Green Dot Highlights Secured Credit, Savings Gains in ‘Strong’ Q3 Earnings Report
Steve Streit, CEO of Pasadena, Calif.-based Green Dot, hailed the third quarter as another strong one for the company, pointing to operating revenue, adjusted EBITDA and earnings per share improving on quarter-by-quarter and year-over-year bases. He also highlighted several Green Dot products and services.
“We experienced stronger than expected bottom-line performance in the quarter, driven by the success of our ongoing cost savings initiatives, combined with higher margin revenue from our legacy business lines,” he said. “We’re pleased with our company’s performance … and believe we are well-positioned to achieve our financial goals for the remainder of this year and in 2017.”
Total operating revenues on a generally accepted accounting principles (GAAP) basis were $154.5 million for the third quarter ended Sept. 30, an increase from $146.4 million for the third quarter of 2015. GAAP net income was $2 million for the third quarter of 2016, up from $200,000 for the same period last year. The company expects its full year non-GAAP total operating revenues to finish at the high end of its previously guided range of $708 million to $713 million. Click here for additional earnings information.
Streit pointed to positive consumer reception to the Green Dot Platinum Visa Secured Credit Card program since its launch in September. Thousands of cards have been applied for and approved. Green Dot is pleased with the rollout so far but will have to wait and see how many customers activate the cards, make their cash security deposits, and make their monthly payments on time to build up their credit scores over time, Streit said, according to a SeekingAlpha transcript of the company earnings call.
Streit also discussed the rapid popularity of the Walmart MoneyCard’s savings account feature. Within 60 days of the new feature, MoneyCard cardholders have set aside “tens of millions of dollars” in their savings “vault,” he said. MoneyCard is one of the largest GPR programs on the market and has won multiple Pay Awards, including a win in the Top of Wallet category in 2015.
Green Dot also is pleased with its two programs with ride-sharing company Uber. The Uber Debit Card from GoBank checking account and Instant Pay services are experiencing growth since launch, according to the company. Both are available in 190 U.S. cities.
“Between the improving revenue-generating characteristics of our legacy card portfolio and the strong unit economics of our new card products, we are benefiting from material year-over-year organic growth in our prepaid card business line,” Streit said.
During the conference call, Streit briefly commented on the CFPB’s recently issued final prepaid accounts rule, saying Green Dot agrees with the “spirit” of the new rule in protecting consumers and leveling the playing field. “While no rule is perfect, and I would expect some implementation hiccups here and there, our initial view is that Green Dot will emerge unscathed with no material financial or operational impacts to our business,” he said.