What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-11-10 compared with 2025-08-11 · 205 added, 180 removed, 394 unchanged (49% of the section changed)

16 unchanged sentences

Our operations are aggregated amongst three reportable segments:

1) Consumer Services, 2) Business to Business ("B2B") Services, and 3) Money Movement Services.

1) Business to Business ("B2B") Services, 2) Consumer Services, and 3) Money Movement Services.

Net interest income, certain other investment income earned by our bank, interest profit sharing arrangements with certain BaaS partners (a reduction of revenue), eliminations of inter-segment revenues and expenses, and unallocated corporate expenses that are not considered when our CODM evaluates the performance of our three reportable segments are recorded in Corporate and Other expenses.

2 unchanged sentences

Consolidated Financial Results and Trends

Our consolidated results of operations for the three and six months ended June 30, 2025 and 2024 were as follows:

Three Months Ended June 30, Six Months Ended June 30,

Our consolidated results of operations for the three and nine months ended September 30, 2025 and 2024 were as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 Change % 2025 2024 Change %

5 unchanged sentences

Total operating revenues

Our total operating revenues for the three and six months ended June 30, 2025 increased $97.1 million, or 24%, and $203.9 million, or 24%, respectively, over the prior year comparable periods, driven primarily by higher revenues in our B2B Services segment, partially offset by lower revenues earned in our Consumer Services segment.

Continued growth of certain BaaS partner programs generated an increase of 20% in our total gross dollar volume for each of the three and six months ended June 30, 2025, and increased the number of consolidated active accounts during the three months ended June 30, 2025 by 2%, which increased our total operating revenues year-over-year.

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 in purchase volume and the effective interchange rates we earn thereon, and a reduction in the number of cash transfers of 8% and 6% for the three and six months ended June 30, 2025, respectively, over the prior year comparable periods.

In our Consumer Services segment, revenues decreased during the three and six months ended June 30, 2025 by 4% and 5%, respectively, over the prior year comparable periods.

Similarly, gross dollar volume and purchase volume each declined for the six months ended June 30, 2025 by 4%.

While these declining trends have begun to moderate, we believe these decreases in our Consumer Services segment remain attributable to several factors, including macro-economic factors affecting consumer behavior and other competitive trends that have impacted account acquisition.

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.

In our B2B Services segment, revenues increased during the three and six months ended June 30, 2025 by 38% and 40%, respectively, over the prior year comparable periods.

The increase was driven by strong year-over-year growth in our gross dollar volume, which increased during the three and six months ended June 30, 2025 by 23% and 24%, respectively, and to a lesser extent, growth in purchase volume, which increased by 1% and 2%, respectively, over the prior year comparable periods.

The number of active accounts for the three months ended June 30, 2025 increased by 10% over the prior year comparable period.

Our total operating revenues for the three and nine months ended September 30, 2025 increased $85.1 million, or 21%, and $289.0 million, or 23%, respectively, over the prior year comparable periods, driven primarily by higher revenues in our B2B Services segment, partially offset by lower revenues earned in our Consumer Services segment.

Continued growth of certain BaaS partner programs generated an increase of 18% and 20% in our total gross dollar volume for the three and nine months ended September 30, 2025, respectively, over the prior year comparable periods, and increased the number of consolidated active accounts during three months ended September 30, 2025 by 1%, which together increased our total operating revenues year-over-year.

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 in purchase volume and the effective interchange rates we earn thereon, and a reduction in the number of cash transfers of 10% and 7% for the three and nine months ended September 30, 2025, respectively, from the prior year comparable periods.

In our B2B Services segment, revenues increased during the three and nine months ended September 30, 2025 by 32% and 37%, respectively, over the prior year comparable periods.

The increase was driven by strong year-over-year growth in our gross dollar volume, which increased during the three and nine months ended September 30, 2025 by 22% and 23%, respectively, and to a lesser extent, growth in purchase volume, which increased by 1% and 2%, respectively, over the prior year comparable periods.

The number of active accounts for the three months ended September 30, 2025 increased by 13% over the prior year comparable period.

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.

In our Money Movement Services segment, revenues decreased during the three months ended June 30, 2025 by 4% and increased by 3% during the six months ended June 30, 2025, over the prior year comparable periods.

The decrease in our Money Movement Services revenue during the three months ended June 30, 2025 was driven by decreases in both our tax processing revenues and cash transfer revenues.

Our tax processing revenues decreased during the three months ended June 30, 2025 due to an 11% decrease in the number of tax refunds processed and from lower ancillary tax program fees that are associated with tax refund transfers.

Our money processing revenues decreased during the three months ended June 30, 2025 primarily due to an 8% decrease in the number of cash transfers processed from the comparable prior year period, partially offset by the mix of cash transfer types and locations where the transactions occurred, as the fees we receive vary depending on these factors.

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.

In our Consumer Services segment, revenues decreased during the three and nine months ended September 30, 2025 by 10% and 6%, respectively, from the prior year comparable periods.

Our gross dollar volume and purchase volume declined by 9% and 6%, respectively, for the three months ended September 30, 2025, and the number of active accounts and direct deposit accounts both declined by 9%.

Similarly, both gross dollar volume and purchase volume declined for the nine months ended September 30, 2025 by 6% and 5%, respectively, from the prior year comparable period.

While we are seeing some moderation in these declining trends, we believe these decreases in our Consumer Services segment remain attributable to several persistent factors, including macro-economic factors affecting consumer behavior and other competitive trends that have impacted account acquisition.

These factors had a corresponding negative impact on the amount of accountholder fee revenue we earn from accounts, including monthly maintenance fees, ATM fees and interchange fees.

In our Money Movement Services segment, revenues decreased during the three months ended September 30, 2025 by 6% and increased by 2% during the nine months ended September 30, 2025, from the prior year comparable periods.

The decrease in our Money Movement Services revenue during the three months ended September 30, 2025 was primarily driven by a decrease in our cash transfer revenues, partially offset by an increase in tax processing revenues.

The decrease in our cash transfer revenues was primarily due to a 10% decrease in the number of cash transfers processed from the comparable prior year period.

The decline in the number of cash transfers processed was primarily due to a lower number of active accounts within our Consumer Services segment discussed above, and to a lesser extent, a lower number of cash transfers processed for third-party programs.

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.

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 June 30, 2025.

The increase in our Money Movement Services segment during the six months ended June 30, 2025 was driven primarily by an increase in our tax processing revenues, partially offset by a decrease in money processing revenues.

Although the number of tax refunds processed decreased by 13% for the six months ended June 30, 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.

The decrease in the number of tax refunds processed in each of the three and six months ended June 30, 2025 was principally attributable to our online tax preparation partners.

Although the number of cash transfers from third-party programs decreased slightly year over year, we continue to experience a strong concentration from our third-party programs, and represented the majority of our total cash transfers as of September 30, 2025.

Our tax processing

revenues increased during the three months ended September 30, 2025 due to a 3% increase in the number of tax refunds processed and from higher ancillary tax program fees that are associated with tax refund transfers.

The increase in our Money Movement Services segment during the nine months ended September 30, 2025 was driven primarily by an increase in our tax processing revenues, partially offset by a decrease in cash transfer revenues.

Although the number of tax refunds processed decreased by 13% for the nine months ended September 30, 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 generated.

The decrease in the number of tax refunds processed during the nine months ended September 30, 2025 was principally attributable to our online tax preparation partners.

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.

The increase in tax processing revenues for the six months ended June 30, 2025 was partially offset by a 6% decline in the number of cash transfers processed from the prior year comparable period, due to the same reasons discussed above.

Revenues within our Corporate and Other segment were driven primarily by net interest income earned by Green Dot Bank, which increased by 46% and 57% for the three and six months ended June 30, 2025, respectively, over the prior year comparable periods.

The increase in net interest income was primarily the result of yields earned from an increase in cash from deposit programs with our partners and net proceeds from investment securities sold, and to a lesser extent, higher yielding investments from our bond repositioning strategy, partially offset by an increase in interest shared with certain BaaS partners (a reduction of revenue).

The increase in tax processing revenues for the nine months ended September 30, 2025 was partially offset by a 7% decline in the number of cash transfers processed from the prior year comparable period, due to the same reasons discussed above.

Revenues within our Corporate and Other segment were driven primarily by net interest income earned by Green Dot Bank, which increased by 41% and 51% for the three and nine months ended September 30, 2025, respectively, over the prior year comparable periods.

The increase in net interest income was primarily the result of yields earned from an increase in cash from deposit programs with our partners and to a lesser extent, higher yielding investments from our bond repositioning strategy and a decrease in interest shared with certain BaaS partners (a reduction of revenue).

Total operating expenses

Our total operating expenses for the three and six months ended June 30, 2025 increased $60.0 million, or 14%, and $116.7 million, or 13%, respectively, over the prior year comparable periods.

The increase in our total operating expenses for the respective periods was driven primarily by an increase in processing expenses within our B2B Services segment, and to a lesser extent, an increase in compensation and benefits expenses, partially offset by a decrease in other general and administrative expenses and a reduction in sales and marketing expenses, each as discussed in more detail below for the respective periods.

For the three months ended June 30, 2025, the increase in total operating expenses was driven primarily by an increase in our processing expenses from the growth in gross dollar volume associated with certain BaaS account programs within our B2B Services segment discussed above.

To a lesser extent, total operating expenses 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 our BaaS account programs discussed above, and higher accrued bonus compensation expense due to our current financial performance relative to our annual targets, partially offset by a decrease in employee stock-based compensation expense due to forfeitures of awards.

These increases were partially offset by lower other general and administrative expenses, which decreased during the three months ended June 30, 2025 primarily due to the timing of accruals in the prior year related to the civil money penalty under our Consent Order from the Federal Reserve Board, and to a lesser extent, 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 anti-money laundering ("AML") programs due to the year-over-year timing of spend on certain initiatives.

These decreases were partially offset by an increase in software licenses and hosting costs due to investments in our platform and operations, and an increase from expenses associated with our strategic review process.

Our sales and marketing expenses also decreased, principally due to a decrease in supply chain materials expenses, which are comprised of debit card plastics and related materials costs, from lower active accounts.

Our total operating expenses for the six months ended June 30, 2025 increased over the prior year comparable period, driven by similar factors as discussed above.

Our processing expenses increased during the six months ended June 30, 2025, due to the same reasons discussed above.

Compensation and benefits expenses also increased due to the same reasons discussed above, and were further partially offset from severance benefits that did not recur at the same magnitude in the current period as a result of our reduction in employee workforce in the comparable prior year period.

Other general and administrative expenses decreased due to the same factors discussed above, and further decreased due to the settlement payment and impairment charges related to the termination of our partnership agreement to develop a new core banking system in the prior year comparable period that did not recur in the current period.

Sales and marketing expenses also decreased due to the same factors discussed above and 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.

Our total operating expenses for the three and nine months ended September 30, 2025 increased $115.0 million, or 28%, and $231.7 million, or 18%, respectively, over the prior year comparable periods.

For the three months ended September 30, 2025, the increase in total operating expenses was driven primarily by an increase in our processing expenses from the growth in gross dollar volume associated with certain BaaS account programs within our B2B Services segment discussed above.

In addition, our total operating expenses increased due to an increase in other general and administrative expenses, driven primarily by an increase in overall transaction losses attributable to an increase in our dispute loss rates, higher professional services fees associated with our strategic review process and our anti-money laundering ("AML") regulatory compliance initiatives, and an increase in software licenses and hosting costs due to investments in our platform and operations.

As discussed further below, we also recorded restructuring and other charges associated with our decision to exit our operations in China.

To a lesser extent, compensation and benefits expenses increased, driven primarily by higher accrued bonus compensation expense due to our current financial performance relative to our annual targets, partially offset by a decrease in employee stock-based compensation expense due to forfeitures of awards.

These increases were partially offset by lower sales and marketing expenses principally due to a decrease in supply chain materials expenses, which are comprised of debit card plastics and related materials costs, from fewer active accounts, a decrease in revenue-sharing arrangements in our tax processing business and a decrease in our marketing expenses in our Consumer Services business.

During the third quarter of 2025, we announced a plan to exit our operational activities in China by the end of 2025 as a means of reducing complexity and promoting long-term structural improvements for our business.

As a result of this transition, we recorded restructuring and other charges of approximately $19.9 million during the three months ended September 30, 2025.

These charges were primarily related to severance and employee benefits and other direct costs associated with the restructuring, including lease termination costs.

Substantially all of the restructuring expenses we expect to incur from this plan were accrued for during the third quarter of 2025.

Our total operating expenses for the nine months ended September 30, 2025 increased over the prior year comparable period, driven by similar factors as discussed above for the three months ended September 30, 2025.

Sales and marketing expenses decreased due to the same factors discussed above.

Compensation and benefits expenses increased for the same reasons discussed above, as well as because of an increase in third-party call center support costs associated with the growth of our BaaS account programs discussed above.

Our processing expenses increased during the nine months ended September 30, 2025 due to the same factors discussed above.

Other general and administrative expenses decreased primarily due to the timing of accruals in the prior year related to the civil money penalty under our Consent Order from the Federal Reserve Board that did not recur in the current period, and to a lesser extent, 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 year-over-year timing of spend on certain initiatives.

These decreases were partially offset by an increase in software licenses and hosting costs due to investments in our platform and

operations, and an increase from expenses associated with our strategic review process.

Other general and administrative expenses also decreased due to the settlement payment and impairment charges related to the termination of our partnership agreement to develop a new core banking system in the prior year comparable period that did not recur in the current period.

Other expense, net

Other expense, net for the three and six months ended June 30, 2025 increased $70.2 million and $94.1 million, respectively, from the prior year comparable periods.

These increases resulted principally from a $70 million incentive payment made by TailFin Labs, LLC ("TailFin") in connection with the extension of the Walmart MoneyCard agreement and related agreements, partially offset by higher income earned from bank-owned life insurance policies.

In addition, during the first quarter of 2025, we determined we would sell certain available-for-sales securities in order to reposition the proceeds into higher yielding assets, which resulted in a realized loss of $24.8 million for the six months ended June 30, 2025.

Our income tax benefit for the three months ended June 30, 2025 increased by $15.1 million from the prior year comparable period primarily due to an increase in our loss before taxes and a decrease in nondeductible expenses and penalties primarily related to the tax effect associated with the civil money penalty we incurred in 2024 for our Consent Order received from the Federal Reserve Board.

Our effective tax rate for the six months ended June 30, 2025 was 27.4%, an increase from (8.0)% for the prior year comparable period.

The increase in our effective tax rate was due to several factors, including a lower tax rate benefit from reduced general business credits, an increase 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 lower tax rate benefit from the cash surrender value in bank-owned life insurance policies.

These increases in our effective tax rate were partially offset by a decrease in state income taxes expense, net of federal benefits, a decrease in tax expense associated with shortfalls from stock-based compensation, and a decrease in tax expense from nondeductible expenses and penalties primarily related to the civil money penalty under our Consent Order discussed above.

Other expense, net for the three months ended September 30, 2025 decreased $2.4 million and for the nine months ended September 30, 2025 increased $91.7 million, from the prior year comparable periods.

The decrease in other expense, net for three months ended September 30, 2025 was primarily driven by a decrease in equity method losses associated with TailFin Labs, LLC ("TailFin") due to lower operating expenses year over year, as well as higher income earned from bank-owned life insurance policies.

The increase in other expense, net for the nine months ended September 30, 2025 resulted principally from a $70 million incentive payment made by TailFin in connection with the extension of the Walmart MoneyCard agreement and related agreements in the second quarter of 2025.

These increases were partially offset by higher income earned from bank-owned life insurance policies.

Our income tax benefit for the three months ended September 30, 2025 increased by $4.6 million over the prior year comparable period primarily due to an increase in our loss before taxes and a decrease in nondeductible expenses and penalties primarily related to the tax effect associated with the civil money penalty we incurred in 2024 for our Consent Order received from the Federal Reserve Board.

Our effective tax rate for the nine months ended September 30, 2025 was 19.9%, an increase from (4.6)% for the prior year comparable period.

The increase in our effective tax rate was due to several factors, including a lower tax rate benefit from reduced general business credits, an increase in state income taxes expense, net of federal benefits, and a lower tax rate benefit from the cash surrender value in bank-owned life insurance policies.

These increases in our effective tax rate were partially offset by a decrease 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, a decrease in tax expense associated with shortfalls from stock-based compensation, and a decrease in tax expense from nondeductible expenses and penalties primarily related to the civil money penalty under our Consent Order discussed above.

On July 4, 2025, H.R.

2 unchanged sentences

The OBBBA introduced several provisions that may affect our future financial results, including an elective deduction for domestic research expenditures, reinstatement of elective 100% first-year bonus depreciation, and modifications to GILTI, among other provisions.

We are currently assessing the impact of these tax law changes on our effective tax rate and deferred tax assets in 2025 and future periods.

A quantitative estimate of the specific financial effects cannot be reasonably determined at this time due to the complexity of the changes in the tax reform.

We are currently assessing the impact of these tax law changes on our effective tax rate and deferred tax assets in 2025 as well as future periods and evaluating multiple strategies for implementation of these tax law changes.

The impact of the tax provisions contained in the OBBBA will depend on our facts in each year and anticipated guidance from the U.S.

Department of the Treasury.

Furthermore, since the OBBBA was enacted subsequent to our balance sheet date, our tax provision for the three and six months ended June 30, 2025, does not incorporate the effects of these tax law changes.

We will continue to monitor additional guidance as it becomes available and reflect the impact in future periods as appropriate.

4 unchanged sentences

Outlook and Other Trends Affecting Our Business

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 and non-operating items such as our equity method losses in TailFin, we expect our core results of operations will stabilize on a full year basis year-over-year in 2025 based on our anticipated initiatives and cost reduction measures we have implemented.

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 and non-operating items such as our equity method losses in TailFin, we continue to expect our core results of operations will stabilize on a full year basis year-over-year in 2025 based on our anticipated initiatives and cost reduction measures we have implemented.

In March 2025, we announced that we had initiated a process to explore potential strategic alternatives.

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.

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.

We do not intend to disclose further developments regarding the process unless and until it is determined that further disclosure is appropriate.

We intend to continue to make growth-oriented investments and incur other expenditures that we believe will benefit our long-term financial results.

of our GO2bank product, and other initiatives across our account programs with the objective of returning to active account growth.

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 created synergies 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.

In March 2025, we also initiated a re-alignment of teams and resources across the enterprise in a continual effort to better support our strategic priorities and growth channels, and improve our operating efficiency.

We expect this re-alignment to further improve our cost structure year-over-year.

We expect these re-alignments, including the exit from our operational activities in China, to further improve our cost structure year-over-year.

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.

While expenses related to our AML programs have decreased through the first half of 2025 on a year-over-year basis, this is in part a timing matter, and we expect to incur higher expenses in this area during the second half of the year.

While expenses related to our AML programs decreased through the first half of 2025 on a year-over-year basis, this was in part a timing matter, and we have incurred and expect will continue to incur higher expenses in this area during the second half of the year.

We believe investments in our AML program will ultimately help us 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.

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.

In October 2025, the Federal Reserve decreased interest rates by an additional 25 basis points to a current range of 3.75% to 4.00%.

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.

1 unchanged sentence

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.

To address some of this dynamic, we have begun to reposition 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.

To address some of this dynamic, we have begun to reposition a portion of our investment securities portfolio and our cash 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.

3 unchanged sentences

We believe the following measures are the primary indicators of our quarterly and annual revenues:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 Change % 2025 2024 Change %

5 unchanged sentences

Number of tax refunds processed 0.20 0.19 0.01 3.1 % 11.91 13.67 (1.76) (12.9) %

* Represents the number of active accounts as of June 30, 2025 and 2024, respectively.

* Represents the number of active accounts as of September 30, 2025 and 2024, respectively.

See “Segment Results” for additional information and discussion regarding key metrics performance by segment.

70 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, internal controls and strategic review process and are generally not correlated with our operating revenues or other transaction metrics.

Restructuring and Other Charges — Restructuring and other charges consist principally of charges related to employee severance and benefits, as well as expenses associated with the termination of our facility lease and other miscellaneous exit costs.

We generally recognize employee severance costs when payments are probable and amounts are estimable or when notification occurs.

Costs related to contracts without future benefit or subject to termination are recognized at the earlier of the contract termination or cease-use date.

Other exit-related costs are recognized as incurred.

Other Expense, net

6 unchanged sentences

Critical Accounting Estimates

There have been no material changes during the six months ended June 30, 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.

Comparison of Consolidated Results for the Three Months Ended June 30, 2025 and 2024

There have been no material changes during the nine months ended September 30, 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.

Comparison of Consolidated Results for the Three Months Ended September 30, 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:

Three Months Ended June 30,

Three Months Ended September 30,

Amount % of Total

8 unchanged sentences

Total operating revenues $ 494,826 100.0 % $ 409,743 100.0 %

Card Revenues and Other Fees — Card revenues and other fees totaled $381.2 million for the three months ended June 30, 2025, an increase of $95.1 million, or 33%, from the comparable prior year period.

Card Revenues and Other Fees — Card revenues and other fees totaled $393.1 million for the three months ended September 30, 2025, an increase of $82.7 million, or 27%, 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.

These increases were partially offset by decreases in certain 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.

Cash Processing Revenues — Cash processing revenues totaled $54.5 million for the three months ended June 30, 2025, a decrease of $2.2 million, or 4%, from the comparable prior year period.

In our Money Movement Services segment, our tax processing revenues decreased for the three months ended June 30, 2025 due to an 11% decrease in the number of tax refunds processed and from lower ancillary tax program fees that are associated with tax refund transfers.

The decrease in the number of tax refunds processed is principally attributable to our online tax preparation partners.

In addition, our cash transfer revenues decreased due to an 8% decrease in the number of cash transfers processed, partially offset by the mix of cash transfer types and locations where the transactions occurred, as the fees we receive vary depending on these factors.

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 $47.0 million for the three months ended June 30, 2025, a decrease of $2.6 million, or 5%, from the comparable prior year period.

The decrease was primarily due to a lower effective interchange rate earned for the comparable periods, which declined due to a mix-shift toward categories of consumer purchases with lower effective rates.

These increases were partially offset by decreases in certain accountholder fees, such as monthly maintenance fees and ATM fees, as a result of a decline in the number of active accounts in our Consumer Services segment during the current period.

Cash Processing Revenues — Cash processing revenues totaled $33.8 million for the three months ended September 30, 2025, a decrease of $1.1 million, or 3%, from the comparable prior year period.

The decrease was primarily attributable to a decrease in our cash transfer revenues due to a 10% decrease in the number of cash transfers processed due to a lower number of active accounts within our Consumer Services segment.

The decrease in cash transfer revenues was partially offset by an increase in our tax processing revenues for the three months ended September 30, 2025 due to a 3% increase in the number of tax refunds processed and from higher ancillary tax program fees that are associated with tax refund transfers.

Interchange Revenues — Interchange revenues totaled $45.3 million for the three months ended September 30, 2025, a decrease of $3.1 million, or 6%, from the comparable prior year period.

The decrease was primarily due to a decrease in purchase volume of 3% and a decrease in the effective interchange rate earned from the comparable prior year period, which 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.

Interest Income, net — Net interest income totaled $21.5 million for the three months ended June 30, 2025, an increase of $6.8 million, or 46%, from the comparable prior year period.

The increase in net interest income was primarily the result of yields earned from an increase in cash from deposit programs with our partners and net proceeds from investment securities sold, and to a lesser extent higher yielding investments from our bond repositioning strategy, partially offset by an increase in interest shared with certain BaaS partners (a reduction of revenue).

Interest Income, net — Net interest income totaled $22.7 million for the three months ended September 30, 2025, an increase of $6.6 million, or 41%, from the comparable prior year period.

The increase in net interest income was primarily the result of yields earned from an increase in cash from deposit programs with our partners and higher yielding investments from our bond repositioning strategy, and a decrease in interest shared with certain BaaS partners (a reduction of revenue).

Operating Expenses

The following table presents a breakdown of our operating expenses among sales and marketing, compensation and benefits, processing, and other general and administrative expenses:

Three Months Ended June 30,

Three Months Ended September 30,

Amount % of Total

7 unchanged sentences

Other general and administrative expenses 86,790 17.5 70,027 17.1

Restructuring and other charges 19,902 4.0 — —

Total operating expenses $ 527,657 106.5 % $ 412,675 100.7 %

Sales and Marketing Expenses — Sales and marketing expenses totaled $50.2 million for the three months ended June 30, 2025, a decrease of $2.7 million, or 5%, from the comparable prior year period.

This decrease was driven primarily by a decrease in supply chain materials expenses, which are comprised of debit card plastics and related materials costs, from lower active accounts.

Compensation and Benefits Expenses — Compensation and benefits expenses totaled $63.8 million for the three months ended June 30, 2025, an increase of $2.5 million, or 4%, from the comparable prior year period.

The increase was driven primarily by an increase in third-party call center support costs associated with the growth of the BaaS account programs within our B2B Services segment, and higher accrued bonus compensation expense due to our current financial performance relative to our annual targets, partially offset by a decrease in employee stock-based compensation expense due to forfeitures of awards.

Processing Expenses — Processing expenses totaled $293.2 million for the three months ended June 30, 2025, an increase of $85.3 million, or 41%, from the comparable prior year period.

Sales and Marketing Expenses — Sales and marketing expenses totaled $48.2 million for the three months ended September 30, 2025, a decrease of $4.4 million, or 8%, from the comparable prior year period.

This decrease was driven primarily by a decrease in supply chain materials expenses, which are comprised of debit card plastics and related materials costs, from fewer active accounts, a decrease in revenue-sharing arrangements in our tax processing business and a decrease in our marketing expenses in our Consumer Services business.

Compensation and Benefits Expenses — Compensation and benefits expenses totaled $63.4 million for the three months ended September 30, 2025, an increase of $1.6 million, or 3%, from the comparable prior year period.

The increase was driven primarily by an increase in accrued bonus compensation expense due to our current financial performance relative to our annual targets, partially offset by a decrease in employee stock-based compensation expense due to forfeitures of awards.

Processing Expenses — Processing expenses totaled $309.3 million for the three months ended September 30, 2025, an increase of $81.1 million, or 36%, from the comparable prior year period.

This increase was principally due to growth in gross dollar volume on certain BaaS account programs within our B2B Services segment.

Other General and Administrative Expenses — Other general and administrative expenses totaled $83.6 million for the three months ended June 30, 2025, a decrease of $25.0 million, or 23%, from the comparable prior year period.

This decrease was driven primarily by the timing of accruals in the prior year period related to the civil money penalty under our Consent Order from the Federal Reserve Board, and to a lesser extent, 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 year-over-year timing of spend on certain initiatives, partially offset by an increase in software licenses and hosting costs due to investments in our platform and operations, and an increase from expenses associated with our strategic review process.

Other General and Administrative Expenses — Other general and administrative expenses totaled $86.8 million for the three months ended September 30, 2025, an increase of $16.8 million, or 24%, from the comparable prior year period.

This increase was driven primarily by an increase in overall transaction losses attributable to an increase in our dispute loss rates, higher professional services fees associated with our strategic review process and our AML regulatory compliance initiatives, and an increase in software licenses and hosting costs due to investments in our platform and operations.

Restructuring and Other Charges — Restructuring and other charges totaled $19.9 million for the three months ended September 30, 2025, and due to our previously announced restructuring plan discussed under "Overview." Additionally, refer to Note 19 — Restructuring and Other Charges in the Consolidated Financial Statements included herein for a more detailed discussion of our restructuring and other charges.

Other Expense, net

Other expense, net totaled $74.7 million for the three months ended June 30, 2025, an increase of $70.2 million, from the prior year comparable period.

This increase was driven by our equity method losses associated with TailFin and resulted principally from a $70 million incentive payment that TailFin made in connection with the extension of the Walmart MoneyCard agreement and related agreements, partially offset by higher income earned from bank-owned life insurance policies.

We recorded the incentive payment as a component of equity in losses attributable to TailFin during the three months ended June 30, 2025 under our HLBV method of accounting.

Other expense, net totaled $1.3 million for the three months ended September 30, 2025, a decrease of $2.4 million, from the prior year comparable period.

This decrease was primarily driven by a decrease in equity method losses associated with TailFin due to lower operating expenses year over year, as well as higher income earned from bank-owned life insurance policies.

Income Tax Expense and Benefit

The following table presents a breakdown of our effective tax rate among federal, state, and other:

Three Months Ended June 30,

Three Months Ended September 30,

federal statutory tax rate 21.0 % 21.0 %

5 unchanged sentences

Bank-owned life insurance income 1.2 (13.0)

Bank-owned life insurance surrender — (19.2)

Nondeductible expenses and penalties (0.1) 57.5

Global intangible low-tax income tax 0.2 3.0

Change in valuation allowance (7.4) —

Other (0.1) (0.1)

Effective tax rate 13.8 % 4.6 %

Our income tax benefit totaled $15.9 million for the three months ended June 30, 2025, representing an increase of $15.1 million from the prior year comparable period, primarily due to an increase in our loss before taxes and a decrease in nondeductible expenses and penalties primarily related to the tax effect associated with the civil money penalty we incurred in 2024 for our Consent Order from the Federal Reserve Board.

The increase in our effective tax rate for the three months ended June 30, 2025 from the prior year comparable period was due to several factors, including an increase of $1.7 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 $0.2 million in the amount of general business credits, and a lower tax rate benefit from bank-owned life insurance policies income.

These increases in our effective tax rate were partially offset by a decrease of $0.5 million in the tax expense associated with shortfalls from stock-based compensation, a decrease of $0.3 million in state income taxes expense, net of federal benefits, and a decrease of $14.4 million in tax expense due to nondeductible expenses and penalties discussed above for the three months ended June 30, 2025.

Our income tax benefit totaled $4.9 million for the three months ended September 30, 2025, representing an increase of $4.6 million from the prior year comparable period, primarily due to an increase in our loss before taxes and a decrease in nondeductible expenses and penalties primarily related to the tax effect associated with the civil money penalty we incurred in 2024 for our Consent Order from the Federal Reserve Board.

The increase in our effective tax rate for the three months ended September 30, 2025 from the prior year comparable period was due to several factors, including an increase of $0.2 million in the amount of compensation expense that was subject to the IRC Section 162(m) limitation on the deductibility of certain executive compensation, an increase of $2.6 million in the valuation allowance on the deferred tax assets of our China subsidiary, a lower tax rate benefit due to a decrease of $0.3 million in the amount of general business credits, and a lower tax rate benefit from bank-owned life insurance policies income.

These increases in our effective tax rate were partially offset by a decrease of $1.8 million in state income taxes expense, net of federal benefits, a decrease of $0.2 million in the tax expense associated with shortfalls from stock-based compensation, a decrease of $4.7 million in tax expense due to nondeductible expenses and penalties discussed above, and a decrease of $1.6 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.

The "Other" category in our effective tax rate consists of a variety of permanent differences, none of which were individually significant.

Comparison of Consolidated Results for the Six Months Ended June 30, 2025 and 2024

Comparison of Consolidated Results for the Nine Months Ended September 30, 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:

Six Months Ended June 30,

Nine Months Ended September 30,

Amount % of Total

8 unchanged sentences

Total operating revenues $ 1,557,876 100.0 % $ 1,268,852 100.0 %

Card Revenues and Other Fees — Card revenues and other fees totaled $757.2 million for the six months ended June 30, 2025, an increase of $189.6 million, or 33%, from the comparable prior year period.

This increase was driven principally by the same factors discussed above under “Comparison of Three-Month Periods Ended June 30, 2025 and 2024—Operating Revenues—Card Revenues and Other Fees." In addition, this net increase was further partially offset by lower breakage revenue on our gift card portfolio.

Cash Processing Revenues — Cash processing revenues totaled $167.9 million for the six months ended June 30, 2025, an increase of $4.3 million, or 3%, from the comparable prior year period.

In our Money Movement Services segment, although the number of tax refunds processed decreased by 13% during the six months ended June 30, 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.

Card Revenues and Other Fees — Card revenues and other fees totaled $1,150.2 million for the nine months ended September 30, 2025, an increase of $272.2 million, or 31%, from the comparable prior year period.

This increase was driven principally by the same factors discussed above under “Comparison of Three-Month Periods Ended September 30, 2025 and 2024—Operating Revenues—Card Revenues and Other Fees." In addition, this net increase was further partially offset by lower breakage revenue on our gift card portfolio.

Cash Processing Revenues — Cash processing revenues totaled $201.6 million for the nine months ended September 30, 2025, an increase of $3.2 million, or 2%, from the comparable prior year period.

In our Money Movement Services segment, our tax processing revenues increased from the expansion of our taxpayer advance program and a favorable mix-shift in the distribution channel in which tax refunds were generated, despite a 13% decline in the number of tax refunds processed.

The decrease in the number of tax refunds processed is principally attributable to our online tax preparation partners.

The increase in tax processing revenues was partially offset by a 6% decline in the number of cash transfers processed during the six months ended June 30, 2025 from the prior year comparable period.

The increase in tax processing revenues was partially offset by a 7% decline in the number of cash transfers processed during the nine months ended September 30, 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.

Interchange Revenues — Interchange revenues totaled $94.9 million for the six months ended June 30, 2025, a decrease of $5.7 million, or 6%, from the comparable prior year period.

The decrease was primarily due to a decrease in purchase volume of 2% and a decrease in the effective interchange rate earned as discussed under “Comparison of Three-Month Periods Ended June 30, 2025 and 2024—Operating Revenues—Interchange Revenues."

Interest Income, net — Net interest income totaled $43.1 million for the six months ended June 30, 2025, an increase of $15.7 million, or 57%, from the comparable prior year period.

This increase was driven principally by the same factors discussed above under “Comparison of Three-Month Periods Ended June 30, 2025 and 2024—Operating Revenues—Interest Income, net."

Interchange Revenues — Interchange revenues totaled $140.2 million for the nine months ended September 30, 2025, a decrease of $8.8 million, or 6%, from the comparable prior year period.

The decrease was primarily due to a decrease in purchase volume of 2% and a decrease in the effective interchange rate earned as discussed under “Comparison of Three-Month Periods Ended September 30, 2025 and 2024—Operating Revenues—Interchange Revenues."

Interest Income, net — Net interest income totaled $65.8 million for the nine months ended September 30, 2025, an increase of $22.3 million, or 51%, from the comparable prior year period.

This increase was driven principally by the same factors discussed above under “Comparison of Three-Month Periods Ended September 30, 2025 and 2024—Operating Revenues—Interest Income, net."

Operating Expenses

The following table presents a breakdown of our operating expenses among sales and marketing, compensation and benefits, processing, and other general and administrative expenses:

Six Months Ended June 30,

Nine Months Ended September 30,

Amount % of Total

7 unchanged sentences

Other general and administrative expenses 257,258 16.5 295,193 23.3

Restructuring and other charges 19,902 1.3 — —

Total operating expenses $ 1,516,563 97.3 % $ 1,284,897 101.3 %

Sales and Marketing Expenses — Sales and marketing expenses totaled $109.8 million for the six months ended June 30, 2025, a decrease of $5.5 million, or 5%, from the comparable prior year period.

This decrease was primarily driven by a decrease in supply chain materials expenses and 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.

Compensation and Benefits Expenses — Compensation and benefits expenses totaled $130.1 million for the six months ended June 30, 2025, an increase of $1.9 million, or 1%, from the comparable prior year period.

This increase was driven primarily by the same factors discussed above under “Comparison of Three-Month Periods Ended June 30, 2025 and 2024—Operating Expenses—Compensation and Benefits Expenses" and offset further by severance benefits that did not recur at the same magnitude in the current period as a result of our reduction in employee workforce in the comparable prior year period.

Processing Expenses — Processing expenses totaled $578.5 million for the six months ended June 30, 2025, an increase of $174.9 million, or 43%, from the comparable prior year period.

This increase was driven primarily by the same factors discussed above under “Comparison of Three-Month Periods Ended June 30, 2025 and 2024—Operating Expenses—Processing Expenses."

Other General and Administrative Expenses — Other general and administrative expenses totaled $170.5 million for the six months ended June 30, 2025, a decrease of $54.7 million, or 24%, from the comparable prior year period.

This decrease was driven primarily by the same factors discussed above under “Comparison of Three-Month Periods Ended June 30, 2025 and 2024—Operating Expenses—Other General and Administrative Expenses." In addition, other general and administrative expenses decreased due to the settlement payment and impairment charges related to the termination of our partnership agreement to develop a new core banking system in the prior year comparable period that did not recur in the current period.

Sales and Marketing Expenses — Sales and marketing expenses totaled $158.1 million for the nine months ended September 30, 2025, a decrease of $9.8 million, or 6%, from the comparable prior year period.

This decrease was driven primarily by the same factors discussed above under “Comparison of Three-Month Periods Ended September 30, 2025 and 2024—Operating Expenses—Sales and Marketing Expenses."

Compensation and Benefits Expenses — Compensation and benefits expenses totaled $193.5 million for the nine months ended September 30, 2025, an increase of $3.5 million, or 2%, from the comparable prior year period.

This increase was driven primarily by the same factors discussed above under “Comparison of Three-Month Periods Ended September 30, 2025 and 2024—Operating Expenses—Compensation and Benefits Expenses" as well as an increase in third-party call center support costs associated with the growth of the BaaS account programs within our B2B Services segment.

Processing Expenses — Processing expenses totaled $887.8 million for the nine months ended September 30, 2025, an increase of $256.0 million, or 41%, from the comparable prior year period.

This increase was driven primarily by the same factors discussed above under “Comparison of Three-Month Periods Ended September 30, 2025 and 2024—Operating Expenses—Processing Expenses."

Other General and Administrative Expenses — Other general and administrative expenses totaled $257.3 million for the nine months ended September 30, 2025, a decrease of $37.9 million, or 13%, from the comparable prior year period.

Restructuring and Other Charges — Restructuring and other charges totaled $19.9 million for the nine months ended September 30, 2025 and due to our previously announced restructuring plan discussed under "Overview." Additionally, refer to Note 19 — Restructuring and Other Charges in the Consolidated Financial Statements included herein for a more detailed discussion of our restructuring and other charges.

Other Expense, net

Other expense, net totaled $100.4 million for the six months ended June 30, 2025, an increase of $94.1 million, from the prior year comparable period.

This increase was driven primarily by the same factors discussed above under “Comparison of Three-Month Periods Ended June 30, 2025 and 2024—Other Expense, net." In addition, during the first quarter of 2025, we determined we would sell certain available-for-sales securities in order to reposition the proceeds into higher yielding assets, which resulted in a realized loss of $24.8 million for the six months ended June 30, 2025.

Other expense, net totaled $101.7 million for the nine months ended September 30, 2025, an increase of $91.7 million, from the prior year comparable period.

We recorded the incentive payment as a component of equity in losses attributable to TailFin during the second quarter of 2025 under our HLBV method of accounting.

These increases were partially offset by higher income earned from bank-owned life insurance policies.

Income Tax Expense and Benefit

The following table presents a breakdown of our effective tax rate among federal, state, and other:

Six Months Ended June 30,

Nine Months Ended September 30,

federal statutory tax rate 21.0 % 21.0 %

8 unchanged sentences

Global intangible low-tax income tax — (1.5)

Change in valuation allowance (4.1) —

Other (0.1) (0.1)

Effective tax rate 19.9 % (4.6) %

Our income tax benefit totaled $8.0 million for the six months ended June 30, 2025, representing an increase of $9.8 million, or 550%, from the prior year comparable period, driven primarily by the same factors discussed above under “Comparison of Three-Month Periods Ended June 30, 2025 and 2024—Income Tax Expense and Benefit."

The increase in our effective tax rate for the six months ended June 30, 2025 from the prior year comparable period was due to several factors, including an increase of $1.0 million in the amount of compensation expense that was subject to the IRC 162(m) limitation on the deductibility of certain executive compensation, a reduced tax rate benefit due to a decrease of $0.6 million in general business credits, an increase of $0.9 million in state income taxes expense, net of federal benefits, and a lower tax rate benefit from the cash surrender value in bank-owned life insurance policies.

These increases were partially offset by a decrease of $0.8 million in tax expense associated with shortfalls from stock-based compensation, a decrease of $0.7 million related to bank-owned life insurance surrender penalties we incurred in connection with the surrender and restructuring of our existing bank-owned life insurance policies in 2024, and a decrease of $14.5 million in tax expense from nondeductible expenses and penalties associated with the civil money penalty we incurred in 2024 for our Consent Order.

Our income tax benefit totaled $12.9 million for the nine months ended September 30, 2025, representing an increase of $14.4 million from the prior year comparable period, driven primarily by the same factors discussed above under “Comparison of Three-Month Periods Ended September 30, 2025 and 2024—Income Tax Expense and Benefit."

The increase in our effective tax rate for the nine months ended September 30, 2025 from the prior year comparable period was due to several factors, including a reduced tax rate benefit due to an increase of $0.8 million in the amount of compensation expense that was subject to the IRC 162(m) limitation on the deductibility of certain executive compensation, a decrease of $1.0 million in general business credits, an increase of $2.6 million in the valuation allowance on the deferred tax assets of our China subsidiary, and a lower tax rate benefit from the cash surrender value in bank-owned life insurance policies.

These increases were partially offset by a decrease of $0.9 million in state income taxes expense, net of federal benefits, a decrease of $1.2 million in tax expense associated with shortfalls from stock-based compensation, a decrease of $2.3 million related to bank-owned life insurance surrender penalties we incurred in connection with the surrender and restructuring of our existing bank-owned life insurance policies in 2024, and a decrease of $9.7 million in tax expense from nondeductible expenses and penalties associated with the civil money penalty we incurred in 2024 for our Consent Order.

The "Other" category in our effective tax rate consists of a variety of permanent differences, none of which were individually significant.

Segment Results

Consumer Services

The results of operations and key metrics of our Consumer Services segment for the three and six months ended June 30, 2025 and 2024 were as follows:

Three Months Ended June 30, Six Months Ended June 30,

The results of operations and key metrics of our B2B Services segment for the three and nine months ended September 30, 2025 and 2024 were as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 Change % 2025 2024 Change %

7 unchanged sentences

Number of active accounts* 1.89 1.68 0.21 12.5 % n/a n/a n/a n/a

Direct deposit active accounts* 0.41 0.45 (0.04) (8.9) % n/a n/a n/a n/a

Purchase volume $ 2,006 $ 1,983 $ 23 1.2 % $ 5,992 $ 5,894 $ 98 1.7 %

* Represents total number of active and direct deposit active accounts as of June 30, 2025 and 2024, respectively.

As additional supplemental information, our key metrics within our Consumer Services segment is presented on a quarterly basis as follows:

Q2 Q1 Q4 Q3 Q2 Q1

* Represents total number of active accounts as of September 30, 2025 and 2024, respectively.

As additional supplemental information, our key metrics within our B2B Services segment is presented on a quarterly basis as follows:

Q3 Q2 Q1 Q4 Q3 Q2 Q1

(In millions)

1 unchanged sentence

Number of active accounts* 1.89 1.81 1.78 1.79 1.68 1.65 1.58

Direct deposit active accounts * 0.41 0.41 0.43 0.44 0.45 0.46

Purchase volume $ 2,006 $ 2,000 $ 1,986 $ 2,070 $ 1,983 $ 1,976 $ 1,935

* Represents total number of active accounts as of the end of each quarter.

Segment revenues within Consumer Services for the three and six months ended June 30, 2025 decreased $3.5 million, or 4%, and $8.9 million, or 5%, respectively, from the prior year comparable periods, while our segment expenses for the three and six months ended June 30, 2025 decreased by $2.2 million, or 3%, and $7.9 million, or 6%, respectively.

Our gross dollar volume and purchase volume declined by 2% and 1%, respectively, for the three months ended June 30, 2025, and the number of active accounts and direct deposit accounts declined by 5% and 9%, respectively, from the comparable prior year periods, 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 account acquisition.

Our gross dollar volume and purchase volume decreased year-over-year by similar levels during the six months ended June 30, 2025.

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.

In addition, our interchange rate declined due to a mix-shift toward categories of consumer purchases with lower effective rates for the comparable period, and a lower average spend per transaction.

Segment expenses for the three and six months ended June 30, 2025 decreased from the comparable prior year periods 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 supply chain material expenses due to lower active accounts, partially offset by an increase in sales commissions from higher revenues on products subject to tiered revenue-sharing agreements.

Overall, segment profit decreased for the three and six months ended June 30, 2025 by approximately 4% and 1%, respectively, from the prior year comparable periods.

The results of operations and key metrics of our B2B Services segment for the three and six months ended June 30, 2025 and 2024 were as follows:

Three Months Ended June 30, Six Months Ended June 30,

Segment revenues within our B2B Services for the three and nine months ended September 30, 2025 increased $87.8 million, or 32%, and $285.2 million, or 37%, respectively, over the prior year comparable periods, while our segment expenses for the three and nine months ended September 30, 2025 increased $86.0 million, or 35%, and $265.6 million, or 38%, respectively.

Our gross dollar volume, purchase volume, and number of active accounts increased during the three months ended September 30, 2025 by 22%, 1%, and 13%, respectively, over the prior year comparable period.

Our gross dollar volume and purchase volume increased year-over-year by similar levels during the nine months ended September 30, 2025.

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.

Segment expenses increased for the three and nine months ended September 30, 2025 over the prior year comparable periods, principally due to higher processing expenses associated with the growth of certain BaaS account programs.

Additionally, segment expenses increased for the three months ended September 30, 2025 over the prior year comparable period from higher transaction losses due to increases in our dispute loss rates and dollar volume and higher third-party call center support costs as a result of increases in gross dollar volume and the number of active accounts.

Segment expenses for the nine months ended September 30, 2025 was driven by these same factors, however, our transaction losses decreased slightly due to favorable reductions in our dispute loss rates on a full year basis.

As a result of these factors, our segment profit increased for the three and nine months ended September 30, 2025 by approximately 7% and 30%, respectively, over the prior year comparable periods.

Although limited, our segment profit increased year-over-year from improvement in our cost structure and revised economics of certain partnerships, despite the impact of certain BaaS partnerships largely providing for a fixed profit.

Consumer Services

The results of operations and key metrics of our Consumer Services segment for the three and nine months ended September 30, 2025 and 2024 were as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 Change % 2025 2024 Change %

7 unchanged sentences

Number of active accounts* 1.62 1.78 (0.16) (9.0) % n/a n/a n/a n/a

Direct deposit active accounts* 0.40 0.44 (0.04) (9.1) % n/a n/a n/a n/a

Purchase volume $ 2,730 $ 2,904 $ (174) (6.0) % $ 8,848 $ 9,279 $ (431) (4.6) %

* Represents total number of active accounts as of June 30, 2025 and 2024, respectively.

As additional supplemental information, our key metrics within our B2B Services segment is presented on a quarterly basis as follows:

Q2 Q1 Q4 Q3 Q2 Q1

* Represents total number of active and direct deposit active accounts as of September 30, 2025 and 2024, respectively.

As additional supplemental information, our key metrics within our Consumer Services segment is presented on a quarterly basis as follows:

Q3 Q2 Q1 Q4 Q3 Q2 Q1

(In millions)

1 unchanged sentence

Number of active accounts * 1.62 1.67 1.80 1.88 1.78 1.76 1.93

Direct deposit active accounts * 0.40 0.41 0.41 0.43 0.44 0.45 0.46

Purchase volume $ 2,730 $ 2,991 $ 3,127 $ 3,082 $ 2,904 $ 3,036 $ 3,339

* Represents total number of active accounts as of the end of each quarter.

Segment revenues within our B2B Services for the three and six months ended June 30, 2025 increased $96.6 million, or 38%, and $197.4 million, or 40%, respectively, compared to the prior year periods, while our segment expenses for the three and six months ended June 30, 2025 increased $87.7 million, or 38%, and $179.6 million, or 39%, respectively.

Our gross dollar volume, purchase volume, and number of active accounts increased during the three months ended June 30, 2025 by 23%, 1%, and 10%, respectively, from the prior year comparable period.

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.

Segment expenses increased for the three and six months ended June 30, 2025 from the comparable prior year periods, 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.

As a result of these factors, our segment profit increased for the three and six months ended June 30, 2025 by approximately 47% and 48%, respectively, from the prior year comparable periods.

Although limited, our segment profit margin increased year-over-year from improvement in our cost structure and revised economics of certain partnerships, despite the impact of certain BaaS partnerships largely providing for a fixed profit.

Segment revenues within Consumer Services for the three and nine months ended September 30, 2025 decreased $9.7 million, or 10%, and $18.6 million, or 6%, respectively, from the prior year comparable periods, while our segment expenses for the three and nine months ended September 30, 2025 decreased by $2.0 million, or 3%, and $9.9 million, or 5%, respectively.

Our gross dollar volume and purchase volume declined by 9% and 6%, respectively, for the three months ended September 30, 2025, and both the number of active accounts and direct deposit accounts declined by 9% from the prior year comparable periods, 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 account acquisition.

Our gross dollar volume and purchase volume decreased year-over-year by similar levels during the nine months ended September 30, 2025.

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.

In addition, our interchange rate declined due to a mix-shift toward categories of consumer purchases with lower effective rates for the comparable period, and a lower average spend per transaction.

Segment expenses for the three and nine months ended September 30, 2025 decreased from the comparable prior year periods 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 supply chain material expenses due to fewer active accounts, partially offset by an increase in sales commissions from higher revenues on products subject to tiered revenue-sharing agreements.

Overall, segment profit decreased for the three and nine months ended September 30, 2025 by approximately 19% and 8%, respectively, from the prior year comparable periods.

Money Movement Services

The results of operations and key metrics of our Money Movement Services segment for the three and six months ended June 30, 2025 and 2024 were as follows:

Three Months Ended June 30, Six Months Ended June 30,

The results of operations and key metrics of our Money Movement Services segment for the three and nine months ended September 30, 2025 and 2024 were as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 Change % 2025 2024 Change %

8 unchanged sentences

As additional supplemental information, our key metrics within our Money Movement Services segment is presented on a quarterly basis as follows:

Q2 Q1 Q4 Q3 Q2 Q1

Q3 Q2 Q1 Q4 Q3 Q2 Q1

(In millions)

1 unchanged sentence

Number of tax refunds processed 0.20 3.73 7.98 0.15 0.19 4.20 9.28

Segment revenues within our Money Movement services for the three months ended June 30, 2025 decreased $2.1 million, or 4%, and for the six months ended June 30, 2025 increased $5.0 million, or 3%, from the comparable prior year periods.

Segment expenses for the three and six months ended June 30, 2025 decreased $0.9 million, or 5%, and $4.8 million, or 9%, respectively.

The decrease in segment revenues for the three months ended June 30, 2025 was driven by lower tax processing revenues due to an 11% decrease in the number of tax refunds processed and from lower ancillary tax program fees that are associated with tax refund transfers.

The decrease in the number of tax refunds processed is principally attributable to our online tax preparation partners.

The decline in the number of cash transfers processed was due to a lower number of active accounts within our Consumer Services segment.

The increase in segment revenues for the six months ended June 30, 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.

These increases were partially offset by a 6% decline in the number of cash transfers processed during the six months ended June 30, 2025 from the prior year comparable period.

The decline in the number of cash transfers processed was due to the same reasons discussed above.

Segment expenses decreased during the three and six months ended June 30, 2025 primarily due to a decrease in revenue-sharing arrangements in our tax processing business.

Segment revenues within our Money Movement services for the three months ended September 30, 2025 decreased $2.0 million, or 6%, and for the nine months ended September 30, 2025 increased $2.9 million, or 2%, from the prior year comparable periods.

Segment expenses for the three and nine months ended September 30, 2025 decreased $2.2 million, or 12%, and $7.0 million, or 9%, respectively.

The decrease in segment revenues for the three months ended September 30, 2025 was driven by a decrease in our cash transfer revenues due to a 10% decrease in the number of cash transfers processed.

The decline in the number of cash transfers processed was due to a lower number of active accounts within our Consumer Services segment and to a lesser extent, a lower number of cash transfers processed for third-party programs.

The decrease was partially offset by slightly higher tax processing revenues due to an 3% increase in the number of tax refunds processed and from higher ancillary tax program fees that are associated with tax refund transfers.

The increase in segment revenues for the nine months ended September 30, 2025 was driven by higher tax processing revenues, which increased due to the expansion of our taxpayer advance program and a favorable mix-shift in the distribution channel in which tax refunds were generated, despite a 13% decline in the number of tax refunds processed.

The decrease in the number of tax refunds processed during the nine months ended September 30, 2025 was principally attributable to our online tax preparation partners.

These increases were partially offset by a 7% decline in the number of cash transfers processed during the nine months ended September 30, 2025 from the prior year comparable period, which was attributable to the same reasons discussed above.

Segment expenses decreased during the three and nine months ended September 30, 2025 primarily due to a decrease in revenue-sharing arrangements in our tax processing business.

Overall, segment profit increased for the three and nine months ended September 30, 2025 by approximately 1% and 9%, respectively, from the prior year comparable periods.

Corporate and Other

The results of operations and key metrics of our Corporate and Other segment for the three and six months ended June 30, 2025 and 2024 were as follows:

Three Months Ended June 30, Six Months Ended June 30,

The results of operations and key metrics of our Corporate and Other segment for the three and nine months ended September 30, 2025 and 2024 were as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 Change % 2025 2024 Change %

9 unchanged sentences

Refer to Note 20—Segment Information to the Consolidated Financial Statements included herein for a summary reconciliation.

Revenues within our Corporate and Other segment were driven primarily by an increase in net interest income, which increased by 46% and 57% for the three and six months ended June 30, 2025, respectively, from the prior year comparable periods.

The increase in net interest income was primarily the result of yields earned from an increase in cash from deposit programs with our partners and net proceeds from investment securities sold, and to a lesser extent higher yielding investments from our bond repositioning strategy, partially offset by an increase in interest shared with certain BaaS partners (a reduction of revenue).

Unallocated corporate expenses for the three months ended June 30, 2025 increased by approximately 5% and for the six months ended June 30, 2025 decreased by approximately 2%, over the prior year comparable periods.

The increase in unallocated corporate expenses for the three months ended June 30, 2025 was driven primarily by an increase in accrued bonus compensation expense due to our current financial performance relative to our annual

targets and higher software licenses and hosting costs due to investments in our platform and operations, partially offset by a decrease from lower professional services fees related to our AML programs due to the year-over-year timing of spend on certain initiatives.

The net decrease for the six months ended June 30, 2025 was impacted by these same factors, and driven lower primarily from professional services fees related to our AML programs.

Revenues within our Corporate and Other segment were driven primarily by an increase in net interest income, which increased by 41% and 51% for the three and nine months ended September 30, 2025, respectively, from the

prior year comparable periods.

The increase in net interest income was primarily the result of yields earned from an increase in cash from deposit programs with our partners and to a lesser extent higher yielding investments from our bond repositioning strategy, and a decrease in interest shared with certain BaaS partners (a reduction of revenue).

Unallocated corporate expenses for the three and nine months ended September 30, 2025 increased by approximately 17% and 4%, respectively, over the prior year comparable periods.

The increase in unallocated corporate expenses for the three months ended September 30, 2025 was driven primarily by an increase in accrued bonus compensation expense due to our current financial performance relative to our annual targets and higher software licenses and hosting costs due to investments in our platform and operations, and higher professional services fees related to our AML regulatory compliance initiatives.

The net increase for the nine months ended September 30, 2025 was impacted by these same factors, partially offset by a decrease from lower professional services fees related to our AML programs due to the year-over-year timing of spend on certain initiatives.

Liquidity and Capital Resources

The following table summarizes our major sources and uses of cash for the periods presented:

Six Months Ended June 30,

Nine Months Ended September 30,

(In thousands)

Total cash provided by

Total cash provided by (used in)

Operating activities $ 201,027 $ 104,395

2 unchanged sentences

Increase in unrestricted cash, cash equivalents and restricted cash $ 44,930 $ 767,091

For the six months ended June 30, 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.

As of June 30, 2025, our primary source of liquidity was unrestricted cash and cash equivalents totaling $2.3 billion.

For the nine months ended September 30, 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.

As of September 30, 2025, our primary source of liquidity was unrestricted cash and cash equivalents totaling $1.6 billion.

We also consider our $2.3 billion of available-for-sale investment securities to be highly liquid instruments.

4 unchanged sentences

Cash Flows from Operating Activities

Our $177.7 million of net cash provided by operating activities during the six months ended June 30, 2025 was the result of $21.3 million of net loss, adjusted for certain non-cash operating items of $173.1 million and increases in net changes in our working capital assets and liabilities of $25.8 million.

Our $120.7 million of net cash provided by operating activities during the six months ended June 30, 2024 was the result of $24.0 million of net loss, adjusted for certain non-cash operating items of $97.4 million and increases in net changes in our working capital assets and liabilities of $47.2 million, attributable primarily to the timing of the accrual related to our Consent Order from the Federal Reserve Board and the collection of fee advances outstanding as of the beginning of the year.

Our $201.0 million of net cash provided by operating activities during the nine months ended September 30, 2025 was the result of $52.0 million of net loss, adjusted for certain non-cash operating items of $211.5 million and increases in net changes in our working capital assets and liabilities of $41.6 million.

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 included the payment of $44 million for the civil money penalty included in our Consent Order.

Cash Flows from Investing Activities

Our $501.7 million of net cash provided by investing activities during the six months ended June 30, 2025 was primarily due to proceeds from sales and maturities of available-for-sale securities, net of purchases, of $558.9 million, partially offset by the acquisition of property and equipment of $38.9 million and net changes in loans of $17.4 million.

Our $7.8 million of net cash provided by investing activities during the six months ended June 30, 2024 was primarily due to net proceeds from maturities of available-for-sale securities of $94.8 million, partially offset by capital contributions related to our investment in TailFin of $35.0 million, the acquisition of property and equipment of $31.5 million and net changes in loans of $20.2 million.

Our final payment under our commitment with TailFin was made in January 2024.

Our $287.5 million of net cash used in investing activities during the nine months ended September 30, 2025 was primarily due to purchases of available-for-sale securities, net of proceeds from sales and maturities, of $206.4 million, and to a lesser extent by the acquisition of property and equipment of $58.7 million and net changes in loans of $20.3 million.

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.

Our final payment under our commitment with TailFin Labs, LLC was made in January 2024.

Cash Flows from Financing Activities

Our $40.8 million of net cash provided by financing activities during the six months ended June 30, 2025 was principally the result of a net increase in customer deposits of $86.3 million and borrowings on our notes payable $14.9 million , partially offset by a net decrease in obligations to customers of $60.0 million.

Our $131.4 million of net cash provided by financing activities during the nine months ended September 30, 2025 was principally the result of a net increase in customer deposits of $204.0 million and borrowings on our notes payable $14.9 million , partially offset by a net decrease in obligations to customers of $86.7 million.

Refer to additional discussion below for our borrowings and repayments of debt.

Our $502.3 million of net cash provided by financing activities during the six months ended June 30, 2024 was principally the result of a net increase in customer deposits of $613.3 million, partially offset by a net decrease of $113.0 million in obligations to customers.

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.

Other Sources of Liquidity

8 unchanged sentences

Interest payments are due monthly, and accrue based on the then-outstanding principal balance.

We had no outstanding balance as of June 30, 2025.

We had no outstanding balance as of September 30, 2025.

2019 Revolving Facility

11 unchanged sentences

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.

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 our capital expenditures in 2025 to be 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.

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.

with our regulators.

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

There have been no material changes during the six months ended June 30, 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.

There have been no material changes during the nine months ended September 30, 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.

As of June 30, 2025 and December 31, 2024, we and Green Dot Bank were categorized as "well-capitalized" under applicable regulatory standards.

As of September 30, 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.

There were no conditions or events since June 30, 2025 which management believes would have changed our category as "well-capitalized."

There were no conditions or events since September 30, 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

The actual amounts and ratios, and required "well-capitalized" minimum capital amounts and ratios at June 30, 2025 and December 31, 2024 were as follows:

June 30, 2025

The actual amounts and ratios, and required "well-capitalized" minimum capital amounts and ratios at September 30, 2025 and December 31, 2024 were as follows:

September 30, 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.

What changed 10-Q

Item 2. Management’s Discussion and Analysis