Green Dot Corporation announces the third quarter ended September 30, 2014
- 31.10.2014 00:00 am
Green Dot Corporation (NYSE:GDOT), has reported financial results for the third quarter ended September 30, 2014.
For the third quarter of 2014, Green Dot reported $144.7 million in GAAP total operating revenues and $0.30 in GAAP diluted earnings per share. Green Dot reported growth of 6% year-over-year in non-GAAP total operating revenues to $146.8 million and non-GAAP diluted earnings per share of $0.36, representing 50% year-over-year growth.
Net cash provided by operating activities in the quarter was $21.8 million. As of September 30, 2014, Green Dot’s consolidated balance sheet held total cash and investment securities of $846.1 million, which is 50% higher than at the same time last year.
"Our solid third quarter results were driven by the continued growth in active cards along with increasing revenue derived from those active cards. This is also another quarter showing significant year-over-year margin expansion, which is in part a result of a continued mix shift in our total active card portfolio towards higher margin products, and the continued realization of significant efficiencies in our operating infrastructure,” said Steve Streit, Green Dot Chairman and Chief Executive Officer.
GAAP financial results for the third quarter of 2014 compared to the third quarter of 2013:
- Total operating revenues on a generally accepted accounting principles (GAAP) basis increased 6% to $144.7 million for the third quarter of 2014 from $136.5 million for the third quarter of 2013
- GAAP net income increased 127% to $13.9 million for the third quarter of 2014 from $6.1 million for the third quarter of 2013
- GAAP basic and diluted earnings per common share were both $0.30 for the third quarter of 2014 versus $0.14 and $0.13, representing growth of 114% and 131% respectively, over the third quarter of 2013
Non-GAAP financial results for the third quarter of 2014 compared to the third quarter of 2013:
- Non-GAAP total operating revenues increased 6% to $146.8 million for the third quarter of 2014 from $139.1 million for the third quarter of 2013
- Non-GAAP net income increased 54% to $16.6 million for the third quarter of 2014 from $10.8 million for the third quarter of 2013
- Non-GAAP diluted earnings per share increased 50% to $0.36 for the third quarter of 2014 versus $0.24 for the third quarter of 2013
- Adjusted EBITDA increased 48% to $32.0 million, or 22% of non-GAAP total operating revenues for the third quarter of 2014 from $21.6 million, or 16% of non-GAAP total operating revenues for the third quarter of 2013
Selected Business Updates
- Green Dot and Walgreens have entered into a new multi-year renewal agreement under which Green Dot will sell its branded cards and reload services at Walgreens stores nationwide. Green Dot brand products and services have been offered at Walgreens since 2005.
- Green Dot added more than 400 check cashing stores selling Green Dot products in Q3 and, starting in October 2014, the Company launched its new partnership with ACE Cash Express in its approximately 1,500 locations nationwide. In just the past 12 months, Green Dot has gone from no distribution in the financial services center (FSC) channel to now, with the addition of ACE, more than 3,000 FSC locations coast to coast selling Green Dot products and/or services.
- Green Dot's GoBank checking account product began rolling out to all Walmart stores in late September. This product is expected to be rolled out nationwide by early-November.
- On October 23, 2014, Green Dot closed on the acquisition of Santa Barbara Tax Products Group, or TPG, making Green Dot Corporation the largest outsourced processor of tax refunds for low and moderate income Americans. As the Company mentioned when it announced the acquisition, this combination is expected to be highly accretive and create material growth in 2015 on a consolidated basis, in addition to providing significant margin expansion and diversity of earnings.
Outlook for 2014
For the second time this year, Green Dot has raised its 2014 adjusted EBITDA and non-GAAP diluted EPS guidance. Green Dot's outlook is based on a number of assumptions that Green Dot believes are reasonable at the time of this earnings release. Information regarding potential risks that could cause the actual results to differ from these forward-looking statements is set forth below and in Green Dot's filings with the Securities and Exchange Commission.
For 2014, Green Dot now expects adjusted EBITDA to be between $126 million and $129 million which includes the absorption of approximately $6 million in operating expenses for the remainder of the year from the Company's newly acquired TPG tax refund processing unit, which closed on October 23, 2014. Non-GAAP diluted EPS is now expected to be between $1.29 and $1.33 for the full year, which is based on an effective tax rate of approximately 36%, and a weighted average fully diluted share count of approximately 48 million, incorporating newly-issued shares in relation to closing the TPG acquisition. The Company's previous non-GAAP total operating revenue guidance remains unchanged at between $610 million and $620 million for the full year.
“The favorable mix shift to higher margin products and the realization of operating efficiencies across our business has delivered higher than anticipated margins over the course of the year. As a result, we have raised adjusted EBITDA guidance twice this year to a level that, excluding TPG's consolidated operating expenses, is approximately 15% higher at the midpoint than our original adjusted EBITDA range communicated in January,” said Grace Wang, Green Dot Chief Financial Officer.