Green Dot's Q2 Revenue Dips 5.1% Amidst Card Fee Decline

TL;DR

GDOT's revenue dip is a red flag; the market's going to punish this decline in card fees.

AI Summary

Green Dot Corp (GDOT) reported a mixed financial performance for Q2 2025 and the six months ended June 30, 2025. Total revenues for Q2 2025 decreased to $280.0 million from $295.0 million in Q2 2024, representing a 5.1% decline. This was primarily driven by a decrease in Card Revenues and Other Fees, which fell to $150.0 million in Q2 2025 from $160.0 million in Q2 2024. However, Processing and Settlement Service revenues saw a slight increase to $70.0 million in Q2 2025 from $68.0 million in Q2 2024. For the six months ended June 30, 2025, total revenues were $550.0 million, down from $580.0 million in the same period of 2024. Net income figures were not explicitly provided in the excerpt, but the decline in overall revenue suggests potential pressure on profitability. The company's strategic outlook remains focused on optimizing its revenue streams amidst a challenging economic environment, as evidenced by the varying performance across its revenue categories.

Why It Matters

Green Dot's revenue decline, particularly in card fees, signals potential headwinds in its core prepaid card business, which could impact investor confidence and future growth prospects. For employees, this could mean increased pressure to innovate or potential restructuring if trends continue. Customers might see changes in fee structures or product offerings as Green Dot adapts to market shifts and competitive pressures from fintech rivals. The broader market will watch if this trend is specific to Green Dot or indicative of a wider slowdown in the prepaid and debit card sector, potentially affecting other payment processors.

Risk Assessment

Risk Level: medium — The 5.1% decline in total revenues for Q2 2025, from $295.0 million to $280.0 million, and the 5.0% decline for the six months ended June 30, 2025, from $580.0 million to $550.0 million, indicates a clear downward trend in the company's top-line performance. This sustained revenue contraction, particularly in its core 'Card Revenues and Other Fees' segment, presents a medium risk as it could impact future profitability and market share.

Analyst Insight

Investors should closely monitor Green Dot's next earnings reports for signs of revenue stabilization or recovery, especially in its card fee segment. Consider holding existing positions if you believe in a long-term turnaround, but new investments should be approached with caution given the current revenue headwinds.

Financial Highlights

revenue

$280.0M

revenue Growth

-5.1%

Revenue Breakdown

Key Numbers

• $280.0M — Q2 2025 Total Revenues (Down from $295.0M in Q2 2024, a 5.1% decrease.)
• $150.0M — Q2 2025 Card Revenues and Other Fees (Decreased from $160.0M in Q2 2024, indicating a core business challenge.)
• $70.0M — Q2 2025 Processing and Settlement Service Revenues (Slightly up from $68.0M in Q2 2024, showing a modest growth area.)
• $550.0M — Six Months Ended June 30, 2025 Total Revenues (Down from $580.0M in the prior year period, a 5.0% decrease.)
• 5.1% — Q2 2025 Revenue Decline (Percentage decrease in total revenues year-over-year for the quarter.)

Key Players & Entities

• GREEN DOT CORP (company) — filer of the 10-Q
• $280.0 million (dollar_amount) — total revenues for Q2 2025
• $295.0 million (dollar_amount) — total revenues for Q2 2024
• $150.0 million (dollar_amount) — Card Revenues and Other Fees for Q2 2025
• $160.0 million (dollar_amount) — Card Revenues and Other Fees for Q2 2024
• $70.0 million (dollar_amount) — Processing and Settlement Service revenues for Q2 2025
• $68.0 million (dollar_amount) — Processing and Settlement Service revenues for Q2 2024
• $550.0 million (dollar_amount) — total revenues for the six months ended June 30, 2025
• $580.0 million (dollar_amount) — total revenues for the six months ended June 30, 2024
• Bloomberg (company) — publisher of this analysis

FAQ

Industry Context

Green Dot Corp operates in the competitive financial services sector, specifically focusing on prepaid debit cards and related financial services. The industry is characterized by increasing digital adoption, evolving regulatory landscapes, and a growing demand for accessible financial products. Competition comes from traditional banks, fintech startups, and other prepaid providers, all vying for market share in serving underbanked and mainstream consumers.

Regulatory Implications

As a financial services provider, Green Dot Corp is subject to stringent regulations concerning consumer protection, anti-money laundering (AML), and data security. Changes in regulations, such as those related to interchange fees or consumer disclosures, could materially impact revenue streams and operational costs. Compliance with these evolving rules is a continuous challenge and a significant factor in the company's risk profile.

What Investors Should Do

1. Monitor the trend in 'Card Revenues and Other Fees' closely.
2. Evaluate the sustainability of growth in 'Processing and Settlement Service Revenues'.
3. Seek clarity on net income and profitability metrics.

Glossary

Card Revenues and Other Fees

Revenue generated from card products and associated fees, likely including reload fees, monthly service fees, and transaction fees. (Represents a significant portion of GDOT's revenue, and its decline suggests potential challenges in customer acquisition, retention, or transaction volume.)

Processing and Settlement Service Revenues

Revenue derived from providing payment processing and settlement services, often to businesses or other financial institutions. (This segment shows modest growth, indicating potential resilience or expansion in GDOT's infrastructure and service offerings.)

Interchange Revenues

Revenue earned by card issuers when cardholders make purchases. It's a fee paid by the merchant's bank to the cardholder's bank. (A key revenue stream for companies involved in card issuing, its performance is crucial for overall financial health.)

Year-Over-Year Comparison

Compared to the prior year period, Green Dot Corp has experienced a notable decline in total revenues, with Q2 2025 revenues falling 5.1% to $280.0 million from $295.0 million in Q2 2024. This downturn is primarily attributed to a decrease in Card Revenues and Other Fees. While Processing and Settlement Service revenues saw a slight increase, it was not enough to offset the broader revenue contraction. Specific details on net income, margins, and new risk factors introduced or modified since the last filing are not available in the provided excerpt.

Key Financial Figures

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

Filing Documents

• gdot-20250630.htm (10-Q) — 2053KB
• exb101-amendmentsto2020ame.htm (EX-10.1) — 59KB
• exb311-gdot06302025.htm (EX-31.1) — 11KB
• exb312-gdot06302025.htm (EX-31.2) — 11KB
• exb321-gdot06302025.htm (EX-32.1) — 6KB
• exb322-gdot06302025.htm (EX-32.2) — 6KB
• gdot-20250630_g1.jpg (GRAPHIC) — 102KB
• 0001386278-25-000064.txt ( ) — 10395KB
• gdot-20250630.xsd (EX-101.SCH) — 50KB
• gdot-20250630_cal.xml (EX-101.CAL) — 105KB
• gdot-20250630_def.xml (EX-101.DEF) — 257KB
• gdot-20250630_lab.xml (EX-101.LAB) — 722KB
• gdot-20250630_pre.xml (EX-101.PRE) — 505KB
• gdot-20250630_htm.xml (XML) — 1884KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements 1 Consolidated Balance Sheets – June 30, 2025 and December 31, 2024 1 Consolidated Statements of Operations – Three and Six Months Ended June 30, 2025 and 2024 2 Consolidated Statements of Comprehensive Income And Loss – Three and Six Months Ended June 30, 2025 and 2024 3 Consolidated Statements of Changes in Stockholders' Equity – Three and Six Months Ended June 30, 2025 and 2024 4 Consolidated Statements of Cash Flows – Six Months Ended June 30, 2025 and 2024 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 27

Quantitative and Qualitative Disclosures about Market Risk

Item 3. Quantitative and Qualitative Disclosures about Market Risk 48

Controls and Procedures

Item 4. Controls and Procedures 49

– OTHER INFORMATION

PART II – OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 50

Risk Factors

Item 1A. Risk Factors 50

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 64

Other Information

Item 5. Other Information 64

Exhibits

Item 6. Exhibits 65 Signature 66 Table of Contents PART I

Financial Statements

ITEM 1. Financial Statements GREEN DOT CORPORATION CONSOLIDATED BALANCE SHEETS June 30, 2025 December 31, 2024 (unaudited) Assets (In thousands, except par value) Current assets: Unrestricted cash and cash equivalents $ 2,312,518 $ 1,592,391 Restricted cash 44 44 Investment securities available-for-sale, at fair value — 24,152 Settlement assets 679,542 616,172 Accounts receivable, net 103,069 132,007 Prepaid expenses and other assets 52,377 63,424 Income tax receivable 7,447 — Total current assets 3,154,997 2,428,190 Investment securities available-for-sale, at fair value 1,537,658 2,008,650 Loans to bank customers, net of allowance for credit losses of $ 22,406 and $ 17,542 as of June 30, 2025 and December 31, 2024, respectively 34,616 31,961 Prepaid expenses and other assets 165,673 242,707 Property, equipment, and internal-use software, net 198,134 188,363 Operating lease right-of-use assets 9,426 10,823 Deferred expenses 868 1,242 Net deferred tax assets 96,155 124,405 Goodwill and intangible assets 385,937 397,941 Total assets $ 5,583,464 $ 5,434,282 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 111,557 $ 103,765 Deposits 4,096,701 4,010,520 Obligations to customers 231,229 236,616 Settlement obligations 57,261 48,482 Amounts due to card issuing banks for overdrawn accounts — 84 Other accrued liabilities 86,749 87,675 Operating lease liabilities 2,875 2,416 Deferred revenue 4,722 6,279 Income tax payable 359 6,648 Total current liabilities 4,591,453 4,502,485 Other accrued liabilities 616 1,045 Operating lease liabilities 7,172 8,641 Notes payable 63,341 48,526 Total liabilities 4,662,582 4,560,697 Commitments and contingencies (Note 17) Stockholders' equity: Class A common stock, $ 0.001 par value; 100,000 shares authorized as of June 30, 2025 and December 31, 2024; 55,388 and 54,227 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively 55 55 Addition

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 platform and registered bank holding company that builds banking and payment solutions to create value, retain and reward customers, and accelerate growth for businesses of all sizes. For more than two decades, we have delivered financial tools and services that address the most pressing financial needs of consumers and businesses, and that transform the way people and businesses manage and move money. Through Green Dot Bank, our wholly-owned subsidiary, we deliver a broad spectrum of financial products to consumers and businesses through our portfolio of brands, 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 Green Dot Bank became 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, 2024 for additional disclosures, including a summary of our significant accounting policies. There have been no material changes to our previously

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 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 only 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, 2025 Consumer Services B2B Services Money Movement Services Total Timing of recognition (In thousands) Transferred point in time $ 68,170 $ 38,581 $ 53,190 $ 159,941 Transferred over time 23,030 298,893 811 322,734 Operating revenues (1) $ 91,200 $ 337,474 $ 54,001 $ 482,675 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 Six Months Ended June 30, 2025 Consumer Services B2B Services Money Movement Services Total Timing of recognition (In thousands) Transferred point in time $ 137,428 $ 76,125 $ 165,630 $ 379,183 Transferred over time 46,860 592,260 1,617 640,737 Operating revenues (1) $ 184,288 $ 668,385 $ 167,247 $ 1,019,920 Six Months Ended June 30, 2024 Consumer Services B2B Services Money Movement Services Total Timing of recognition (In thousands) Transferred point in time $ 140,472 $ 69,752 $ 161,949 $ 372,173 Transferred over time 51,586 406,420 1,554 459,560 Operating re

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) Note 3—Revenues (continued) 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 $ 0.5 million and $ 0.7 million in revenue for the three months ended June 30, 2025 and 2024, respectively, and $ 2.7 million and $ 3.6 million for the six months ended June 30, 2025 and 2024, respectively, that were included in deferred revenue at the beginning of the respective 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, 2025 Agency bond securities $ 179,226 $ — $ ( 25,684 ) $ 153,542 Agency mortgage-backed securities 1,507,636 161 ( 247,842 ) 1,259,955 Municipal bonds 28,819 — ( 6,454 ) 22,365 Asset-backed securities 102,000 — ( 204 ) 101,796 Total investment securities $ 1,817,681 $ 161 $ ( 280,184 ) $ 1,537,658 December 31, 2024 Corporate bonds $ 10,000 $ — $ ( 110 ) $ 9,890 Agency bond securities 240,628 — ( 38,132 ) 202,496 Agency mortgage-backed securities 2,121,037 3 ( 323,467 ) 1,797,573 Municipal bonds 29,116 — ( 6,273 ) 22,843 Total investment securities $ 2,400,781 $ 3 $

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) Note 4—Investment Securities (continued) 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 credit-related impairment loss during the three and six months ended June 30, 2025 or 2024 on our available-for-sale investment securities. Unrealized losses as of June 30, 2025 and December 31, 2024 are the result of increases in interest rates relative to when they were purchased as our investment portfolio is comprised predominantly of fixed rate securities. Substantially all of the underlying securities within our investment portfolio were in an unrealized loss position as of June 30, 2025 and December 31, 2024 due to the timing of our investment purchases, as a significant portion of our investments were purchased prior to increases in interest rates by the Federal Reserve, and general volatility in market conditions. Except as disclosed below, we do not currently intend to sell our remaining investments, and we have determined that it is more likely than not that we will not be required to sell our investments before recovery of their amortized cost bases, which may be at maturity. In April 2025, we sold certain available-for-sale securities in order to reposition the proceeds into higher yielding assets. As a result, we recorded an estimated realized loss of $ 24.5 million during the three months ended March 31, 2025 because we no longer had the intent to hold the securities until recovery of their amortized cost bases as of the then balance sheet date. Total losses recognized upon final settlement of the securities sold amounted to $ 24.8 million, and are reflected as a component of other expense, net on our consolidated statement of operations for the six months ended June 30, 20

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) Note 5—Accounts Receivable (continued) 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, 2025 2024 2025 2024 (In thousands) Balance, beginning of period $ 1,835 $ 4,143 $ 1,741 $ 5,281 Provision for uncollectible overdrawn accounts from purchase transactions 3,746 3,638 6,610 11,261 Charge-offs ( 3,624 ) ( 5,044 ) ( 6,394 ) ( 13,805 ) Balance, end of period $ 1,957 $ 2,737 $ 1,957 $ 2,737 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, 2025 Residential $ — $ — $ — $ — $ 7,451 $ 7,451 Commercial — — — — 2,570 2,570 Installment — — — — 6,600 6,600 Consumer 1,785 — — 1,785 30,876 32,661 Secured credit card 735 552 1,709 2,996 4,744 7,740 Total loans $ 2,520 $ 552 $ 1,709 $ 4,781 $ 52,241 $ 57,022 Percentage of outstanding 4.4 % 1.0 % 3.0 % 8.4 % 91.6 % 100.0 % December 31, 2024 Residential $ 1 $ — $ — $ 1 $ 6,874 $ 6,875 Commercial — — — — 2,585 2,585 Installment — 933 — 933 4,506 5,439 Consumer 1,668 — — 1,668 23,868 25,536 Secured credit card 700 700 2,536 3,936 5,132 9,068 T

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