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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%

Stocks in this article: GDOT

Green Dot Corporation (NYSE:GDOT), today reported financial results for the second quarter ended June 30, 2014.

For the second quarter of 2014, Green Dot reported $147.0 million in GAAP total operating revenues and $0.31 in GAAP diluted earnings per share. On a non-GAAP basis, Green Dot reported growth of 5% year-over-year in non-GAAP total operating revenues 1 to $149.0 million and non-GAAP diluted earnings per share 1 of $0.41, representing 24% year-over-year growth.

Net cash provided by operating activities in the quarter was $25.2 million. As of June 30, 2014, Green Dot’s consolidated balance sheet held total cash and investment securities of $849.9 million, which is 47% higher than at the same time last year.

"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,” said Steve Streit, Green Dot Chairman and Chief Executive Officer.

GAAP financial results for the second quarter of 2014 compared to the second quarter of 2013:

  • Total operating revenues on a generally accepted accounting principles (GAAP) basis increased 5% to $147.0 million for the second quarter of 2014 from $140.6 million for the second quarter of 2013
  • GAAP net income increased 27% to $14.3 million for the second quarter of 2014 from $11.3 million for the second quarter of 2013
  • GAAP basic and diluted earnings per common share were $0.32 and $0.31, respectively, for the second quarter of 2014 versus $0.26 and $0.25, respectively, for the second quarter of 2013

Non-GAAP financial results for the second quarter of 2014 compared to the second quarter of 2013: 1

  • Non-GAAP total operating revenues 1 increased 5% to $149.0 million for the second quarter of 2014 from $142.6 million for the second quarter of 2013
  • Non-GAAP net income 1 increased 27% to $18.7 million for the second quarter of 2014 from $14.8 million for the second quarter of 2013
  • Non-GAAP diluted earnings per share 1 increased 24% to $0.41 for the second quarter of 2014 versus $0.33 for the second quarter of 2013
  • EBITDA plus employee stock-based compensation expense and stock-based retailer incentive compensation expense (adjusted EBITDA 1) increased 23% to $36.4 million, or 24% of non-GAAP total operating revenues for the second quarter of 2014 from $29.6 million, or 21% of non-GAAP total operating revenues for the second quarter of 2013
1   Reconciliations of total operating revenues to non-GAAP total operating revenues, net income to non-GAAP net income, diluted earnings per share to non-GAAP diluted earnings per share and net income to adjusted EBITDA, respectively, are provided in the tables immediately following the consolidated financial statements of cash flows. Additional information about the Company's non-GAAP financial measures can be found under the caption “About Non-GAAP Financial Measures” below.
 

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.

  2014   2013
Q2   Q1   Q4   Q3   Q2   Q1
(In millions)
Number of cash transfers 11.66   11.67 11.44   11.43   11.32  

11.25

 

Number of active cards at quarter end 4.71 4.72 4.49 4.41 4.39 4.49
Gross dollar volume $ 4,623 $ 5,290 $ 4,405 $ 4,396 $ 4,425 $ 5,072
Purchase volume $ 3,406 $ 3,872 $ 3,298 $ 3,259 $ 3,248 $ 3,582
 

Selected Business Updates

Updates on Green Dot’s Walmart business:

     

1.

 

Green Dot and Walmart have extended their long-standing open loop gift card contract for another multi-year term. This renewed contract calls for Green Dot to continue to provide and manage the large Visa gift card category at Walmart.

 

2.

Green Dot and Walmart have entered into a new agreement to provide credit card bill pay services at the register. This new and innovative service gives consumers the ability to make same- and next-day credit card payments quickly and safely by paying via cash or PIN debit at the checkout register. Credit Card Bill Pay @ the Register will be part of Walmart’s Rapid Reload service and is powered by Green Dot’s Swipe Interface Technology (“SwIT”).

 

3.

Starting in late June, Walmart began selling the Green Dot brand Everyday prepaid card, with the product to be available at all Walmart stores nationwide. The Green Dot brand Everyday card now sells on the same prepaid rack as the Walmart MoneyCard suite of products.

 

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.

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