Green Dot Corp Q2 2024 Earnings Report

TL;DR

GDT Q2 earnings out: Card revenues, processing, and interchange all detailed. Check the numbers.

AI Summary

Green Dot Corp reported its Q2 2024 results, ending June 30, 2024. The company's financial performance for the first half of the year and the second quarter showed various revenue streams, including Card Revenues and Other Fees, Processing and Settlement Services, and Interchange Revenues. Specific dollar amounts for these periods are detailed within the filing.

Why It Matters

This filing provides insight into Green Dot Corp's financial health and operational performance for the second quarter of 2024, impacting investors and stakeholders.

Risk Assessment

Risk Level: medium — The filing contains detailed financial data and operational metrics that require careful analysis to assess the company's risk profile.

Key Numbers

• Q2 2024 — Quarterly Period (Reporting period for the 10-Q filing.)
• 2024-01-01 to 2024-06-30 — Year-to-Date Period (First six months of the fiscal year for financial reporting.)
• 2023-12-31 — Previous Fiscal Year End (Reference point for year-over-year comparisons.)

Key Players & Entities

• GREEN DOT CORP (company) — Filer
• 20240630 (date) — Period of Report
• 20240809 (date) — Filed as of Date
• 114 W 7TH STREET SUITE 240 (address) — Business Address
• AUSTIN (city) — Business Address City
• TX (state) — Business Address State
• 78701 (zip_code) — Business Address Zip
• 6267652000 (phone_number) — Business Phone
• 4675 CORNELL ROAD, SUITE 280 (address) — Mail Address
• CINCINNATI (city) — Mail Address City

FAQ

Key Financial Figures

• $0.001 — hich registered: Class A Common Stock, $0.001 par value GDOT New York Stock Exchange

Filing Documents

• gdot-20240630.htm (10-Q) — 1865KB
• exb101-amended2010equitypl.htm (EX-10.1) — 315KB
• exb311-gdot06302024.htm (EX-31.1) — 11KB
• exb312-gdot06302024.htm (EX-31.2) — 11KB
• exb321-gdot06302024.htm (EX-32.1) — 6KB
• exb322-gdot06302024.htm (EX-32.2) — 6KB
• gdot-20240630_g1.jpg (GRAPHIC) — 102KB
• 0001386278-24-000051.txt ( ) — 9774KB
• gdot-20240630.xsd (EX-101.SCH) — 46KB
• gdot-20240630_cal.xml (EX-101.CAL) — 96KB
• gdot-20240630_def.xml (EX-101.DEF) — 241KB
• gdot-20240630_lab.xml (EX-101.LAB) — 722KB
• gdot-20240630_pre.xml (EX-101.PRE) — 489KB
• gdot-20240630_htm.xml (XML) — 1571KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements 1 Consolidated Balance Sheets – June 30, 2024 and December 31, 2023 1 Consolidated Statements of Operations – Three and Six Months Ended June 30, 2024 and 2023 2 Consolidated Statements of Comprehensive Income – Three and Six Months Ended June 30, 2024 and 2023 3 Consolidated Statements of Changes in Stockholders' Equity – Three and Six Months Ended June 30, 2024 and 2023 4 Consolidated Statements of Cash Flows – Six Months Ended June 30, 2024 and 2023 6

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 7

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 25

Quantitative and Qualitative Disclosures about Market Risk

Item 3. Quantitative and Qualitative Disclosures about Market Risk 45

Controls and Procedures

Item 4. Controls and Procedures 46

– OTHER INFORMATION

PART II – OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 47

Risk Factors

Item 1A. Risk Factors 47

Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities 61

Other Information

Item 5. Other Information 61

Exhibits

Item 6. Exhibits 62 Signature 63 Table of Contents PART I

Financial Statements

ITEM 1. Financial Statements GREEN DOT CORPORATION CONSOLIDATED BALANCE SHEETS June 30, 2024 December 31, 2023 (unaudited) Assets (In thousands, except par value) Current assets: Unrestricted cash and cash equivalents $ 1,316,999 $ 682,263 Restricted cash 218 4,239 Investment securities available-for-sale, at fair value 62,339 33,859 Settlement assets 915,816 737,989 Accounts receivable, net 75,881 110,141 Prepaid expenses and other assets 51,734 69,419 Income tax receivable 1,839 — Total current assets 2,424,826 1,637,910 Investment securities available-for-sale, at fair value 2,067,504 2,203,142 Loans to bank customers, net of allowance for credit losses of $ 17,360 and $ 11,383 as of June 30, 2024 and December 31, 2023, respectively 34,687 30,534 Prepaid expenses and other assets 253,824 221,656 Property, equipment, and internal-use software, net 175,210 179,376 Operating lease right-of-use assets 3,869 5,342 Deferred expenses 1,211 1,546 Net deferred tax assets 148,310 117,139 Goodwill and intangible assets 407,913 420,477 Total assets $ 5,517,354 $ 4,817,122 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 99,462 $ 119,870 Deposits 3,904,994 3,293,603 Obligations to customers 368,590 314,278 Settlement obligations 67,542 57,001 Amounts due to card issuing banks for overdrawn accounts 84 225 Other accrued liabilities 124,645 91,239 Operating lease liabilities 2,650 3,369 Deferred revenue 6,064 6,343 Line of credit 62,000 61,000 Income tax payable 8,307 6,262 Total current liabilities 4,644,338 3,953,190 Other accrued liabilities 1,388 1,895 Operating lease liabilities 1,677 2,687 Total liabilities 4,647,403 3,957,772 Commitments and contingencies (Note 17) Stockholders' equity: Class A common stock, $ 0.001 par value; 100,000 shares authorized as of June 30, 2024 and December 31, 2023; 53,707 and 52,816 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively 5

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Note 1— Organization Green Dot Corporation ("we," "our," or "us" refer to Green Dot Corporation and its consolidated subsidiaries) is a financial technology and registered bank holding company committed to giving all people the power to bank seamlessly, affordably, and with confidence. Our technology platform enables us to build products and features that address the most pressing financial challenges of consumers and businesses, transforming the way they manage and move money, and making financial empowerment more accessible for all. We offer a broad set of financial services to consumers and businesses including debit, checking, credit, prepaid, and payroll cards, as well as robust money processing services, such as tax refunds, cash deposits and disbursements. We were incorporated in Delaware in 1999 and became a bank holding company under the Bank Holding Company Act and a member bank of the Federal Reserve System in December 2011. Note 2— Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America, or GAAP. We consolidated our wholly-owned subsidiaries and eliminated all significant intercompany balances and transactions. We have also prepared the accompanying unaudited consolidated financial statements in conformity with the instructions to Form 10-Q and Article 10 of Regulation S-X and, consequently, they do not include all of the annual disclosures required by GAAP. Reference is made to our Annual Report on Form 10-K for the year ended December 31, 2023 for additional disclosures, including a summary of our significant accounting policies. There have been no material changes to our significant accounting policies during the six months ended June 30, 2024, except as discussed further below. In our opinion, the accompanying unau

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) Note 2—Summary of Significant Accounting Policies (continued) disclosures about significant segment expenses. ASU 2023-07 is effective for our annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025, with early adoption permitted. We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures. In December 2023, the FASB issued ASU 2023-09 "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023-09 is effective for our annual periods beginning January 1, 2025, with early adoption permitted. We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures. Note 3— Revenues As discussed in Note 19 — Segment Informatio n, we determine our operating segments based on how our chief operating decision maker manages our operations, makes operating decisions and evaluates operating performance. Within our segments, we believe that the nature, amount, timing and uncertainty of our revenue and cash flows and how they are affected by economic factors can be further illustrated based on the timing in which revenue for each of our products and services is recognized. Our products and services are offered to customers within the United States and certain U.S. territories. The following tables disaggregate our revenues earned from external customers by each of our reportable segments: Three Months Ended June 30, 2024 Consumer Services B2B Services Money Movement Services Total Timing of recognition (In thousands) Transferred point in time $ 69,608 $ 35,952 $ 55,906 $ 161,466 Transferred over time 24,443 205,779 768 230,990 Operating revenues (1) $ 94,051 $ 241,731 $ 56,674 $ 392,456 Three Months Ended June 30, 20

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) Note 3—Revenues (continued) Revenues recognized at a point in time are comprised of interchange fees, ATM fees, overdraft protection fees, other similar accountholder transaction-based fees, and substantially all of our cash processing revenues. Revenues recognized over time consists of new card fees, monthly maintenance fees, revenue earned from gift cards and substantially all BaaS (as defined herein) partner program management service fees. As presented on our consolidated balance sheets, we record deferred revenue for any upfront payments received in advance of our performance obligations being satisfied. These contract liabilities consist principally of unearned new card fees and monthly maintenance fees. We recognized approximately $ 0.7 million and $ 7.6 million in revenue for the three months ended June 30, 2024 and 2023, respectively, and $ 3.6 and $ 22.0 for the six months ended June 30, 2024 and 2023, respectively, that were included in deferred revenue at the beginning of the periods and did not recognize any revenue during these periods from performance obligations satisfied in previous periods. Substantially all of the deferred revenue balances at the beginning of the respective periods are recognized in the first half of each year. Changes in the deferred revenue balance are driven primarily by the amount of new card fees recognized during the period, and the degree to which these reductions to the deferred revenue balance are offset by the deferral of new card fees associated with cards sold during the period. Note 4— Investment Securities Our available-for-sale investment securities were as follows: Amortized cost Gross unrealized gains Gross unrealized losses Fair value (In thousands) June 30, 2024 Corporate bonds $ 10,000 $ — $ ( 277 ) $ 9,723 Agency bond securities 240,536 — ( 41,440 ) 199,096 Agency mortgage-backed securities 2,243,752 4 ( 345,863 ) 1,897,893 Municipal bond

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) Note 4—Investment Securities (continued) As of June 30, 2024 and December 31, 2023, the gross unrealized losses and fair values of available-for-sale investment securities that were in unrealized loss positions were as follows: Less than 12 months 12 months or more Total fair value Total unrealized loss Fair value Unrealized loss Fair value Unrealized loss (In thousands) June 30, 2024 Corporate bonds $ — $ — $ 9,723 $ ( 277 ) $ 9,723 $ ( 277 ) Agency bond securities — — 199,096 ( 41,440 ) 199,096 ( 41,440 ) Agency mortgage-backed securities — — 1,895,674 ( 345,863 ) 1,895,674 ( 345,863 ) Municipal bonds — — 23,131 ( 6,173 ) 23,131 ( 6,173 ) Total investment securities $ — $ — $ 2,127,624 $ ( 393,753 ) $ 2,127,624 $ ( 393,753 ) December 31, 2023 Corporate bonds $ — $ — $ 9,626 $ ( 374 ) $ 9,626 $ ( 374 ) Agency bond securities — — 200,230 ( 40,217 ) 200,230 ( 40,217 ) Agency mortgage-backed securities — — 2,001,270 ( 333,901 ) 2,001,270 ( 333,901 ) Municipal bonds — — 23,636 ( 5,773 ) 23,636 ( 5,773 ) Total investment securities $ — $ — $ 2,234,762 $ ( 380,265 ) $ 2,234,762 $ ( 380,265 ) Our investments generally consist of highly rated securities, substantially all of which are directly or indirectly backed by the U.S. federal government, as our investment policy restricts our investments to highly liquid, low credit risk assets. As such, we have not recorded any meaningful credit-related impairment losses during the three and six months ended June 30, 2024 or 2023 on our available-for-sale investment securities. Unrealized losses as of June 30, 2024 and December 31, 2023 are the result of increases in interest rates as our investment portfolio is comprised predominantly of fixed rate securities. Almost all of the underlying securities within our investment portfolio were in an unrealized loss position as of June 30, 2024 and December 31, 2023 due to the timing of our investment purcha

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) Note 5— Accounts Receivable Accounts receivable, net consisted of the following: June 30, 2024 December 31, 2023 (In thousands) Trade receivables $ 30,235 $ 29,786 Reserve for uncollectible trade receivables ( 102 ) ( 109 ) Net trade receivables 30,133 29,677 Overdrawn accountholder balances from purchase transactions 7,252 9,565 Reserve for uncollectible overdrawn accounts from purchase transactions ( 2,737 ) ( 5,281 ) Net overdrawn accountholder balances from purchase transactions 4,515 4,284 Accountholder fees 2,505 2,564 Receivables due from card issuing banks 1,767 1,768 Fee advances, net 3,913 41,974 Other receivables 33,048 29,874 Accounts receivable, net $ 75,881 $ 110,141 Activity in the reserve for uncollectible overdrawn accounts from purchase transactions consisted of the following: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (In thousands) Balance, beginning of period $ 4,143 $ 2,292 $ 5,281 $ 2,230 Provision for uncollectible overdrawn accounts from purchase transactions 3,638 4,341 11,261 5,529 Charge-offs ( 5,044 ) ( 3,941 ) ( 13,805 ) ( 5,067 ) Balance, end of period $ 2,737 $ 2,692 $ 2,737 $ 2,692 11 Table of Contents GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) Note 6— Loans to Bank Customers The following table presents total outstanding loans, gross of the related allowance for credit losses, and a summary of the related payment status: 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due Total Current or Less Than 30 Days Past Due Total Outstanding (In thousands) June 30, 2024 Residential $ — $ — $ — $ — $ 6,314 $ 6,314 Commercial — — — — 2,686 2,686 Installment — — — — 4,723 4,723 Consumer 1,852 — — 1,852 27,035 28,887 Secured credit card 829 746 2,283 3,858 5,579 9,437 Total loans $ 2,681 $ 746 $ 2,283 $ 5,710 $ 46,337 $ 52,047 Percentage of outstanding 5.2 % 1.4 % 4.4 % 11.0 % 89.0 % 100.0 % December 31, 2023 Residential $ — $ — $ — $ — $ 5,095 $ 5,095 Commercial — — — — 2,716 2,716 Installment — — — — 4,357

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