Green Dot Reports Fourth Quarter and Full Year 2023 Results

Green Dot Corporation (NYSE: GDOT), a leading digital bank and fintech that delivers seamless banking and payment tools for consumers and businesses, today reported financial results for the quarter and year ended December 31, 2023.

“2023 was a pivotal year as we completed our processor conversion, streamlined costs and announced new partners in our BaaS and retail channels,” said George Gresham, Chief Executive Officer of Green Dot. “Looking forward with a more powerful and efficient foundation and a strong business pipeline, I believe we are poised to improve our revenue and adjusted EBITDA growth as we move through 2024.”

Consolidated Results Summary

	Three Months Ended December 31,											Year Ended December 31,
		2023				2022			% Change				2023				2022			% Change
	(In thousands, except per share data and percentages)
GAAP financial results
Total operating revenues	$	366,043			$	342,432			7	%		$	1,501,328			$	1,449,566			4	%
Net (loss) income	$	(23,603	)		$	5,884			*			$	6,722			$	64,212			(90	)%
Diluted (loss) earnings per common share	$	(0.45	)		$	0.11			*			$	0.13			$	1.19			(89	)%
Non-GAAP financial results1
Non-GAAP total operating revenues1	$	361,717			$	336,630			7	%		$	1,483,795			$	1,423,609			4	%
Adjusted EBITDA1	$	25,727			$	35,387			(27	)%		$	170,874			$	238,754			(28	)%
Adjusted EBITDA/Non-GAAP total operating revenues (adjusted EBITDA margin)		7.1	%			10.5	%		(3.4	)%			11.5	%			16.8	%		(5.3	)%
Non-GAAP net income1	$	7,325			$	17,712			(59	)%		$	85,214			$	140,024			(39	)%
Non-GAAP diluted earnings per share1	$	0.14			$	0.34			(59	)%		$	1.62			$	2.59			(37	)%
* Change not meaningful

1

Reconciliations of total operating revenues to non-GAAP total operating revenues, net income to adjusted EBITDA, net income to non-GAAP net income, and diluted earnings per share to non-GAAP diluted earnings per share, respectively, are provided in the tables immediately following the unaudited consolidated financial statements. Additional information about the Company's non-GAAP financial measures can be found under the caption “About Non-GAAP Financial Measures” below.

Unencumbered cash at the holding company was approximately $55 million as of December 31, 2023.

Green Dot has received a proposed consent order from the Federal Reserve Board relating principally to various aspects of compliance risk management, including consumer compliance and compliance with anti-money laundering regulations. The matters addressed in the proposed consent order relate to activities and practices that commenced prior to the company's Chief Executive Officer transition in 2020. Included in the consent order are proposals for civil money penalties related to these issues. While Green Dot is still in discussions with the Federal Reserve Board regarding these proposals, it has accrued as part of its GAAP financial results an estimated liability of $20 million related to the proposed consent order during the quarter ended December 31, 2023. Green Dot believes the estimate of the aggregate range of reasonably possible losses (meaning the likelihood of losses is more than remote but less than likely) is up to $50 million as of December 31, 2023. This estimated range of reasonably possible losses is based on currently available information for those proceedings in which Green Dot is involved and considers its best estimate of such losses for those matters for which an estimate can be made. However, there can be no assurance that its accrual is sufficient or that losses from the consent order will not exceed the estimated range.

“We are confident in our financial and regulatory positions and do not expect this to impact our ability to operate and serve our customers and partners on an ongoing basis,” Gresham continued. “The regulatory environment is continuously evolving, and we are committed to partnering and fully cooperating with our regulators to ensure our products are designed and marketed in ways that put our customers’ best interests at the forefront.”

Key Metrics

The following table shows Green Dot's quarterly key business metrics for each of the last eight calendar quarters on a consolidated basis and by each of its reportable segments. Please refer to Green Dot’s latest Quarterly Report on Form 10-Q for a description of the key business metrics, as well as additional information regarding how Green Dot organizes its business by segment.

	2023									2022
	Q4		Q3		Q2		Q1			Q4		Q3		Q2		Q1
	(In millions)
Consolidated *
Gross dollar volume	$	26,355	$	24,836	$	24,724	$	23,289		$	20,010	$	18,682	$	17,356	$	17,436
Number of active accounts		3.57		3.67		3.71		3.84			4.15		4.33		4.61		4.93
Purchase volume	$	5,273	$	5,362	$	5,734	$	6,145		$	6,292	$	6,443	$	6,760	$	7,192
Consumer Services
Gross dollar volume	$	4,290	$	4,619	$	5,122	$	5,677		$	5,426	$	5,495	$	5,715	$	6,621
Number of active accounts		2.05		2.16		2.35		2.41			2.37		2.51		2.78		3.04
Direct deposit active accounts		0.49		0.52		0.59		0.60			0.63		0.66		0.67		0.69
Purchase volume	$	3,312	$	3,553	$	3,984	$	4,344		$	4,229	$	4,302	$	4,588	$	5,017
B2B Services
Gross dollar volume	$	22,065	$	20,217	$	19,602	$	17,612		$	14,584	$	13,187	$	11,641	$	10,815
Number of active accounts		1.52		1.51		1.36		1.43			1.78		1.82		1.83		1.89
Purchase volume	$	1,961	$	1,809	$	1,750	$	1,801		$	2,063	$	2,141	$	2,172	$	2,175
Money Movement
Number of cash transfers		8.19		8.31		8.66		8.70			9.03		9.16		9.00		8.87
Number of tax refunds processed		0.16		0.20		3.87		9.91			0.20		0.28		4.48		9.61
* Represents the sum of Green Dot's Consumer Services and B2B (as defined herein) Services segments.

"Over the course of 2023, we faced numerous headwinds that impacted our financial performance, namely higher interest rates, client de-conversions and elevated spending on a variety of initiatives, including our processor conversions," said Jess Unruh, Chief Financial Officer of Green Dot. "As I look at 2024, I expect to return to growth in the second half of the year as we lap tough comparisons, and more fully realize the benefit of new partner launches, expense management initiatives and other measures that we undertook in 2023.”

2024 Financial Guidance

Green Dot has provided its financial outlook for 2024. Green Dot’s outlook is based on a number of assumptions that management believes are reasonable at the time of this earnings release. In particular, its outlook reflects several considerations, including but not limited to the current macro-economic environment, the effect of high inflation and interest rates, the impact of previously disclosed non-renewals of certain partnerships and programs, the company's decision to wind down many of its legacy cardholder programs in support of GO2bank, negative trends within certain channels of its business, investment in strategic initiatives and compliance programs, and cost reduction initiatives. Additionally, any fines or direct losses in excess of Green Dot’s accrual for the proposed consent order are expressly excluded from its outlook. Information regarding potential risks that could cause the actual results to differ from these forward-looking statements is set forth below and in Green Dot's filings with the Securities and Exchange Commission.

Total Non-GAAP Operating Revenues²

• Green Dot expects its full year non-GAAP total operating revenues² to be between $1.55 billion and $1.60 billion, or up approximately 6% year over year at the mid-point.

Adjusted EBITDA²

• Green Dot expects its full year adjusted EBITDA² to be between $170 million and $180 million, or up approximately 2% year over year at the mid-point.

Non-GAAP EPS²

• Green Dot expects its full year non-GAAP EPS² to be between $1.45 and $1.59, or down 6% year over year at the mid-point.

The components of Green Dot's non-GAAP EPS² guidance range are as follows:

	Range
	Low				High
	(In millions, except per share data)
Adjusted EBITDA	$	170.0			$	180.0
Depreciation and amortization*		(66.0	)			(66.0	)
Net interest expense		(3.0	)			(3.0	)
Non-GAAP pre-tax income	$	101.0			$	111.0
Tax impact**		(22.7	)			(25.0	)
Non-GAAP net income	$	78.3			$	86.0
Non-GAAP diluted weighted-average shares issued and outstanding		54.0				54.0
Non-GAAP earnings per share	$	1.45			$	1.59

*	Excludes the impact of amortization of acquired intangible assets
**	Assumes a non-GAAP effective tax rate of approximately 22.5% for full year.

2

For additional information, see reconciliations of forward-looking guidance for these non-GAAP financial measures to their respective, most directly comparable projected GAAP financial measures provided in the tables immediately following the reconciliation of Net Income to Adjusted EBITDA.

Conference Call

Green Dot's management will host a conference call to discuss fourth quarter and full year 2023 financial results today at 5:00 p.m. ET. The conference call can be accessed live from Green Dot's investor relations website at http://ir.greendot.com/. Green Dot uses this website as a tool to disclose important information about the company to investors and comply with its disclosure obligations under Regulation Fair Disclosure. A replay of the webcast will be available at the same website following the call. The replay will be available until Tuesday, March 5, 2024.

Forward-Looking Statements

This earnings release contains forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, among other things, statements in the quotes of Green Dot's executive officers and under the heading "2024 Financial Guidance," and other future events that involve risks and uncertainties. Actual results may differ materially from those contained in the forward-looking statements contained in this earnings release, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from those projected include, among other things, Green Dot’s ability to achieve the expected cost savings and other benefits from its processor conversions, impacts from and changes in general economic conditions on Green Dot’s business, results of operations and financial condition, shifts in consumer behavior towards electronic payments, the timing and impact of revenue growth activities, Green Dot's dependence on revenues derived from Walmart, the timing and impact of non-renewals or terminations of agreements with other large partners, impact of competition, Green Dot's reliance on retail distributors for the promotion of its products and services, demand for Green Dot's new and existing products and services, continued and improving returns from Green Dot's investments in strategic initiatives, Green Dot's ability to operate in a highly regulated environment, including with respect to any restrictions imposed on its business, changes to governmental policies or rulemaking or enforcement priorities affecting financial institutions or to existing laws or regulations affecting Green Dot's operating methods or economics, Green Dot's reliance on third-party vendors, changes in credit card association or other network rules or standards, changes in card association and debit network fees or products or interchange rates, instances of fraud developments in the prepaid financial services industry that impact prepaid debit card usage generally, business interruption or systems failure, economic, political and other conditions may adversely affect trends in consumer spending and Green Dot's involvement in litigation or investigations. These and other risks are discussed in greater detail in Green Dot's Securities and Exchange Commission filings, including its most recent annual report on Form 10-K and quarterly report on Form 10-Q, which are available on Green Dot's investor relations website at ir.greendot.com and on the SEC website at www.sec.gov. All information provided in this release and in the attachments is as of February 27, 2024, and Green Dot assumes no obligation to update this information as a result of future events or developments, except as required by law.

About Non-GAAP Financial Measures

To supplement Green Dot's consolidated financial statements presented in accordance with accounting principles generally accepted in the United States of America (GAAP), Green Dot uses measures of operating results that are adjusted for, among other things, non-operating net interest income and expense; other non-interest investment income earned by its bank; income tax benefit and expense; depreciation and amortization, including amortization of acquired intangibles; certain legal settlement gains and charges; stock-based compensation and related employer payroll taxes; changes in the fair value of contingent consideration; transaction costs from acquisitions; amortization attributable to deferred financing costs, impairment charges; extraordinary severance expenses; earnings or losses from equity method investments; changes in the fair value of loans held for sale; commissions and certain processing-related costs associated with Banking as a Service ("BaaS") products and services where Green Dot does not control customer acquisition; realized gains on investment securities; other charges and income not reflective of ongoing operating results; and income tax effects. This earnings release includes non-GAAP total operating revenues, adjusted EBITDA, non-GAAP net income, and non-GAAP diluted earnings per share. These non-GAAP financial measures are not calculated or presented in accordance with, and are not alternatives or substitutes for, financial measures prepared in accordance with GAAP, and should be read only in conjunction with Green Dot's financial measures prepared in accordance with GAAP. Green Dot's non-GAAP financial measures may be different from similarly-titled non-GAAP financial measures used by other companies. Green Dot believes that the presentation of non-GAAP financial measures provides useful information to management and investors regarding underlying trends in its consolidated financial condition and results of operations. Green Dot's management regularly uses these supplemental non-GAAP financial measures internally to understand, manage and evaluate Green Dot's business and make operating decisions. For additional information regarding Green Dot's use of non-GAAP financial measures and the items excluded by Green Dot from one or more of its historic and projected non-GAAP financial measures, investors are encouraged to review the reconciliations of Green Dot's historic and projected non-GAAP financial measures to the comparable GAAP financial measures, which are attached to this earnings release, and which can be found by clicking on “Financial Information” in the Investor Relations section of Green Dot's website at http://ir.greendot.com/.

About Green Dot

Green Dot Corporation (NYSE: GDOT) is a financial technology and registered bank holding company committed to giving all people the power to bank seamlessly, affordably, and with confidence. Green Dot’s technology platform enables it 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.

Green Dot offers a broad set of financial products 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. Its flagship digital banking platform GO2bank offers consumers simple and accessible mobile banking designed to help improve financial health over time. The company’s banking platform services business enables a growing list of the world’s largest and most trusted consumer and technology brands to deploy customized, seamless, value-driven money management solutions for their customers.

Founded in 1999, Green Dot has served more than 33 million customers directly and many millions more through its partners. The Green Dot Network of more than 90,000 retail distribution locations nationwide, more than all remaining bank branches in the U.S. combined, enables it to operate primarily as a “branchless bank.” Green Dot Bank is a subsidiary of Green Dot Corporation and member of the FDIC. For more information about Green Dot’s products and services, please visit www.greendot.com.

GREEN DOT CORPORATION
CONSOLIDATED BALANCE SHEETS
	December 31, 2023				December 31, 2022
	(unaudited)
Assets	(In thousands, except par value)
Current assets:
Unrestricted cash and cash equivalents	$	682,263			$	813,945
Restricted cash		4,239				5,900
Investment securities available-for-sale, at fair value		33,859				—
Settlement assets		737,989				493,395
Accounts receivable, net		110,141				74,437
Prepaid expenses and other assets		69,419				78,155
Total current assets		1,637,910				1,465,832
Investment securities available-for-sale, at fair value		2,203,142				2,363,687
Loans to bank customers, net of allowance for credit losses of $11,383 and $9,078 as of December 31, 2023 and December 31, 2022, respectively		30,534				21,421
Prepaid expenses and other assets		221,656				192,901
Property, equipment, and internal-use software, net		179,376				160,222
Operating lease right-of-use assets		5,342				8,316
Deferred expenses		1,546				14,547
Net deferred tax assets		117,139				117,167
Goodwill and intangible assets		420,477				445,083
Total assets	$	4,817,122			$	4,789,176
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	119,870			$	113,891
Deposits		3,293,603				3,450,105
Obligations to customers		314,278				218,239
Settlement obligations		57,001				40,691
Amounts due to card issuing banks for overdrawn accounts		225				328
Other accrued liabilities		91,239				98,580
Operating lease liabilities		3,369				3,167
Deferred revenue		6,343				25,029
Line of credit		61,000				—
Income tax payable		6,262				11,641
Total current liabilities		3,953,190				3,961,671
Other accrued liabilities		1,895				5,777
Operating lease liabilities		2,687				5,247
Line of credit		—				35,000
Total liabilities		3,957,772				4,007,695
Stockholders’ equity:
Class A common stock, $0.001 par value; 100,000 shares authorized as of December 31, 2023 and December 31, 2022; 52,816 and 51,674 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively		53				52
Additional paid-in capital		375,980				340,575
Retained earnings		770,304				763,582
Accumulated other comprehensive loss		(286,987	)			(322,728	)
Total stockholders’ equity		859,350				781,481
Total liabilities and stockholders’ equity	$	4,817,122			$	4,789,176

GREEN DOT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
	Three Months Ended December 31,								Year Ended December 31,
		2023				2022				2023				2022
	(In thousands, except per share data)
Operating revenues:
Card revenues and other fees	$	272,185			$	225,339			$	1,007,565			$	876,318
Cash processing revenues		33,491				36,632				225,416				235,445
Interchange revenues		52,053				69,345				231,003				295,646
Interest income, net		8,314				11,116				37,344				42,157
Total operating revenues		366,043				342,432				1,501,328				1,449,566
Operating expenses:
Sales and marketing expenses		50,795				70,002				245,325				297,900
Compensation and benefits expenses		45,594				58,196				238,528				243,939
Processing expenses		178,673				131,719				639,228				481,460
Other general and administrative expenses		117,253				74,436				355,577				331,892
Total operating expenses		392,315				334,353				1,478,658				1,355,191
Operating (loss) income		(26,272	)			8,079				22,670				94,375
Interest expense, net		906				112				3,027				255
Other income (expense), net		1,040				(1,142	)			(5,010	)			(10,199	)
(Loss) income before income taxes		(26,138	)			6,825				14,633				83,921
Income tax (benefit) expense		(2,535	)			941				7,911				19,709
Net (loss) income	$	(23,603	)		$	5,884			$	6,722			$	64,212
Basic (loss) earnings per common share:	$	(0.45	)		$	0.11			$	0.13			$	1.20
Diluted (loss) earnings per common share	$	(0.45	)		$	0.11			$	0.13			$	1.19
Basic weighted-average common shares issued and outstanding:		52,622				51,901				52,251				53,351
Diluted weighted-average common shares issued and outstanding:		52,622				52,299				52,510				53,871

GREEN DOT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
	Year Ended December 31,
		2023				2022
	(In thousands)
Operating activities
Net income	$	6,722			$	64,212
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property, equipment and internal-use software		58,714				57,101
Amortization of intangible assets		24,257				23,509
Provision for uncollectible overdrawn accounts from purchase transactions		24,771				13,771
Provision for loan losses		26,311				32,352
Stock-based compensation		33,744				34,812
Losses in equity method investments		9,310				15,648
Amortization of discount on available-for-sale investment securities		(2,276	)			(1,434	)
Impairment of long-lived assets		—				4,264
Deferred income tax benefit		(11,867	)			(6,674	)
Other		(4,100	)			(4,666	)
Changes in operating assets and liabilities:
Accounts receivable, net		(60,475	)			(7,807	)
Prepaid expenses and other assets		3,354				5,417
Deferred expenses		13,001				2,308
Accounts payable and other accrued liabilities		690				41,098
Deferred revenue		(19,539	)			(3,694	)
Income tax receivable/payable		(5,613	)			11,716
Other, net		515				(4,247	)
Net cash provided by operating activities		97,519				277,686
Investing activities
Purchases of available-for-sale investment securities		—				(931,549	)
Proceeds from maturities of available-for-sale securities		176,665				293,748
Proceeds from sales and calls of available-for-sale securities		186				3,488
Payments for property, equipment and internal-use software		(75,942	)			(84,326	)
Net changes in loans		(28,970	)			(32,057	)
Investment in TailFin Labs, LLC		(35,000	)			(35,000	)
Purchases of other investments		—				(31,934	)
Other investing activities		(3,782	)			(2,558	)
Net cash provided by (used in) investing activities		33,157				(820,188	)
Financing activities
Borrowings on revolving line of credit		282,000				100,000
Repayments on revolving line of credit		(256,000	)			(65,000	)
Proceeds from exercise of options and ESPP purchases		5,565				6,177
Taxes paid related to net share settlement of equity awards		(3,903	)			(5,947	)
Net changes in deposits		(159,436	)			157,140
Net changes in settlement assets and obligations to customers		(132,245	)			(53,991	)
Contingent consideration payments		—				(1,647	)
Repurchase of Class A common stock		—				(95,525	)
Other financing activities		—				(4,500	)
Net cash (used in) provided by financing activities		(264,019	)			36,707
Net decrease in unrestricted cash, cash equivalents and restricted cash		(133,343	)			(505,795	)
Unrestricted cash, cash equivalents and restricted cash, beginning of period		819,845				1,325,640
Unrestricted cash, cash equivalents and restricted cash, end of period	$	686,502			$	819,845
Cash paid for interest	$	5,923			$	627
Cash paid for income taxes	$	24,351			$	12,966
Reconciliation of unrestricted cash, cash equivalents and restricted cash at end of period:
Unrestricted cash and cash equivalents	$	682,263			$	813,945
Restricted cash		4,239				5,900
Total unrestricted cash, cash equivalents and restricted cash, end of period	$	686,502			$	819,845

GREEN DOT CORPORATION
REPORTABLE SEGMENTS (UNAUDITED)
	Three Months Ended December 31,								Year Ended December 31,
		2023				2022				2023				2022
Segment Revenue	(In thousands)
Consumer Services	$	111,489			$	141,319			$	498,617			$	586,798
B2B Services		221,841				158,830				772,991				594,468
Money Movement Services		29,370				33,062				209,674				222,192
Corporate and Other		(983	)			3,419				2,513				20,151
Total segment revenues		361,717				336,630				1,483,795				1,423,609
BaaS commissions and processing expenses (8)		5,103				6,576				20,449				28,831
Other income (9)		(777	)			(774	)			(2,916	)			(2,874	)
Total operating revenues	$	366,043			$	342,432			$	1,501,328			$	1,449,566

	Three Months Ended December 31,								Year Ended December 31,
		2023				2022				2023				2022
Segment Profit	(In thousands)
Consumer Services	$	37,740			$	53,543			$	177,190			$	222,148
B2B Services		18,495				18,937				77,303				86,372
Money Movement Services		9,526				11,550				113,176				117,830
Corporate and Other		(40,034	)			(48,643	)			(196,795	)			(187,596	)
Total segment profit *		25,727				35,387				170,874				238,754
Reconciliation to (loss) income before income taxes
Depreciation and amortization of property, equipment and internal-use software		16,408				14,220				58,715				57,101
Stock based compensation and related employer taxes		6,033				3,604				34,288				35,414
Amortization of acquired intangible assets		5,664				5,664				24,257				23,509
Impairment charges		—				130				—				4,264
Legal settlements and related expenses		21,650				(338	)			23,614				16,021
Other expense		2,244				4,028				7,330				8,070
Operating (loss) income		(26,272	)			8,079				22,670				94,375
Interest expense, net		906				112				3,027				255
Other income (expense), net		1,040				(1,142	)			(5,010	)			(10,199	)
(Loss) income before income taxes	$	(26,138	)		$	6,825			$	14,633			$	83,921
* Total segment profit is also referred to herein as adjusted EBITDA in its non-GAAP measures. Additional information about the Company's non-GAAP financial measures can be found under the caption “About Non-GAAP Financial Measures."

Green Dot's segment reporting is based on how its Chief Operating Decision Maker (“CODM”) manages its businesses, including resource allocation and performance assessment. Its CODM (who is the Chief Executive Officer) organizes and manages the businesses primarily on the basis of the channels in which its product and services are offered and uses net revenue and segment profit to assess profitability. Segment profit reflects each segment's net revenue less direct costs, such as sales and marketing expenses, processing expenses, third-party call center support and transaction losses. Green Dot’s operations are aggregated amongst three reportable segments: 1) Consumer Services, 2) Business to Business ("B2B") Services and 3) Money Movement Services.

The Corporate and Other segment primarily consists of net interest income, certain other investment income earned by Green Dot's bank, interest profit sharing arrangements with certain BaaS partners (a reduction of revenue), eliminations of inter-segment revenues and expenses, and unallocated corporate expenses, which include Green Dot's fixed expenses, such as salaries, wages and related benefits for its employees, professional services fees, software licenses, telephone and communication costs, rent, utilities, and insurance that are not considered when Green Dot's CODM evaluates segment performance. Non-cash expenses such as stock-based compensation, depreciation and amortization of long-lived assets, impairment charges and other non-recurring expenses that are not considered by Green Dot's CODM when it is evaluating overall consolidated financial results are excluded from its unallocated corporate expenses. Green Dot does not evaluate performance or allocate resources based on segment asset data, and therefore such information is not presented.

GREEN DOT CORPORATION
Reconciliation of Total Operating Revenues to Non-GAAP Total Operating Revenues (1)
(Unaudited)
	Three Months Ended December 31,								Year Ended December 31,
		2023				2022				2023				2022
	(In thousands)
Total operating revenues	$	366,043			$	342,432			$	1,501,328			$	1,449,566
BaaS commissions and processing expenses (8)		(5,103	)			(6,576	)			(20,449	)			(28,831	)
Other income (9)		777				774				2,916				2,874
Non-GAAP total operating revenues	$	361,717			$	336,630			$	1,483,795			$	1,423,609

Reconciliation of Net Income (Loss) to Non-GAAP Net Income (1)
(Unaudited)
	Three Months Ended December 31,								Year Ended December 31,
		2023				2022				2023				2022
	(In thousands, except per share data)
Net (loss) income	$	(23,603	)		$	5,884			$	6,722			$	64,212
Stock-based compensation and related employer payroll taxes (3)		6,033				3,604				34,288				35,414
Amortization of acquired intangible assets (4)		5,664				5,664				24,257				23,509
Change in fair value of contingent consideration (4)		—				—				—				300
Transaction and related acquisition costs (4)		—				6				(3	)			739
Amortization of deferred financing costs (5)		36				36				144				144
Impairment charges (5)		—				130				—				4,264
Legal settlements and related expenses (5)		21,650				(338	)			23,614				16,021
Losses in equity method investments (5)		24				3,770				9,310				15,648
Change in fair value of loans held for sale (5)		(264	)			(1,736	)			(1,365	)			(2,622	)
Realized gain on sale of investments (5)		—				(135	)			—				(135	)
Extraordinary severance expenses (6)		1,326				2,948				4,741				3,499
Other expense (income), net (5)		118				317				(343	)			840
Income tax effect (7)		(3,659	)			(2,438	)			(16,151	)			(21,809	)
Non-GAAP net income	$	7,325			$	17,712			$	85,214			$	140,024
Diluted (loss) earnings per common share
GAAP	$	(0.45	)		$	0.11			$	0.13			$	1.19
Non-GAAP	$	0.14			$	0.34			$	1.62			$	2.59
Diluted weighted-average common shares issued and outstanding
GAAP		52,622				52,299				52,510				53,871
Non-GAAP		52,852				52,326				52,510				54,019

Reconciliation of GAAP to Non-GAAP Diluted Weighted-Average
Shares Issued and Outstanding
(Unaudited)
	Three Months Ended December 31,				Year Ended December 31,
	2023		2022		2023		2022
	(In thousands)
Diluted weighted-average shares issued and outstanding	52,622		52,299		52,510		53,871
Weighted-average unvested Walmart restricted shares (10)	—		27		—		148
Anti-dilutive shares due to GAAP net loss	230		—		—		—
Non-GAAP diluted weighted-average shares issued and outstanding	52,852		52,326		52,510		54,019

GREEN DOT CORPORATION
Supplemental Detail on Non-GAAP Diluted Weighted-Average Common Shares Issued and Outstanding
(Unaudited)
	Three Months Ended December 31,					Year Ended December 31,
	2023			2022		2023			2022
	(In thousands)
Class A common stock outstanding as of December 31:	52,816			51,674		52,816			51,674
Weighting adjustment	(194	)		254		(565	)		1,825
Dilutive potential shares:
Stock options	—			2		—			29
Service based restricted stock units	165			145		138			160
Performance-based restricted stock units	24			229		52			295
Employee stock purchase plan	41			22		69			36
Non-GAAP diluted weighted-average shares issued and outstanding	52,852			52,326		52,510			54,019

Reconciliation of Net Income (Loss) to Adjusted EBITDA (1)
(Unaudited)
	Three Months Ended December 31,								Year Ended December 31,
		2023				2022				2023				2022
	(In thousands)
Net (loss) income	$	(23,603	)		$	5,884			$	6,722			$	64,212
Interest expense, net (2)		906				112				3,027				255
Income tax (benefit) expense		(2,535	)			941				7,911				19,709
Depreciation and amortization of property, equipment and internal-use software (2)		16,408				14,220				58,715				57,101
Stock-based compensation and related employer payroll taxes (2)(3)		6,033				3,604				34,288				35,414
Amortization of acquired intangible assets (2)(4)		5,664				5,664				24,257				23,509
Change in fair value of contingent consideration (2)(4)		—				—				—				300
Transaction and related acquisition costs (2)(4)		—				6				(3	)			739
Impairment charges (2)(5)		—				130				—				4,264
Legal settlements and related expenses (2)(5)		21,650				(338	)			23,614				16,021
Losses in equity method investments (2)(5)		24				3,770				9,310				15,648
Change in fair value of loans held for sale (2)(5)		(264	)			(1,736	)			(1,365	)			(2,622	)
Realized gain on sale of investments (2)(5)		—				(135	)			—				(135	)
Extraordinary severance expenses (2)(6)		1,326				2,948				4,741				3,499
Other expense (income), net (2)(5)		118				317				(343	)			840
Adjusted EBITDA	$	25,727			$	35,387			$	170,874			$	238,754
Non-GAAP total operating revenues	$	361,717			$	336,630			$	1,483,795			$	1,423,609
Adjusted EBITDA/Non-GAAP total operating revenues (adjusted EBITDA margin)		7.1	%			10.5	%			11.5	%			16.8	%

GREEN DOT CORPORATION
Reconciliation of Forward Looking Guidance for Non-GAAP Financial Measures to
Projected GAAP Total Operating Revenues (1)
(Unaudited)
	FY 2024
	Range
	Low				High
	(In millions)
Total operating revenues	$	1,567			$	1,617
Adjustments (8)(9)		(17	)			(17	)
Non-GAAP total operating revenues	$	1,550			$	1,600

Reconciliation of Forward Looking Guidance for Non-GAAP Financial Measures to
Projected GAAP Net Income (1)
(Unaudited)
	FY 2024
	Range
	Low				High
	(In millions)
Net income	$	12.4			$	20.0
Adjustments (11)		157.6				160.0
Adjusted EBITDA	$	170.0			$	180.0
Non-GAAP total operating revenues	$	1,600			$	1,550
Adjusted EBITDA/Non-GAAP total operating revenues (adjusted EBITDA margin)		10.6	%			11.6	%

Reconciliation of Forward Looking Guidance for Non-GAAP Financial Measures to
Projected GAAP Net Income and GAAP Diluted Weighted-Average Shares Issued and Outstanding (1)
(Unaudited)
	FY 2024
	Range
	Low			High
	(In millions, except per share data)
Net income	$	12.4		$	20.0
Adjustments (11)		65.9			66.0
Non-GAAP net income	$	78.3		$	86.0
Diluted earnings per share
GAAP	$	0.23		$	0.37
Non-GAAP	$	1.45		$	1.59
Diluted weighted-average shares issued and outstanding
GAAP		54.0			54.0

(1)

To supplement Green Dot’s consolidated financial statements presented in accordance with GAAP, Green Dot uses measures of operating results that are adjusted to exclude various, primarily non-cash, expenses and charges. These financial measures are not calculated or presented in accordance with GAAP and should not be considered as alternatives to or substitutes for operating revenues, operating income, net income or any other measure of financial performance calculated and presented in accordance with GAAP. These financial measures may not be comparable to similarly-titled measures of other organizations because other organizations may not calculate their measures in the same manner as Green Dot does. These financial measures are adjusted to eliminate the impact of items that Green Dot does not consider indicative of its core operating performance. You are encouraged to evaluate these adjustments and the reasons Green Dot considers them appropriate.

Green Dot believes that the non-GAAP financial measures it presents are useful to investors in evaluating Green Dot’s operating performance for the following reasons:

• adjusted EBITDA is widely used by investors to measure a company’s operating performance without regard to items, such as non-operating net interest income and expense, income tax benefit and expense, depreciation and amortization, stock-based compensation and related employer payroll taxes, changes in the fair value of contingent consideration, transaction costs, impairment charges, extraordinary severance expenses, certain legal settlement and related expenses, earnings or losses from equity method investments, changes in the fair value of loans held for sale, and other charges and income that can vary substantially from company to company depending upon their respective financing structures and accounting policies, the book values of their assets, their capital structures and the methods by which their assets were acquired;
• securities analysts use adjusted EBITDA as a supplemental measure to evaluate the overall operating performance of companies; and
• Green Dot records stock-based compensation from period to period, and recorded stock-based compensation expenses and related employer payroll taxes, net of forfeitures, of approximately $6.0 million and $3.6 million for the three months ended December 31, 2023 and 2022, respectively. By comparing Green Dot’s adjusted EBITDA, non-GAAP net income and non-GAAP diluted earnings per share in different historical periods, investors can evaluate Green Dot’s operating results without the additional variations caused by stock-based compensation expense and related employer payroll taxes, which may not be comparable from period to period due to changes in the fair market value of Green Dot’s Class A common stock (which is influenced by external factors like the volatility of the public markets and the financial performance of Green Dot’s peers) and is not a key measure of Green Dot’s operations.

Green Dot’s management uses the non-GAAP financial measures:

• as measures of operating performance, because they exclude the impact of items not directly resulting from Green Dot’s core operations;
• for planning purposes, including the preparation of Green Dot’s annual operating budget;
• to allocate resources to enhance the financial performance of Green Dot’s business;
• to evaluate the effectiveness of Green Dot’s business strategies;
• to establish metrics for variable compensation; and
• in communications with Green Dot’s board of directors concerning Green Dot’s financial performance.

Green Dot understands that, although adjusted EBITDA and other non-GAAP financial measures are frequently used by investors and securities analysts in their evaluations of companies, these measures have limitations as an analytical tool, and you should not consider them in isolation or as substitutes for an analysis of Green Dot’s results of operations as reported under GAAP. Some of these limitations are:

• that these measures do not reflect Green Dot’s capital expenditures or future requirements for capital expenditures or other contractual commitments;
• that these measures do not reflect changes in, or cash requirements for, Green Dot’s working capital needs;
• that these measures do not reflect non-operating interest expense or interest income;
• that these measures do not reflect cash requirements for income taxes;
• that, although depreciation and amortization are non-cash charges, the assets being depreciated or amortized will often have to be replaced in the future, and these measures do not reflect any cash requirements for these replacements; and
• that other companies in Green Dot’s industry may calculate these measures differently than Green Dot does, limiting their usefulness as comparative measures.

(2)		Green Dot does not include any income tax impact of the associated non-GAAP adjustment to adjusted EBITDA, as the case may be, because each of these adjustments to the non-GAAP financial measure is provided before income tax expense.
(3)		This expense consists primarily of expenses for restricted stock units (including performance-based restricted stock units), performance-based stock options and related employer payroll taxes. Stock-based compensation expense is not comparable from period to period due to changes in the fair market value of Green Dot’s Class A common stock (which is influenced by external factors like the volatility of public markets and the financial performance of Green Dot’s peers) and is not a key measure of Green Dot’s operations. Green Dot excludes stock-based compensation expense from its non-GAAP financial measures primarily because it consists of non-cash expenses that Green Dot does not believe are reflective of ongoing operating results. Green Dot also believes that it is not useful to investors to understand the impact of stock-based compensation to its results of operations. Further, the related employer payroll taxes are dependent upon volatility in Green Dot's stock price, as well as the timing and size of option exercises and vesting of restricted stock units, over which Green Dot has limited to no control. This expense is included as a component of compensation and benefits expenses on Green Dot's consolidated statements of operations.
(4)		Green Dot excludes certain income and expenses that are the result of acquisitions. These acquisition-related adjustments include items such as transaction costs, the amortization of acquired intangible assets, changes in the fair value of contingent consideration, settlements of contingencies established at time of acquisition and other acquisition related charges, such as integration charges and professional and legal fees, which result in Green Dot recording expenses or fair value adjustments in its GAAP financial statements. Green Dot analyzes the performance of its operations without regard to these adjustments. In determining whether any acquisition-related adjustment is appropriate, Green Dot takes into consideration, among other things, how such adjustments would or would not aid in the understanding of the performance of its operations. These items are included as a component of other general and administrative expenses on Green Dot's consolidated statements of operations, as applicable for the periods presented.
(5)		Green Dot excludes certain income and expenses that are not reflective of ongoing operating results. It is difficult to estimate the amount or timing of these items in advance. Although these events are reflected in Green Dot's GAAP financial statements, Green Dot excludes them in its non-GAAP financial measures because Green Dot believes these items may limit the comparability of ongoing operations with prior and future periods. These adjustments include items such as amortization attributable to deferred financing costs, impairment charges related to long-lived assets, earnings or losses from equity method investments, legal settlements and related expenses, changes in the fair value of loans held for sale, realized gains on investment securities and other income and expenses, as applicable for the periods presented. In determining whether any such adjustment is appropriate, Green Dot takes into consideration, among other things, how such adjustments would or would not aid in the understanding of the performance of its operations. Each of these adjustments, except for amortization of deferred financing costs, earnings and losses from equity method investments, fair value changes on loans held for sale, and realized gains on investment securities, which are all included below operating income, are included within other general and administrative expenses on Green Dot's consolidated statements of operations.
		During the three months ended December 31, 2023, Green Dot accrued an estimated liability of $20 million related to a proposed consent order it received from the Federal Reserve Board relating principally to various aspects of compliance risk management, including consumer compliance, as well as compliance with anti-money laundering regulations. The accrual is included within legal settlements and related expenses, a component of other general and administrative expenses as discussed above.
(6)		During the three and twelve months ended December 31, 2023, Green Dot recorded charges of $1.3 million and $4.7 million, respectively, related to extraordinary severance expenses, which were paid out in connection with reductions in force and other extraordinary involuntary terminations of employment. Although severance expenses may arise throughout the fiscal year, Green Dot believes the nature of these extraordinary costs are not indicative of its core operating performance. This expense is included as a component of compensation and benefits expenses on Green Dot's consolidated statements of operations.
(7)		Represents the tax effect for the related non-GAAP measure adjustments using Green Dot's year to date non-GAAP effective tax rate. It also excludes both the impact of excess tax benefits related to stock-based compensation and the IRC §162(m) limitation that applies to performance-based restricted stock units and stock options expense as of December 31, 2023.
(8)		Represents commissions and certain processing-related costs associated with BaaS products and services where Green Dot does not control customer acquisition. This adjustment is netted against Green Dot's B2B Services revenues when evaluating segment performance.
(9)		Represents other non-interest investment income earned by Green Dot Bank. This amount is included along with operating interest income in Green Dot's Corporate and Other segment since the yield earned on these investments are generated on a recurring basis and earned similarly to its investment securities available for sale.
(10)		Represents the weighted average of the unvested balance of restricted shares issued to Walmart in January 2020. Walmart is entitled to voting rights and participate in any dividends paid on the unvested balance and therefore, the shares are included in the computation of non-GAAP diluted earnings per share.
(11)		These amounts represent estimated adjustments for items such as income taxes, depreciation and amortization, employee stock-based compensation and related employer taxes, amortization attributable to deferred financing costs, extraordinary severance expenses, and earnings and losses from equity method investments. Employee stock-based compensation expense includes assumptions about the future fair value of the Company’s Class A common stock (which is influenced by external factors like the volatility of public markets and the financial performance of the Company’s peers).

 

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The Green Dot Registered (A) Stock at the time of publication of the news with a raise of +4,83 % to 8,795USD on NYSE stock exchange (27. Februar 2024, 21:59 Uhr).