Q3 2024 Earnings Summary
Reported on Nov 7, 2024 (After Market Close)
Pre-Earnings Price$13.10Last close (Nov 7, 2024)
Post-Earnings Price$12.50Open (Nov 8, 2024)
Price Change
$-0.60(-4.58%)
- Strong Growth in B2B Segment: Green Dot's non-GAAP revenue increased by 16% year-over-year and adjusted EBITDA increased by 19%, primarily driven by continued growth in the B2B segment. The BaaS channel, in particular, is showing significant momentum with improved key metrics such as purchase volume and active accounts due to new partners and growth from existing partnerships. The company anticipates continued year-over-year growth from the entire BaaS channel.
- Positive Outlook for Adjusted EBITDA Margins: Green Dot expects adjusted EBITDA margins in the fourth quarter to be up 200 to 300 basis points from last year, benefiting from revenue growth and favorable expense comparisons. This indicates improved profitability and operational efficiency moving forward.
- Stabilization and Growth in Key Metrics: The company has seen moderating rates of decline in active accounts year-over-year and posted sequential growth for the first time since Q1 2021, demonstrating progress in improving financial and operational performance. The launch of the PLS partnership contributed to sequential growth in active accounts in the retail channel during a seasonally slow period.
- Persistent declines in the Consumer Services segment: The company continues to face revenue declines in its Consumer Services segment due to secular headwinds in the retail channel that impact the number of active accounts. Revenue in this segment is expected to decline in the fourth quarter at a rate in the low single digits, with full-year declines in the high teens.
- Underperformance in the retail channel leading to lowered guidance: Despite efforts to stabilize the retail channel, declines in revenue and active accounts are falling short of expectations. The company acknowledged that difficult trends in this channel will persist longer than anticipated, resulting in a modestly lowered adjusted EBITDA guidance for 2024.
- Headwinds in key verticals impacting growth: The staffing industry, one of Green Dot's largest verticals, has faced headwinds for almost two years and has not yet seen a rebound. This continued weakness could negatively affect the company's sales activity and overall financial performance.
Research analysts covering GREEN DOT.