Green Dot Reports Second Quarter 2013 Non-GAAP Revenue Growth of 4%, Adjusted EBITDA growth of 10% a

Green Dot Reports Second Quarter 2013 Non-GAAP Revenue Growth of 4%, Adjusted EBITDA growth of 10% and Non-GAAP diluted EPS of $0.33 on Higher Customer Retention and Usage

  • Announces large scale prepaid distribution expansion into 20,000 additional retail locations
  • Announces entry into the check cashing distribution channel
  • Announces expanded GoBank marketing through college campuses, mobile carriers and retailers
  • Raises outlook for 2013

PASADENA, Calif.--(BUSINESS WIRE)-- Green Dot Corporation (NYS: GDOT) , today reported financial results for the second quarter ended June 30, 2013.

For the second quarter of 2013, Green Dot reported a 4% year-over-year increase in non-GAAP total operating revenues1 to $142.6 million and non-GAAP diluted earnings per share1 of $0.33. GAAP results for the second quarter were $140.6 million in total operating revenues and $0.25 in diluted earnings per share.

Net cash provided by operating activities in the quarter more than doubled year-over-year to $62.6 million.

"We are pleased to deliver growth in revenues, adjusted EBITDA, and non-GAAP EPS in Q2. Additionally, we generated more than $60 million in operating cash flows. These solid financial results for this quarter combined with substantial distribution wins, the successful launch of our GoBank Mobile Bank Account product and our entry into new greenfield customer channels, like college campuses and check cashing stores, provides evidence that Green Dot Corporation has successfully navigated through the past year of uncertainty. Despite aggressive competition from large financial services companies and rigid self-imposed risk controls that materially reduced new customer enrollment, we believe Green Dot remains the clear leader in the prepaid space and is well positioned for the future," said Steve Streit, Green Dot's Chairman and Chief Executive Officer.

GAAP financial results for the second quarter of 2013 compared to the second quarter of 2012:

  • Total operating revenues on a generally accepted accounting principles (GAAP) basis increased 4% to $140.6 million for the second quarter of 2013 from $135.0 million for the second quarter of 2012
  • GAAP net income increased 4% to $11.3 million for the second quarter of 2013 from $10.9 million for the second quarter of 2012
  • GAAP basic and diluted earnings per common share were $0.26 and $0.25, respectively, for the second quarter of 2013 versus $0.26 and $0.25, respectively, for the second quarter of 2012

Non-GAAP financial results for the second quarter of 2013 compared to the second quarter of 2012:1

  • Non-GAAP total operatingrevenues1 increased 4% to $142.6 million for the second quarter of 2013 from $137.6 million for the second quarter of 2012
  • Non-GAAP net income1 increased 4% to $14.8 million for the second quarter of 2013 from $14.3 million for the second quarter of 2012
  • Non-GAAP diluted earnings per share1 was $0.33 for the second quarter of 2013 versus $0.32 for the second quarter of 2012
  • EBITDA plus employee stock-based compensation expense and stock-based retailer incentive compensation expense (adjusted EBITDA1) increased 10% to $29.6 million for the second quarter of 2013 from $27.0 million for the second quarter of 2012

Key business metrics for the quarter ended June 30, 2013:

  • Number of cash transfers was 11.32 million for the second quarter of 2013, an increase of 1.18 million, or 12%, versus the second quarter of 2012
  • Number of active cards at quarter end was 4.39 million, a decrease of 0.05 million, or 1%, versus the second quarter of 2012
  • Gross dollar volume (GDV) was $4.4 billion for the second quarter of 2013, an increase of $445 million, or 11%, versus the second quarter of 2012
  • Purchase volume was $3.2 billion for the second quarter of 2013, an increase of $305 million, or 10%, versus the second quarter of 2012

Please refer to the Company's latest Quarterly Report on Form 10-Q for a description of the key business metrics described above. The following table shows the Company's quarterly key business metrics for each of the last six calendar quarters:

   2013  2012
Q2 Q1  Q4 Q3 Q2 Q1
(In millions)
Number of cash transfers11.32 11.2511.04 10.52 10.14 10.09
Number of active cards at quarter end4.394.494.374.424.444.69
Gross dollar volume$4,425$5,072$4,279$4,070$3,980$4,823
Purchase volume$3,248$3,582$3,233$2,966$2,943$3,487

Select Business Updates

  • Green Dot products are currently being rolled out to approximately 20,000 new retail locations. These new distribution outlets include The Home Depot, Kroger Convenience Stores, Save-a-Lot retail stores, Dollar General and the previously announced Dollar Tree.
  • Green Dot and Green Dot Bank have launched a new initiative called Project Outreach whereby the company has made it a strategic priority to become a leading provider of prepaid cards and other types of bank accounts through the nation's best and largest Community Based Financial Service Centers (also known as check cashers). Green Dot has already signed distribution agreements with three of the largest and best known check cashing operations throughout the five boroughs of the greater New York City metro area, which ranks as the #1 check cashing market in the U.S.
  • In June 2013, Green Dot announced the proposed transfer of the Walmart MoneyCard portfolio from GE Consumer Retail Bank to Green Dot Bank, which is subject to regulatory approval. Green Dot believes having Green Dot Bank become the bank issuer and insured depository for the MoneyCard program will mitigate a key business and regulatory risk of relying on a third party non-affiliated bank to provide these foundational services for the program while also creating certain financial efficiencies post transfer, if approved.
  • GoBank was released to the general public over the July 4th holiday to strong reviews from various media outlets. The distribution/promotional pipeline for GoBank has expanded to now include 7-Eleven, Barnes and Noble college book stores, the UCLA main campus hub bookstore, and US Cellular, a large regional mobile carrier.

John Keatley, Green Dot's Chief Financial Officer, added, "Green Dot once again saw solid gains in the average quality of our portfolio with increases in revenue per customer and cardholder retention. We continued to see solid gains in direct deposit enrollment, which increased 11% year-over-year, and non-GAAP revenue per active card, which increased 5%. The resilience of our core business gives us sufficient clarity to raise our full year non-GAAP revenue guidance to $565-575 million and increase our outlook for adjusted EBITDA to $95-105 million for the full year. This guidance reflects significant investments in the second half of the year required to roll out our new retail locations and check cashing partners, and to support our new GoBank partnerships. It also reflects the technology and compliance expenses associated with the proposed migration of accounts from GE Consumer Retail Bank to Green Dot Bank. We believe that these investments will provide a solid foundation for growth as we look to 2014 and beyond."

Updated Outlook for 2013

Green Dot's updated outlook is based on a number of assumptions that Green Dot believes are reasonable at the time of this earnings release. Information regarding potential risks that could cause the actual results to differ from these forward-looking statements is set forth below and in Green Dot's filings with the Securities and Exchange Commission.

For 2013, Green Dot now expects full year non-GAAP total operating revenues2 to be in the range of $565 million to $575 million. Green Dot now expects adjusted EBITDA2 to be between $95 million and $105 million for the full year, and full-year non-GAAP diluted EPS2 to be between $1.05 and $1.20.

Conference Call

The Company will host a conference call to discuss second quarter 2013 financial results today at 5:00 p.m. ET. In addition to the conference call, there will be a webcast presentation of accompanying slides accessible on the Company's investor relations website. Hosting the call will be Steve Streit, Chief Executive Officer, and John Keatley, Chief Financial Officer. The conference call can be accessed live over the phone by dialing (877) 300-8521, or (412) 317-6026 for international callers. A replay will be available approximately two hours after the call concludes and can be accessed by dialing (877) 870-5176 or (858) 384-5517 for international callers; the conference ID is 10031326. The replay of the webcast will be available until Tuesday, August 6, 2013. The live call and the replay, along with supporting materials, can also be accessed through the Company's investor relations website at

Forward-Looking Statements

This earnings release contains forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, among other things, statements regarding the Company's full-year 2013 guidance, including all the statements under "Updated Outlook for 2013," and other future events that involve risks and uncertainties. Actual results may differ materially from those contained in the forward-looking statements contained in this earnings release, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from those projected include, among other things, the Company's dependence on revenues derived from Walmart and three other retail distributors, impact of competition, the Company's reliance on retail distributors for the promotion of its products and services, demand for the Company's new and existing products and services, continued and improving returns from the Company's investments in new growth initiatives, the possibility that the migration of accounts from GE Consumer Retail Bank to Green Dot Bank does not achieve regulatory approval, potential difficulties in integrating operations of acquired entities and acquired technologies, the Company's ability to operate in a highly regulated environment, changes to existing laws or regulations affecting the Company's operating methods or economics, the Company's reliance on third-party vendors and card issuing banks, changes in credit card association or other network rules or standards, changes in card association and debit network fees or products or interchange rates, instances of fraud developments in the prepaid financial services industry that impact prepaid debit card usage generally, business interruption or systems failure, and the Company's involvement litigation or investigations. These and other risks are discussed in greater detail in the Company's Securities and Exchange Commission filings, including its most recent annual report on Form 10-K and quarterly report on Form 10-Q, which are available on the Company's investor relations website at and on the SEC website at All information provided in this release and in the attachments is as of July 30, 2013, and the Company assumes no obligation to update this information as a result of future events or developments.

 1 Reconciliations of total operating revenues to non-GAAP total operating revenues, net income to non-GAAP net income, diluted earnings per share to non-GAAP diluted earnings per share and net income to adjusted EBITDA, respectively, are provided in the tables immediately following the consolidated financial statements of cash flows. Additional information about the Company's non-GAAP financial measures can be found under the caption "About Non-GAAP Financial Measures" below.
 2 Reconciliations of forward-looking guidance for these non-GAAP financial measures to their respective, most directly comparable projected GAAP financial measures are provided in the tables immediately following the reconciliation of Net Income to Adjusted EBITDA.

About Non-GAAP Financial Measures

To supplement the Company's consolidated financial statements presented in accordance with accounting principles generally accepted in the United States of America (GAAP), the Company uses measures of operating results that are adjusted to exclude net interest income; income tax expense; depreciation and amortization; employee stock-based compensation expense; and stock-based retailer incentive compensation expense. This earnings release includes non-GAAP total operating revenues, non-GAAP net income, non-GAAP earnings per share, non-GAAP weighted-average shares issued and outstanding and adjusted EBITDA. It also includes full-year 2013 guidance for non-GAAP total operating revenues, adjusted EBITDA and Non-GAAP diluted earnings per share. These non-GAAP financial measures are not calculated or presented in accordance with, and are not alternatives or substitutes for, financial measures prepared in accordance with GAAP, and should be read only in conjunction with the Company's financial measures prepared in accordance with GAAP. The Company's non-GAAP financial measures may be different from similarly-titled non-GAAP financial measures used by other companies. The Company believes that the presentation of non-GAAP financial measures provides useful information to management and investors regarding underlying trends in its consolidated financial condition and results of operations. The Company's management regularly uses these supplemental non-GAAP financial measures internally to understand, manage and evaluate the Company's business and make operating decisions. For additional information regarding the Company's use of non-GAAP financial measures and the items excluded by the Company from one or more of its historic and projected non-GAAP financial measures, investors are encouraged to review the reconciliations of the Company's historic and projected non-GAAP financial measures to the comparable GAAP financial measures, which are attached to this earnings release, and which can be found by clicking on "Financial Information" in the Investor Relations section of the Company's website at

About Green Dot

Green Dot Corporation is a publicly traded bank holding company with a mission to reinvent personal banking for the masses. Its products and brands include Green Dot brand reloadable prepaid debit cards, the Green Dot Reload Network, the Green Dot MoneyPak and GoBank. The Company's prepaid products and services are available in more than 60,000 retail stores nationwide and online at GoBank is available online at and via the Apple App Store and Google Play, and additional distribution locations. The company is headquartered in Pasadena, Calif. with technology offices in Mountain View, Calif. and Westlake Village, Calif. and its bank subsidiary, Green Dot Bank, located in Provo, Utah.




June 30,
December 31,
(In thousands, except par value)
Current assets:
Unrestricted cash and cash equivalents$406,110$293,590
Federal funds sold9193,001
Investment securities available-for-sale, at fair value103,713115,244
Settlement assets48,69436,127
Accounts receivable, net42,00040,441
Prepaid expenses and other assets14,92631,952
Income tax receivable7,386
Net deferred tax assets 2,338  2,478
Total current assets618,700530,219
Restricted cash637634
Investment securities, available-for-sale, at fair value68,75468,543
Accounts receivable, net10,14710,931
Loans to bank customers, net of allowance for loan losses of $460 and $475 as of June 30, 2013 and December 31, 2012, respectively7,2267,552
Prepaid expenses and other assets1,5141,530
Property and equipment, net58,36358,376
Deferred expenses7,72212,510
Net deferred tax assets4,6664,629
Goodwill and intangible assets 30,740  30,804
Total assets$808,469 $725,728
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable$15,860$31,411
Obligations to customers67,74946,156
Settlement obligations17,6173,639
Amounts due to card issuing banks for overdrawn accounts52,13950,724
Other accrued liabilities30,56229,469
Deferred revenue16,82419,557
Income tax payable 6,204  
Total current liabilities408,314379,407
Other accrued liabilities 32,287  18,557
Total liabilities440,601397,964
Stockholders' equity:
Convertible Series A preferred stock, $0.001 par value: 10 shares authorized and 7 shares issued and outstanding as of June 30, 2013 and December 31, 2012, respectively77
Class A common stock, $0.001 par value; 100,000 shares authorized as of June 30, 2013 and December 31, 2012, respectively; 32,513 and 31,798 shares issued and outstanding as of June 30, 2013 and December 31, 2012, respectively3231
Class B convertible common stock, $0.001 par value, 100,000 shares authorized as of June 30, 2013 and December 31, 2012, respectively; 3,909 and 4,197 shares issued and outstanding as of June 30, 2013 and December 31, 2012, respectively44
Additional paid-in capital172,007158,656
Retained earnings195,851168,960
Accumulated other comprehensive income (loss) (33) 106
Total stockholders' equity 367,868  327,764
Total liabilities and stockholders' equity$808,469 $725,728




Three Months Ended June 30,Six Months Ended June 30,
(In thousands, except per share data)
Operating revenues:
Card revenues and other fees$55,029$57,862$119,697$119,084
Cash transfer revenues45,63340,24689,96879,889
Interchange revenues41,91339,52888,66983,034
Stock-based retailer incentive compensation (1,967) (2,593) (3,576) (5,783)
Total operating revenues140,608135,043294,758276,224
Operating expenses:
Sales and marketing expenses51,68053,014107,857105,586
Compensation and benefits expenses31,20027,88062,95454,033
Processing expenses19,94819,01641,94739,866
Other general and administrative expenses 20,425  17,998  41,305  33,966 
Total operating expenses 123,253  117,908  254,063  233,451 
Operating income17,35517,13540,69542,773
Interest income8551,1851,6742,144
Interest expense (16) (17) (33) (41
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