Sign in
GD

GREEN DOT CORP (GDOT)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 delivered a clean top-line and EPS beat: GAAP total operating revenues were $504.18M vs $490.57M consensus (+$13.61M, +2.8%); non-GAAP diluted EPS was $0.40 vs $0.18 consensus (+$0.22). Strength was driven by B2B (BaaS) growth, higher interest income, and disciplined costs . Consensus values from S&P Global.*
  • Year-over-year, non-GAAP revenue rose 24% to $501.16M and adjusted EBITDA rose 34% to $45.43M; however, GAAP net loss widened to $(47.0)M due primarily to a $70M non‑cash equity method charge tied to Walmart JV Tailfin incentive, recorded in “losses in equity method investments” ($75.9M) .
  • FY25 guidance raised: adjusted EBITDA to $160–$170M (from $150–$160M) and non‑GAAP EPS to $1.28–$1.42 (from $1.14–$1.28); non‑GAAP revenue maintained at $2.0–$2.1B . Prior quarter’s guide was $2.0–$2.1B, $150–$160M, and $1.14–$1.28, respectively .
  • Catalysts: accelerating BaaS momentum on Arc (Samsung Tap to Transfer launched; Credit Sesame competitive takeaway), balance-sheet optimization (repositioning into floating-rate 5–7% yield), and pipeline calling for seven new partner onboardings in 2025; near-term offsets include compliance investments, slower money processing ramp, and staffing vertical weakness in Rapid/EWA .

What Went Well and What Went Wrong

  • What Went Well

    • “Adjusted revenue was up 24% and adjusted EBITDA was up 34%, both ahead of plan,” reflecting strong B2B (BaaS) and improved interest income; management raised full-year EBITDA and EPS guidance accordingly .
    • Embedded finance momentum: launched Samsung “Tap to Transfer”; signed Credit Sesame (competitive takeaway) to power Sesame Cash on Arc; seven partner onboardings expected in 2025 .
    • Tax processing outperformed on mix (higher revenue per transaction) driving >10% profit growth YTD; corporate interest income up on bond repositioning and better yield sharing .

  • What Went Wrong

    • GAAP optics: $(47.0)M net loss in Q2 on a $70M non-cash Tailfin payment (recorded as equity method loss), masking underlying profitability gains (non-GAAP EPS $0.40) .
    • Money Processing revenue declined modestly as transactions fell 8%; H2 outlook trimmed given slower-than-expected partner ramp and mix shifts (though ARPT up 8%) .
    • Rapid Employer Services (paycards) still pressured by prolonged staffing industry weakness; pivoting sales motion to EWA but near-term revenue remains under pressure .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Total Operating Revenues (GAAP, $M)$407.12 $558.87 $504.18
Non-GAAP Total Operating Revenues ($M)$402.56 $555.96 $501.16
Net Income (Loss) (GAAP, $M)$(28.72) $25.77 $(47.03)
Diluted EPS (GAAP)$(0.54) $0.47 $(0.85)
Non-GAAP Diluted EPS$0.25 $1.06 $0.40
Adjusted EBITDA ($M)$33.998 $90.559 $45.425
Adjusted EBITDA Margin (%)8.4% 16.3% 9.1%

Q2 2025 vs Consensus (Street)

MetricQ2 2025 ConsensusQ2 2025 ActualSurprise
Revenue (GAAP, $M)$490.57*$504.18 +$13.61M (+2.8%)
Primary EPS$0.18*$0.40 (non-GAAP diluted) +$0.22

Segment Breakdown

SegmentRevenue ($000s) Q2 2024Revenue ($000s) Q2 2025Segment Profit ($000s) Q2 2024Segment Profit ($000s) Q2 2025
Consumer Services96,620 93,099 34,449 33,094
B2B Services252,056 348,650 19,078 27,980
Money Movement Services52,963 50,848 35,291 34,112
Corporate & Other917 8,567 (54,820) (49,761)
Total/Adjusted EBITDA402,556 501,164 33,998 45,425

KPIs (Consolidated)

KPIQ2 2024Q1 2025Q2 2025
Gross Dollar Volume ($M)$32,130 $37,252 $38,545
Active Accounts (M)3.41 3.58 3.48
Purchase Volume ($M)$5,012 $5,113 $4,991
Cash Transfers (M)8.15 7.51 7.52
Tax Refunds Processed (M)4.20 7.98 3.73

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Non-GAAP Total Operating RevenuesFY 2025$2.0B–$2.1B $2.0B–$2.1B Maintained
Adjusted EBITDAFY 2025$150M–$160M $160M–$170M Raised
Non-GAAP EPSFY 2025$1.14–$1.28 $1.28–$1.42 Raised
Notes: Non‑GAAP EPS bridge assumes ~22% non‑GAAP tax rate and ~56.0M diluted shares .

Earnings Call Themes & Trends

TopicQ4 2024 (Q-2)Q1 2025 (Q-1)Q2 2025 (Current)Trend
BaaS/Arc momentumNew partnerships (Varo, Clip Money, DolFintech) underscored embedded finance expansion .New Samsung and Crypto.com partnerships; renewed major retail relationship .Samsung Tap to Transfer launched; Credit Sesame signed; seven onboardings expected in 2025; strong pipeline .Improving
Balance sheet optimization/interest income——Repositioning bond portfolio; deploying cash into floating-rate 5–7% yields; interest income rising with minimal incremental costs .Strengthening
Rapid/EWA——Shifting sales motion to EWA, rightsizing organization; staffing vertical still soft .Transition
Money Processing—Strong Q1 profit; RT volumes mix improving .Slower partner ramp; revised outlook; ARPT +8% offsets some volume declines .Near-term softer
Consumer ServicesHeadwinds expected; EBITDA down in FY25 guide .All three segments posted profit growth; consumer stabilizing .Retail decline moderating; PLS partnership stabilizing actives; Walmart program migration to modern platform .Stabilizing
Regulatory/compliance——Concentrated compliance investments in H2; expect 2H EBITDA margin compression vs tough comps .Investment cycle
Strategic review——Process ongoing; no update yet .Ongoing

Management Commentary

  • “It was a strong second quarter… Adjusted revenue was up 24% and adjusted EBITDA was up 34%... Our embedded finance platform, ARC, is seeing continued momentum and increasing demand.” – William Jacobs, Interim CEO .
  • “We launched new products, including Samsung's Tap to Transfer… and announced an exciting new partnership with Credit Sesame.” – William Jacobs .
  • “Non‑GAAP revenue grew 24% y/y and adjusted EBITDA increased 34%... non‑GAAP EPS reached $0.40.” – Jess Unruh, CFO .
  • “Optimizing our balance sheet and increasing interest income has become a key operational strategy… repositioned a portion of our securities portfolio… new securities will be earning something in the range of 5% to almost 7%.” – Jess Unruh .

Q&A Highlights

  • Balance sheet yield strategy: Deploying excess cash into floating-rate securities (target 5–7% yields) to lift interest income; expects more repositioning through the year; yields tied to SOFR/IORB .
  • Strategic alternatives: Review remains ongoing; company will update when there is “something of real significance” to share .
  • Rapid/EWA pivot: Moving from territory-based paycard sales to a direct EWA-focused sales motion with tailored marketing, leveraging team expertise to accelerate adoption .
  • B2B growth drivers: Expanding partner solution sets and renewing contracts at better economics; with largest BaaS partner, feature expansion boosted revenue growth 55% above initial launch plan .
  • Crypto.com: Both parties “very excited”; teams working closely; long-term roadmap potential; no new specifics yet .

Estimates Context

  • Q2 2025 beat vs consensus: Revenue $504.18M vs $490.57M; non‑GAAP/Primary EPS $0.40 vs $0.18. Q1 2025 also exceeded Street on both revenue and EPS. The beats reflect B2B (BaaS) growth, tax mix, and higher interest income . Consensus values from S&P Global.*
  • Guidance implies H2 EBITDA margin down ~500 bps y/y on compliance investments, higher bonus accruals (after prior-year reductions), lapping fraud expense improvements, slower money processing ramp, and staffing vertical headwinds—Street may adjust quarterly margin cadence even as FY25 EBITDA/EPS rise .

Key Takeaways for Investors

  • Core beat and raise: Strong BaaS growth and interest income drove a revenue/EPS beat; FY25 EBITDA/EPS raised with non‑GAAP revenue maintained—constructive for estimate revisions .
  • GAAP noise vs underlying: A one‑time, non‑cash $70M JV incentive payment drove large equity method losses and a GAAP net loss; non‑GAAP profitability trends remain favorable .
  • BaaS flywheel strengthening: Samsung live; Credit Sesame signed; multiple pipeline launches including crypto.com; migration of Walmart MoneyCard to modern platform supports feature velocity and partner economics .
  • Balance sheet as a profit lever: Repositioning into floating-rate 5–7% yields can compound earnings power with limited incremental cost; deposit growth from BaaS is a tailwind .
  • Near-term margin setup: Expect H2 adjusted EBITDA margin pressure on compliance spend, bonus normalization, and mix—important for quarterly traders; FY guide still higher .
  • Money Processing watchlist: Partner ramp slower than anticipated; ARPT mix positive, but volume softness warrants monitoring into 2026 .
  • EWA pivot execution: Rapid’s shift to EWA-focused GTM could reaccelerate growth once staffing vertical stabilizes—timeline remains the swing factor .

Footnote: *Consensus values retrieved from S&P Global.

Sources: Q2 2025 8-K/press release and financials ; Q2 2025 earnings call transcript ; Credit Sesame partnership press release ; Q1 2025 8-K ; Q4 2024 8-K .