Green Dot Reports First Quarter 2021 Results
Green Dot Corporation (NYSE: GDOT) today reported financial results for the quarter ended March 31, 2021.
“Our first quarter saw considerable growth and engagement across business lines, as we invested significantly in becoming a more focused, lean, customer-centric company with consistent, scalable growth in years to come,” said Dan Henry, CEO of Green Dot. “We’re proud of the progress we made launching GO2bank, and we remain committed to our plan to deliver significant bottom-line growth in 2022 and beyond as we seamlessly connect more people to their money, both directly and through our valued partners.”
GAAP financial results for the first quarter of 2021 compared to the first quarter of 2020:
-
Total operating revenues on a generally accepted accounting principles (GAAP) basis were
$393.5 million for the first quarter of 2021, up from$362.2 million for the first quarter of 2020, representing a year-over-year increase of9% . -
GAAP net income was
$25.7 million for the first quarter of 2021, compared to net income of$46.8 million for the first quarter of 2020. -
GAAP diluted earnings per common share was
$0.46 for the first quarter of 2021, compared to a diluted earnings per common share of$0.87 for the first quarter of 2020.
Non-GAAP financial results for the first quarter of 2021 compared to the first quarter of 2020:1
-
Non-GAAP total operating revenues1 were
$379.8 million for the first quarter of 2021, up from$346.5 million for the first quarter of 2020, representing a year-over-year increase of10% . -
Adjusted EBITDA1 was
$73.4 million , or19.3% of non-GAAP total operating revenues1 for the first quarter of 2021, down from$92.1 million , or26.6% of non-GAAP total operating revenues1 for the first quarter of 2020. -
Non-GAAP net income1 was
$46.1 million for the first quarter of 2021, down from$60.4 million for the first quarter of 2020. -
Non-GAAP diluted earnings per share1 was
$0.83 for the first quarter of 2021, down from$1.13 for the first quarter of 2020.
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. Additional information about the Company's non-GAAP financial measures can be found under the caption “About Non-GAAP Financial Measures” below. |
Reportable Segments
Effective beginning with the first quarter of 2021, Green Dot Corporation (“Green Dot”) realigned its segment financial reporting based on how its current Chief Operating Decision Maker (“CODM”) manages its businesses, including resource allocation and performance assessment. Its CODM organizes and manages the business primarily on the basis of the channels in which its product and services are offered and uses net revenue and segment profit to assess profitability. Segment profit reflects each segment's net revenue less direct costs, such as sales and marketing expenses, processing expenses, third-party call center support and transaction losses. As a result of this realignment, Green Dot’s operations are now aggregated amongst the following three reportable segments, each as more fully described below under the heading "New Segments Structure": 1) Consumer Services, 2) Business to Business ("B2B") Services and 3) Money Movement Services.
Green Dot will present the retrospective financial results of this change in reportable segments and introduce additional key metric disclosures beginning with its Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 and other future filings. In addition, on May 3, 2021, Green Dot filed an 8-K furnishing supplemental financial results and key metric data for the fiscal years ended December 31, 2019 and 2020 under its revised reportable segments structure. These changes have no impact on Green Dot's previously reported consolidated financial results.
Key Metrics
Additionally, beginning with the first quarter of 2021, Green Dot has provided certain key metrics at the realigned segment level and has revised the definition of its direct deposit active accounts metric. Following these changes, the direct deposit active accounts metric only consists of accounts in its Consumer Services segment and no longer includes direct deposit active accounts in its B2B Services segment. Based on the economic structure of its partnerships within its B2B services segment, Green Dot believes that total active accounts is the most relevant key metric for the B2B Services segment. Green Dot also narrowed the definition of "direct deposit active account" to include only active accounts that have received one or more payroll or government benefit transaction during the period. Prior period metrics have been restated to conform to the current definition. There have been no changes to gross dollar volume, number of active accounts, purchase volume, number of cash transfers or number of tax refunds processed.
Please refer to Green Dot’s latest Annual Report on Form 10-K for a description of the key business metrics prior to the adjustments described above.
The following table shows Green Dot's quarterly key business metrics for each of the last five calendar quarters.
|
2021 |
|
2020 |
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|
Q1 |
|
Q4 |
|
Q3 |
|
Q2 |
|
Q1 |
||||||||||
|
(In millions) |
||||||||||||||||||
Consolidated (1) |
|
|
|
|
|
|
|||||||||||||
Gross dollar volume |
$ |
20,666 |
|
|
$ |
14,349 |
|
$ |
14,453 |
|
$ |
15,107 |
|
$ |
14,294 |
|
|||
Number of active accounts |
6.35 |
|
|
5.45 |
|
5.72 |
|
6.25 |
|
5.74 |
|
||||||||
Purchase volume |
$ |
10,445 |
|
|
$ |
6,861 |
|
$ |
7,600 |
|
$ |
8,477 |
|
$ |
8,282 |
|
|||
Consumer Services |
|
|
|
|
|
|
|||||||||||||
Gross dollar volume |
$ |
10,156 |
|
|
$ |
7,562 |
|
$ |
8,333 |
|
$ |
8,683 |
|
$ |
7,561 |
|
|||
Number of active accounts |
4.07 |
|
|
3.73 |
|
3.98 |
|
4.10 |
|
3.70 |
|
||||||||
Direct deposit active accounts |
0.97 |
|
|
0.88 |
|
0.91 |
|
0.90 |
|
0.89 |
|
||||||||
Purchase volume |
$ |
7,138 |
|
|
$ |
5,176 |
|
$ |
5,840 |
|
$ |
6,123 |
|
$ |
5,555 |
|
|||
B2B Services |
|
|
|
|
|
|
|||||||||||||
Gross dollar volume |
$ |
10,510 |
|
|
$ |
6,787 |
|
$ |
6,120 |
|
$ |
6,424 |
|
$ |
6,733 |
|
|||
Number of active accounts |
2.28 |
|
|
1.72 |
|
1.74 |
|
2.15 |
|
2.04 |
|
||||||||
Purchase volume |
$ |
3,307 |
|
|
$ |
1,685 |
|
$ |
1,760 |
|
$ |
2,354 |
|
$ |
2,727 |
|
|||
Money Movement |
|
|
|
|
|
|
|||||||||||||
Number of cash transfers |
10.32 |
|
|
11.29 |
|
12.81 |
|
12.48 |
|
12.13 |
|
||||||||
Number of tax refunds processed |
7.44 |
|
|
0.11 |
|
0.75 |
|
1.90 |
|
9.70 |
|
||||||||
(1) |
Represents the sum of Green Dot's Consumer Services and B2B Services segments. |
“We’re excited about the strengths of each of our segments. Combined with the growth-oriented investments we are making this year, we believe we’ll be on solid footing to generate consistent operating leverage and earnings growth in the years to come.” said Jess Unruh, interim CFO. "Even with these investments, we are forecasting adjusted EBITDA growth in 2021."
Updated 2021 Financial Guidance
Green Dot has provided its updated outlook for 2021. Green Dot’s outlook is based on a number of assumptions that management 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.
Green Dot's guidance now incorporates the economic stimulus funds and incremental unemployment benefits enacted by the U.S. federal government in March 2021.
Additionally, Green Dot intends to continue to make growth-oriented investments in 2021 that it believes will help accelerate revenue growth and allow margins to expand in 2022 and beyond. Notwithstanding this investment, Green Dot expects adjusted EBITDA in 2021 to grow year-over-year.
Total Non-GAAP Operating Revenues2
-
Green Dot now expects its full year non-GAAP total operating revenues2 to be between
$1.27 0 billion to$1.29 0 billion, or up7% year-over-year at the mid-point.
Adjusted EBITDA2
-
Green Dot reaffirms its full year adjusted EBITDA2 to be between
$210 million to$217 million , or up4% year-over-year at the mid-point. As noted above, Green Dot is making growth-oriented investments in 2021 and believes it's prudent to reinvest any incremental revenue benefit in 2021 back into areas that present the most growth potential, as well as strengthening the foundation of the company, such as implementing a core processing and card management platform, and improving the overall customer experience.
Non-GAAP EPS2
-
Green Dot reaffirms its full year non-GAAP EPS2 to be between
$2.06 and$2.15 , or flat year-over-year at the mid-point.
The components of Green Dot's non-GAAP EPS2 guidance range are as follows:
|
Range |
||||||
|
Low |
|
High |
||||
|
(In millions, except per share data) |
||||||
Adjusted EBITDA |
$ |
210.0 |
|
|
$ |
217.0 |
|
Depreciation and amortization* |
(58.5 |
) |
|
(58.5 |
) |
||
Non-GAAP pre-tax income |
$ |
151.5 |
|
|
$ |
158.5 |
|
Tax impact** |
(35.3 |
) |
|
(36.9 |
) |
||
Non-GAAP net income |
$ |
116.2 |
|
|
$ |
121.6 |
|
Non-GAAP diluted weighted-average shares issued and outstanding |
56.5 |
|
|
56.5 |
|
||
Non-GAAP earnings per share |
$ |
2.06 |
|
|
$ |
2.15 |
|
* |
Excludes the impact of amortization of acquired intangible assets |
|
** |
Assumes a non-GAAP effective tax rate of approximately |
2 |
For additional information, see reconciliations of forward-looking guidance for these non-GAAP financial measures to their respective, most directly comparable projected GAAP financial measures provided in the tables immediately following the reconciliation of Net Income to Adjusted EBITDA. |
New Segments Structure
Beginning with the first quarter of 2021, Green Dot now organizes its business by the following three segments:
Consumer Services.
This segment consists of revenues and expenses derived from deposit account programs, such as consumer checking accounts, prepaid cards, secured credit cards, and gift cards that Green Dot offers to consumers (i) through distribution arrangements with more than 90,000 retail locations and thousands of neighborhood Financial Service Center locations, and (ii) directly through various marketing channels, such as online search engine optimization, online displays, direct mail campaigns, mobile advertising, and affiliate referral programs. Green Dot sometimes refers to the channels identified in clauses (i) and (ii) above as its "Retail" channel and the "Direct" channel, respectively.
Business to Business Services.
This segment consists of revenues and expenses derived from (i) its partnerships with some of America's most prominent consumer and technology companies that make Green Dot's banking products and services available to their consumers, partners and workforce through integration with Green Dot’s banking platform, and (ii) a comprehensive payroll platform that Green Dot offers to corporate enterprises (the "Employer" channel) to facilitate payments for today’s workforce. Green Dot’s products and services in this segment include deposit account programs, such as consumer and small business checking accounts and prepaid cards, as well as its Simply Paid Disbursements services utilized by its partners. Green Dot sometimes refers to the channel identified in clause (i) above as its "Banking-as-a-Service," or "BaaS," channel.
Money Movement Services.
This segment consists of revenues and expenses generated on a per transaction basis from its services that specialize in facilitating the movement of cash on behalf of consumers and businesses, such as money processing services and tax refund processing services. Green Dot’s money processing services are marketed to third-party banks, program managers, and other companies seeking cash deposit and disbursement capabilities for their customers. Those customers, including Green Dot's own cardholders, can access Green Dot's cash deposit and disbursement services at any of the locations within its network of retail distributors and neighborhood Financial Service Centers. Green Dot markets its tax-related financial services through a network of tax preparation franchises, independent tax professionals and online tax preparation providers.
Conference Call
Green Dot will host a conference call to discuss first quarter 2021 financial results today at 5:00 p.m. ET. Hosting the call will be Dan Henry, Chief Executive Officer, and Jess Unruh, interim Chief Financial Officer. The conference call can be accessed live from Green Dot's investor relations website at http://ir.greendot.com/. A replay of the webcast will be available at the same website following the call. The replay will be available until Wednesday, May 12, 2021.
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 in the quotes of its executive officers, its updated 2021 financial guidance, the expected impact of the March 2021 economic stimulus package on its business, its investment strategy 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 impact of the COVID-19 pandemic on Green Dot’s business, results of operations and financial condition, the effectiveness of Green Dot’s measures taken in response to the COVID-19 pandemic, the U.S. government’s response to the COVID-19 pandemic, including with respect to stimulus funds and unemployment benefits, shifts in consumer behavior towards electronic payments, the impact of the new U.S. presidential administration on, among other things, the regulation of financial institutions and corporate tax rates, the timing and impact of revenue growth activities, Green Dot's dependence on revenues derived from Walmart, impact of competition, Green Dot's reliance on retail distributors for the promotion of its products and services, demand for Green Dot's new and existing products and services, continued and improving returns from Green Dot's investments in new growth initiatives, potential difficulties in integrating operations of acquired entities and acquired technologies, Green Dot's ability to operate in a highly regulated environment, changes to existing laws or regulations affecting Green Dot's operating methods or economics, Green Dot's reliance on third-party vendors, 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 Green Dot's involvement in litigation or investigations. These and other risks are discussed in greater detail in Green Dot'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 Green Dot's investor relations website at ir.greendot.com and on the SEC website at www.sec.gov. All information provided in this release and in the attachments is as of May 5, 2021, and Green Dot assumes no obligation to update this information as a result of future events or developments.
About Non-GAAP Financial Measures
To supplement Green Dot's consolidated financial statements presented in accordance with accounting principles generally accepted in the United States of America (GAAP), Green Dot uses measures of operating results that are adjusted to exclude, among other things, non-operating net interest income and expense; income tax benefit and expense; depreciation and amortization, including amortization of acquired intangibles; certain legal settlement charges; stock-based compensation and related employer payroll taxes; changes in the fair value of contingent consideration; impairment charges; extraordinary severance; earnings or losses from equity method investments; realized gains or losses on the sale of investment securities; commissions and certain processing-related costs associated with BaaS products and services where Green Dot does not control customer acquisition; other charges and income; and income tax effects. This earnings release includes non-GAAP total operating revenues, adjusted EBITDA, non-GAAP net income, 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 Green Dot's financial measures prepared in accordance with GAAP. Green Dot's non-GAAP financial measures may be different from similarly-titled non-GAAP financial measures used by other companies. Green Dot 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. Green Dot's management regularly uses these supplemental non-GAAP financial measures internally to understand, manage and evaluate Green Dot's business and make operating decisions. For additional information regarding Green Dot's use of non-GAAP financial measures and the items excluded by Green Dot from one or more of its historic and projected non-GAAP financial measures, investors are encouraged to review the reconciliations of Green Dot'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 Green Dot's website at http://ir.greendot.com/.
About Green Dot
Green Dot Corporation (NYSE: GDOT) is a financial technology and registered bank holding company committed to transforming the way people and businesses manage and move money, and making financial well-being and empowerment more accessible for all.
Green Dot’s proprietary technology enables faster, more efficient electronic payments and money management, powering intuitive and seamless ways for people to spend, send, control and save their money. Through its bank, Green Dot offers a broad set of financial products to consumers and businesses including debit, prepaid, checking, credit and payroll cards, as well as robust money processing services, tax refunds, cash deposits and disbursements. The company’s Banking as a Service (“BaaS”) platform enables a growing list of America’s most prominent consumer and technology companies to design and deploy their own customized banking and money movement solutions for customers and partners in the US and internationally.
Founded in 1999 and headquartered in Pasadena, CA, Green Dot has served more than 33 million customers directly, and now operates primarily as a “branchless bank” with more than 90,000 retail distribution locations nationwide. Green Dot Bank is a subsidiary of Green Dot Corporation and member of the FDIC. For more information about Green Dot’s products and services, please visit https://www.greendot.com.
GREEN DOT CORPORATION |
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CONSOLIDATED BALANCE SHEETS |
|||||||
|
March 31, 2021 |
|
December 31, 2020 |
||||
|
(unaudited) |
|
|
||||
Assets |
(In thousands, except par value) |
||||||
Current assets: |
|
|
|
||||
Unrestricted cash and cash equivalents |
$ |
2,711,791 |
|
|
$ |
1,491,842 |
|
Restricted cash |
4,900 |
|
|
4,859 |
|
||
Settlement assets |
416,753 |
|
|
782,262 |
|
||
Accounts receivable, net |
76,276 |
|
|
67,755 |
|
||
Prepaid expenses and other assets |
69,436 |
|
|
66,705 |
|
||
Total current assets |
3,279,156 |
|
|
2,413,423 |
|
||
Investment securities available-for-sale, at fair value |
996,215 |
|
|
970,969 |
|
||
Loans to bank customers, net of allowance for loan losses of |
26,089 |
|
|
21,011 |
|
||
Prepaid expenses and other assets |
73,619 |
|
|
40,481 |
|
||
Property, equipment, and internal-use software, net |
130,713 |
|
|
133,400 |
|
||
Operating lease right-of-use assets |
13,051 |
|
|
13,134 |
|
||
Deferred expenses |
12,241 |
|
|
18,332 |
|
||
Net deferred tax assets |
19,992 |
|
|
12,739 |
|
||
Goodwill and intangible assets |
484,322 |
|
|
491,778 |
|
||
Total assets |
$ |
5,035,398 |
|
|
$ |
4,115,267 |
|
Liabilities and Stockholders’ Equity |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
56,180 |
|
|
$ |
34,823 |
|
Deposits |
3,594,984 |
|
|
2,735,116 |
|
||
Obligations to customers |
129,385 |
|
|
95,375 |
|
||
Settlement obligations |
13,722 |
|
|
17,759 |
|
||
Amounts due to card issuing banks for overdrawn accounts |
277 |
|
|
235 |
|
||
Other accrued liabilities |
143,168 |
|
|
145,359 |
|
||
Operating lease liabilities |
8,421 |
|
|
8,175 |
|
||
Deferred revenue |
21,531 |
|
|
28,584 |
|
||
Income tax payable |
19,246 |
|
|
12,146 |
|
||
Total current liabilities |
Green Dot Corporation
NYSE:GDOTGDOT RankingsGDOT Latest NewsGDOT Stock Data
487.99M
45.97M
1.42%
94.05%
4.71%
Offices of Bank Holding Companies
Management of Companies and Enterprises
United States of America
AUSTIN
About GDOTgreen dot corporation, along with its wholly owned subsidiary bank, green dot bank, is a pro-consumer financial technology innovator with a mission to reinvent personal banking for the masses. green dot invented the prepaid debit card industry and is the largest provider of reloadable prepaid debit cards and cash reload processing services in the united states. green dot is also a leader in mobile technology and mobile banking with its award-winning gobank mobile checking account. through its wholly owned subsidiary, tpg, green dot is additionally the largest processor of tax refund disbursements in the u.s. green dot's products and services are available to consumers through a large-scale "branchless bank" distribution network of more than 100,000 u.s. locations, including retailers, neighborhood financial service center locations, and tax preparation offices, as well as online, in the leading app stores and through leading online tax preparation providers. green dot corporation is h
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