to support consumer account initiatives [17] - The company signed agreements with significant players in the small and medium business segment, indicating a focus on expanding market share [18] Company Strategy and Development Direction - The company aims to restore the health of its Consumer Business while expecting continued momentum in its Platform Services Business [43] - The 2020 financial guidance includes non-GAAP net operating revenue expected to be between $1.08 billion to $1.1 billion, adjusted EBITDA between $175 million to $185 million, and non-GAAP EPS between $1.60 to $1.74 per share [21][33] - The company is focusing on a profitable consumer acquisition strategy rather than chasing account growth for the sake of active card growth [15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged headwinds affecting the Consumer Business and expressed confidence in the ability to stabilize active account declines by refining marketing strategies [37][50] - The CEO search is ongoing, with management emphasizing the importance of hiring a candidate who understands the payments industry and can drive both consumer and enterprise business [120] Other Important Information - The company has a joint venture with Walmart, committing $35 million annually to the program, which is expected to produce large-scale programs over the next several years [19][20] - The company is committed to maintaining its bank status as a competitive advantage in the market [91] Q&A Session Summary Question: Stabilizing active account decline - Management acknowledged the shift in retail operations and emphasized the importance of the BaaS program for customer acquisition [49][50] Question: Relationship with Starboard - Management expressed alignment with Starboard's objectives and a shared goal of hiring the best CEO for the company [56] Question: Growth of BaaS business - The Platform business is expected to generate over 50% of consolidated revenues in 2020, indicating healthy growth [60] Question: Consumer Business execution factors - Management identified late product launches and marketing strategy as controllable factors affecting execution [70] Question: Expense base management - Management is implementing a hiring freeze and reviewing vendor management to optimize expenses [71][75] Question: Retail strategy amidst tepid consumer presence - Management is focused on maintaining or growing market share within the retail channel despite overall declines [112] Question: Capital structure and cash utilization - Management has not yet focused on buybacks but will consider capital utilization in the coming months [116] Question: CEO search and strategic direction - The new CEO will evaluate the current strategy and numbers approved by the Board, with confidence in achieving the laid-out goals [106]