Green Dot (GDOT) Q2 2024 earnings summary

Executive summary

• Q2 2024 delivered 11% year-over-year revenue growth, led by B2B momentum and new partner launches, but profitability was pressured by compliance investments, regulatory penalties, and ongoing Consumer segment declines.

• Net loss for Q2 2024 was $28.7 million, compared to net income of $0.6 million in Q2 2023, reflecting higher operating expenses and a $44 million regulatory penalty.

• Focused on operational efficiency, with card processing expenses down over 50% year-over-year, compensation expense down 6%, and headcount reduced by 10% since the start of 2024.

• Renewed largest BaaS partner and launched new PLS program, expected to drive growth in the second half of 2024.

• Finalized a consent order with regulators, investing heavily in compliance infrastructure and addressing legacy issues.

Financial highlights

• Q2 2024 non-GAAP revenue grew 11% year-over-year to $447 million, driven by B2B and modest Money Movement growth.

• Q2 2024 operating revenues were $407.1 million, with net loss of $28.7 million and adjusted EBITDA of $34 million, down 13% year-over-year.

• Non-GAAP EPS was $0.25, down 32% year-over-year; GAAP results included a $24 million incremental reserve for the consent order, with a $44 million penalty paid in July 2024.

• Active accounts declined 8% year-over-year, with B2B actives up 21% and Consumer actives down 25%.

• Gross dollar volume rose 30% year-over-year to $32.1 billion, while purchase volume declined 13%.

Outlook and guidance

• Full-year 2024 non-GAAP revenue guidance raised to $1.6–$1.7 billion, with adjusted EBITDA expected at the low end of $170–$180 million and non-GAAP EPS at $1.45–$1.59.

• Consumer segment revenue expected to decline mid-teens% for the year, with growth returning in Q4; B2B segment forecasted for mid-30% full-year revenue growth, and Money Movement segment for mid- to high-single-digit growth.

• Margins for Consumer and Money Movement segments expected to expand, while B2B margins to decline 150–200 basis points year-over-year.

• Management expects stabilization and margin expansion in H2 2024 as cost reduction measures take effect.

• Guidance excludes civil money penalty and related expenses from the consent order.