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|Green Dot Reports Second Quarter 2014 Non-GAAP Revenue Growth of 5% to $149 million, Adjusted EBITDA Growth of 23% to $36 million, Non-GAAP EPS of $0.41, up 24%|
Raises Full Year Guidance for Adjusted EBITDA and Non-GAAP EPS
For the second quarter of 2014, Green Dot reported
Net cash provided by operating activities in the quarter was
"We had a strong second quarter driven by three key factors in our
business that we believe we can sustain over the long term. First, we’re
witnessing strong outperformance of our Green Dot-branded business.
Second, more robust customer usage metrics within all of our portfolios
are generating higher incremental revenue and margin per active card.
And third, the investments we’ve made into operational excellence are
beginning to pay off with greater efficiencies in risk management,
supply chain and technology development. Based on these factors, our
first half performance, and the initiatives we have planned for the
second half of the year, we are maintaining our revenue guidance and we
are raising our adjusted EBITDA and non-GAAP EPS guidance for the year,”
GAAP financial results for the second quarter of 2014 compared to the second quarter of 2013:
Non-GAAP financial results for the second quarter of 2014 compared to the second quarter of 2013:1
The following table shows the Company's quarterly key business metrics for each of the last six calendar quarters. Please refer to the Company's latest Quarterly Report on Form 10-Q for a description of the key business metrics described.
Selected Business Updates
Updates on Green Dot’s Walmart business:
Green Dot added approximately 1,200 check casher, or FSC, locations, and now counts approximately 1,500 FSC locations where its products and services are sold. Usage metrics and corresponding lifetime revenue metrics from cards acquired in the FSC channel tend to be materially better than those acquired through many of the Company’s traditional retail channels.
Green Dot’s performance continues to advance amidst the current competitive landscape, with the Green Dot-branded portfolio achieving among the highest growth rates in the Company’s history across several key operating metrics during the quarter, including 33% growth in active cards, 33% growth in cash transfers, 29% growth in GDV, and 24% growth in purchase volume over the same period last year.
Updated Outlook for 2014
Green Dot's updated outlook is based on a number of assumptions that
Green Dot believes are reasonable at the time of this earnings release.
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
For 2014, Green Dot now expects adjusted EBITDA2 to be
“At the midpoint, our new adjusted EBITDA guidance is 12% higher than
our initial guidance and, on a full year basis, would represent annual
adjusted EBITDA growth of 26% year-over-year. This revised guidance
implies lower expected second half adjusted EBITDA margins than our
first half results. The reasons for this difference are that first half
adjusted EBITDA margins were favorably impacted by a one-time
The Company will host a conference call to discuss second quarter 2014
financial results today at
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 regarding the Company's full-year 2014 guidance
contained under "Updated Outlook for 2014" and in the quotes of our
Chief Executive Officer and Chief Financial Officer, the future
distribution the Company’s products 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, the impact of the Company’s supply chain management efforts on
its revenue growth, the timing and impact of revenue growth activities,
the Company's dependence on revenues derived from Walmart and three
other retail distributors, impact of competition, the Company's reliance
on retail distributors for the promotion of its products and services,
demand for the Company's new and existing products and services,
continued and improving returns from the Company's investments in new
growth initiatives, potential difficulties in integrating operations of
acquired entities and acquired technologies, the Company's ability to
operate in a highly regulated environment, changes to existing laws or
regulations affecting the Company's operating methods or economics, the
Company'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, and the Company's involvement
litigation or investigations. These and other risks are discussed in
greater detail in the Company's
About Non-GAAP Financial Measures
To supplement the Company's consolidated financial statements presented
in accordance with accounting principles generally accepted in
About Green Dot
(1) To supplement the Company’s consolidated financial statements presented in accordance with GAAP, the Company 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 we do. These financial measures are adjusted to eliminate the impact of items that the Company does not consider indicative of its core operating performance. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate.
The Company believes that the non-GAAP financial measures it presents are useful to investors in evaluating the Company’s operating performance for the following reasons:
The Company’s management uses the non-GAAP financial measures:
The Company 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 analysis of the Company’s results of operations as reported under GAAP. Some of these limitations are:
(2) This expense consists of the recorded fair value of the shares of
Class A common stock for which the Company’s right to repurchase has
lapsed pursuant to the terms of the
(3) The Company does not include any income tax impact of the associated non-GAAP adjustment to non-GAAP total operating revenues or adjusted EBITDA, as the case may be, because each of these non-GAAP financial measures is provided before income tax expense.
(4) This expense consists primarily of expenses for employee stock options. Employee stock-based compensation expense is not comparable from period to period due to changes in the fair market 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) and is not a key measure of the Company’s operations. The Company excludes employee stock-based compensation expense from its non-GAAP financial measures primarily because it consists of non-cash expenses that the Company does not believe are reflective of ongoing operating results. Further, the Company believes that it is useful to investors to understand the impact of employee stock-based compensation to its results of operations.
(5) This expense represents the amortization attributable to the Company's acquired intangible assets. The Company excludes amortization expenses related to acquired intangible assets from its non-GAAP financial measures primarily because it consists of non-cash expenses that the Company does not believe are reflective of ongoing operating results.
(6) These amounts represent estimated adjustments for net interest income, income taxes, depreciation and amortization, employee stock-based compensation expense, and stock-based retailer incentive compensation expense. Employee stock-based compensation expense and stock-based retailer incentive compensation expense include assumptions about the future fair market 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).