Green Dot revealed a 17 percent year-over-year revenue increase for Q4, according to the firm's earnings data released on Wednesday (Feb. 20). The firm saw $6.2 billion in purchase volume during Q4, up from $5.65 billion in the same quarter a year prior.
The stats beat analyst estimates, with the company posting $0.56 quarterly earnings per share, surpassing expectations of $0.50 per share and up from $0.29 per share during Q4 2017.
Steve Streit, Green Dot's president and CEO, pointed to key partnerships as significant drivers of growth, including Walmart, with Green Dot issuing the Walmart MoneyCard, and which will see continued expansion through 2019. Streit also highlighted the firm's ongoing collaboration with Intuit, with its Turbo Tax solution enabling users to receive tax refunds on a Prepaid Visa Card issued by Green Dot.
The Intuit partnership is expanding, too, noted Streit, thanks to a BaaS collaboration that enables Green Dot to link Intuit users with full-service bank accounts. Intuit is also integrating the BaaS platform into its QuickBooks Desktop platform. That partnership means small business owners can pay their own employees in a more cost-effective way, he said.
The firm's work with Intuit is also a symbol of the company's broader ambitions in the BaaS space, which landed at the center of the company's Six-Point Plan for growth in 2019. Outlined by Streit during the earnings call, that plan includes likely M&A activity, new hires and promotions for the firm's executive team, and continued focus on Green Dot's underlying infrastructure. Yet, a key component of its growth plan is the expansion of BaaS operations, particularly as Green Dot positions itself to meet the digital-first needs of Generation Z, said Streit.
"We see this demographic change of people who are very much focused on their phones, and app-based financial services that the banks have not done such a good job of attracting,” he said at the time.
During Wednesday's earnings call, Streit emphasized the firm's upcoming focus on selling directly to consumers, catering to Generation Z's demands for digital financial services, and reaching them indirectly via broadened BaaS initiatives. The company plans to roll out the next iteration of its BaaS platform this year to focus on enhanced user experience and seamless interconnectivity across multiple apps in the BaaS platform ecosystem. Green Dot also plans to upgrade the BaaS platform again in 2020, he noted, with an emphasis on risk controls and compliance.
Green Dot aims to take down some of the barriers that organizations face when using the firm's BaaS offering by launching a platform directly for developers, linking them to a set of APIs and tools to develop their own financial service solutions with integrated Green Dot banking technology. Dubbed the "bOS," the goal of the platform is to enable developers and smaller firms to be the "boss" and create their own solutions.
Green Dot said that, in the first quarter of 2019, it will begin releasing an additional revenue figure, related to the revenue generated as a result of BaaS partner programs. The firm expects full-year operating revenues for 2019 to hit a 10 percent year-over-year increase to between $1.114 billion and $1.134 billion.
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