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|Green Dot Reports First Quarter 2015 Non-GAAP YoY Revenue Growth of 43% to $231M, Adjusted EBITDA growth of 120% to $83M and non-GAAP EPS growth of 105% to $0.86|
Better than forecasted Q1 results; but higher MoneyPak headwinds now forecast for full year
For the first quarter of 2015, Green Dot reported growth of 43%
year-over-year in both consolidated GAAP and non-GAAP total operating
Net cash provided by operating activities in the quarter was
"These positive results represent our first full quarter of the new,
consolidated Green Dot, inclusive of our acquisition of TPG and two
smaller prepaid program managers,
Consolidated GAAP financial results for the first quarter of 2015 compared to the first quarter of 2014:
Consolidated non-GAAP financial results for the first quarter of 2015 compared to the first quarter of 2014:1
The Company's key business metrics described in the latest Annual Report
on Form 10-K have been revised to reflect its recent acquisitions,
The Company believes the following measures are the primary indicators of quarterly and annual revenues:
Number of Cash Transfers - represents the total number of reload transactions that the Company conducted through its retail distributors in a specified period. The Company uses this metric to analyze the number of fee- and non-fee generating reload transactions that are performed at the retail stores of its retail distributor partners in order to determine the cash-based reload activity to its products and to third party network acceptance members, and to analyze the average fee per transaction as an indicator of revenue performance from this activity.
Number of Tax Refunds Processed - represents the total number of tax refunds processed in a specified period through the Company’s wholly-owned subsidiary, TPG. The Company uses this metric to analyze the number of customers utilizing TPG’s tax refund processing services and as a metric used to analyze the average fee as an indicator of revenue performance from this activity.
Number of Active Cards - represents the total number of GPR cards and checking accounts in the Company's portfolio that had a purchase, reload or ATM withdrawal transaction during the previous 90-day period. The Company uses this metric to analyze the overall size of its active customer base and to analyze multiple metrics expressed as an average across this active card base.
Gross Dollar Volume - represents the total dollar volume of funds processed and settled by the consolidated enterprise, excluding tax refunds processed by TPG. This includes funds deposited to the Company's GPR cards and checking accounts and funds applied to a third party network program through the Company's reload network. The Company uses this metric to analyze the total amount of money moving through the enterprise, either to its branded and private label deposit account programs or to programs managed by third party network acceptance members. The Company also uses this metric to determine the overall engagement and usage patterns of its customer base and serves as a leading indicator of fee and interchange revenues generated through card usage.
Purchase Volume - represents the total dollar volume of purchase transactions made by customers using the Company's GPR, checking account and gift card products. This metric excludes the dollar volume of ATM withdrawals. The Company uses this metric to analyze interchange revenue, which is a key component of its financial performance.
The following table shows the Company's quarterly key business metrics for each of the last five calendar quarters.
Financial Division Changes
The Company announced that, effective
Green Dot Acting CFO
Revised Outlook for 2015
Non-GAAP Total Operating Revenues2:
Green Dot now expects full-year non-GAAP total operating revenues in the
The Company is reiterating its adjusted EBITDA2 guidance
Green Dot reaffirms its non-GAAP EPS2 guidance range of
Green Dot's 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
The Company's non-GAAP EPS2 range for 2015 is calculated as follows.
The Company will host a conference call to discuss first quarter 2015
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 guidance contained under
"Revised Outlook for 2015" and in the quotes of its executive officers,
the impact of acquisitions, cost savings and synergies 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
Beginning in 2015, the Company's operations are comprised of two reportable segments, Account Services and Processing and Settlement Services. The Account Services segment consists of revenues and expenses derived from the Company's branded and private label deposit account programs. These programs include Green Dot-branded and affinity-branded GPR card accounts, private label GPR card accounts, checking accounts and open-loop gift cards. The Processing and Settlement Services segment consists of revenues and expenses derived from reload services through the Green Dot Network and the Company's tax refund processing services. The Corporate and Other segment primarily consists of unallocated corporate expenses, depreciation and amortization, intercompany eliminations and other costs that are not considered when the Company's management evaluates segment performance.
(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) This expense consists of certain co-op advertising costs recognized
as contra-revenue under GAAP. The Company believes the substance of the
costs incurred are a result of advertising and is not reflective of
ongoing total operating revenues. The Company believes that excluding
co-op advertising costs from total operating revenues facilitates the
comparison of our financial results to the Company's historical
operating results. Prior to the three months ended
(4) 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.
(5) This expense consists primarily of expenses for employee stock options and restricted stock units. 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.
(6) The Company excludes certain income and expenses that are the result of acquisitions. These acquisition related adjustments include 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 the Company recording expenses or fair value adjustments in its GAAP financial statements. The Company analyzes the performance of its operations without regard to these adjustments. In determining whether any acquisition related adjustment is appropriate, the Company takes into consideration, among other things, how such adjustments would or would not aid in the understanding of the performance of its operations.
(7) The Company 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 the Company's GAAP financial statements, the Company excludes them in it's non-GAAP financial measures because the Company believes these items may limit the comparability of ongoing operations with prior and future periods. These adjustments include amortization attributable to deferred financing costs and other charges related to gain or loss contingencies. In determining whether any such adjustments is appropriate, the Company takes into consideration, among other things, how such adjustments would or would not aid in the understanding of the performance of its operations.
(8) These amounts represent estimated adjustments for net interest income, income taxes, depreciation and amortization, employee stock-based compensation expense, stock-based retailer incentive compensation expense, contingent consideration, other income and expenses and transaction costs. 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).