Green Dot Q1 Revenues Up 6 Pct

Green Dot Corporation reported financial results for the first quarter of 2019, showing total operating revenues of $340.5 million, a 6 percent increase compared to the first quarter of 2018.

The FinTech company also reported GAAP net income of $64.0 million, a decrease of 9 percent from the first quarter of 2018. GAAP diluted earnings also fell 9 percent, at $1.17 for the first quarter of 2019. In addition, non-GAAP total operating revenues were $325.7 million, and adjusted EBITDA and non-GAAP diluted earnings per common share were $119.0 million and $1.51, respectively, for the quarter that ended March 31, 2019.

“Green Dot delivered solid Q1 financial results, including 6 percent growth in our total operating revenues,” Green Dot Founder and CEO Steve Streit said in a press release. “More importantly, we have seen new business line momentum increase dramatically over the past 90 days with positive developments in both our Product and Platform product lines. In our new product initiatives, customer research and key stakeholder feedback have served to validate our assumptions around both the potential breadth and depth of appeal of our new and revolutionary product concepts, while demand for our BaaS platform product line has greatly increased above our original expectations. While there are always uncertain outcomes associated with launching new products, new technologies and new platform business models, we believe our future prospects are looking materially stronger and incrementally more assured as we remain focused on executing our 2019 Six Step Plan to drive long-term enterprise value for our shareholders for years to come.”

Looking ahead, Green Dot expects its full-year non-GAAP total operating revenues to be between $1.114 billion and $1.134 billion, representing 10 percent year-over-year increase at the mid-point. And for the second quarter, the company predicts non-GAAP total operating revenues to be approximately $261 million for a 3 percent year-over-year increase.

“We believe now is the right time to accelerate investment in initiatives designed to materially grow both the Products and Platform parts of our business, creating the opportunity to achieve material incremental growth into 2020 and beyond,” said Mark Shifke, Green Dot’s chief financial officer. “To that end, we intend to invest an incremental $60 million for the purpose of aggressively marketing our new products that are set to launch later this year, and to advance the development and deployment of our BaaS 3.0 and BaaS 4.0 technology platforms in order to meet the increasing demand for these services and capitalize on the resulting revenue opportunities sooner and more assuredly. We expect the incremental $60 million investment could deliver over one million incremental active accounts at the exit of 2019, which, at that number of incremental active accounts, would be expected to deliver incremental lifetime revenue of approximately $200 million to $300 million, at an approximate average contribution margin of 50 percent. As a result of this $60 million incremental investment, we are revising our 2019 full year adjusted EBITDA and Non-GAAP EPS outlook.”



The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.