Green Dot (GDOT) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenues rose 16% year-over-year to $409.7M, with adjusted EBITDA up 19% to $28.3M, led by B2B Services growth and the launch of Arc, an embedded finance brand, despite a net loss of $7.8M.

• Growth was driven by investments in B2B, especially embedded finance (BaaS), and moderating declines in active accounts.

• Consumer Services declines moderated, with direct channel stabilizing and GO2bank comprising nearly 75% of direct channel revenue.

• A $44M civil money penalty related to a Federal Reserve Consent Order was paid in July 2024, impacting results.

• Net loss for Q3 2024 was $7.8M, compared to $6.3M in Q3 2023.

Financial highlights

• Q3 2024 operating revenues: $409.7M (+16% YoY); adjusted EBITDA: $28.3M (+19% YoY); adjusted EBITDA margin: 7.0%.

• Q3 2024 GAAP net loss: $7.8M, or $(0.15) per share; non-GAAP net income: $7.0M, or $0.13 per share.

• Gross dollar volume for Q3 2024: $33.5B (+35% YoY); purchase volume down 9% year-over-year.

• Net interest income for Q3 2024 increased 92% YoY to $16.1M.

• Operating expenses for Q3 2024 rose 15% YoY to $412.7M, mainly due to higher processing costs in B2B Services.

Outlook and guidance

• Full-year 2024 non-GAAP revenue guidance raised to $1.65–$1.7B; adjusted EBITDA expected at $164–$166M; non-GAAP EPS between $1.33–$1.36.

• Fourth quarter adjusted EBITDA margins expected to be up 200–300 basis points year-over-year.

• Consumer segment revenue expected to decline in low single digits in Q4, with full-year declines in the high teens.

• B2B segment Q4 revenue growth expected in the low-30% range; full-year in the mid-30% range.

• Guidance reflects macroeconomic factors, inflation, interest rates, partnership non-renewals, and cost reduction initiatives.