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1. Company Snapshot

1.a. Company Description

Green Dot Corporation, a financial technology and bank holding company, provides various financial products to consumers and businesses in the United States.It operates through three segments: Consumer Services, Business to Business Services, and Money Movement Services.The company offers deposit account programs, including consumer and small business checking account products, network-branded reloadable prepaid debit cards and gift cards, and secured credit programs.


It also provides money processing services, such as cash transfer services that enable consumers to deposit or pick up cash and pay bills with cash at the point-of-sale at any participating retailer; and simply paid disbursement services, which enable wages and authorized funds disbursement to its deposit account programs and accounts issued by any third-party bank or program manager.In addition, the company offers tax processing services comprising tax refund transfers, which provide the processing technology to facilitate receipt of a taxpayers' refund proceeds; small business lending to independent tax preparation providers that seek small advances; and fast cash advance, a loan that enables tax refund recipients.Green Dot Corporation was incorporated in 1999 and is headquartered in Austin, Texas.

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1.b. Last Insights on GDOT

The recent 3-month performance of Green Dot Corporation was negatively impacted by the leadership transition and exploration of strategic alternatives. The company announced that it had engaged Citi to explore potential options, which may lead to a change in its business model or ownership structure. Additionally, the lack of recent earnings releases and the upcoming announcement of first-quarter 2025 results on May 8th may have contributed to the uncertainty surrounding the company's performance.

1.c. Company Highlights

2. Green Dot's Q2 2025 Earnings: A Strong Beat

Green Dot Corporation reported a robust second quarter 2025, with non-GAAP revenue growing 24% year-over-year to an unspecified amount, and adjusted EBITDA increasing 34%. The earnings per share (EPS) came in at $0.40, significantly beating estimates of $0.17. The strong financial performance was driven by the company's B2B segment and higher interest income, alongside continued expense management efforts. As Jess Unruh mentioned, "Non-GAAP revenue grew 24% year-over-year, and adjusted EBITDA increased 34%." The company's focus on strengthening its revenue engine by signing and launching new partners has paid off, with the embedded finance platform, ARC, seeing continued momentum and increasing demand.

Publication Date: Aug -23

📋 Highlights
  • Revenue and EBITDA Growth:: Adjusted revenue up 24%, adjusted EBITDA up 34% YoY, exceeding initial plans.
  • Non-GAAP EPS Surge:: Non-GAAP EPS reached $0.40/share, a 60% YoY increase, driven by B2B growth and interest income.
  • Partnership Milestones:: Launched Samsung’s tap-to-Transfer feature and secured a BaaS partnership with Credit Sesame, boosting engagement and scale.
  • Walmart Incentive:: Received $70 million non-cash incentive from a Walmart affiliate, reflecting strong economic returns from the partnership.
  • 2025 Guidance Update:: Non-GAAP revenue now projected at $2B–$2.1B, adjusted EBITDA at $160M–$170M, with B2B growth expected in low 30% range.

Segment-wise Performance

The B2B segment was a key driver of growth, with revenue expected to show strong growth in the low 30% range for the full year. The Money Movement segment revenue is expected to see flattish revenue growth, while the Consumer segment revenue is projected to decline in the low double digits. The company's partnership with Walmart continues to provide strong economic returns, with a $70 million non-cash incentive payment made to a Walmart affiliate. The company's guidance for 2025 has been updated, with non-GAAP revenue expected to be $2 billion to $2.1 billion, adjusted EBITDA $160 million to $170 million, and non-GAAP EPS $1.28 to $1.42.

Valuation and Outlook

Green Dot's valuation metrics indicate a relatively attractive price. The Price-to-Sales Ratio stands at 0.39, and the EV/EBITDA ratio is -10.9. The company's return on invested capital (ROIC) is 6.97%, while the return on equity (ROE) is -2.61%. Analysts estimate next year's revenue growth at 12.5%. With the company's strong adjusted EBITDA growth in the first half driven by BaaS tax processing and increased interest income at Green Dot Bank, the outlook appears positive. The company's focus on investing in its regulatory compliance and infrastructure, and its confidence in growth opportunities in the B2B and Money Movement segments, are expected to drive future growth.

Partnerships and Future Initiatives

The company is making progress in its partnerships, having partnered with Samsung to introduce Samsung's tap to Transfer capability, and signed a new BaaS partnership with Credit Sesame. The Crypto.com partnership is also expected to provide value for both parties, with the teams working closely to bring the current solution set to market. The company is preparing to launch Dole Fintech, which is expected to have a material impact in 2026. With a shelf registration to be filed with the SEC to preserve financial flexibility and optionality, Green Dot is well-positioned for future growth.

3. NewsRoom

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Green Dot Corporation (GDOT) Q3 2025 Earnings Call Transcript

Nov -11

Source: seekingalpha.com

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Green Dot (GDOT) Q3 Earnings and Revenues Surpass Estimates

Nov -11

Source: zacks.com

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Green Dot Lifts Guidance on B2B Strength, Embedded Finance

Nov -11

Source: pymnts.com

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Green Dot Reports Third Quarter 2025 Results; Raises 2025 Guidance

Nov -10

Source: businesswire.com

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GDOT Gears Up to Report Q3 Earnings: Here's What You Should Know

Nov -06

Source: zacks.com

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Crypto.com Offers Up to 5% APY with New Cash Earn Program

Oct -22

Source: businesswire.com

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U.S. Companies are Increasing Use of Embedded Finance as a Retention Tool & Revenue Driver

Oct -21

Source: businesswire.com

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Green Dot to Announce Third Quarter 2025 Results on November 10th

Oct -21

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.69%)

6. Segments

Business to Business Services

Expected Growth: 6.5%

Green Dot Corporation's 6.5% growth in Business to Business Services is driven by increasing demand for digital payment solutions, expansion into new industries, and strategic partnerships. Additionally, the company's focus on innovation, customer acquisition, and retention, as well as its ability to adapt to changing market trends, contribute to its growth momentum.

Consumer Services

Expected Growth: 6.8%

Green Dot Corporation's Consumer Services segment growth of 6.8% is driven by increasing adoption of digital banking and mobile payment solutions, expansion of retail partnerships, and rising demand for prepaid debit cards and reload services. Additionally, strategic investments in technology and marketing initiatives have enhanced customer acquisition and retention, contributing to the segment's growth.

Money Movement Services

Expected Growth: 7.2%

The 7.2% growth in Money Movement Services from Green Dot Corporation is driven by increasing adoption of digital payment solutions, rising demand for prepaid debit cards, and strategic partnerships with fintech companies. Additionally, the company's expansion into new markets, such as the gig economy and cross-border payments, has contributed to the growth.

Reconciling Items

Expected Growth: 6.2%

Green Dot Corporation's 6.2% growth is driven by increasing adoption of digital banking solutions, expansion of its B2B payment services, and strategic partnerships. Additionally, the company's focus on cost savings initiatives and operational efficiencies have contributed to its growth. Furthermore, the rising demand for prepaid debit cards and the growth of the gig economy have also fueled the company's revenue growth.

Corporate and Other

Expected Growth: 6.0%

Green Dot's Corporate and Other segment growth of 6.0% is driven by increasing demand for its digital banking and payment solutions, expansion of its partner network, and strategic investments in technology and innovation. Additionally, the company's focus on cost savings initiatives and operational efficiencies have contributed to the segment's growth.

7. Detailed Products

Reloadable Debit Cards

Reloadable debit cards that can be loaded with funds and used to make purchases, pay bills, and get cash at ATMs.

Prepaid Cards

Prepaid cards that can be loaded with a specific amount of funds and used to make purchases, pay bills, and get cash at ATMs.

Cash Back Rewards

A rewards program that offers cash back on certain purchases made with Green Dot debit cards.

Mobile Banking

A mobile banking app that allows users to manage their accounts, deposit checks, and transfer funds on the go.

Tax Refund Processing

A service that allows users to have their tax refund direct deposited onto a Green Dot debit card.

Money Transfer

A service that allows users to send and receive money transfers using their Green Dot debit card.

8. Green Dot Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Green Dot Corporation's prepaid debit cards and banking services have some substitutes, but they are not easily replaceable due to the company's strong brand recognition and customer loyalty.

Bargaining Power Of Customers

Green Dot Corporation's customers have limited bargaining power due to the company's diversified product offerings and lack of dependence on a single customer segment.

Bargaining Power Of Suppliers

Green Dot Corporation has a diversified supplier base, which reduces the bargaining power of individual suppliers. The company's scale and negotiating power also help to mitigate supplier bargaining power.

Threat Of New Entrants

The threat of new entrants in the prepaid debit card and banking services industry is low due to the high barriers to entry, including regulatory hurdles and the need for significant capital investments.

Intensity Of Rivalry

The prepaid debit card and banking services industry is highly competitive, with several established players competing for market share. Green Dot Corporation faces intense rivalry from companies such as NetSpend and PayPal.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 7.26%
Debt Cost 9.14%
Equity Weight 92.74%
Equity Cost 9.14%
WACC 9.14%
Leverage 7.83%

11. Quality Control: Green Dot Corporation passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Oportun Financial

A-Score: 5.1/10

Value: 9.4

Growth: 3.3

Quality: 6.0

Yield: 0.0

Momentum: 10.0

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
Green Dot

A-Score: 4.5/10

Value: 9.1

Growth: 2.9

Quality: 4.9

Yield: 0.0

Momentum: 7.5

Volatility: 2.3

1-Year Total Return ->

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PRA Group

A-Score: 4.2/10

Value: 9.3

Growth: 2.6

Quality: 7.9

Yield: 0.0

Momentum: 1.5

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
Consumer Portfolio Services

A-Score: 3.8/10

Value: 7.3

Growth: 5.0

Quality: 4.8

Yield: 0.0

Momentum: 2.0

Volatility: 3.7

1-Year Total Return ->

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Upstart

A-Score: 3.3/10

Value: 6.6

Growth: 2.4

Quality: 5.2

Yield: 0.0

Momentum: 4.5

Volatility: 1.0

1-Year Total Return ->

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Stock-Card
Open Lending

A-Score: 1.5/10

Value: 4.6

Growth: 0.7

Quality: 1.4

Yield: 0.0

Momentum: 0.5

Volatility: 2.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

11.35$

Current Price

11.35$

Potential

-0.00%

Expected Cash-Flows