Surging Instant Pay Card Use Pushes Green Dot’s Earnings Beat

Green Dot reported a big beat on earnings yesterday — exactly one year after surprising the market with a loss during the same period last year.

By the numbers, Green Dot brought in net income of $12.2 million during Q4 2017 — with adjusted earnings coming in at 29 cents per share, outdrawing the 25 cents per share earnings predictions put out by analysts.

The firm also posted revenue of $213 million in the period — another beat on Street forecasts, which predicted Green Dot would clock at $206.3 million.

Green Dot Founder and CEO Steve Streit was, perhaps expectedly, bullish on the results — and touted 2017 as perhaps Green Dot’s finest year ever.

“Q4 was yet another very strong quarter for Green Dot, capping a year that, on many levels, was the finest year in Green Dot’s history to date. We beat our financial expectations with four consecutive quarters of accelerating financial results and achieved record total operating revenues, record profits and expanding margins,” Streit noted, also touting the firm’s return to organic active account growth in the Account Services operating segment and the launch of several “Banking as a Service” programs wins with “world-class partners” and strategic acquisitions.

For the year, the company reported profits of $85.9 million, or $1.61 per share. Revenue was reported as $890.2 million.

For full year predictions, Green Dot is looking for earnings in the range of $2.81 to $2.88 per share, with revenue ranging from $982 million to $997 million.

For the current quarter ending in April, Green Dot said it expects to see revenue hit a range of $295 million to $300 million.

“We obviously feel great about our financial results for both Q4 and the full year; but we are even more pleased with how our unique and compelling Products and Platform model is generating business momentum across both our reporting segments and each of our revenue divisions, which gives us the foundation for our optimism regarding growth into 2018 and beyond.”

Green Dot also continued to log strength with its card products. At the close of 2016, Green Dot had 4.13 million cards in circulation — but the end of 2017, that figure had climbed to 5.26 million. Gross dollar volume and purchase volume both surged as well.  As of Q4 2016, Green Dot’s gross dollar volume was $5.6 billion, compared to the $8.5 billion at the end of Q4 2017. Purchase volume went from a little over $4 billion at the end of 2016 to a little over $5.6 billion at the end of 2017.

Said Mark Shifke, Green Dot’s chief financial officer, “Our strong Q4 results capped a year of tremendous performance across practically every revenue division in the company.”

Showing particularly strength, according to Green Dot’s CEO, was its SimplyPaid service, which allows 1099 and gig economy workers to be paid out immediately. That service has reportedly grown by triple digits year on year.

“I think employers are recognizing that employees want money sooner, not later — how about that? And by the way, it’s funny — people will say, Steve, is that because low income people like their money faster? The answer is, it’s because all people, as it turns out, want their money faster. I’m sure folks who work for you, as well, want it that way.”

Streit also noted that while Green Dot is not the only firm making this offering, they have seen strong and growing interest all year — and believe they will be able to make a compelling case to all players, particularly large ones.

“We may have been one of the first to start it, and maybe the only one start it initially at our size and scale with Uber — but a lot of people are offering it, and there’s a lot of competition for it. But we think, given our unified assets as a bank and a technology provider — and all the regulation, everything that goes in the middle — we’re ideally suited to offer this to enterprise-level clients. And so we hope that product will continue to do well — but so far, it’s done very, very well.”