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Timothy Willi | executive |
George Gresham | executive |
Jess Unruh | executive |
Timothy Switzer | analyst |
James Rush | analyst |
Good day, and welcome to the Green Dot Corp. Fourth Quarter 2023 Conference Call. [Operator Instructions] Please note this event is being recorded.
I would now like to turn the conference over to Mr. President, Vice Senior Willi, Finance. Tim sir. Please go ahead,
we Thank Dot's Green Today, and you, good afternoon, and are fourth results. discussing operating everyone. quarter financial XXXX
questions. remarks, our we'll the for Following open your call
this Our call at most release recent that ir.greendot.com. and can be earnings webcast found accompanies
reminder, the include forward-looking most our with in Dot's earnings future release expectations actual statements the to the may forward-looking the and Please XX-Q concerning information results could from XX-K Exchange Form filings our performance. to and recent and refer comments Commission, Securities cautionary statements. a differ materially and regarding additional As results language including that and in Green for factors cause
principles. our measures refer During the not will call, that financial we accepted conform to accounting do with generally
otherwise be to financial calculated other than presented information release. appears For numbers be companies. of in clarity, all today's Quantitative will press today data non-GAAP comparable sake we differently may a information about of non-GAAP Information reconciliation the financial by on directly unless noted, GAAP similar non-GAAP basis. talk the our
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to like call over turn to George. the I'd Now
results for Jess, brief who call. earnings will and walk strategy. consent to joining provide thank will then our make my our guidance I and thoughts quarter spend some our I business and time release will Good discussing and we disclosed afternoon, handing some before comments over it you proposed the for our regarding our order in on XXXX. fourth XXXX through
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development momentum gaining efforts pipelines grow. continue Our are to business and
and have and generally management processes controls. made business significant new and launching We improving disparate procedures, dispute, and progress project fraud, across technologies integrating regulatory
initiatives other the busy Finally, a made cost in was resulted It across reductions a conversion and year, we of processor progress. and company. lot efficiencies savings the and
on in returning will a growth in moments, XXXX. half back to our we are the account cusp guidance forward we believe of Jess detail but of the few
lost lapped impacts various midyear. have by partner brands will of we part, revenue most the For and sunsetting
partners new GOXbank features, from meaningful other cost from see We will and launch we management and see and will other product benefits growth efforts.
discuss turn optimistic reason combined that, this it gives our us and be of Jess? head exit All I'll to good results. over to XXXX. With as we into to XXXX Jess
financial I'll I'll good for our guidance walk and you key our highlights, color provide and XXXX. George, everyone. afternoon, through Thanks, then on
the grew and full quarter EPS revenue full X% quarter down Our X%, were while GAAP fourth for the and year. year the respectively, and non-GAAP by for adjusted EBITDA year-over-year non-GAAP and and year-over-year
proposed reserve GAAP moment. in and impacted full consent to the quarter year will was $XX order. decline to adjusted million our George addition more a EBITDA, by in color income on topic further that recorded the the operating our In for provide related we
continue conversion challenges disputes. quarter, it associated results the for transaction address to with to non-GAAP transitory processor and our our that relates losses third arose to customer As we quarter during related the
We ongoing investments improvements program, compliance in our in procedures. incurred policies including connection expenses our incremental with laundering also and controls, our anti-money to
I in fraud the addressed SEC programs believe order, that mentioned term. previous As the this these market-leading Over that I'll to long to compliance we high-level discuss reduce and our performance time, of on a proposed and believe competitive quarterly be remediate my meet later context we that earnings able I'll advantage. Despite were poised we revised expect consent are and continue outlook see mitigate to calls and our to ensure losses comments filings, the in over XXXX. With our color have in to for each programs our provide near-term we results, matters we will guidance, fundamental to invest segments. our to which these headwinds, improve, about in
revenue Segment the channel, in for and down revenue of was XX% Revenue driven XX% retail year, and the deconversion is generally was year-over-year full half XXXX. XXXX, revenue the both in down with and purchase First our year, though declines volume by quarter see some XX%. down was by and impacted XX%. did in down was declines channels. the program the in actives is pressure for while of Consumer the In cardholder million such second as quarter flat segment. in modest activity, the retail our $XXX direct-to-consumer in we GDV And XXXX
of channel XX%. in seeing of prior the in revenue with in roughly we believe of deconversion, revenue retail And our comments the a for down a XXXX, in trends to XX% prior Excluding discussed was direct XX% for that of versus call and quarter year, XX% of on revenue program our have year-over-year the XXXX the division of QX, quarter and to approximately revenue the XX% out division up the GOXbank decline for XX% quarter. strategy the year in the for in XXXX I growth a impact saw the are of million decline. GOXbank. calls. I'll reflects The the decline down and reposition $XXX in was XX% rate this decline for several the full moderation through in impact result consistent the a full calls, just year. from revenue year was decline brands as we XX% sunsetting of under The which moderated
channel deposit higher but momentum up this segment accounts helping these also per excluding excluding in direct volume whole impact channel, products have the in the sunset were in largely account XX%, rate driving of brand in direct drive the of this the In as believe retail, fourth the Consumer to offset of the account. impact higher than for is and over as direct rate revenue non-direct GOXbank, engaged the point GOXbank mid-single and deconversion moderate. accounts in in direct that with deposit of the legacy for now segment, accounts. Overall, accounts per are to force deeper continued continued total up This the This accounts X/X than accounts in segment notably from on. It's revenue behind GOXbank attach this digits that deposit with continues quarter, just some for in the builds direct deposit engagement single a more retail, resulted of retail. with in fueled be the worth and year-over-year we attrition accounts strong growth of is year and during will which in XX% down digits are the channel part pointing deposit low our was direct the revenues by particularly growth about moderating but rates, portfolios. in as program the the the in to I was quarter, out declines the decline Direct division
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XX% to mentioned offset conversion challenges full cost processing our completion to reduction a of down the the in as from Segment the impact partially transaction year-over-year by related losses by headwinds I from of was profit from decline quarter QX. discussed and due well the earlier, as processor that in revenue our conversion
the year $XXX BaaS XX%. was channel deconversion, the approximately Rapid! was And in million Revenue quarter XX% quarter. revenue the XX% in was in profit of for segment quarter the and down aggregate the growth our segment, Excluding the the BaaS revenue the our up year. In XX% full which consists program our in BXB for of the channel. PayCard year, channels, driven both BaaS mid-teens impact the of by and and up of was for predominantly
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was with driven the the momentum, solid BaaS and while that reaccelerate in gives certain said, improved changes client growth X% in revenue our that fixed structures performance. in yields are resulted to by largely channel in That this full BaaS benefit the the modest improved in deconversions as in in with structure. it XXXX. Profit BXB of coupled These move the quarter half of partners changes through should revenue impact the impact confidence down profitability XXXX. profit compressed strongest growth business with margins expected, a our due When and have some should of us as the quarter better PayCard of changes the we revenue second year in business sales segment year have fourth those fee was
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transfer the principally coming With in decline driven the our partners remained by growth returning in in in and retail grow programs overall our offset proportion accelerating transactions partially total other now the quarters, XXXX. the declines PLS coupled the I'm the launch impact active Revenue cash continue segments, single digits to X/X to third-party numerous growing growth of from slated Volume optimistic represent of of in upper in by to new total our from channel, launch accounts continued about third-party in of mid-single segment. volume. to volume with this digits,
annual I business. refund tax of can over the in in Revenue would the timing of for And line and in year-over-year this with down the in modest were that the decline XXXX, are shifts down solid confidence margins the all because almost refunds outlook improvement on pressure year. X volume processed. some XX%, X%, was impacting refunds year continue around expansion the of be years for million giving due $XX last total for steady, bounce network to note in down up were processed to versus us saw tax refunds Our process in quarter, through while grower. Profitability year the full while organic remains growth refunds last a margins this the business. the predictable the business to with growth, in segment revenue
due smaller the in year-over-year a we share to reflects Interest our Other intercompany on as our we net technology adjustments. expected bank, income segment, net costs administrative interest final In salaries, and sharing revenue and as income environment. down was partners as of of the earn some higher rate interest Corporate and partner to well BaaS pay
our earn impact of offset rate effectively rapidly notably rising and the and XXXX and with for imbalance costs XXXX reducing and we in the the environment down reminder, our saw we our year conversions, on investment were in the and headwind a of revenue an investments cost-cutting partially efforts, expenses the by accruals other yields As pay benefits we our creates reduction associated created between this from and administrative cash bonus regulatory a and as rate in BaaS general technology infrastructure. our last the blended segment. Salaries of partners compliance a and
For the full connection in we program expenses perspective, year-over-year million, investments and anti-money in QX year, laundering incremental of $X incurred and million with made and $X our respectively.
turn Now to guidance let for me XXXX. our
non-GAAP as $X.XX revenue of to billion to in non-GAAP range to $X.X $X.XX of adjusted billion, million is follows: guidance of Our $XXX $XXX a million, EPS $X.XX. EBITDA
Our technology in assumes non-GAAP to an and our expense and transformation. XXXX EPS EBITDA expect with adjusted we slight modest in some over guidance share growth in as increase increase count associated decline our a depreciation modestly
in deconversion the result declines. will some on color first a most channel sunsetting Now the our In let both and in briefly the combination program low the Consumer second segments sharp outlook. expect when of lapping of in and we the will This pronounced some double-digit you see turn headwinds, first to declines. me revenue half portfolios direct the secular and segment, retail year the to be provide quarters
headwinds, customers a with revenue quarter, of conversion coupled of and in the Growth with a BXB range my new the and with in in completion GOXbank our solid partners year. the year. Commensurate outlook, aforementioned year we in full revenue in for margins, segment, second rebound from the a contribution and throughout half we in the However, exhibit mid-XX% we the the growth. look XXXX. In the revenue and drive growth a lapping comments direct to of existing momentum growing of growth cost the with expect processor the in in from reduction improved PLS on channel, modest should pattern also second launched with PayCard actives similar volumes the growth BaaS, processing see will launch the of XXXX
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operating digits, also single should will to mid- rate In as regulatory where modest in in with mid-teens up plan our on upper investments and that accruals of QX to our discussed substantial while some cash efforts the short quarter Other incorporating be infrastructure segment, QX we as increase which a cuts, and some our on should XXXX. we original I in earlier Expenses revenue the related reflecting pretty benefit up maximize us. the yields we 'XX bonus and in compare the fourth Corporate jump of reversed be came to an to spending in
of outstanding. tax diluted expected be a XX.X is share rate fully shares with million to count Our XX.X%
I'll back it turn Now to George.
proposed describe now they individual how consent distribution priorities and corporate discussing We'd our to each for goals into characteristics my the order, and strategy time and our the Jess. spend channels tie you, of XXXX. Thank like some
compliance proposed noted ongoing regulations. well proposed I As to laundering aspects with as with outset, as compliance, various discussions management, order. in consumer principally at the the risk we of our Federal anti-money been have regarding order The including Reserve relates consent compliance
not The XXXX any to incremental expect practices operations. to the or currently our back We prior activities placed on CEO order and and in to be matters that our business to commenced relate addressed date XXXX. do restrictions in transition proposed
specific am to the able order comment is finalized, elements. However, until its I not on
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will While significant to out of some surpassing we by gradually, legacy the revenue anticipate retirements brands impact most continue phase mid-XXXX.
constitutes As division. this about of XX% And GOXbank growth was of now, as XXXX. in revenue XX% about highlighted, Jess
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BaaS retail in advantage time, unique previous in part our At growth and growing markets, the have Network several and Green equation like all I a comments. my but supporting channel. They modest have our growth attractive of growth while and secular competitive businesses Dot Direct BaaS, the is same profiles operate more key profile, has business PayCard, a believe of a that discussed I in we the
revenue All XX% have are profitable of these in businesses, investment opportunities of of and front which them. represent attractive our
into payments the agreed to we While venture, conclusion point by bringing $XX of while topic flow TailFin important I our the should financial profile, management. is now to I'm investment believe made XXXX free it cash of solid, have improve to beyond the prior as generation, out that our on final sharply sequence million
respects. unique our companies businesses finance about be The leader embedded premise think simple is services. it's this embedded Finally, us market I delivering for our position we finance. with nonfinancial do a When financial quite collection the for in of a partners in on what to of customers, certain provides and built
integrated Our partners channel which powered DDA cards accounts, vertically and payment facilitate and all of by our our direct deliver platform. financial transactions, are
discuss for briefly XXXX. me my priorities let Now corporate
to ensure and priority always all the fallen for past, or others and being future we be have we it, will and is in first technical, have organizationally we have Where correct the capabilities. a of in now compliance capabilities, every has operationally we company in Our follow. ensuring have and to the the systems model place state-of-the-art short will regulatory intention
are getting continuing build in revenue Second, of about and business growth the we more business accelerating momentum our development serious to efforts.
of tough For XXXX, we growth we XXXX comparisons move as the see faces through revenue half some first should reaccelerate.
will various I noted, on you XXXX. in have commented As have investments
We of where we and our bring we will capabilities product can. a number investments markets par into be making where servicing us not are in to to lead
about and for see how efforts. in This 'XX, of execution. gotten still lines better and with financial improvement those we improving our executing a in both associated have but we time in room is go execution, at terms priority outcomes initiatives, is Third I the
enable further should reinvest to to expect here, we which improve earnings us will driving we As and margin continue efficiency while improvements, growth.
we a operate people. focus high We must management on with continue in invest developing capabilities. will high-performance to culture Finally,
of Melissa Officer, brings to Michael Dot. members and like I'd large Both Melissa with I our team, of Human they from management welcome are Chief to a them career new that, forward With payment will Officer; companies, to X look the multinational technology and executives, and positive team Douros. bank and new to impact the Meston; experiences and Michael excited seasoned am Melissa our to has wealth long a Resources Discover. technology talented the Green and Michael bring Chief new Product that welcome
but Green In all for points be progress team to to XXXX. XXXX plenty the closing, efforts I productive in in we positioning a and done, of I work on Dot forward strides our their future hard you There the in look updating made team work finance. would fundamentals. leader our numerous accelerating be to in is thank outlook calls. like still the embedded and had XXXX to to and is for energized
will Jess And and with I questions. that, happy to be take Operator? your
come Instructions] first Tim question the Switzer will [Operator from with KBW. And
appreciate I all provided. you color guys the
looking last new year pretty guys and should us particularly think at benefits help of year-over-year out? either I you we something for help been in are as impact you over lapping improve from But revenue here partners. you about XXXX XXXX, qualitative have or and earnings that? like like guys growth the of what the you the over how maybe Like we enter 'XX? basis, or as can start anything Can or on course either towards end quantify us get BaaS rate get revenue EBITDA we
Sure.
to -- take a I it some long commenting buried hard may in of be understand stab a on me so each the script, very of find. at Let
program On in the have launch from Consumer revenue business, et GOXbank. we back year, continued of as talk cetera. lapping declines we about the growth then and improving And half things some are we're we PLS first deconversions, half as the
I half that's Network builds higher we year, first we of growth have pipeline, course PLS, on back the So I year mid-XX% rates Consumer growth about think year revenue. In commented cetera. in And development the as sort pronounced of the we business revenue half in year. Money of would single-digit business, the the in Green would launch BXB, of have the of of would sort talk its expect then Movement, to the of have rates the back that mid-single-digit throughout we in and half the Dot more growth, roughly et in the growth
with it, in teens mid So a, rate Money XXXX you end business. growth call Movement the
stop I'm me your question. if there Let answering see and
by that's other question of now finished you the the And It core had on It out your be to the like mid-XXXX. sounds that? side. sounds investment you to you you -- rate. you guys expense investments? is finish focusing investments after like AML/BSA that should guys want will be do Yes. Where your able your Where put I your No, so dollars conversion, helpful. run expense is
George. Thanks Tim, question. your for is this
some of you on clarifications observed. the few a Just points just
There First, lingering it fourth the expenses is by correct August. trailed through of that the the conversion that were was in end quarter. completed
behind I think at this that that those us system. mostly are so point, of a the on is basis, go-forward
the half of audit et BSA/AML up year will year, out although investments cetera, is half to a that compliance-related internal activities, overall second the relative our have of year-over-year will point basis. fairly on compliance the first the BSA/AML department, significantly in heightened investment we I in
dip in a normal in year. half more will back the half back rate run of to it So of bit the year the the a
basis, our a prospective to So I investments. on clarify wanted importantly, But more that.
of categories. making investments year. are make of I couple discussion, a we'd there's kind and to So categories like this went of through In those my
in be cetera, needs that our our in our the order in so this API more for That et to certain in libraries, be done make year. example, BaaS business, done, -- So competitive we will out marketplace. building are product sandbox, to
we are at to unacceptably this accelerate We win the long of frankly that point. onboarding and opportunities number of a because it's building tools capabilities
those out capabilities cases to more provide more product making order distribution features channels. in we're investments, building in So and our we're our use services and for
those general, prospective in a on So nature -- our nature making of that we're investments the that's are the basis.
will question next Sutton [Operator Instructions] come Our Craig-Hallum. with from George
for George. on James
talk maybe over to how key GOXbank has kind the X How product evolved? since various have about any forward hoping next been of achieve going years? And Just launch. couple customer the milestones cohorts of you're you GOXbank years performed? Can about
of But that's go long the remains due is to not through what's a that think experience you It consumer change. Yes, you'll particularly James. point, To going update. and your GOXbank quantification size important, some years launched have Yes. as is GOXbank. it our Thanks, I user a script, ago. product, flagship X chance of see back was for to
last should other to So part product. updates Walmart Green question investment both structure any of and Tim's is neglected experience significant our GOXbank, 'XX and in have Dot MoneyCard added I UX and that 'XX for
made. being are investments those So
on into in to we'll adding as are million, XX and XX million in target count move that market, how inroads individual our XXX United through consumers further And GOXbank we million, that, order you is depending to enhancing which it, be digital features States. the make first
of rate GOXbank very has by It's bit profitability good. burdened success. GOXbank. We've the been focus very of brands been we growth The had good. lot So a as a retiring has been on
So life cycle. through almost that we're
So the GOXbank very trend that is it doing continue to and future. well, we into expect
more considering? generation, in been the sort commentary of Got other you. But the free investments. you where of potential about And opportunities of given it a internal flow sort sounds thinking like fundamental -- be how I you mean, of guys some stock capital back have half sort of might just improvement about making the and you're could improving on the cash you some is, comment allocation potential year, strategic just
a remind point for cash embedded discussion We've my at underlines journey create of our this we're to spectacular is the The of generating that's rationalize, the consolidated being that lot frankly. on like on. just in market weave of that's hopefully, value was the a trading and to an lot our of opportunity kind strategy and Sure. Commenting businesses to incredible Xx offering our extended flow. of these beyond assets something and products. And constituents of got some are entity. of There's finance amazing together a stock that [indiscernible] to businesses consumer amazing kind
capital the in term. near to relates it As
We're of your with repurchase -- the don't. next move as as like quarters, the to use that. share capital is, don't we with respect question this I expect through example, today, our quite few of point over this something allocation, So any the for at announcements cautious or We wouldn't expect if dramatic capital period. underlying
get we to think year, and more that into some we're As bit afford a seeing us latitude with will choices. growth the going to respect start again, I capital
going ways incremental and better our to our we're capital units continue to business capital So of absent moves, make to in stronger more competitive. each deploy big and
that's so And otherwise. approach hear you our until
to Please Mr. closing our would back ahead, turn sir. any remarks. over question-and-answer Gresham for I concludes This go conference session. the to like George
Well, to thank this you, operator. I you have thank and just are to want all us of who along today for chosen join journey.
is making the company team future. journey very in to right forward future. the great you with care. excited talking We've the but challenges, us, some you the about I And been place, appreciate it's in look and Take near Bye-bye. taking got Now the strides. to
you now has concluded. Thank attending The today's conference for presentation.
You may now disconnect.
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