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In this Quarterly 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 Green Dot Bank, our wholly-owned subsidiary, 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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Business" for more detailed information about our operations and Note 19—Segment Information in the notes to the accompanying unaudited consolidated financial statements.
+Added: Recent Developments
+Added: In March 2025, we announced that we had initiated a process to explore potential strategic alternatives.
+Added: No assurances can be given as to the outcome or timing of the strategic review process, including without limitation that such process will result in a transaction or that any transaction, if pursued, will be successfully completed.
+Added: We do not intend to disclose further developments regarding the process unless and until it is determined that further disclosure is appropriate.
+Added: We also announced in March 2025 the commencement of a CEO transition process, pursuant to which George Gresham ceased serving as our President and Chief Executive Officer, and as a member of our Board of Directors, and William I Jacobs, our Chairperson of the Board, was appointed to serve as our interim Chief Executive Officer, and Chris Ruppel, our Chief Revenue Officer, was appointed to serve as our interim President.
Consolidated Financial Results and Trends
−Removed: Our consolidated results of operations for the three and nine months ended September 30, 2024 and 2023 were as follows:
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2024 2023 Change % 2024 2023 Change %
+Added: Our consolidated results of operations for the three months ended March 31, 2025 and 2024 were as follows:
+Added: Three Months Ended March 31,
+Added: 2025 2024 Change %
(In thousands, except percentages)
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Total operating expenses 498,129 441,434 56,695 12.8 %
−Removed: Net (loss) income (7,840) (6,265) (1,575) 25.1 % (31,805) 30,325 (62,130) (204.9) %
+Added: Net income 25,773 4,750 21,023 442.6 %
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 three and nine months ended September 30, 2024 increased $56.7 million or 16%, and $133.6 million, or 12%, respectively, over the prior year comparable periods, 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.
−Removed: 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 for the three and nine months ended September 30, 2024 of 35% and 32%, respectively.
−Removed: However, our total operating revenues were negatively impacted by several other factors impacting our deposit account programs, as discussed below, that impacted the number of consolidated active accounts, purchase volume, and number of cash transfers, each of which decreased for the three months ended September 30, 2024 by 6%, 9%, and 1% respectively.
−Removed: For the nine months ended September 30, 2024, purchase volume and the number of cash transfers decreased by 12% and 6%, respectively, over the prior year comparable period.
−Removed: In our Consumer Services segment, revenues decreased during the three and nine months ended September 30, 2024 by 17% and 24%, respectively, over the prior year comparable periods.
−Removed: Gross dollar volume, the number of active accounts, the number of direct deposit active accounts and purchase volume each declined year-over-year for the three months ended September 30, 2024 by 14%, 18%, 15% and 18%, respectively.
−Removed: Similarly, gross dollar volume and purchase volume declined for the nine months ended September 30, 2024 by 19% and 22%, respectively.
−Removed: 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 leading to economic challenges for consumers and other competitive trends that have impacted acquisition at retail locations, and the non-renewal of one of our retail partner programs, as previously disclosed.
−Removed: 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.
−Removed: Revenues within this segment were also adversely impacted by a decrease in breakage revenue on our gift card portfolios for each of the comparable periods.
−Removed: In our B2B Services segment, revenues increased by 39% and 40% during the three and nine months ended September 30, 2024, respectively, over the prior year comparable periods.
−Removed: The increase was driven by strong year-over-year growth in our gross dollar volume, which increased during each of the three and nine months ended September 30, 2024 by 46%, and to a lesser extent, growth in purchase volume, which also increased during each of the respective periods by 10%.
−Removed: The number of active accounts for the three months ended September 30, 2024 increased by 11% over the prior year comparable period.
−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 certain other BaaS partners, as previously disclosed.
−Removed: In our Money Movement Services segment, revenues decreased by less than 1% during the three months ended September 30, 2024 and increased by 4% during the nine months ended September 30, 2024 over the prior year comparable periods.
−Removed: The decrease in our Money Movement Services revenues during the three months ended September 30, 2024 was driven by a decrease in cash transfer revenues.
−Removed: Our cash transfer revenues decreased from the comparable prior year period primarily due to a 1% decrease in the number of cash transfers processed during the three months ended September 30, 2024, and an unfavorable mix of cash transfer types and locations where the transactions occurred, as the fees we receive vary depending on these factors.
−Removed: Our tax processing revenues during the three months ended September 30, 2024 remained consistent year over year.
−Removed: Due to the seasonal nature of our tax products and services, substantially all of our tax processing revenues are earned during the first half of each year.
−Removed: The increase in our Money Movement Services segment during the nine months ended September 30, 2024 was driven primarily by an increase in our tax processing revenues, partially offset by a decrease in cash transfer revenues.
−Removed: Although the number of tax refunds processed decreased for the nine months ended September 30, 2024 by 2%, 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.
−Removed: These increases were partially offset by a 6% decline in the number of cash transfers processed for the nine months ended September 30, 2024 from the prior year comparable period.
+Added: Our total operating revenues for the three months ended March 31, 2025 increased $106.9 million or 24%, 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.
+Added: Continued growth of certain BaaS partner programs generated an increase in our total gross dollar volume and number of consolidated active accounts for the three months ended March 31, 2025 of 21% and 2%, respectively, which increased our total operating revenues year-over-year.
+Added: However, as discussed below, our total operating revenues were negatively impacted by unfavorable trends and factors in our deposit account programs, driving, among other things, a reduction of approximately 3% to each of our purchase volume and number of cash transfers for the three months ended March 31, 2025, as compared to the prior year period.
+Added: In our Consumer Services segment, revenues decreased during the three months ended March 31, 2025 by 5% from the prior year comparable period.
+Added: Our gross dollar volume and purchase volume each declined by 6% for the three months ended March 31, 2025, and the number of active accounts and direct deposit accounts declined by 7% and 11%, respectively.
+Added: We believe these decreases in our Consumer Services segment are attributable to several factors, including 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, 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.
+Added: In our B2B Services segment, revenues increased during the three months ended March 31, 2025 by 42% over the prior year comparable period.
+Added: The increase was driven by strong year-over-year growth in our gross dollar volume, which increased by 26%, and to a lesser extent, growth in purchase volume, which increased by 3%, and the number of active accounts for the three months ended March 31, 2025, which increased by 13%.
+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: In our Money Movement Services segment, revenues increased during the three months ended March 31, 2025 by 7% from the prior year comparable period.
+Added: This increase in revenue was driven primarily by an increase in our tax processing revenues.
+Added: Although the number of tax refunds processed decreased by 14% for the three months ended March 31, 2025, as compared to the prior year period, our tax processing revenues increased due to the expansion of our taxpayer advance programs and a favorable mix-shift in the distribution channel in which the tax refund was processed.
+Added: The decrease in the number of tax refunds processed is principally attributable to our online tax preparation partners.
+Added: The increase in tax processing revenues was partially offset by a 3% decline in the number of cash transfers processed for the three months ended March 31, 2025 from the prior year comparable period.
The decline in the number of cash transfers processed was due to a lower number of active accounts within our Consumer Services segment discussed above.
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.
−Removed: Net interest income earned by Green Dot Bank, a component of our Corporate and Other segment, increased for the three and nine months ended September 30, 2024 by 92% and 50%, respectively, over the prior year comparable periods.
+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 March 31, 2025.
+Added: Revenues within our Corporate and Other segment were driven primarily by net interest income earned by Green Dot Bank, which increased by 70% for the three months ended March 31, 2025, over the prior year comparable period.
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).
Total operating expenses
−Removed: Our total operating expenses for the three and nine months ended September 30, 2024 increased $52.8 million, or 15% , and $198.6 million, or 18%, respectively, over the prior year comparable periods.
−Removed: The increase in our total operating expenses for the three months ended September 30, 2024 was driven primarily by an increase in processing expenses associated with the growth of certain BaaS account programs within our B2B Services segment as discussed above, partially offset by reductions in processor costs realized from the processor migration to our in-licensed card management platform.
−Removed: To a lesser extent, 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 discussed above, partially offset by lower salary and wages driven by the reduction in employee workforce we initiated in February 2024, as previously disclosed (the "Headcount Reduction").
−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, and lower other general and administrative expenses, primarily driven by a decrease in transaction losses due to a decrease in the amount of customer dispute volume across our portfolios and favorable reductions in our dispute loss rates.
−Removed: This decrease in other general and administrative expenses was partially offset by higher professional services fees related to our anti-money laundering ("AML") programs, including improvements to our compliance controls, policies and procedures.
−Removed: Our total operating expenses for the nine months ended September 30, 2024 increased over the prior year comparable period.
−Removed: Processing expenses increased during the nine months ended September 30, 2024 due to the same factors discussed above.
−Removed: Other general and administrative expenses increased due to penalties paid under the consent order (the "Consent Order") we received from the Federal Reserve Board, as previously disclosed and discussed further below, higher professional services fees related to our AML programs, 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, as previously disclosed during the first quarter of 2024.
−Removed: Other general and administrative expenses also increased during the nine months ended September 30, 2024 due to an increase in overall transaction losses attributable to an increase in the amount of customer dispute volume across our portfolios.
−Removed: These increases were partially offset by lower sales and marketing expenses due to the same factors discussed above, and lower compensation and benefits expenses, primarily due to lower salary and wages driven by the Headcount Reduction and lower employee stock-based compensation expense, primarily due to a higher number of forfeited awards.
−Removed: As previously disclosed, on July 19, 2024, we and our subsidiary bank received a Consent Order from the Federal Reserve Board relating principally to various aspects of compliance risk management, including consumer compliance and compliance with anti-money laundering regulations.
−Removed: 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.
−Removed: 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.
−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 II, Item 1A, "Risk Factors."
−Removed: Our income tax benefit for the three months ended September 30, 2024 decreased by $1.2 million, or 77%, from the prior year comparable period primarily due to the impact of the surrender of our existing bank owned life insurance policies, and our income tax expense for the nine months ended September 30, 2024 decreased by $9.0 million, or 87%, from the prior year comparable period primarily due to a decrease in our year-to-date taxable income.
−Removed: Our effective tax rate for the nine months ended September 30, 2024 was 5%, a decrease from 26% for the comparable prior year period.
−Removed: The decrease in our effective tax rate was primarily due to a decrease in state income taxes expense, net of federal benefits, the impact of general business credits, tax benefits from bank owned life insurance policies, and a reduction in the amount of compensation expense that was subject to the Internal
−Removed: Revenue Code (the "IRC") Section 162(m) limitation on the deductibility of certain executive compensation.
−Removed: 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 tax expense associated with shortfalls from stock-based compensation, and an increase in tax expense due to nondeductible expenses and penalties.
−Removed: The increase in nondeductible expenses and penalties for the nine months ended September 30, 2024 is primarily related to the tax effect associated with the civil money penalty for the Consent Order.
+Added: Our total operating expenses for the three months ended March 31, 2025 increased $56.7 million, or 13%, over the prior year comparable period.
+Added: The increase in our total operating expenses was driven primarily by an increase in processing expenses within our B2B Services segment, partially offset by a decrease in other general and administrative expenses, sales and marketing expenses and to a lesser extent, a decrease in compensation and benefits expenses, each as discussed in more detail below.
+Added: The increase in our processing expenses for the three months ended March 31, 2025 was driven primarily by the growth in gross dollar volume associated with certain BaaS account programs within our B2B Services segment discussed above.
+Added: This increase was partially offset by lower other general and administrative expenses, which decreased during the three months ended March 31, 2025 primarily due to a decrease in overall transaction losses attributable to lower customer dispute volume across our portfolios and favorable reductions in our dispute loss rates, the settlement payment and impairment charges related to the termination of our partnership agreement to develop a new core banking system that were incurred in the first quarter of 2024 that did not recur in the current period, and lower professional services fees related to our anti-money laundering ("AML") programs, due to the completion of certain initiatives.
+Added: Our sales and marketing expenses also decreased, principally due to a decrease in revenue-sharing arrangements in our tax processing business, partially offset by an increase in sales commissions from higher revenues on products subject to tiered revenue-sharing agreements in our Consumer Services segment.
+Added: To a lesser extent, total operating expenses decreased due to a decrease in compensation and benefits expenses, driven primarily by a decrease in employee stock-based compensation due to forfeitures of awards from certain employees and severance benefits not recurring at the same magnitude in the current period as a result of our reduction in employee workforce in the comparable prior year period, partially offset by an increase in third-party call center support costs associated with the growth of the BaaS account programs discussed above.
+Added: Our income tax expense for the three months ended March 31, 2025 increased by $5.3 million, or 211%, from the prior year comparable period primarily due to an increase in our pre-taxable income, partially offset by a decrease in our effective tax rate.
+Added: Our effective tax rate for the three months ended March 31, 2025 was 23.4%, a decrease from 34.8% for the prior year comparable period.
+Added: The decrease in our effective tax rate was due to several factors, including the impact of general business credits, tax benefits from bank owned life insurance policies, a decrease in tax expense associated with shortfalls from stock-based compensation, a decrease in tax expense from nondeductible expenses, 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, and a reduction of the incremental taxes and penalties ("surrender penalties") we incurred in connection with the surrender and restructuring of our existing bank owned life insurance policies completed in 2024.
+Added: These decreases in our effective tax rate were partially offset by an increase in state income taxes expense, net of federal benefits.
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").
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Outlook and Other Trends Affecting Our Business
−Removed: Based on the overall macro-economic environment, the effect of elevated inflation and interest rates, our commitment to making growth-oriented investments and the timing of the related expense savings from our processor migration to our in-licensed card management platform, the previously-disclosed non-renewals in our Consumer Services and B2B Services segments, our decision to wind-down many of our legacy accountholder programs in support of GO2bank, trends occurring within our retail channel in our Consumer Services segment, and our investments in our compliance programs, we have experienced declining trends in our consolidated operating results in recent periods.
−Removed: However, we do not expect some of these trends or events to persist, such as partner non-renewals and the discontinuation of certain legacy accountholder programs.
−Removed: After taking into consideration the one-time nature of our Consent Order accrual and other charges, we expect our results of operations will stabilize on a year-over-year basis over the remainder of 2024 based on our anticipated initiatives and cost reduction measures we have implemented.
+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, excluding any impact from our strategic review process, 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.
−Removed: 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.
+Added: Our growth-oriented investments are focused on, among other things, accelerating our ability to onboard new partners in our B2B Services and Money Movement segments, adding new features and functionality to our Arc platform, 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.
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.
−Removed: We have seen our cost reduction initiatives partially offset by increases 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, which we believe 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.
−Removed: 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 25 basis points in early November 2024.
−Removed: Although we remain in an elevated interest rate environment, the general market consensus is that interest rates will gradually decrease further over the near term.
+Added: In March 2025, we also initiated a re-alignment of teams and
+Added: resources across the enterprise in a continual effort to better support our strategic priorities and growth channels, and to improve our operating efficiency.
+Added: We expect this re-alignment to further improve our cost structure year-over-year.
+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 conduct our strategic review process, incur or accrue for additional retention and interim officer compensation expenses and incur additional expenses in connection with our ongoing investments in our AML program, including improvements to our compliance controls, policies and procedures.
+Added: We believe investments in our AML program will ultimately help us to continue to remediate matters identified in the Consent Order from the previous year, reduce our fraud losses over the long term and cost-efficiently scale our compliance and regulatory programs as we look to grow our business.
+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.
−Removed: 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.
+Added: In general, while higher 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.
+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: However, we are also beginning to shift a portion of our investment securities portfolio into variable rate debt securities to improve net yields and balance the effect of our interest sharing arrangements with BaaS partners.
Further, the duration and magnitude of the continuing effects of macro-economic factors remain uncertain and dependent on various factors outside of our control.
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We believe the following measures are the primary indicators of our quarterly and annual revenues:
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2024 2023 Change % 2024 2023 Change %
+Added: Three Months Ended March 31,
+Added: 2025 2024 Change %
(In millions, except percentages)
Gross dollar volume $ 37,252 $ 30,755 $ 6,497 21.1 %
−Removed: Number of active accounts* 3.46 3.67 (0.21) (5.7) % n/a n/a n/a n/a
+Added: Number of active accounts* 3.58 3.51 0.07 2.0 %
Purchase volume $ 5,113 $ 5,274 $ (161) (3.1) %
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Number of tax refunds processed 7.98 9.28 (1.3) (14.0) %
−Removed: * Represents the number of active accounts as of September 30, 2024 and 2023, respectively.
+Added: * Represents the number of active accounts as of March 31, 2025 and 2024, respectively.
See “Segment Results” for additional information and discussion regarding key metrics performance by segment.
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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.
−Removed: Income Tax Expense (Benefit)
−Removed: Our income tax expense (benefit) consists of the federal and state corporate income taxes accrued on income resulting from the sale of our products and services.
+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.
+Added: Income Tax Expense
+Added: 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.
+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 10—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
−Removed: There have been no material changes during the nine months ended September 30, 2024 to the critical accounting estimates disclosed in Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2023.
−Removed: Comparison of Consolidated Results for the Three Months Ended September 30, 2024 and 2023
+Added: There have been no material changes during the three months ended March 31, 2025 to the critical accounting estimates disclosed in Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2024.
+Added: Comparison of Consolidated Results for the Three Months Ended March 31, 2025 and 2024
Operating Revenues
The following table presents a breakdown of our operating revenues among card revenues and other fees, cash processing revenues, interchange revenues and net interest income:
−Removed: Three Months Ended September 30,
+Added: Three Months Ended March 31,
Amount % of Total
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Total operating revenues $ 558,874 100.0 % $ 451,988 100.0 %
−Removed: Card Revenues and Other Fees — Card revenues and other fees totaled $310.4 million for the three months ended September 30, 2024, an increase of $57.0 million, or 22%, from the comparable prior year period.
+Added: Card Revenues and Other Fees — Card revenues and other fees totaled $376.0 million for the three months ended March 31, 2025, an increase of $94.5 million, or 34%, 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: These increases were partially offset by decreases in accountholder fees, such as monthly maintenance fees, ATM fees and new card fees for the reasons discussed above in "Overview." In addition, the increase in card revenues and other fees was partially offset by a decrease in breakage revenue on our gift card portfolios.
−Removed: Cash Processing Revenues — Cash processing revenues totaled $34.9 million for the three months ended September 30, 2024, a decrease of $1.4 million, or 4%, from the comparable prior year period.
−Removed: The decrease was driven by lower cash transfer revenues.
−Removed: Our cash transfer revenues decreased from the comparable prior year period primarily due to a 1% decrease in the number of cash transfers processed during the three months ended September 30, 2024, and an unfavorable mix of cash transfer types and locations where the transactions occurred, as the fees we receive vary depending on these factors.
−Removed: Interchange Revenues — Interchange revenues totaled $48.4 million for the three months ended September 30, 2024, a decrease of $6.6 million, or 12%, from the comparable prior year period.
−Removed: The decrease was primarily due to a decrease in purchase volume of 9% during the three months ended September 30, 2024, as well as a lower effective interchange rate earned for the comparable periods.
+Added: These increases were partially offset by decreases in accountholder fees, such as monthly maintenance fees and ATM fees, as a result of a decline in active accounts in our Consumer Services segment during the current period, and lower breakage revenue on our gift card portfolio.
+Added: Cash Processing Revenues — Cash processing revenues totaled $113.4 million for the three months ended March 31, 2025, an increase of $6.6 million, or 6%, from the comparable prior year period.
+Added: Although the number of tax refunds processed decreased by 14% during the three months ended March 31, 2025, our tax processing revenues increased from the expansion of our taxpayer advance program and a favorable mix-shift in the distribution channel in which the tax refund was processed.
+Added: The decrease in the number of tax refunds processed is principally attributable to our online tax preparation partners.
+Added: The increase in tax processing revenues was partially offset by a 3% decline in the number of cash transfers processed during the three months ended March 31, 2025 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.
+Added: Interchange Revenues — Interchange revenues totaled $47.9 million for the three months ended March 31, 2025, a decrease of $3.1 million, or 6%, from the comparable prior year period.
+Added: The decrease was primarily due to a decrease in purchase volume of 3% during the three months ended March 31, 2025, as well as a lower effective interchange rate earned for the comparable periods.
Our interchange rate declined due to a mix-shift toward categories of consumer purchases with lower effective rates.
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.
−Removed: Interest Income, net — Net interest income totaled $16.1 million for the three months ended September 30, 2024, an increase of $7.7 million, or 92%, from the comparable prior year period.
+Added: Interest Income, net — Net interest income totaled $21.6 million for the three months ended March 31, 2025, an increase of $8.9 million, or 70%, from the comparable prior year period.
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).
1 unchanged sentence
The following table presents a breakdown of our operating expenses among sales and marketing, compensation and benefits, processing, and other general and administrative expenses:
−Removed: Three Months Ended September 30,
−Removed: Amount % of Total
−Removed: Operating Revenues Amount % of Total
−Removed: Operating Revenues
−Removed: (In thousands, except percentages)
−Removed: Operating expenses:
−Removed: Sales and marketing expenses $ 52,626 12.8 % $ 56,495 16.0 %
−Removed: Compensation and benefits expenses 61,795 15.1 59,168 16.8
−Removed: Processing expenses 228,227 55.7 162,375 46.0
−Removed: Other general and administrative expenses 70,027 17.1 81,830 23.2
−Removed: Total operating expenses $ 412,675 100.7 % $ 359,868 102.0 %
−Removed: Sales and Marketing Expenses — Sales and marketing expenses totaled $52.6 million for the three months ended September 30, 2024, a decrease of $3.9 million, or 7%, from the comparable prior year period.
−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.
−Removed: Compensation and Benefits Expenses — Compensation and benefits expenses totaled $61.8 million for the three months ended September 30, 2024, an increase of $2.6 million, or 4%, from the comparable prior year period.
−Removed: The increase was driven primarily by third-party call center support costs associated with the growth of certain BaaS programs within our B2B Services segment, partially offset by lower salary and wages driven by the Headcount Reduction.
−Removed: Processing Expenses — Processing expenses totaled $228.2 million for the three months ended September 30, 2024, an increase of $65.8 million, or 41%, from the comparable prior year period.
−Removed: This increase was principally due to growth in certain BaaS account programs within our B2B Services segment, partially offset by reductions in processor costs realized from the processor migration to our in-licensed card management platform.
−Removed: Other General and Administrative Expenses — Other general and administrative expenses totaled $70.0 million for the three months ended September 30, 2024, a decrease of $11.8 million, or 14%, from the comparable prior year period.
−Removed: This decrease was primarily driven by a decrease in transaction losses due to a decrease in the amount of customer dispute volume across our portfolios and favorable reductions in our dispute loss rates, partially offset by higher professional services fees related to our AML program, including improvements to our compliance controls, policies and procedures.
−Removed: Income Tax Expense (Benefit)
−Removed: The following table presents a breakdown of our effective tax rate among federal, state, and other:
−Removed: Three Months Ended September 30,
−Removed: federal statutory tax rate 21.0 % 21.0 %
−Removed: State income taxes, net of federal tax benefit (8.7) 0.8
−Removed: Foreign tax rate differential (2.6) (0.5)
−Removed: General business credits (24.4) 2.8
−Removed: Stock-based compensation (2.6) (7.8)
−Removed: IRC 162(m) limitation (6.3) 5.0
−Removed: Bank owned life insurance income (13.0) (1.3)
−Removed: Bank owned life insurance surrender (19.2) —
−Removed: Nondeductible expenses and penalties 57.5 4.3
−Removed: Global intangible low-tax income tax 3.0 (3.9)
−Removed: Other (0.1) 0.1
−Removed: Effective tax rate 4.6 % 20.5 %
−Removed: Our income tax benefit totaled $0.4 million for the three months ended September 30, 2024, compared to a $1.6 million income tax benefit for the three months ended September 30, 2023, representing a decrease of $1.2 million, or 77%, from the prior year comparable period, primarily due to the impact of the surrender of our existing bank owned life insurance policies, as discussed further below.
−Removed: The decrease in our effective tax rate for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023 was primarily due to the impact of general business credits, tax benefits from bank owned life insurance policies, and a decrease of $0.4 million in the tax expense associated with shortfalls from stock-based compensation.
−Removed: These decreases in our effective tax rate were partially offset by an increase of $0.9 million in the amount of compensation expense that was subject to the IRC Section 162(m) limitation on the deductibility of certain executive compensation, incremental taxes of $1.1 million and surrender penalties of $0.5 million, and tax expense due to nondeductible expenses and penalties.
−Removed: The increase in nondeductible expenses and penalties for the three months ended September 30, 2024 is primarily related to the tax effect associated with the civil money penalty for the Consent Order.
−Removed: The "Other" category in our effective tax rate consists of a variety of permanent differences, none of which were individually significant.
−Removed: Comparison of Consolidated Results for the Nine Months Ended September 30, 2024 and 2023
−Removed: Operating Revenues
−Removed: The following table presents a breakdown of our operating revenues among card revenues and other fees, cash processing revenues, interchange revenues and net interest income:
−Removed: Nine Months Ended September 30,
−Removed: Amount % of Total
−Removed: Operating Revenues Amount % of Total
−Removed: Operating Revenues
−Removed: (In thousands, except percentages)
−Removed: Operating revenues:
−Removed: Card revenues and other fees $ 878,002 69.2 % $ 735,380 64.8 %
−Removed: Cash processing revenues 198,447 15.6 191,925 16.9
−Removed: Interchange revenues 148,950 11.8 178,950 15.7
−Removed: Interest income, net 43,453 3.4 29,030 2.6
−Removed: Total operating revenues $ 1,268,852 100.0 % $ 1,135,285 100.0 %
−Removed: Card Revenues and Other Fees — Card revenues and other fees totaled $878.0 million for the nine months ended September 30, 2024, an increase of $142.6 million, or 19%, from the comparable prior year period.
−Removed: This increase was driven principally by the same factors discussed above under “Comparison of Three-Month Periods Ended September 30, 2024 and 2023—Operating Revenues—Card Revenues and Other Fees."
−Removed: Cash Processing Revenues — Cash processing revenues totaled $198.4 million for the nine months ended September 30, 2024, an increase of $6.5 million, or 3%, from the comparable prior year period.
−Removed: Although the number of tax refunds processed decreased by 2% during the nine months ended September 30, 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.
−Removed: These increases were partially offset by a 6% decline in the number of cash transfers processed during the nine months ended September 30, 2024 due to a lower number of active accounts within our Consumer Services segment, as discussed above in "Overview."
−Removed: Interchange Revenues — Interchange revenues totaled $149.0 million for the nine months ended September 30, 2024, a decrease of $30.0 million, or 17%, from the comparable prior year period.
−Removed: The decrease was primarily due to a decrease in purchase volume and effective interchange rate earned as discussed under “Comparison of Three-Month Periods Ended September 30, 2024 and 2023—Operating Revenues—Interchange Revenues."
−Removed: Interest Income, net — Net interest income totaled $43.5 million for the nine months ended September 30, 2024, an increase of $14.5 million, or 50%, from the comparable prior year period.
−Removed: The increase in net interest income was primarily the result of an increase in cash from deposit programs with our partners and increases in short-term interest rates for the comparable period, as discussed under “Comparison of Three-Month Periods Ended September 30, 2024 and 2023—Operating Revenues—Interest Income, net."
−Removed: Operating Expenses
−Removed: The following table presents a breakdown of our operating expenses among sales and marketing, compensation and benefits, processing, and other general and administrative expenses:
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
Amount % of Total
8 unchanged sentences
Total operating expenses $ 498,129 89.2 % $ 441,434 97.7 %
−Removed: Sales and Marketing Expenses — Sales and marketing expenses totaled $167.9 million for the nine months ended September 30, 2024, a decrease of $26.6 million, or 14%, from the comparable prior year period.
−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, partially offset by higher supply chain expenses, which consist of debit card plastics and related materials costs, due to notifications of terms and conditions we mailed to accountholders in our B2B Services segment.
−Removed: Compensation and Benefits Expenses — Compensation and benefits expenses totaled $190.0 million for the nine months ended September 30, 2024, a decrease of $2.9 million, or 2%, from the comparable prior year period.
−Removed: The decrease was driven primarily by lower salary and wages as a result of our Headcount Reduction and lower employee stock-based compensation expense, primarily due to a higher number of forfeited awards versus the prior year comparable period.
−Removed: These decreases were partially offset by third-party call center support costs associated with the growth of certain BaaS programs within our B2B Services segment and severance benefits associated with the Headcount Reduction.
−Removed: Processing Expenses — Processing expenses totaled $631.8 million for the nine months ended September 30, 2024, an increase of $171.2 million, or 37%, from the comparable prior year period.
−Removed: This increase was driven primarily by the same factors as discussed above under “Comparison of Three-Month Periods Ended September 30, 2024 and 2023—Operating Expenses—Processing Expenses."
−Removed: Other General and Administrative Expenses — Other general and administrative expenses totaled $295.2 million for the nine months ended September 30, 2024, an increase of $56.9 million, or 24%, from the comparable prior year period.
−Removed: This increase was primarily due to penalties paid under the Consent Order and higher professional services fees related to our AML program, including improvements to our compliance controls, policies and procedures.
−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 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, as previously disclosed during the first quarter of 2024.
+Added: Sales and Marketing Expenses — Sales and marketing expenses totaled $59.7 million for the three months ended March 31, 2025, a decrease of $2.7 million, or 4%, from the comparable prior year period.
+Added: This decrease was primarily driven by a decrease in revenue-sharing arrangements in our tax processing business, partially offset by an increase in sales commissions from higher revenues on products subject to tiered revenue-sharing agreements in our Consumer Services segment.
+Added: Compensation and Benefits Expenses — Compensation and benefits expenses totaled $66.2 million for the three months ended March 31, 2025, a decrease of $0.6 million, or 1%, from the comparable prior year period.
+Added: The decrease was driven primarily by a decrease in employee stock-based compensation due to forfeitures of awards from certain employees and severance benefits not recurring at the same magnitude in the current period as a result of our reduction in employee workforce in the comparable prior year period, partially offset by an increase in third-party call center support costs associated with the growth of the BaaS account programs within our B2B Services segment.
+Added: Processing Expenses — Processing expenses totaled $285.3 million for the three months ended March 31, 2025, an increase of $89.6 million, or 46%, from the comparable prior year period.
+Added: This increase was principally due to growth in gross dollar volume on certain BaaS account programs within our B2B Services segment.
+Added: Other General and Administrative Expenses — Other general and administrative expenses totaled $86.9 million for the three months ended March 31, 2025, a decrease of $29.7 million, or 25%, from the comparable prior year period.
+Added: This decrease was primarily due to a decrease in overall transaction losses attributable to lower customer dispute volume across our portfolios and favorable reductions in our dispute loss rates, the settlement payment and impairment charges related to the termination of our partnership agreement to develop a new core banking system that were incurred in the first quarter of 2024 that did not recur in the current period, and lower professional services fees related to our AML programs, due to the completion of certain initiatives.
+Added: Other Expense, net
+Added: Other expense, net totaled $25.7 million for the three months ended March 31, 2025, an increase of $23.9 million, from the prior year comparable period.
+Added: In April 2025, we sold certain available-for-sales securities in order to reposition the proceeds into higher yielding assets.
+Added: As a result, we recorded a realized loss of $24.5 million for the three months ended March 31, 2025 because we no longer had the intent to hold the securities until recovery of their amortized cost bases.
+Added: This increase was partially offset by a decrease in equity method losses in TailFin Labs, LLC due to lower marketing expenses, and higher income earned from bank-owned life insurance policies.
Income Tax Expense
The following table presents a breakdown of our effective tax rate among federal, state, and other:
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
federal statutory tax rate 21.0 % 21.0 %
2 unchanged sentences
General business credits (1.1) (11.5)
−Removed: IRC 162(m) limitation (10.0) 1.1
Stock-based compensation 3.8 22.7
+Added: IRC 162(m) limitation (2.9) (3.6)
Bank owned life insurance income (1.0) (2.9)
Bank owned life insurance surrender — 9.3
−Removed: Nondeductible expenses and penalties (32.3) 0.3
−Removed: Global intangible low-tax income tax (1.5) 0.8
+Added: Nondeductible expenses 0.3 2.6
Other 0.1 0.1
Effective tax rate 23.4 % 34.8 %
−Removed: Our income tax expense totaled $1.4 million for the nine months ended September 30, 2024, compared to a $10.4 million income tax expense for the nine months ended September 30, 2023, representing a decrease of $9.0 million, or 87%, from the prior year comparable period, primarily due to a decrease in our year-to-date taxable income.
−Removed: The decrease in our effective tax rate for the nine months ended September 30, 2024 from the prior year comparable period was primarily due to a decrease in state income tax expense, net of federal benefits, the impact of general business credits, tax benefits from bank owned life insurance policies, and a reduction of $1.6 million in the amount of compensation expense that was subject to the IRC Section 162(m) limitation on the deductibility of certain executive compensation.
−Removed: These decreases in our effective tax rate were partially offset by an increase of $0.2 million in the tax expense associated with shortfalls from stock-based compensation, an increase in tax expense due to nondeductible expenses and penalties, and a tax charge of $1.5 million and a surrender penalty of $0.7 million.
−Removed: The increase in nondeductible expenses and penalties for the nine months ended September 30, 2024 is primarily related to the tax effect associated with the civil money penalty for the Consent Order.
+Added: Our income tax expense totaled $7.9 million for the three months ended March 31, 2025, representing an increase of $5.3 million, or 211%, from the prior year comparable period, primarily due to an increase in our taxable income, partially offset by a decrease in our effective tax rate.
+Added: The decrease in our effective tax rate for the three months ended March 31, 2025 from the prior year comparable period was due to several factors, including the impact of general business credits, an increase of $0.1 million in tax benefits from bank owned life insurance policies, a decrease of $0.3 million in the tax expense associated with shortfalls from stock-based compensation, a decrease of $0.7 million in the amount of compensation expense that was subject to the IRC Section 162(m) limitation on the deductibility of certain executive compensation, a decrease of $0.1 million in tax expense due to nondeductible expenses, and a decrease of $0.7 million related to our bank owned life insurance surrender penalties we incurred in connection with the surrender and restructuring of our existing bank owned life insurance policies completed in 2024.
+Added: These decreases in our effective tax rate were partially offset by an increase in state income taxes expense, net of federal benefits of $1.3 million for the three months ended March 31, 2025 .
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
−Removed: The results of operations and key metrics of our Consumer Services segment for the three and nine months ended September 30, 2024 and 2023 were as follows:
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2024 2023 Change % 2024 2023 Change %
+Added: The results of operations and key metrics of our Consumer Services segment for the three months ended March 31, 2025 and 2024 were as follows:
+Added: Three Months Ended March 31,
+Added: 2025 2024 Change %
(In thousands, except percentages)
5 unchanged sentences
Gross dollar volume $ 4,238 $ 4,500 $ (262) (5.8) %
−Removed: Number of active accounts* 1.78 2.16 (0.38) (17.6) % n/a n/a n/a n/a
−Removed: Direct deposit active accounts* 0.44 0.52 (0.08) (15.4) % n/a n/a n/a n/a
+Added: Number of active accounts* 1.80 1.93 (0.13) (6.7) %
+Added: Direct deposit active accounts* 0.41 0.46 (0.05) (10.9) %
Purchase volume $ 3,127 $ 3,339 $ (212) (6.3) %
−Removed: * Represents total number of active and direct deposit active accounts as of September 30, 2024 and 2023, respectively.
+Added: * Represents total number of active and direct deposit active accounts as of March 31, 2025 and 2024, respectively.
As additional supplemental information, our key metrics within our Consumer Services segment is presented on a quarterly basis as follows:
−Removed: Q3 Q2 Q1 Q4 Q3 Q2 Q1
+Added: Q1 Q4 Q3 Q2 Q1
(In millions)
4 unchanged sentences
* Represents total number of active accounts as of the end of each quarter.
−Removed: Segment revenues within Consumer Services for the three and nine months ended September 30, 2024 decreased $20.2 million, or 17%, and $91.9 million, or 24%, respectively, from the prior year comparable periods, while our segment expenses for the three and nine months ended September 30, 2024 decreased by $17.1 million, or 23%, and $59.5 million, or 24%, respectively.
−Removed: Our gross dollar volume, number of active accounts, number of direct deposit active accounts and purchase volume each decreased during the three months ended September 30, 2024 by 14%, 18%, 15% and 18%, respectively, from the comparable prior year period, primarily due to each of the several factors discussed above in "Overview." These factors include macro-economic factors leading to economic challenges for consumers 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, as previously disclosed.
−Removed: Our gross dollar volume and purchase volume decreased year-over-year by similar levels during the nine months ended September 30, 2024 for the same reasons discussed above.
−Removed: 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.
−Removed: 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.
−Removed: Consumer Services segment expenses for the three and nine months ended September 30, 2024 decreased from the comparable prior year periods due to several factors, including a decrease in sales commissions from lower revenues on products subject to tiered revenue-sharing agreements, and a decrease in processing expenses from lower volumes in this segment, as well as our processor migration, as discussed above in "Overview." Transactions losses for the three and nine months ended September 30, 2024 decreased from the prior year
−Removed: comparable periods, 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.
−Removed: Overall, segment profit decreased for the three and nine months ended September 30, 2024 by approximately 7% and 23%, respectively, from the prior year comparable periods.
−Removed: The results of operations and key metrics of our B2B Services segment for the three and nine months ended September 30, 2024 and 2023 were as follows:
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2024 2023 Change % 2024 2023 Change %
+Added: Segment revenues within Consumer Services for the three months ended March 31, 2025 decreased $5.4 million, or 5%, from the prior year comparable period, while our segment expenses for the three months ended March 31, 2025 decreased by $5.7 million, or 9%.
+Added: Our gross dollar volume and purchase volume each declined by 6% for the three months ended March 31, 2025, and the number of active accounts and direct deposit accounts declined by 7% and 11%, respectively, from the comparable prior year period, primarily due to each of the factors discussed above in "Overview." These factors include macro-economic factors leading to economic challenges for consumers and other competitive trends that have impacted acquisition at retail locations, as well as the non-renewal of one of our retail partner programs in a prior period.
+Added: Our gross dollar volume and purchase volume decreased year-over-year by similar levels during the three months ended March 31, 2025 for the same reasons discussed above.
+Added: As a result of these decreases in each of our key metrics, our monthly maintenance 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 the comparable period.
+Added: Segment expenses for the three months ended March 31, 2025 decreased from the comparable prior year period primarily due a decrease in overall transaction losses attributable to lower customer dispute volume across our portfolios and favorable reductions in our dispute loss rates, partially offset by an increase in sales commissions from higher revenues on products subject to tiered revenue-sharing agreements.
+Added: Overall, segment profit increased for the three months ended March 31, 2025 by approximately 1%, from the prior year comparable period.
+Added: The results of operations and key metrics of our B2B Services segment for the three months ended March 31, 2025 and 2024 were as follows:
+Added: Three Months Ended March 31,
+Added: 2025 2024 Change %
(In thousands, except percentages)
5 unchanged sentences
Gross dollar volume $ 33,014 $ 26,255 $ 6,759 25.7 %
−Removed: Number of active accounts* 1.68 1.51 0.17 11.3 % n/a n/a n/a n/a
+Added: Number of active accounts* 1.78 1.58 0.20 12.7 %
Purchase volume $ 1,986 $ 1,935 $ 51 2.6 %
−Removed: * Represents total number of active accounts as of September 30, 2024 and 2023, respectively.
+Added: * Represents total number of active accounts as of March 31, 2025 and 2024, respectively.
As additional supplemental information, our key metrics within our B2B Services segment is presented on a quarterly basis as follows:
−Removed: Q3 Q2 Q1 Q4 Q3 Q2 Q1
+Added: Q1 Q4 Q3 Q2 Q1
(In millions)
3 unchanged sentences
* Represents total number of active accounts as of the end of each quarter.
−Removed: Segment revenues within our B2B Services for the three and nine months ended September 30, 2024 increased $77.2 million, or 39%, and $218.5 million, or 40%, respectively, compared to the prior year periods, while our segment expenses for the three and nine months ended September 30, 2024 increased $68.3 million, or 38% and $212.2 million, or 43%, respectively.
−Removed: Our gross dollar volume, number of active accounts and purchase volume each increased during the three months ended September 30, 2024 by 46%, 11% and 10%, respectively, from the prior year comparable period.
+Added: Segment revenues within our B2B Services for the three months ended March 31, 2025 increased $100.8 million, or 42%, compared to the prior year period, while our segment expenses for the three months ended March 31, 2025 increased $91.9 million, or 41%.
+Added: Our gross dollar volume, purchase volume, and number of active accounts increased during the three months ended March 31, 2025 by 26%, 3%, and 13%, respectively, from the prior year comparable period.
We have continued to experience organic growth from both new and existing users concentrated in certain BaaS programs that tend to yield higher gross dollar volume per active user but do not generate comparable levels of interchange fees.
The growth in gross dollar volume from these BaaS 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 the non-renewals of certain other BaaS partners, as previously disclosed.
−Removed: Our gross dollar volume and purchase volume increased year-over-year by similar levels during the nine months ended September 30, 2024 for the same reasons discussed above.
−Removed: B2B Services segment expenses increased for the three and nine months ended September 30, 2024 from the comparable prior year periods, 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.
−Removed: Transaction losses decreased during the three months ended September 30, 2024 due to favorable reductions in our dispute loss rates, and increased during the nine months ended September 30, 2024 on a year over year basis.
−Removed: Overall, our segment profit increased for the three and nine months ended September 30, 2024 by approximately 47% and 11%, respectively, from the prior year comparable periods.
−Removed: This segment also experienced margin compression during each period because certain BaaS
−Removed: partnerships are structured based on a fixed profit and, therefore, our segment profit for certain arrangements will not scale with revenue growth.
+Added: Segment expenses increased for the three months ended March 31, 2025 from the comparable prior year period, principally due to higher processing expenses associated 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, partially offset by lower transaction losses due to favorable reductions in our dispute loss rates.
+Added: As a result of these factors, our segment profit increased for the three months ended March 31, 2025 by approximately 49%, from the prior year comparable period.
+Added: Segment profit margin increased year-over-year from improvement in our cost structure, although it was limited because certain BaaS partnerships were structured based largely on a fixed profit and, therefore, our segment profit for certain arrangements will not scale with revenue growth.
Money Movement Services
−Removed: The results of operations and key metrics of our Money Movement Services segment for the three and nine months ended September 30, 2024 and 2023 were as follows:
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2024 2023 Change % 2024 2023 Change %
+Added: The results of operations and key metrics of our Money Movement Services segment for the three months ended March 31, 2025 and 2024 were as follows:
+Added: Three Months Ended March 31,
+Added: 2025 2024 Change %
(In thousands, except percentages)
7 unchanged sentences
As additional supplemental information, our key metrics within our Money Movement Services segment is presented on a quarterly basis as follows:
−Removed: Q3 Q2 Q1 Q4 Q3 Q2 Q1
+Added: Q1 Q4 Q3 Q2 Q1
(In millions)
1 unchanged sentence
Number of tax refunds processed 7.98 0.15 0.19 4.20 9.28
−Removed: Segment revenues within our Money Movement services for the three and nine months ended September 30, 2024 decreased $0.2 million, or 1%, and increased $7.7 million, or 4%, respectively, from the comparable prior year periods.
−Removed: Segment expenses for the three and nine months ended September 30, 2024 decreased $0.1 million, or 1%, and $2.5 million, or 3%, respectively.
−Removed: The decrease in segment revenues for the three months ended September 30, 2024 was driven by lower cash transfer revenues.
−Removed: Our cash transfer revenues decreased from the comparable prior year period primarily due to a 1% decrease in the number of cash transfers processed during the three months ended September 30, 2024, and an unfavorable mix of cash transfer types and locations where the transactions occurred, as the fees we receive vary depending on these factors.
−Removed: Our tax processing revenues during the three months ended September 30, 2024 remained consistent year over year.
−Removed: Due to the seasonal nature of our tax products and services, substantially all of our tax processing revenues are earned during the first half of each year.
−Removed: The increase in segment revenues for the nine months ended September 30, 2024 was driven primarily by an increase in our tax processing revenues, partially offset by a decrease in cash transfer revenues.
−Removed: While the number of tax refunds processed decreased by 2% during the nine months ended September 30, 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.
−Removed: These increases were partially offset by a 6% decline in the number of cash transfers processed during the nine months ended September 30, 2024.
−Removed: This decline was due to a lower number of active accounts within our Consumer Services segment discussed above.
+Added: Segment revenues within our Money Movement services for the three months ended March 31, 2025 increased $7.1 million, or 7%, from the comparable prior year period, while segment expenses for the three months ended March 31, 2025 decreased $3.9 million, or 10%.
+Added: The increase in segment revenues for the three months ended March 31, 2025 was driven by higher tax processing revenues despite a lower number of tax refunds processed, due to the expansion of our taxpayer advance program and a favorable mix-shift in the distribution channel in which the tax refund was processed.
+Added: partially offset by lower cash transfer revenues.
+Added: The decrease in the number of tax refunds processed is principally attributable to our online tax preparation partners.
+Added: These increases were partially offset by a 3% decline in the number of cash transfers processed during the three months ended March 31, 2025 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 discussed above.
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.
−Removed: Segment expenses decreased during the three and nine months ended September 30, 2024 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: Segment expenses decreased during the three months ended March 31, 2025 primarily due to a decrease in revenue-sharing arrangements in our tax processing business.
Corporate and Other
−Removed: The results of operations and key metrics of our Corporate and Other segment for the three and nine months ended September 30, 2024 and 2023 were as follows:
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2024 2023 Change % 2024 2023 Change %
+Added: The results of operations and key metrics of our Corporate and Other segment for the three months ended March 31, 2025 and 2024 were as follows:
+Added: Three Months Ended March 31,
+Added: 2025 2024 Change %
(In thousands, except percentages)
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Refer to Note 19—Segment Information to the Consolidated Financial Statements included herein for a summary reconciliation.
−Removed: Revenues within our Corporate and Other segment were driven primarily by an increase in net interest income for the three and nine months ended September 30, 2024 by 92% and 50%, respectively, over the prior year comparable periods, partially offset by the portion of interest shared with certain BaaS partners (a reduction of revenue).
−Removed: 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.
−Removed: Unallocated corporate expenses for the three and nine months ended September 30, 2024 increased by approximately 4% and 5%, respectively, over the prior year comparable periods.
−Removed: The increases were driven primarily from higher professional services fees related to our AML program, including improvements to our compliance controls, policies and procedures, partially offset by lower salary and wages from the Headcount Reduction.
+Added: Revenues within our Corporate and Other segment were driven primarily by an increase in net interest income, which increased by 70% for the three months ended March 31, 2025, 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 three months ended March 31, 2025 decreased by approximately 8%, over the prior year comparable period.
+Added: The decreases were primarily due to a decrease in overall transaction losses attributable to lower customer dispute volume across our portfolios and favorable reductions in our dispute loss rates, and lower professional services fees related to our AML programs, due to the completion of certain initiatives.
Liquidity and Capital Resources
The following table summarizes our major sources and uses of cash for the periods presented:
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
(In thousands)
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Financing activities 135,189 347,877
−Removed: Increase (decrease) in unrestricted cash, cash equivalents and restricted cash $ 767,091 $ (104,410)
−Removed: For the nine months ended September 30, 2024 and 2023, we financed our operations primarily through our cash flows provided by operating activities, and from time to time, our short-term working capital activities through our borrowings under our credit facility.
−Removed: As of September 30, 2024, our primary source of liquidity was unrestricted cash and cash equivalents totaling $1.5 billion.
+Added: Increase in unrestricted cash, cash equivalents and restricted cash $ 180,453 $ 432,528
+Added: For the three months ended March 31, 2025 and 2024, we financed our operations primarily through our cash flows provided by operating activities, customer funds held on deposit and borrowings from our senior unsecured notes.
+Added: As of March 31, 2025, our primary source of liquidity was unrestricted cash and cash equivalents totaling $1.8 billion.
We also consider our $2.1 billion of available-for-sale investment securities 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 net proceeds from the issuance and sale of our senior unsecured
−Removed: notes will be sufficient to meet our working capital, capital expenditures, 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 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.
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Cash Flows from Operating Activities
−Removed: Our $104.4 million of net cash provided by operating activities during the nine months ended September 30, 2024 was the result of $31.8 million of net losses, adjusted for certain non-cash operating items of $139.5 million and decreases in net changes in our working capital assets and liabilities of $3.3 million, which includes the payment of $44 million for the civil money penalty included in our Consent Order.
−Removed: Our $132.4 million of net cash provided by operating activities during the nine months ended September 30, 2023 was the result of $30.3 million of net income, adjusted for certain non-cash operating items of $121.8 million and decreases in net changes in our working capital assets and liabilities of $19.7 million.
+Added: Our $108.7 million of net cash provided by operating activities during the three months ended March 31, 2025 was the result of $25.8 million of net income, adjusted for certain non-cash operating items of $62.8 million and increases in net changes in our working capital assets and liabilities of $20.2 million.
+Added: Our $89.2 million of net cash provided by operating activities during the three months ended March 31, 2024 was the result of $4.8 million of net income, adjusted for certain non-cash operating items of $47.2 million and increases in net changes in our working capital assets and liabilities of $37.2 million.
Cash Flows from Investing Activities
−Removed: Our $85.8 million of net cash provided by investing activities during the nine months ended September 30, 2024 was primarily due to proceeds from maturities of available-for-sale securities, net of purchases, of $143.1 million and the surrender of a portion of our bank-owned life insurance policies of $55.1 million, partially offset by capital contributions related to our investment in TailFin Labs, LLC of $35.0 million, the acquisition of property and equipment of $52.2 million and net changes in loans of $24.4 million.
−Removed: Our final payment under our commitment with TailFin Labs, LLC was made in January 2024.
−Removed: Our $18.4 million of net cash provided by investing activities during the nine months ended September 30, 2023 was primarily due to proceeds from maturities of available-for-sale securities of $131.8 million, partially offset by capital contributions related to our investment in TailFin Labs, LLC of $35.0 million, the acquisition of property and equipment of $55.5 million and net changes in loans of $21.6 million.
+Added: Our $63.5 million of net cash used in investing activities during the three months ended March 31, 2025 was primarily due to purchases of available-for-sale securities, net of maturities and sales, of $25.9 million, the acquisition of property and equipment of $19.4 million and net changes in loans of $17.6 million.
+Added: Our $4.5 million of net cash used in investing activities during the three months ended March 31, 2024 was primarily due to capital contributions related to the payment of the final installment of our investment commitment to TailFin Labs, LLC of $35.0 million, net changes in loans of $39.9 million, and the acquisition of property and equipment of $14.5 million, partially offset by net proceeds from maturities of available-for-sale securities of $45.9 million and the surrender of a portion of our bank-owned life insurance policies of $39.1 million.
Cash Flows from Financing Activities
−Removed: Our $576.9 million of net cash provided by financing activities during the nine months ended September 30, 2024 was principally the result of a net increase in customer deposits of $547.5 million and in obligations to customers of $46.0 million.
+Added: Our $135.2 million of net cash provided by financing activities during the three months ended March 31, 2025 was principally the result of a net increase in customer deposits of $159.8 million partially offset by a net decrease in obligations to customers of $36.6 million.
Refer to additional discussion below for our borrowings and repayments of debt.
−Removed: Our $255.3 million of net cash used in financing activities during the nine months ended September 30, 2023 was principally the result of a net decrease in customer deposits of $238.4 million and a net decrease of $8.8 million in obligations to customers.
−Removed: We also repaid $8.0 million, net of borrowings, on our revolving line of credit during the nine months ended September 30, 2023.
+Added: Our $347.9 million of net cash provided from financing activities during the three months ended March 31, 2024 was principally the result of a net increase in customer deposits of $452.0 million, partially offset by a net decrease of $86.7 million in obligations to customers and repayments of $16.0 million, net of borrowings, on our revolving line of credit during the three months ended March 31, 2024.
Other Sources of Liquidity
Senior Unsecured Notes
−Removed: In September 2024, we issued and sold senior unsecured notes (the "Notes") in an aggregate principal amount of $45 million.
+Added: In 2024 and 2025, we issued and sold senior unsecured notes (the "Notes") in an aggregate principal amount of $65 million.
The Notes have a five-year term, maturing September 15, 2029.
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The net proceeds of the offering were used to repay outstanding indebtedness under our revolving credit facility discussed below, and for general corporate purposes.
−Removed: In October 2024, we issued and sold additional Notes in an aggregate principal amount of $5 million.
2025 Revolving Facility
+Added: In February 2025, we entered into a new revolving line of credit agreement 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 line of credit 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: We had no outstanding balance as of March 31, 2025.
+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.
3 unchanged sentences
Material Cash Requirements
−Removed: While the overall macro-economic environment, the effect of high inflation and interest rates, and other factors described in "Outlook and Other Trends Affecting Our Business" above have created economic uncertainty and impacted how we manage our liquidity and capital resources, we anticipate that we will continue to develop and invest in property, equipment and internal-use software as necessary in the normal course of our business.
−Removed: The amount and timing of these payments and the related cash outflows in future periods is difficult to predict and is dependent on a number of factors including the rate of change of computer hardware and software used in our business and our business outlook as a result of macro-economic uncertainties.
−Removed: We intend to continue to invest in new products and programs, including GO2bank, new features for our existing products and IT infrastructure in order to scale and operate effectively to meet our strategic objectives.
−Removed: We expect our capital expenditures in 2024 to be lower compared to our capital expenditures in 2023, but at similar levels compared to our annual investments in recent years.
+Added: While the overall macro-economic environment, the effect of high inflation and interest rates, and other factors described in "Outlook and Other Trends Affecting Our Business" above have created economic uncertainty and impacted how we manage our liquidity and capital resources, we intend to continue to invest in growth and cost efficiency initiatives in the normal course of business until we reach a conclusion regarding the process we recently initiated to explore potential strategic alternatives.
+Added: The amount and timing of these investments and the related cash outflows in future periods is difficult to predict and is dependent on a number of factors including the rate of change of computer hardware and software used in our business and our business outlook as a result of macro-economic uncertainties.
+Added: We intend to continue to invest in new products and programs, new features for our existing products and IT infrastructure in order to scale and operate effectively to meet our strategic objectives.
+Added: We expect our capital expenditures in 2025 to be lower compared to our capital expenditures in the prior year, but at similar levels compared to our annual investments in recent years.
We expect to fund these capital expenditures primarily through our cash flows provided by operating activities.
1 unchanged sentence
The nature of these transactions, however, makes it difficult to predict the amount and timing of such cash requirements.
−Removed: Additionally, we may make periodic cash contributions to our subsidiary bank, Green Dot Bank, to maintain its capital, leverage and other financial commitments at levels we have agreed to with our regulators.
−Removed: If another economic relief package is signed into law that provides for substantial additional direct payments and unemployment benefits, we may need to increase the size of our cash contributions to Green Dot Bank to maintain its capital, leverage and other financial commitments.
+Added: Additionally, we have made and may further make periodic cash contributions to our subsidiary bank, Green Dot Bank, to maintain its capital, leverage and other financial commitments at levels we have agreed to with our regulators.
+Added: We may need to increase the size of our cash contributions to Green Dot Bank to maintain its capital, leverage and other financial commitments.
Contractual Obligations
−Removed: There have been no material changes during the nine months ended September 30, 2024 to our contractual obligations disclosed in Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2023.
+Added: There have been no material changes during the three months ended March 31, 2025 to our contractual obligations disclosed in Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2024.
Capital Requirements for Bank Holding Companies
14 unchanged sentences
Basel III Rules.
−Removed: As of September 30, 2024 and December 31, 2023, we and Green Dot Bank were categorized as "well capitalized" under applicable regulatory standards.
+Added: As of March 31, 2025 and December 31, 2024, we and Green Dot Bank were categorized as "well-capitalized" under applicable regulatory standards.
To be categorized as "well-capitalized," we and Green Dot Bank must maintain specific total risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set forth in the table below.
−Removed: There were no conditions or events since September 30, 2024 which management believes would have changed our category as "well capitalized."
+Added: There were no conditions or events since March 31, 2025 which management believes would have changed our category as "well-capitalized."
The definitions associated with the amounts and ratios below are as follows:
18 unchanged sentences
The standardized risk weights are prescribed in the bank capital rules and reflect regulatory judgment regarding the riskiness of a type of asset or exposure
−Removed: The actual amounts and ratios, and required "well capitalized" minimum capital amounts and ratios at September 30, 2024 and December 31, 2023 were as follows:
−Removed: September 30, 2024
+Added: The actual amounts and ratios, and required "well-capitalized" minimum capital amounts and ratios at March 31, 2025 and December 31, 2024 were as follows:
+Added: March 31, 2025
Amount Ratio Regulatory Minimum "Well-capitalized" Minimum
24 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.