Green Dot Q2 Sees Organic Growth, Active Card Count Up

Green Dot Corp released earnings on Tuesday that topped analyst expectations, with 55 cents a share reported, versus estimates of 40 cents a share, as organic growth and card counts both showed momentum in the period.

Top line was $222.5 million versus the Street at $208.6 million, adding 28 percent year over year.

Excluding UniRush, organic revenues were up 12 percent year over year — the first time that metric had been up double digits since the second quarter of 2015.

In remarks delivered during the conference call with analysts, CEO Steven Streit said that “all of our revenue and operating divisions are executing their strategic plans beautifully,” with faster than expected growth coming on a consolidated basis.

With a nod to Apple Pay, Streit said that in that tech behemoth’s P2P initiative, Green Dot will serve in the role of merchant of record, accepting credit and debit cards using Apple Pay to fund transactions.  Cash is to be kept in a Green Dot bank-issued Apple Pay cash account.  Streit also said the company has entered an agreement to acquire a small tuck in secured credit card portfolio.

Breaking down broad segment performance, account services grew to $175.1 million, from $135.1 million last year.  Active cards grew by 20 percent, to 5.15 million, said CFO Mark Shifke.  Organic card growth is likely to return next year, management said, and demographically speaking, millennials have been a tailwind.

Processing and settlement, as a division, saw growth of 22 percent to $55.1 million, tied in part to a stronger tax season and tax processing activities up 20 percent.

Streit said on the call that new card acquisition and other activities are getting a boost from omnichannel efforts, with the company’s direct deposit active base showing 83 percent growth year over year.

MoneyPak has added 21,000 locations since the beginning of the year, with the total number of stores selling MoneyPak now at more than 50,000. Management noted that MoneyPak is also seeing growth in its mobile and online offerings.

The company also said that revenues for the year would be in the range of $855 million to $865 million, comparing favorably with the $844 million seen by the Street and above previous management guidance of $830 million to $845 million. The bottom line, said the company, should be between $1.99 to $2.03, and consensus has that tally at $1.95.

During the call with analysts, Streit told listeners that the credit card account unit referenced above has about 25,000 active accounts and that the unit could become a “sizable division” over the next few years.