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In this Annual Report, unless otherwise specified or the context otherwise requires, “Green Dot,” “we,” “us,” and “our” refer to Green Dot Corporation and its consolidated subsidiaries.
−Removed: Green Dot Corporation is a financial technology and registered bank holding company ("BHC") committed to giving all people the power to bank seamlessly, affordably, and with confidence.
−Removed: Our technology platform enables us to build products and features that address the most pressing financial challenges of consumers and businesses, transforming the way they manage and move money, and making financial empowerment more accessible for all.
−Removed: Through our bank, we offer a suite of financial products to consumers and businesses including debit, prepaid, checking, credit and payroll cards, as well as robust money processing services, such as tax refund processing, cash deposits and disbursements.
+Added: Green Dot Corporation is a financial technology platform and registered bank holding company ("BHC") that builds banking and payment solutions to create value, retain and reward customers, and accelerate growth for businesses of all sizes.
+Added: For more than two decades, we have delivered financial tools and services that address the most pressing financial needs of consumers and businesses, and that transform the way people and businesses manage and move money.
+Added: Through Green Dot Bank, our wholly-owned subsidiary, we deliver a broad spectrum of financial products to consumers and businesses through our portfolio of brands, including debit, checking, credit, prepaid, and payroll cards, as well as robust money processing services, such as tax refunds, cash deposits and disbursements.
Our Chief Operating Decision Maker (our “CODM” who is our Chief Executive Officer) organizes and manages our businesses primarily on the basis of the channels in which our product and services are offered and uses net revenue and segment profit to assess profitability.
−Removed: Segment profit reflects each segment's net revenue less direct costs, such as sales and marketing expenses, processing expenses, third-party call center support and transaction losses.
+Added: Segment profit reflects each segment's net revenue less direct costs, such as sales and marketing expenses, processing expenses, transaction losses and fraud management, and customer support and related expenses.
Our operations are aggregated amongst three reportable segments:
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Total operating expenses 1,725,544 1,478,658 246,886 16.7 %
−Removed: Net income 6,722 64,212 (57,490) (89.5) %
+Added: Net (loss) income (26,702) 6,722 (33,424) (497.2) %
Refer to "Segment Results" below for a summary of financial results of each of our reportable segments.
Total operating revenues
−Removed: Our total operating revenues for the year ended December 31, 2023 increased $51.8 million , or 4% over the prior year comparable period, driven primarily by higher revenues in our B2B Services segment, partially offset by lower revenues earned in our Consumer Services and Money Movement Services segments.
+Added: Our total operating revenues for the year ended December 31, 2024 increased $222.5 million , or 15% over the prior year comparable period, driven primarily by higher revenues in our B2B Services segment and to a lesser extent in our Money Movement Services segment, partially offset by lower revenues earned in our Consumer Services segment.
Our consolidated total operating revenues increased year-over-year due to the continued growth of certain BaaS partner programs, which generated an increase in our total gross dollar volume of 33% for the year ended December 31, 2024.
−Removed: However, our total operating revenues were negatively impacted by several other factors impacting our deposit account programs, including our strategic decision to reduce marketing spend on GO2bank in the beginning of the fiscal year in response to market trends, our decision to wind-down many of our legacy cardholder programs in support of GO2bank, macro-economic factors leading to economic challenges for consumers and other trends that have impacted acquisition at retail locations, and the non-renewal of certain partner programs as previously disclosed.
−Removed: These factors impacted the number of consolidated active accounts, purchase volume and number of cash transfers, each of which decreased for the year ended December 31, 2023 by 14%, 16% and 6%, respectively, from the prior year comparable period.
+Added: However, as discussed below, our total operating revenues were negatively impacted by unfavorable trends and factors in our deposit account programs that reduced the average number of consolidated active accounts, purchase volume and number of cash transfers for the year ended December 31, 2024 by 5% , 10% and 5%, respectively, from the prior year comparable period.
In our Consumer Services segment, revenues decreased during the year ended December 31, 2024 by 19% from the prior year comparable period.
−Removed: As compared to the year ended December 31, 2022, gross dollar volume and purchase volume each declined 15% and 16%, respectively, and the average number of active accounts and direct deposit accounts for the fiscal year declined by 16% and 17%, respectively.
−Removed: We believe these decreases are attributable to the factors discussed above, including lower account acquisition from reduced marketing spend on GO2bank in the beginning of fiscal year 2023 in our Direct channel in response to market trends, our decision to wind-down many of our legacy cardholder programs in support of GO2bank, observed changes in consumer traffic within our retail locations and the non-renewal of one of our retail partner programs.
−Removed: These factors had a corresponding impact on the amount of revenue we earn from accounts, including through monthly maintenance fees, new card fees, ATM fees and interchange fees.
−Removed: These declines in revenue from our Consumer Services segment were partially offset by the continued adoption of our optional overdraft protection program services available to accountholders across our portfolios.
+Added: Gross dollar volume and purchase volume declined for the year ended December 31, 2024 by 16% and 19%, respectively, and the average number of active accounts and direct deposit accounts for the fiscal year declined by 18% and 19%, respectively.
+Added: We believe these decreases in our Consumer Services segment are attributable to several factors, including our decision to wind-down many of our legacy accountholder programs in support of GO2bank, macro-economic factors affecting consumer behavior and other competitive trends that have impacted acquisition at retail locations, and the non-renewal of one of our retail partner programs in a prior period.
+Added: These factors had a corresponding impact on the amount of accountholder fee revenue we earn from accounts, including monthly maintenance fees, new card fees, ATM fees and interchange fees.
+Added: Revenues within this segment were also adversely impacted by a decrease in breakage revenue on our gift card portfolios for the comparable period.
In our B2B Services segment, revenues increased by 40% during the year ended December 31, 2024 over the prior year comparable period.
−Removed: The increase was driven by strong year-over-year growth in our gross dollar volume, which increased during the year ended December 31, 2023 by 58%, despite a year-over-year reduction in purchase volume by 14%, and a year-over-year decline in the average number of active accounts by 20%.
−Removed: The growth in gross dollar volume was driven primarily by certain BaaS programs that do not generate interchange fees and resulted in a net increase in segment revenue due to higher program management service fees earned from these BaaS partners, partially offset by the non-renewals of other BaaS partners as previously disclosed.
−Removed: Our Money Movement Services segment revenues decreased for the year ended December 31, 2023 by 6% from the prior year comparable period.
−Removed: The decrease in our Money Movement Services segment was primarily attributable to the number of cash transfers processed, which decreased by 6% from the prior year comparable period, and to a lesser extent, a 3% decrease in our tax processing revenues.
−Removed: The Green Dot Network is a service provider to accountholders in our Consumer Services and B2B Services segments, as well as third-party programs.
−Removed: The decrease in cash transfers was the result of lower active accounts within our Consumer Services and B2B Services segments discussed above.
−Removed: However, we continued to experience an increase in the number of cash transfers processed for third-party programs, which has grown steadily on a year-over-year basis, and represented the majority of our total cash transfers as of December 31, 2023.
−Removed: Our tax processing revenues decreased for the year ended December 31, 2023 from the prior year comparable period, as a result of a 3% year-over-year decrease in the number of tax refunds processed.
−Removed: The decrease in number of tax refunds processed was principally attributable to lower volumes from our online consumer tax channels.
−Removed: Net interest income earned by Green Dot Bank, a component of our Corporate and Other segment, decreased for the year ended December 31, 2023 by 11% from the prior year comparable period.
−Removed: The decrease in net interest income was the result of an increase in interest shared with certain BaaS partners (a reduction of revenue), partially offset by higher yields on our cash balances, each driven by increases in short-term interest rates by the Federal Reserve.
+Added: The increase was driven by strong year-over-year growth in our gross dollar volume, which increased during the year ended December 31, 2024 by 45%, and to a lesser extent, growth in purchase volume, which also increased year-over-year by 9%.
+Added: The average number of active accounts for the year ended December 31, 2024 increased by 15% over the prior year comparable period.
+Added: The growth in gross dollar volume was driven primarily by certain BaaS programs that do not generate interchange fees and resulted in a net increase in segment revenue due to higher program management service fees earned from these BaaS partners, partially offset by the non-renewals of certain other BaaS partners in prior periods.
+Added: In our Money Movement Services segment, revenues increased for the year ended December 31, 2024 by 4% from the prior year comparable period.
+Added: The increase in revenues was driven primarily by an increase in our tax processing revenues, partially offset by a decrease in cash transfer revenues.
+Added: Although the number of tax refunds processed decreased by 2% during the year ended December 31, 2024, our tax processing revenues increased due to a favorable mix-shift in the distribution channel in which the tax refund was processed and from the expansion of our taxpayer advance programs.
+Added: These increases were partially offset by a 5% decline in the number of cash transfers processed during the year ended December 31, 2024 from the prior year comparable period.
+Added: The decline in the number of cash transfers processed was due to a lower number of active accounts within our Consumer Services segment as discussed above.
+Added: The Green Dot Network is a service provider to accountholders in both our Consumer Services and B2B Services segments, as well as third-party programs.
+Added: We continued to experience an increase in the number of cash transfers processed for third-party programs, which has grown steadily on a year-over-year basis, and represented the majority of our total cash transfers as of December 31, 2024.
+Added: Revenues within our Corporate and Other segment were driven primarily by net interest income earned by Green Dot Bank, which increased by 67% for the year ended December 31, 2024 from the prior year comparable period.
+Added: The increase in net interest income was the result of an increase in cash from deposit programs with our partners and yields earned at the Federal Reserve, partially offset by an increase in interest shared with certain BaaS partners (a reduction of revenue).
Total operating expenses
Our total operating expenses for the year ended December 31, 2024 increased $246.9 million, or 17%, over the prior year comparable period.
−Removed: As discussed in more detail below, the increase in our total operating expenses was driven primarily by an increase in processing expenses within our B2B Services segment, and to a lesser extent, a net increase in other general and administrative expenses, partially offset by a decrease in sales and marketing expenses, and lower compensation and benefits expenses.
−Removed: The increase in our total operating expenses for the year ended December 31, 2023 was driven primarily by an increase in processing expenses associated with the growth of certain BaaS account programs within our B2B Services segment discussed above, partially offset by reductions in processor costs realized from the migration to our in-licensed card management system.
−Removed: Other general and administrative expenses increased during the year ended December 31, 2023 in part due to an estimated accrual we recorded based on a proposed consent order we and our subsidiary bank received from the Federal Reserve Board, as discussed in more detail below.
−Removed: Other general and administrative expenses also increased due to an increase in overall transaction losses attributable to an increase in the amount of customer dispute volume across our portfolios and higher professional services fees related to our anti-money laundering program ("AML"), including improvements to our compliance controls, policies and procedures, partially offset by a $13 million legal settlement and certain impairment charges of internal-use software that were recorded in the prior year comparable period, which in each case did not recur in 2023.
−Removed: These increases were partially offset by lower sales and marketing expenses, principally due to decreases in sales commissions from lower revenues on products subject to tiered revenue-sharing agreements, as well as reduced marketing spend associated with GO2bank as discussed above.
−Removed: In addition, our marketing expenses decreased as a result of lower supply chain expenses, which consists of debit card plastics and related materials, as a result of a lower number of active accounts for the comparable periods and the non-renewal of certain partner programs as previously disclosed.
−Removed: Compensation and benefits expenses decreased, primarily due to lower accrued bonus compensation expense, partially offset by an increase in third-party call center support costs associated with the growth of certain programs within our B2B Services segment.
−Removed: We and our subsidiary bank received a proposed consent order from the Federal Reserve Board relating principally to various aspects of compliance risk management, including consumer compliance and compliance with AML regulations.
−Removed: The matters addressed in the proposed consent order relate to activities and practices that commenced prior to our CEO transition in 2020.
−Removed: Included in the proposed consent order are proposals for civil money penalties related to these issues.
−Removed: While we are still in discussions with the Federal Reserve Board regarding these proposals, we accrued an estimated liability of $20 million related to the proposed consent order during the three months ended December 31, 2023.
−Removed: We believe the estimate of the aggregate range of reasonably possible losses (meaning the likelihood of losses is more than remote but less than likely), is up to $50 million as of December 31, 2023.
−Removed: This estimated range of reasonably possible losses is based on currently available information for those proceedings in which we are involved and considers our best estimate of such losses for those matters for which an estimate can be made.
−Removed: However, there can be no assurance that our accrual is sufficient or that losses from the proposed consent order will not exceed the estimated range.
−Removed: For further discussion, see the headings "As a bank holding company, we are subject to extensive and potentially changing regulation and are required to serve as a source of strength for Green Dot Bank" and “Litigation or investigations could result in significant settlements, sanctions, fines or penalties” included as part of our risk factor disclosures in "Part I, Item 1A, Risk Factors," of this Annual Report on Form 10-K.
−Removed: Our income tax expense for the year ended December 31, 2023 decreased $11.8 million, or 60% over the prior year comparable period.
−Removed: The decrease in our income tax expense was due primarily to an 83% decrease in our income before taxes, partially offset by an increase in our effective tax rate.
+Added: The increase in our total operating expenses was driven primarily by an increase in processing expenses within our B2B Services segment, and to a lesser extent, a net increase in compensation and benefits expenses and other general and administrative expenses, partially offset by a decrease in sales and marketing expenses, each as discussed in more detail below.
+Added: The increase in our processing expenses for the year ended December 31, 2024 was driven primarily by the growth in gross dollar volume associated with certain BaaS account programs within our B2B Services segment discussed above, partially offset by reductions in processor costs realized from the migration to our in-licensed card management system.
+Added: Our total operating expenses also increased due to an increase in compensation and benefits expenses, driven primarily by an increase in third-party call center support costs associated with the growth of the BaaS account programs, as discussed above, and higher accrued bonus compensation expense, partially offset by lower salary and wages driven by the reduction in employee workforce we initiated in February 2024 (the "Headcount Reduction") and lower employee stock-based compensation expense, primarily due to fluctuations in the expected achievement of certain performance-based equity awards.
+Added: Other general and administrative expenses increased during the year ended December 31, 2024 due to a civil money penalty paid, as discussed further below, higher professional services fees related to our anti-money laundering program ("AML") programs, including improvements to our compliance controls, policies and procedures, and the settlement payment and impairment charges related to internal-use software and other related assets associated with the termination of our partnership agreement to develop a new core banking system.
+Added: These increases in other general and administrative expenses were partially offset by a decrease in overall transaction losses attributable to a decrease in the amount of customer dispute volume across our portfolios and favorable reductions in our dispute loss rates, as well as lower losses from purchase overdraft transactions.
+Added: These increases in total operating expenses were partially offset by lower sales and marketing expenses, principally due to decreases in sales commissions due to lower revenues generated from certain products that are subject to tiered revenue-sharing agreements, and to a lesser extent, reduced marketing spend within our Consumer Services segment.
+Added: On July 19, 2024, we and our subsidiary bank entered into a consent order (the "Consent Order") with the Federal Reserve Board relating principally to various aspects of compliance risk management, including consumer compliance and compliance with anti-money laundering regulations.
+Added: Included in the Consent Order was a civil money penalty related to these issues in the amount of $44 million which was subsequently paid in July 2024.
+Added: We previously accrued an estimated liability of $20 million related to the Consent Order during the three months ended December 31, 2023, and the remaining portion was accrued during the three months ended June 30, 2024.
+Added: For further discussion, see the headings " As a bank holding company, we are subject to extensive and potentially changing regulation and are required to serve as a source of strength for Green Dot Bank " and “ Litigation or investigations could result in significant settlements, sanctions, fines or penalties ” included as part of our risk factor disclosures in Part I, Item 1A, "Risk Factors."
+Added: Our income tax expense for the year ended December 31, 2024 decreased $3.7 million, or 47%, from the prior year comparable period.
+Added: The decrease in our income tax expense was due primarily to a decrease in our pre-taxable income.
Our effective tax rate for the years ended December 31, 2024 and 2023 was (18.5)% and 54.1%, respectively.
−Removed: The increase in our effective tax rate was primarily attributable to the expense associated with tax shortfalls from stock-based compensation, expense related to nondeductible penalties, and higher expenses related to state taxes, net of federal benefits, partially offset by higher tax benefits from general business credits and cash value growth in bank owned life insurance policies.
−Removed: The increase in nondeductible penalties for the year ended December 31, 2023 is related to the tax effect associated with the estimated accrual for our proposed consent order received from the Federal Reserve Board discussed above.
−Removed: The Inflation Reduction Act of 2022 (the "IRA") levies a 15% corporate minimum income tax and a 1% excise tax on corporate stock repurchases.
−Removed: To date, these tax law changes have had no immediate effect and we do not expect that they will have a material impact on our results of operations in future periods.
+Added: The decrease in our effective tax rate was primarily attributable to a decrease in state income taxes expense, net of federal benefits, the impact of general business credits, and a reduction in the amount of compensation expense that was subject to the Internal Revenue Code (the "IRC") Section 162(m) limitation on the deductibility of certain executive compensation.
+Added: These decreases were partially offset by incremental taxes and penalties ("surrender penalties") we incurred in connection with the surrender and restructuring of our existing bank owned life insurance policies, an increase in the valuation allowance on a portion of our unrealized loss on equity securities, an increase in tax expense associated with shortfalls from stock-based compensation, and an increase in tax expense due to nondeductible expenses and penalties.
+Added: The increase in nondeductible expenses and penalties for the year ended December 31, 2024 is primarily related to the tax effect associated with the civil money penalty for the Consent Order.
In December 2021, the Organization for Economic Cooperation and Development ("OECD") released model rules introducing a 15% global minimum tax rate for large multinational corporations ("Pillar Two").
Certain countries in which we operate have enacted legislation consistent with the OECD model rules effective beginning in 2024.
−Removed: We are monitoring legislative developments and continuing to evaluate the potential impact of Pillar Two on our consolidated financial statements, but we do not expect that it will have a material impact on our results of operations in future periods.
+Added: We are monitoring legislative developments and continuing to evaluate the potential impact of Pillar Two on our
+Added: consolidated financial statements, but we do not expect that it will have a material impact on our results of operations in future periods.
Outlook and Other Trends Affecting Our Business
−Removed: Based on the overall macro-economic environment, the effect of high inflation and interest rates, our commitment to making growth-oriented investments and the timing of the related expense savings from our ongoing technology transformation, the previously-disclosed non-renewals in our Consumer Services and B2B Services segments, our decision to wind-down many of our legacy cardholder programs in support of GO2bank, trends occurring within our retail channel in our Consumer Services segment, and our investments in our compliance programs, our consolidated operating profit has declined year-over-year in 2023.
−Removed: However, we do not expect some of these trends or events to recur in 2024.
−Removed: Based on our anticipated growth initiatives and cost reduction measures we have put in place, we expect our 2024 financial results will moderate on a year-over-year basis.
−Removed: We expect the previously-disclosed non-renewals in our Consumer Services and B2B Service segments and our decision to wind-down many of our legacy cardholder programs in support of GO2bank will impact our year-over-year growth rates in the first half of 2024.
+Added: While we are still experiencing a difficult macro-economic environment, competitive headwinds and other factors that have contributed to declining trends in our consolidated operating results in recent periods, we expect our results of operations will stabilize on a year-over-year basis in 2025 based on our anticipated initiatives and cost reduction measures we have implemented.
We intend to continue to make growth-oriented investments and incur other expenditures that we believe will benefit our long-term financial results.
Our growth-oriented investments are focused on, among other things, cost-effectively re-engaging in strategic marketing initiatives in support of our GO2bank product and other initiatives across our account programs with the objective of returning to active account growth.
−Removed: During the third quarter of 2023, we completed the final account migrations of our processor conversion.
−Removed: While we will continuously seek opportunities to enhance and invest in our overall technology platform, we expect the implementation of our card management platform will allow us to begin fully realizing reductions in our processing expenses in 2024.
−Removed: Additionally, in February 2024, we also initiated a reduction in workforce that impacted approximately 10% of our global employees.
−Removed: This strategic reduction in force is intended to improve our cost structure, streamline operations, and refocus resources on core strategic priorities.
−Removed: We expect these cost reduction initiatives to be partially offset by increases in other areas, as we will continue to invest in and incur additional expenses in connection with our AML program, including improvements to our compliance controls, policies and procedures, which we believe will ultimately help us to continue to remediate regulatory matters discussed above and mitigate and reduce our fraud losses over the long term.
−Removed: During 2022, the Federal Reserve raised interest rates by an aggregate of 425 basis points.
−Removed: During 2023, the Federal Reserve raised rates by an additional 100 basis points, which further contributed to a market slowdown.
−Removed: The market consensus is that interest rates will decrease during 2024, but we expect that an elevated interest rate environment may persist for the foreseeable future.
+Added: We have seen reductions in our processing expenses from our processor conversion and expect the implementation of our card management platform will allow us to continue to realize reductions in our processing expenses as we seek to expand account programs.
+Added: Despite the meaningful reductions to our cost structure we have achieved across our organization through our various initiatives, we are incurring increased expenses in other areas, as we have incurred additional expenses in connection with our continued investments in our AML program, including improvements to our compliance controls, policies and procedures.
+Added: We believe these investments will ultimately help us to continue to remediate matters identified in the Consent Order and mitigate and reduce our fraud losses over the long term.
+Added: In September 2024, the Federal Reserve decreased interest rates by 50 basis points, the first rate cut in over four years, and further reduced interest rates by an additional 50 basis points during the fourth quarter of 2024.
The Federal Reserve's decision-making policies for short-term interest rates will continue to impact the amount of net interest income we earn in the future.
In general, while increases in short-term interest rates benefit the yield we earn on our cash, certain of our BaaS partner arrangements allow for the BaaS partner to share in a significant portion of the interest earned from accountholder deposits (which are recorded as a reduction of revenue in our consolidated financial statements), and yields on our investment portfolio tend to lag interest rate increases as securities mature and proceeds are reinvested.
−Removed: Accordingly, the net effect has had and may continue to have a negative impact on our consolidated financial statements, and will be dependent upon future interest rate changes enacted by the Federal Reserve.
−Removed: Further, the duration and magnitude of the continuing effects of macro-economic factors remain uncertain and dependent on various factors.
+Added: Accordingly, the net effect has had and we expect will continue to have a negative impact on our consolidated financial statements and will be dependent upon future interest rate changes enacted by the Federal Reserve.
+Added: Further, the duration and magnitude of the continuing effects of macro-economic factors remain uncertain and dependent on various factors outside of our control.
See Part I, Item 1A, "Risk Factors," for an additional discussion of risks related to macro-economic factors.
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Number of tax refunds processed 13.82 14.14 (0.32) (2.3) % 14.14 14.57 (0.43) (3.0) %
−Removed: * Represents number of active accounts as of December 31, 2023 , 2022, and 2021 respectively.
+Added: * Represents the number of active accounts as of December 31, 2024 , 2023, and 2022 respectively.
See “Segment Results” for additional information and discussion regarding key metrics performance by segment.
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A substantial portion of our gross dollar volume is generated from direct deposit sources.
−Removed: We use this metric to analyze the total amount of money moving onto our account programs, and to determine the overall engagement and usage patterns of our account holder base.
−Removed: This metric also serves as a leading indicator of revenue generated through our Consumer Services and B2B Services segments, inclusive of fees charged to account holders and interchange revenues generated through the spending of account balances.
+Added: We use this metric to analyze the total amount of money moving onto our account programs, and to determine the overall engagement and usage patterns of our accountholder base.
+Added: This metric also serves as a leading indicator of revenue generated through our Consumer Services and B2B Services segments, inclusive of fees charged to accountholders and interchange revenues generated through the spending of account balances.
Number of Active Accounts — Represents any bank account within our Consumer Services and B2B Services segments that is subject to the USA PATRIOT Act of 2001 compliance and, therefore, requires customer identity verification prior to use and is intended to accept ongoing customer cash or ACH deposits.
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Refer to sub-section entitled Consumer Services under “Segment Results” below for key metric results for direct deposit active accounts.
−Removed: Purchase Volume — Represents the total dollar volume of purchase transactions made by our account holders.
+Added: Purchase Volume — Represents the total dollar volume of purchase transactions made by our accountholders.
This metric excludes the dollar volume of ATM withdrawals and volume generated by certain BaaS programs where the BaaS partner receives interchange fees and we earn a program management service fee.
1 unchanged sentence
Number of Cash Transfers — Represents the total number of cash transfer transactions conducted by consumers, such as a point-of-sale swipe reload transaction, the purchase of a MoneyPak or an e-cash mobile remittance transaction marketed under various brand names, that we conducted through our retail distributors in a specified period.
−Removed: This metric excludes disbursements made through our Simply Paid wage disbursement platform.
+Added: This metric excludes disbursements made through our wage disbursement platform.
We review this metric as a measure of the size and scale of our retail cash processing network, as an indicator of customer engagement and usage of our products and services, and to analyze cash transfer revenue, which is a key component of our financial performance.
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We charge maintenance fees on prepaid cards, checking accounts and certain cash transfer products, such as MoneyPak, pursuant to the terms and conditions in our customer agreements.
−Removed: We charge ATM fees to cardholders when they withdraw money at certain ATMs in accordance with the terms and conditions in our cardholder agreements.
+Added: We charge ATM fees to accountholders when they withdraw money at certain ATMs in accordance with the terms and conditions in our accountholder agreements.
We charge new card fees, if applicable, when a consumer purchases a prepaid card, gift card, or a checking account product through our Retail channel.
−Removed: Other revenues consist primarily of revenue associated with our gift card program, annual fees associated with our secured credit card portfolio, transaction-based fees, fees associated with optional products or services, such as our overdraft protection program, and cash-back rewards we offer to cardholders.
+Added: Other revenues consist primarily of revenue associated with our gift card program, annual fees associated with our secured credit card portfolio, transaction-based fees, fees associated with optional products or services, such as our overdraft protection program, and cash-back rewards we offer to accountholders.
Our cash-back rewards are recorded as a reduction to card revenues and other fees.
2 unchanged sentences
Our average monthly maintenance fee per active account depends upon the mix of products in our portfolio at any given point in time and upon the extent to which fees are waived based on various incentives provided to customers in an effort to encourage higher usage and retention.
−Removed: Our aggregate ATM fee revenues vary based upon the number of cardholder ATM transactions and the average fee per ATM transaction.
−Removed: The average fee per ATM transaction depends upon the mix of products in our portfolio at any given point in time and the extent to which cardholders use ATMs within our free network that carry no fee for cash withdrawal transactions.
+Added: Our aggregate ATM fee revenues vary based upon the number of accountholder ATM transactions and the average fee per ATM transaction.
+Added: The average fee per ATM transaction depends upon the mix of products in our portfolio at any given point in time and the extent to which accountholders use ATMs within our free network that carry no fee for cash withdrawal transactions.
Our aggregate new card fee revenues vary based upon the number of prepaid cards and checking accounts activated and the average new card fee.
3 unchanged sentences
Our aggregate other fees vary primarily based upon account sales of all types, gift card sales, purchase transactions and the number of active accounts in our portfolio.
−Removed: Cash Processing Revenues — Cash processing revenues consist of cash transfer revenues, tax refund processing service revenues, Simply Paid disbursement revenues and other tax processing service revenues.
+Added: Cash Processing Revenues — Cash processing revenues consist of cash transfer revenues, tax refund processing service revenues, disbursement revenues and other tax processing service revenues.
We earn cash transfer revenues when consumers fund their cards through a reload transaction at a Green Dot Network retail location.
1 unchanged sentence
We earn tax refund processing service revenues at the point in time when a customer of a third-party tax preparation company chooses to pay his or her tax preparation fee through the use of our tax refund processing services.
−Removed: We earn Simply Paid disbursement fees from our business partners at the point in time payment disbursements are made.
+Added: We earn disbursement fees from our business partners at the point in time payment disbursements are made.
Interchange Revenues — We earn interchange revenues from fees remitted by the merchant’s bank, which are based on rates established by the payment networks, at the point in time when customers make purchase transactions using our products.
−Removed: Our aggregate interchange revenues vary based primarily on the number of active accounts in our portfolio, the average transactional volume of the active accounts in our portfolio, the merchant category of spend, and on the mix of cardholder purchases between those using signature identification technologies and those using personal identification numbers and the corresponding rates.
+Added: Our aggregate interchange revenues vary based primarily on the number of active accounts in our portfolio, the average transactional volume of the active accounts in our portfolio, the merchant category of spend, and on the mix of accountholder purchases between those using signature identification technologies and those using personal identification numbers and the corresponding rates.
Interest Income, net — Net interest income represents the difference between the interest income earned on our interest-earning assets and the interest expense on our interest-bearing liabilities held at Green Dot Bank.
17 unchanged sentences
These costs generally vary based on the total number of active accounts in our portfolio and gross dollar volume transacted by those accounts.
−Removed: Also included in processing expenses are bank fees associated with our tax refund processing services and gateway and network fees associated with our Simply Paid disbursement services.
+Added: Also included in processing expenses are bank fees associated with our tax refund processing services and gateway and network fees associated with our disbursement services.
Bank fees generally vary based on the total number of tax refund transfers processed and gateway and network fees vary based on the number of disbursements made.
3 unchanged sentences
Costs associated with professional services, depreciation and amortization of our property and equipment, amortization of our acquired intangible assets, impairment charges of long-lived assets, rent and utilities vary based upon our investment in infrastructure, business development, risk management and internal controls and are generally not correlated with our operating revenues or other transaction metrics.
+Added: Other Expense, net
+Added: Other expense, net includes income and expenses we generally do not consider normal operating activities, such as earnings, losses or impairment attributable to equity method investments, realized gains or losses on investment securities, income earned on bank-owned life insurance policies, and changes in valuation allowances on loans held for sale, amongst other similar items that may arise from time to time.
Income Tax Expense
Our income tax expense consists of the federal and state corporate income taxes accrued on income resulting from the sale of our products and services.
−Removed: As discussed above, while the IRA includes a number of revisions to the Internal Revenue Code ("IRC"), to date, these tax law revisions have had no immediate effect and we do not expect that they will have a material impact on our results of operations going forward.
+Added: Our effective income tax rate may differ from the 21% U.S.
+Added: federal statutory rate due to a number of factors, including state income taxes, general business credits, non-deductible expenses and penalties, increases or decreases in valuation allowances and liabilities for uncertain tax positions, excess tax benefits or shortfalls on stock compensation awards, audit developments, and legislative changes.
+Added: See Note 14—Income Taxes to the Consolidated Financial Statements included herein for a discussion of the significant tax differences that impacted our effective tax rate.
Critical Accounting Estimates
4 unchanged sentences
Accordingly, actual results could differ significantly from the estimates made by our management.
−Removed: To the extent that there are differences between our estimates and actual results, our future financial
−Removed: statement presentation, financial condition, results of operations and cash flows will be affected.
+Added: To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected.
We believe that the critical accounting estimates discussed below are critical to understanding our historical and future performance, as these estimates involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations of the registrant.
2 unchanged sentences
We charge new card fees, if applicable, when a consumer purchases a prepaid card, gift card, or a demand deposit account product through our Retail channel.
−Removed: Our new card fee provides our cardholders a material right and accordingly we defer and recognize new card fee revenues on a straight-line basis over the period commensurate with our performance obligation to our customers.
+Added: Our new card fee provides our accountholders a material right and accordingly we defer and recognize new card fee revenues on a straight-line basis over the period commensurate with our performance obligation to our customers.
We consider the performance obligation period to be the average card lifetime, which is currently less than one year for our deposit account programs acquired through our Retail channel.
1 unchanged sentence
We reassess average card lifetime quarterly for prepaid cards and checking accounts and annually for gift cards.
−Removed: Average card lifetimes may vary in the future as cardholder behavior changes relative to historical experience because customers are influenced by changes in the pricing of our services, the availability of substitute products, and other factors.
+Added: Average card lifetimes may vary in the future as accountholder behavior changes relative to historical experience because customers are influenced by changes in the pricing of our services, the availability of substitute products, and other factors.
We also defer commissions paid to retail distributors related to new card sales as costs to obtain contracts and expense ratably over the average card lifetime commensurate with our deposit account programs acquired through our Retail channel.
1 unchanged sentence
We estimate such amounts using historical data and customer behavior patterns to determine these estimates which are recorded as a reduction to the corresponding fee revenue.
−Removed: Additionally, while the number of transactions that a cardholder may perform is unknown, any uncertainty is resolved at the end of each daily service contract.
−Removed: The amount of cash-back rewards on our programs varies based on multiple factors, including the terms and conditions for cardholder eligibility, the redemption amount based on cardholder activity, and the cardholder redemption rates.
+Added: Additionally, while the number of transactions that an accountholder may perform is unknown, any uncertainty is resolved at the end of each daily service contract.
+Added: The amount of cash-back rewards on our programs varies based on multiple factors, including the terms and conditions for accountholder eligibility, the redemption amount based on accountholder activity, and the accountholder redemption rates.
Our estimated cash-back rewards are recorded as a reduction to card revenues and other fees on our consolidated statements of operations and as a component of other accrued liabilities on our consolidated balance sheets.
Cash rewards have decreased by approximately 15% for the year ended December 31, 2024 compared to the prior year period, as our cash-back programs have declined, principally from our shift from our legacy products to our GO2bank product which does not have a cash rewards feature.
−Removed: Increases or decreases in our estimate of cash-back rewards is dependent upon cardholder behavioral changes and we periodically evaluate our estimation process and assumptions based on developments in redemption patterns, dollars redeemed and other cardholder behavioral trends.
+Added: Increases or decreases in our estimate of cash-back rewards is dependent upon accountholder behavioral changes and we periodically evaluate our estimation process and assumptions based on developments in redemption patterns, dollars redeemed and other accountholder behavioral trends.
A relatively small change in any of our assumptions could result in a sizable increase or decrease in the amount of cash-back rewards we accrue.
−Removed: For example, on our Green Dot Unlimited product, a combination of a 1% increase in cardholder eligibility and a $1 increase in the average redemption amount would translate to additional cash rewards of approximately $0.5 million.
−Removed: Differences between actual results and our estimates are adjusted in the period that each cardholder's annual rewards cycle is completed.
+Added: For example, on our Green Dot Unlimited product, a combination of a 1% increase in accountholder eligibility and a $1 increase in the average redemption amount would translate to additional cash rewards of approximately $0.5 million.
+Added: Differences between actual results and our estimates are adjusted in the period that each accountholder's annual rewards cycle is completed.
Reserve for Uncollectible Overdrawn Accounts
−Removed: For cardholders who are not enrolled or do not meet the eligibility requirements of our overdraft protection program, we generally decline authorization attempts for amounts that exceed the available balance in a cardholder’s account, however, the application of card association rules, the timing of the settlement of transactions and the assessment of the card’s monthly maintenance fee, among other things, can still result in overdrawn accounts.
−Removed: These overdrawn account balances are deemed to be receivables due from cardholders, and are included as a component of accounts receivable, net, on our consolidated balance sheets.
−Removed: We generally recover overdrawn account balances from those cardholders that perform a reload transaction and, in some cases, through enforcement of payment network rules, which allow us to recover the amounts from the merchant where the purchase transaction was conducted.
+Added: For accountholders who are not enrolled or do not meet the eligibility requirements of our overdraft protection program, we generally decline authorization attempts for amounts that exceed the available balance in an accountholder’s account, however, the application of card association rules, the timing of the settlement of transactions and the assessment of the card’s monthly maintenance fee, among other things, can still result in overdrawn accounts.
+Added: These overdrawn account balances are deemed to be receivables due from accountholders, and are included as a component of accounts receivable, net, on our consolidated balance sheets.
+Added: We generally recover overdrawn account balances from those accountholders that perform a reload transaction and, in some cases, through enforcement of payment network rules, which allow us to recover the amounts from the merchant where the purchase transaction was conducted.
However, we are exposed to losses from any unrecovered overdrawn account balances.
−Removed: The probability of recovering these amounts is primarily related to the number of days that have elapsed since an account had transaction activity, such as a purchase, ATM transaction or
−Removed: fee assessment.
+Added: The probability of recovering these amounts is primarily related to the number of days that have elapsed since an account had transaction activity, such as a purchase, ATM transaction or fee assessment.
We generally recover approximately 50-60% of overdrawn account balances in accounts that have had transaction activity in the last 30 days and less than 10% when more than 30 days have elapsed.
19 unchanged sentences
In the event it is more likely than not the carrying value of our reporting units is greater than its fair value, we calculate the estimated fair value of the reporting unit and record an impairment charge for the difference between the carrying value of the reporting unit and its fair value, not to exceed the carrying amount of goodwill.
−Removed: The estimate of fair value requires management to make a number of assumptions and projections, which could include, but would not be limited to, future revenues, earnings and the probability of certain outcomes.
−Removed: We completed our annual goodwill impairment test as of September 30, 2023 and concluded there was no impairment in any of our reporting units.
+Added: When applying the quantitative assessment, we determine the fair value of our reporting units based on a weighted average of multiple valuation techniques, principally a combination of an income approach and a market approach.
+Added: The income approach calculates a value based upon the present value of estimated future cash flows, while the market approach uses earnings multiples of similarly situated guideline public companies.
+Added: Determining the fair value of a reporting unit requires management judgment and the use of significant estimates and assumptions, which could include, but would not be limited to, future revenues, earnings and the
+Added: probability of certain outcomes, risk-adjusted discount rates and future economic and market conditions.
+Added: We completed our annual goodwill impairment test as of November 30, 2024 and concluded there was no impairment in any of our reporting units.
Intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
11 unchanged sentences
Such omitted discussion can be found under "Item 7.
−Removed: Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 1, 2023.
+Added: Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 29, 2024.
Comparison of Consolidated Results for the Years Ended December 31, 2024 and 2023
12 unchanged sentences
Total operating revenues $ 1,723,876 100.0 % $ 1,501,328 100.0 %
−Removed: Card Revenues and Other Fees — Card revenues and other fees totaled $1,007.6 million for the year ended December 31, 2023, an increase of $131.3 million, or 15%, from the comparable prior year period.
+Added: Card Revenues and Other Fees — Card revenues and other fees totaled $1.2 billion for the year ended December 31, 2024, an increase of $223.9 million, or 22%, from the comparable prior year period.
Card revenues and other fees increased primarily due to growth in gross dollar volume in our B2B Services segment programs, which resulted in higher program management service fees earned from our BaaS partners.
−Removed: In addition, card revenues and other fees also increased due to customer adoption of optional features launched on our card programs, such as our overdraft protection program.
−Removed: These increases were partially offset by decreases in cardholder fees, such as monthly maintenance fees, new card fees and ATM fees for the reasons discussed above in "Overview."
−Removed: Cash Processing Revenues — Cash processing revenues totaled $225.4 million for the year ended December 31, 2023, a decrease of $10.0 million, or 4%, from the comparable prior year period.
−Removed: The decrease is primarily due to a decline in the number of cash transfers processed year-over-year as a result of lower active accounts within our Consumer Services and B2B Services segments, partially offset by an increase in the number of cash transfers processed for third-party programs as discussed above in "Overview." To a lesser extent, cash processing revenues also decreased due to lower overall tax processing revenues, as a result of a 3% decrease in the number of tax refunds processed.
+Added: These increases were partially offset by decreases in accountholder fees, such as monthly maintenance fees, ATM fees, and new card fees, and lower breakage revenue on our gift card portfolios.
+Added: Cash Processing Revenues — Cash processing revenues totaled $231.8 million for the year ended December 31, 2024, an increase of $6.4 million, or 3%, from the comparable prior year period.
+Added: Although the number of tax refunds processed decreased by 2% during the year ended December 31, 2024, our tax processing revenues increased due to a favorable mix-shift in the distribution channel in which the tax refund was processed and from the expansion of our taxpayer advance programs.
+Added: These increases were partially offset by a 5% decline in the number of cash transfers processed during the year ended December 31, 2024 from the prior year comparable period.
+Added: The decline in the number of cash transfers processed was due to a lower number of active accounts within our Consumer Services segment.
Interchange Revenues — Interchange revenues totaled $198.3 million for the year ended December 31, 2024, a decrease of $32.7 million, or 14%, from the comparable prior year period.
The decrease was primarily due to a 10% decrease in purchase volume during the year ended December 31, 2024, as well as a lower effective interchange rate for the comparable periods.
−Removed: Our interchange fees have both fixed and variable components, and as a result, the effective rate we earn may vary based on the size of transactions, among other factors.
−Removed: In addition, our interchange rate declined due to a mix shift toward categories of consumer purchases with lower effective rates.
−Removed: Interest Income, net — Net interest income totaled $37.3 million for the year ended December 31, 2023, a decrease of $4.9 million, or 11%, from the comparable prior year period.
−Removed: The decrease in net interest income was the result of an increase in interest shared with certain BaaS partners (a reduction of revenue), partially offset by higher yields on our cash balances, each driven by increases in short-term interest rates by the Federal Reserve.
+Added: Our interchange rate declined due to a mix-shift toward categories of consumer purchases with lower effective rates.
+Added: In addition, our interchange fees have both fixed and variable components, and as a result, the effective rate we earn may vary based on the size of transactions, among other factors.
+Added: Interest Income, net — Net interest income totaled $62.4 million for the year ended December 31, 2024, an increase of $25.1 million, or 67%, from the comparable prior year period.
+Added: The increase in net interest income was primarily the result of an increase in cash from deposit programs with our partners and yields earned at the Federal Reserve, partially offset by an increase in interest shared with certain BaaS partners (a reduction of revenue).
Operating Expenses
12 unchanged sentences
Sales and Marketing Expenses — Sales and marketing expenses totaled $217.2 million for the year ended December 31, 2024, a decrease of $28.1 million, or 11%, compared to the year ended December 31, 2023.
−Removed: This decrease was primarily driven by a decrease in sales commissions due to lower revenues generated from certain products that are subject to tiered revenue-sharing agreements and our strategic decision to reduce marketing spend on GO2bank in the beginning of the fiscal year in our Direct channel in response to market trends.
−Removed: In addition, our sales and marketing expenses decreased as a result of lower supply chain expenses, which consists of debit card plastics and related materials, as a result of a lower number of active accounts for the comparable periods and the non-renewal of certain partner programs as previously disclosed.
−Removed: Compensation and Benefits Expenses — Compensation and benefits expenses totaled $238.5 million for the year ended December 31, 2023, a decrease of $5.4 million, or 2%, compared to the year ended December 31, 2022.
−Removed: The decrease was primarily due to lower accrued bonus compensation expense, partially offset by an increase in third-party call center support costs associated with the growth of certain programs within our B2B Services segment.
+Added: This decrease was primarily driven by a decrease in sales commissions due to lower revenues generated from certain products that are subject to tiered revenue-sharing agreements, and to a lesser extent, reduced marketing spend within our Consumer Services segment.
+Added: Compensation and Benefits Expenses — Compensation and benefits expenses totaled $251.0 million for the year ended December 31, 2024, an increase of $12.5 million, or 5%, compared to the year ended December 31, 2023.
+Added: The increase was driven primarily by an increase in third-party call center support costs associated with the growth of certain BaaS programs within our B2B Services segment and higher accrued bonus compensation expense, partially offset by lower salary and wages driven by the Headcount Reduction and lower employee stock-based compensation expense, primarily due to fluctuations in the expected achievement of certain performance-based equity awards.
Processing Expenses — Processing expenses totaled $887.2 million for the year ended December 31, 2024, an increase of $248.0 million, or 39%, compared to the year ended December 31, 2023.
1 unchanged sentence
Other General and Administrative Expenses — Other general and administrative expenses totaled $370.0 million for the year ended December 31, 2024, an increase of $14.4 million, or 4%, from the comparable prior year period.
−Removed: The increase in other general and administrative expenses during the year ended December 31, 2023 was in part due to an estimated accrual we recorded based on a proposed consent order we and our subsidiary bank received from the Federal Reserve Board, as discussed above in "Overview." Other general and administrative expenses also increased due to an increase in overall transaction losses attributable to an increase in the amount of customer dispute volume across our portfolios and higher professional services fees related to our AML program, partially offset by a $13 million legal settlement and certain impairment charges of internal-use software that were recorded in the prior year comparable period, which in each case did not recur in 2023.
+Added: The increase in other general and administrative expenses during the year ended December 31, 2024 was due to a civil money penalty paid under the Consent Order, higher professional services fees related to our AML program, including improvements to our compliance controls, policies and procedures and the settlement payment and impairment charges related to internal-use software and other related assets associated with the termination of our partnership agreement to develop a new core banking system.
+Added: These increases in other general and administrative expenses were partially offset by a decrease in overall transaction losses attributable to a decrease in the amount of customer dispute volume across our portfolios and reductions in our dispute loss rates, as well as lower losses from purchase overdraft transactions.
+Added: Other Expense, net
+Added: Other expense, net totaled $15.4 million for the year ended December 31, 2024, an increase of $10.4 million, or 207%, from the prior year comparable period.
+Added: The net increase in other expenses was driven primarily from an increase in equity method losses in TailFin Labs, LLC ("TailFin") of $8.1 million, which was comprised of a $10.1 million increase in compensation and related professional services to support project initiatives undertaken during the current year period, partially offset by interest income earned.
Income Tax Expense
6 unchanged sentences
Stock-based compensation (31.4) 28.8
−Removed: IRC 162(m) limitation 0.4 0.8
−Removed: Bank owned life insurance (4.2) (0.7)
+Added: Bank owned life insurance income 2.6 (4.2)
+Added: Bank owned life insurance surrender (10.0) —
Nondeductible penalties (22.4) 29.1
−Removed: Global intangible low-taxed income tax 2.0 0.3
+Added: Global intangible low-tax income tax (1.4) 2.0
+Added: IRC 162(m) limitation 12.7 0.4
+Added: Change in valuation allowance (1.9) —
Other (1.0) 1.5
1 unchanged sentence
Our income tax expense totaled $4.2 million for the year ended December 31, 2024, representing a decrease of $3.7 million from the comparable prior year period.
−Removed: The decrease in income tax expense was primarily driven by the decrease in our operating income, partially offset by an increase in our effective tax rate.
+Added: The decrease in income tax expense was primarily driven by the decrease in our taxable income and a lower effective tax rate.
+Added: The net decrease in the effective tax rate for the year ended December 31, 2024 from the prior year comparable period was primarily due to a decrease of $2.9 million in the amount of compensation expense subject to the IRC 162(m) limitation on the deductibility of certain executive compensation, a decrease of $0.8 million in state income tax expense, net of federal benefits, and the impact of general business credits.
+Added: These decreases were partially offset by an increase of $2.9 million in the expense related to tax shortfalls from stock-based compensation, an increase of $0.8 million in the expense related to nondeductible penalties, an increase of $0.4 million in the valuation allowance on a portion of our unrealized loss on equity securities, and the surrender of our existing bank owned life insurance policies which resulted in a tax charge of $1.5 million and surrender penalties of $0.7 million.
+Added: The increases in nondeductible penalties for the years ended December 31, 2024 and 2023 are primarily related to the tax effect associated with the civil money penalty under the Consent Order.
+Added: Our effective tax rate for the year ended December 31, 2024 is lower than our statutory federal income tax rate primarily due to a reduction in the amount of compensation expense that was subject to the IRC Section 162(m) limitation on the deductibility of certain executive compensation, cash value growth in bank owned life insurance policies, and higher tax benefits from general business credits partially offset by the expense associated with tax shortfalls from stock-based compensation, the expense related to nondeductible penalties, an increase in the valuation allowance on a portion of our unrealized loss on equity securities, and the expense from the surrender of our existing bank owned life insurance policies.
+Added: Our negative effective tax rate for the year ended December 31, 2024 was the result of our loss before income taxes of $22.5 million and the tax effect of the civil money penalty under the Consent Order.
Our effective tax rate for the year ended December 31, 2023 is higher than our statutory federal income tax rate primarily due to the expense associated with tax shortfalls from stock-based compensation, the expense related to nondeductible penalties, and higher expenses related to state taxes, net of federal benefits, partially offset by higher tax benefits from general business credits and cash value growth in bank owned life insurance policies.
−Removed: The increase in nondeductible penalties for the year ended December 31, 2023 is related to the tax effect associated with the estimated accrual for our proposed consent order received from the Federal Reserve Board discussed above in "Overview." Our effective tax rate for the year ended December 31, 2022 is higher than our statutory federal income tax rate primarily due to higher taxes from tax shortfalls from stock-based compensation, and higher expenses related to state taxes, net of federal benefits, partially offset by higher tax benefits from general business credits.
The "Other" category in our effective tax rate consists of a variety of permanent differences, none of which were individually significant.
1 unchanged sentence
Consumer Services
+Added: The results of operations and key metrics of our Consumer Services segment for the years ended December 31, 2024 and 2023 were as follows:
Year Ended December 31,
20 unchanged sentences
Segment revenues within Consumer Services for the year ended December 31, 2024 decreased $96.2 million, or 19%, compared to the prior year comparable period, while our segment expenses for the year ended December 31, 2024 decreased $80.9 million, or 25%.
−Removed: Our gross dollar volume, purchase volume, the average number of active accounts and the average number of direct deposit active accounts across the year decreased during the year ended December 31, 2023 by 15%, 16%, 16% and 17%, respectively, from the comparable prior year period, primarily from each of the several factors discussed above in "Overview." These factors include our strategic decision to reduce marketing spend on GO2bank in the beginning of the fiscal year in response to market trends and observed changes in consumer traffic within our retail locations, both of which have negatively impacted account acquisition, our decision to wind-down many of our legacy cardholder programs in support of GO2bank, as well as the non-renewal of one of our retail partner programs as previously disclosed.
−Removed: Our monthly maintenance fee revenues, new card fee revenues, ATM fee revenues and interchange revenues decreased as a result of the decreases in each of our key metrics stated above.
−Removed: In addition, our interchange rate declined due to a mix shift toward categories of consumer purchases with lower effective rates.
−Removed: These decreases were partially offset by increased customer adoption of optional features launched on our card programs, such as our overdraft protection program.
−Removed: Our segment profit for the year ended December 31, 2023 decreased by approximately 20% from the prior year comparable period.
−Removed: Consumer Services expenses for the year ended December 31, 2023 decreased year-over-year due to several factors, including a decrease in sales commissions from lower revenues on products subject to tiered revenue-sharing agreements, a decrease in marketing spend on GO2bank, lower supply chain expenses, and lower processing expenses from our processor migration, each as discussed above, partially offset by an increase in transactions losses attributable in part to an increase in customer dispute volume across our portfolios.
+Added: Our gross dollar volume, purchase volume, the average number of active accounts and the average number of direct deposit active accounts across the year decreased during the year ended December 31, 2024 by 16%, 19%, 18% and 19%, respectively, from the comparable prior year period, primarily from each of the several factors discussed above in "Overview." These factors include macro-economic factors affecting consumer behavior and other competitive trends that have impacted acquisition at retail locations, our decision to wind-down many of our legacy accountholder programs in support of GO2bank, as well as the non-renewal of one of our retail partner programs in a prior period.
+Added: As a result of these decreases in each of our key metrics, our monthly maintenance fee revenues, new card fee revenues, ATM fee revenues and interchange revenues decreased year-over-year.
+Added: In addition, our interchange rate declined due to a mix-shift toward categories of consumer purchases with lower effective rates, as well as a decrease in breakage revenue on our gift card portfolios for each of the comparable periods.
+Added: Segment expenses for the year ended December 31, 2024 decreased year-over-year due to several factors, including a decrease in sales commissions from lower revenues on products subject to tiered revenue-sharing agreements, a decrease in marketing spend on GO2bank, lower processing expenses from our processor migration, and a decrease in transactions losses attributable to a decrease in the amount of customer dispute volume across our portfolios in this segment and favorable reductions in our dispute loss rates.
+Added: Despite the year-over-year decline in segment expenses, our segment profit for the year ended December 31, 2024 decreased by approximately 9% from the prior year comparable period.
+Added: The results of operations and key metrics of our B2B Services segment for the years ended December 31, 2024 and 2023 were as follows:
Year Ended December 31,
18 unchanged sentences
Segment revenues within our B2B Services for the year ended December 31, 2024 increased $308.8 million, or 40%, compared to the prior year period, while our segment expenses for the year ended December 31, 2024 increased $293.7 million, or 42%.
−Removed: Our total gross dollar volume during the year ended December 31, 2023 increased by 58% from the prior year comparable period, despite the average number of active accounts across the year decreasing by 20% year-over-year.
−Removed: We have continued to experience organic growth from both new and existing users in certain BaaS programs that tend to yield higher gross dollar volume per active user.
−Removed: The growth in gross dollar volume from these programs resulted in a net increase in segment revenue due to higher program management service fees earned from these BaaS partners.
−Removed: This increase was partially offset by a decrease in active accounts and the associated purchase volume, which decreased due to the non-renewals of certain other BaaS partners as previously disclosed, resulting in a lower amount of interchange revenue earned year-over-year.
−Removed: Purchase volume decreased by approximately 14% for the year ended December 31, 2023 from the prior year comparable period.
−Removed: B2B Services expenses increased for the year ended December 31, 2023 principally due to higher processing expenses and third-party call center support costs, each associated with the growth of certain BaaS account programs, and higher overall transaction losses as a result of the increase in gross dollar volume.
+Added: Our gross dollar volume, purchase volume, and the average number of active accounts during the year ended December 31, 2024 increased by 45%, 9%, and 15%, respectively, from the prior year comparable period.
+Added: We have continued to experience organic growth from both new and existing users in certain BaaS programs that tend to yield higher gross dollar volume per active user but do not generate comparable levels of interchange fees.
+Added: The growth in gross dollar volume was driven primarily by certain BaaS programs that do not generate interchange fees and resulted in a net increase in segment revenue due to higher program management service fees earned from these BaaS partners.
+Added: This increase was partially offset by the non-renewals of certain other BaaS partners in prior periods.
+Added: Segment expenses increased for the year ended December 31, 2024 from the comparable prior year period, principally due to higher processing expenses with the growth of certain BaaS account programs, as well as higher third-party call center support costs as a result of an increase in gross dollar volume and the number of active accounts.
+Added: As a result of these factors, our segment profit for the year ended December 31, 2024 increased by approximately 19% from the prior year comparable period.
This segment also experienced margin compression because certain BaaS partnerships were structured based on a fixed profit and therefore, our segment profit for certain arrangements will not scale with revenue growth.
Money Movement Services
+Added: The results of operations and key metrics of our Money Movement Services segment for the years ended December 31, 2024 and 2023 were as follows:
Year Ended December 31,
13 unchanged sentences
Number of tax refunds processed 0.15 0.19 4.20 9.28 0.16 0.20 3.87 9.91
−Removed: Segment revenues within our Money Movement services for the year ended December 31, 2023 decreased $12.5 million, or 6%, from the comparable prior year period, and segment expenses for the year ended December 31, 2023 decreased $7.9 million, or 8%.
−Removed: The decrease in segment revenues for the year ended December 31, 2023 was driven primarily by a lower number of cash transfers processed, which decreased by 6% from the prior year comparable period.
−Removed: The Green Dot Network is a service provider to accountholders in our Consumer Services and B2B Services segments, as well as third-party programs.
−Removed: The decrease in cash transfers was the result of lower active accounts within our Consumer Services and B2B Services segments discussed above, partially offset by an increase in the number of cash transfers processed for third-party programs.
−Removed: To a lesser extent, this decrease was also driven by a decrease in our tax processing revenues, as the number of tax refunds processed decreased by 3% from the prior year comparable period principally due to lower volumes from our online consumer tax channels.
−Removed: Money Movement Services segment expenses decreased for the year ended December 31, 2023 by 8% and segment profit increased by approximately 4% year-over-year.
−Removed: Segment expenses decreased for the year ended December 31, 2023 primarily due to a decrease in third-party call center support costs as a result of lower volumes from our tax refund processing services and tax platform efficiencies, and decreases in sales commissions from lower cash transfer revenues.
+Added: Segment revenues within our Money Movement services for the year ended December 31, 2024 increased $8.0 million, or 4%, from the comparable prior year period, and segment expenses for the year ended December 31, 2024 decreased $1.4 million, or 1%.
+Added: The increase in segment revenues for the year ended December 31, 2024 was driven primarily by an increase in our tax processing revenues, partially offset by a decrease in cash transfer revenues.
+Added: Although the number of tax refunds processed decreased by 2% during the year ended December 31, 2024, our tax processing revenues increased due to a favorable mix-shift in the distribution channel in which the tax refund was processed and from the expansion of our taxpayer advance programs.
+Added: These increases were partially offset by a 5% decline in the number of cash transfers processed during the year ended December 31, 2024 from the prior year comparable period.
+Added: The decline in the number of cash transfers processed was due to a lower number of active accounts within our Consumer Services segment, as discussed above.
+Added: The Green Dot Network is a service provider to accountholders in both our Consumer Services and B2B Services segments, as well as third-party programs.
+Added: Segment expenses decreased for the year ended December 31, 2024 by 1% from the comparable prior year period primarily from decreases in sales commissions from lower cash transfer revenues, partially offset by third-party costs and related expenses due to growth across our tax processing services.
+Added: As a result of these factors, our segment profit increased by approximately 8% year-over-year.
Corporate and Other
+Added: The results of operations and key metrics of our Corporate and Other segment for the years ended December 31, 2024 and 2023 were as follows:
Year Ended December 31,
6 unchanged sentences
Revenues within Corporate and Other are comprised of net interest income, certain other investment income earned by our bank, interest profit sharing arrangements with certain BaaS partners (a reduction of revenue) and eliminations of inter-segment revenues.
−Removed: Unallocated corporate expenses include eliminations of inter-segment expenses and our fixed expenses such as salaries, wages and related benefits for our employees, professional services fees, software licenses, telephone and communication costs, rent, utilities and insurance.
+Added: Unallocated corporate expenses include eliminations of inter-segment expenses and our fixed expenses such as salaries, wages and related benefits for our employees and certain third-party contractors, professional services fees, software licenses, telephone and communication costs, rent, utilities and insurance.
These costs are not considered when our CODM evaluates the performance of our three reportable segments since they are not directly attributable to any reporting segment.
1 unchanged sentence
Refer to Note 24—Segment Information to the Consolidated Financial Statements included herein for a summary reconciliation.
−Removed: Revenues within our Corporate and Other segment decreased primarily due to the portion of interest we share with certain BaaS partners (a reduction of revenue).
−Removed: Net interest income decreased by 11% for the year ended December 31, 2023 from the prior year comparable period.
−Removed: The increase in interest shared with certain BaaS partners (a reduction of revenue) was partially offset by higher yields on our cash, each driven by increases in short-term interest rates by the Federal Reserve.
−Removed: Unallocated corporate expenses for the year ended December 31, 2023 decreased year-over-year by approximately 4%, driven primarily by lower salary and wage expenses and related benefits for the comparable periods due to lower accrued bonus compensation, partially offset by higher professional services fees related to our AML program, and higher hosting costs and software licenses as a result of our technology transformation.
+Added: Revenues within our Corporate and Other segment were driven primarily by an increase in net interest income, which increased by 67% for the year ended December 31, 2024 from the prior year comparable period.
+Added: Net interest income increased as a result of an increase in cash from deposit programs with our partners and yields earned at the Federal Reserve, partially offset by the portion of interest shared with certain BaaS partners (a reduction of revenue).
+Added: Unallocated corporate expenses for the year ended December 31, 2024 increased by approximately 9% over the prior year comparable period.
+Added: The increase was driven primarily from higher professional services fees related to our AML program, including improvements to our compliance controls, policies and procedures, and higher accrued bonus compensation, partially offset by lower salary and wages from the Headcount Reduction.
Capital Requirements for Bank Holding Companies
11 unchanged sentences
Basel III rules provided that it has a Tier 1 leverage ratio greater than 9% and satisfies other applicable conditions.
−Removed: Commencing in 2021, Green Dot Corporation and Green Dot Bank qualified for (including, in the case of Green Dot Bank, through grace periods) and opted to use the community bank leverage ratio framework.
+Added: Green Dot Corporation and Green Dot Bank qualify for and opt into use of the community bank leverage ratio framework.
We expect that Green Dot Corporation will continue to qualify for and use the community bank leverage ratio framework, and that Green Dot Bank will calculate and disclose its risk-based capital ratios and Tier 1 leverage ratio under standardized approach of the U.S.
58 unchanged sentences
Financing activities 743,148 (264,019)
−Removed: Decrease in unrestricted cash, cash equivalents and restricted cash $ (133,343) $ (505,795)
−Removed: During the years ended December 31, 2023 and 2022, we financed our operations primarily through our cash flows provided by operating activities and customer funds held on deposit.
−Removed: From time to time, we may also finance short-term working capital activities through our borrowings under our credit facility.
−Removed: As of December 31, 2023, our primary source of liquidity was unrestricted cash and cash equivalents totaling $682.3 million.
+Added: Increase (decrease) in unrestricted cash, cash equivalents and restricted cash $ 905,933 $ (133,343)
+Added: During the years ended December 31, 2024 and 2023, we financed our operations primarily through our cash flows provided by operating activities and customer funds held on deposit, and, from time to time, our short-term working capital activities through our borrowings under our credit facility.
+Added: As of December 31, 2024, our primary source of liquidity was unrestricted cash and cash equivalents totaling $1.6 billion.
We also consider our $2.0 billion of investment securities available-for-sale to be highly-liquid instruments.
We use trend and variance analysis as well as our detailed budgets and forecasts to project future cash needs, making adjustments to the projections when needed.
−Removed: We believe that our current unrestricted cash and cash equivalents, cash flows from operations and borrowing capacity under our credit facility will be sufficient to meet our
−Removed: working capital, capital expenditures, equity method investee capital commitments, and any other capital needs for at least the next 12 months.
+Added: We believe that our current unrestricted cash and cash equivalents, cash flows from operations, borrowing capacity under our revolving line of credit, and net proceeds
+Added: from the issuance and sale of our senior unsecured notes will be sufficient to meet our working capital, capital expenditures, and any other capital needs for at least the next 12 months.
We are currently not aware of any trends or demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in our liquidity increasing or decreasing in any material way that will impact our capital needs during or beyond the next 12 months.
1 unchanged sentence
Cash Flows from Operating Activities
+Added: Our $81.4 million of net cash provided by operating activities during the year ended December 31, 2024 principally resulted from $26.7 million of net losses, adjusted for certain non-cash operating expenses of $170.3 million, and a decrease in net working capital assets and liabilities of $62.2 million, which includes the payment of $44 million for the civil money penalty included in the Consent Order.
Our $97.5 million of net cash provided by operating activities during the year ended December 31, 2023 principally resulted from $6.7 million of net income, adjusted for certain non-cash operating expenses of $158.9 million, and a decrease in net working capital assets and liabilities of $68.1 million.
−Removed: The year-over-year decrease in our net cash provided by operating activities during the year ended December 31, 2023 is principally due to a $57.5 million decline in net income and net working capital changes associated with cash paid for taxes, increases in volume of fee advances, and timing impacts associated with the non-renewal of programs discussed above.
−Removed: Our cash paid for taxes was adversely impacted by the requirement to capitalize and amortize research and development expenses under Section 174 of the IRC.
−Removed: Although Congress is considering legislation that would reinstate and extend Section 174 expensing for certain research and experimental expenditures, the possibility that this will happen is uncertain.
−Removed: See Note 14—Income Taxes of the Consolidated Financial Statements included herein for additional information.
−Removed: Our $277.7 million of net cash provided by operating activities during the year ended December 31, 2022 principally resulted from $64.2 million of net income, adjusted for certain non-cash operating expenses of $168.7 million, and an increase in net working capital assets and liabilities of $44.8 million.
Cash Flows from Investing Activities
−Removed: Our $33.2 million of net cash provided by investing activities during the year ended December 31, 2023 primarily reflects net proceeds from sales and maturities of our available-for-sale investment securities of $176.9 million, payments for property, equipment and internal-use software of $75.9 million, net changes in loans of $29.0 million, and capital contributions related to our investment in TailFin Labs, LLC of $35.0 million.
+Added: Our $81.4 million of net cash provided by investing activities during the year ended December 31, 2024 primarily reflects net proceeds from sales and maturities of our available-for-sale investment securities of $221.1 million, partially offset by payments for property, equipment and internal-use software of $74.3 million, net changes in loans of $27.9 million, and capital contributions related to our investment in TailFin of $35.0 million.
+Added: Our final payment under our commitment with TailFin was made in January 2024.
The year-over-year increase in our net cash provided by investment activities during the year ended December 31, 2024 is principally associated with maturities of our investment securities and our decision not to reinvest the proceeds into new investment securities.
−Removed: Our $820.2 million of net cash used in investing activities during the year ended December 31, 2022 primarily reflects purchases of available-for-sale investment securities, net of proceeds from sales and maturities of $634.3 million, payments for property, equipment and internal-use software of $84.3 million, net changes in loans of $32.1 million, purchases of bank-owned life insurance policies of $31.9 million and capital contributions related to our investment in TailFin Labs, LLC of $35.0 million.
+Added: Our $33.2 million of net cash provided by investing activities during the year ended December 31, 2023 primarily reflects net proceeds from sales and maturities of our available-for-sale investment securities of $176.9 million, partially offset by payments for property, equipment and internal-use software of $75.9 million, net changes in loans of $29.0 million, and capital contributions related to our investment in TailFin of $35.0 million.
Cash Flows from Financing Activities
+Added: Our $743.1 million of net cash provided by financing activities for the year ended December 31, 2024 was principally the result of a net increase in customer deposits of $718.0 million and a net increase in obligations to customers of $35.6 million.
+Added: Refer to additional discussion below for our borrowings and repayments of debt.
Our $264.0 million of net cash used in financing activities for the year ended December 31, 2023 was principally the result of a net decrease in customer deposits of $159.4 million, and a net decrease in obligations to customers of $132.2 million, partially offset by net borrowings on our revolving credit facility of $26.0 million.
−Removed: Our $36.7 million of net cash provided by financing activities for the year ended December 31, 2022 was principally the result of a net increase in customer deposits of $157.1 million, and net borrowings on our revolving credit facility of $35.0 million, partially offset by share repurchases of our Class A common stock of $95.5 million and a net decrease in obligations to customers of $54.0 million.
Other Sources of Liquidity
+Added: Senior Unsecured Notes
+Added: In September and October 2024, we issued and sold senior unsecured notes (the "Notes") in an aggregate principal amount of $50 million.
+Added: The Notes have a five-year term, maturing September 15, 2029.
+Added: The principal amounts bear interest at a fixed rate of 8.75% per annum, payable semi-annually in arrears.
+Added: The net proceeds of the offering were used to repay outstanding indebtedness under our revolving credit facility discussed below, and for general corporate purposes.
+Added: In February 2025, we issued and sold additional Notes in an aggregate principal amount of $15 million.
2025 Revolving Facility
+Added: In February 2025, we entered into a new revolving line of credit agreement (the "2025 Revolving Facility") with a financial institution up to a maximum principal amount of $20 million, subject to borrowing base limitations defined under the terms of the agreement.
+Added: The 2025 Revolving Facility matures in August 2026 and will bear interest at variable market rates, but subject to a minimum rate of 6.0% per annum.
+Added: Interest payments are due monthly, and accrue based on the then-outstanding principal balance.
+Added: 2019 Revolving Facility
In October 2019, we entered into a secured credit agreement with Wells Fargo Bank, National Association, and other lenders party thereto.
−Removed: The credit facility provides for a $100.0 million five-year revolving line of credit (the "2019 Revolving Facility"), maturing in October 2024.
−Removed: We use the proceeds of any borrowings under the 2019 Revolving Facility for working capital and other general corporate purposes, subject to the terms and conditions set forth in the credit agreement.
−Removed: We classify amounts outstanding on our consolidated balance sheets based on the remaining duration of the credit facility, however, we may make voluntary repayments at any time prior to maturity.
−Removed: As of December 31, 2023, the outstanding balance on the 2019 Revolving Facility was $61.0 million, with $39.0 million available for use.
−Removed: In March 2023, we amended the terms of our agreement to replace LIBOR with the Secured Overnight Financing Rate ("SOFR").
−Removed: At our election, loans made under the credit agreement bear interest at 1) an adjusted SOFR rate (the “SOFR Rate") or 2) a base rate determined by reference to the highest of (a) the United States federal funds rate plus 0.50%, (b) the Wells Fargo prime rate, and (c) an adjusted SOFR rate plus 1.0% (the “Base Rate"), plus in either case, an applicable margin.
−Removed: The applicable margin for borrowings depends on our total leverage ratio and varies from 1.25% to 2.00% for SOFR Rate loans and 0.25% to 1.00% for Base Rate loans.
−Removed: The interest rate on our outstanding balance as of December 31, 2023 was 7.23%.
−Removed: We are also subject to certain financial covenants, which include maintaining a minimum fixed charge coverage ratio and a maximum consolidated leverage ratio at the end of each fiscal quarter, as defined in the agreement.
−Removed: At December 31, 2023, we were in compliance with all such covenants.
+Added: The credit facility provided for a $100.0 million five-year revolving line of credit (the "2019 Revolving Facility"), which matured in October 2024.
+Added: The proceeds of any borrowings under the 2019 Revolving Facility were used for working capital and other general corporate purposes, subject to the terms and conditions set forth in the credit agreement.
+Added: As of September 30, 2024, the then-outstanding balance on the 2019 Revolving Facility was repaid in full, and the 2019 Revolving Facility terminated at its maturity date.
Material Cash Requirements
9 unchanged sentences
Contractual Obligations
−Removed: On January 2, 2020, we effectuated our agreement with Walmart to jointly establish a new fintech accelerator under the name TailFin Labs, LLC, with a mission to develop innovative products, services and technologies that sit at the intersection of retail shopping and consumer financial services.
+Added: On January 2, 2020, we effectuated our agreement with Walmart to jointly establish a new fintech accelerator under the name TailFin, with a mission to develop innovative products, services and technologies that sit at the intersection of retail shopping and consumer financial services.
We hold a 20% ownership interest in the entity, in exchange for annual capital contributions of $35.0 million per year from January 2020 through January 2024.
96 unchanged sentences
Total deposits $ 3,840,640 $ 3,250,648 $ 3,309,491
−Removed: Our aggregate deposits in denominations that met or exceeded FDIC limits were $310 million, $215 million and $180 million as of December 31, 2023, 2022 and 2021, respectively.
+Added: Our aggregate deposits in denominations that met or exceeded FDIC limits were approximately $116 million, $228 million and $83 million as of December 31, 2024, 2023 and 2022, respectively.
Our time deposits portfolio in excess of FDIC limits is not material at December 31, 2024.
17 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.