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Item 7. Management’s Discussion and Analysis

2026-03-16 compared with 2025-03-04 · 187 added, 129 removed, 539 unchanged (37% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Annual Report on Form 10-K, including this Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933, as amended, (the "Securities Act") and the Securities Exchange Act of 1934, as amended, (the “Exchange Act”).

All statements other than statements of historical facts are statements that could be deemed to be forward-looking statements.

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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.

Refer to " Part I, Item 1.

Business " for more detailed information about our operations and Note 24—Segment Information to the Consolidated Financial Statements.

Business " for more detailed information about our operations and Note 25—Segment Information to the Consolidated Financial Statements included herein.

Proposed Transactions with CommerceOne Financial Corporation and Smith Ventures, LLC

In connection with a strategic review process we commenced in March 2025 (our “strategic review process”), on November 23, 2025, we entered into an Agreement and Plan of Merger (the “Merger Agreement”), with CommerceOne Financial Corporation, an Alabama corporation (“CommerceOne”), Compass Sub North, Inc., a newly formed Delaware corporation and a direct, wholly owned subsidiary of CommerceOne (“New CommerceOne”), Compass Sub East, Inc., a newly formed Delaware corporation and a direct, wholly owned subsidiary of New CommerceOne (“Merger Sub One”), and Compass Sub West, Inc., a newly formed Delaware corporation and an indirect, wholly owned subsidiary of New CommerceOne (“Merger Sub Two”), pursuant to which, upon the terms and subject to the conditions therein, (i) Merger Sub One will merge with and into CommerceOne, with CommerceOne surviving (the “CommerceOne Merger”), and Merger Sub Two will merge with and into Green Dot Corporation, with Green Dot Corporation surviving (the “Green Dot Merger,” and together with the CommerceOne Merger, the “First Mergers”);

and (ii) following the First Mergers, CommerceOne will merge with and into New CommerceOne, with New CommerceOne surviving under the name “CommerceOne Financial Corporation” (together with the First Mergers, the “Mergers”).

Subject to the terms and conditions of the Merger Agreement, at the effective time of the First Mergers (the “First Effective Time”), each share of common stock of Green Dot Corporation, issued and outstanding immediately prior to the First Effective Time, other than certain excluded shares held by us, CommerceOne, New CommerceOne or our dissenting stockholders, will be converted into the right to receive (i) 0.2215 shares of the common stock of New CommerceOne and (ii) an amount in cash equal to $8.11 (the “Per Share Cash Consideration”), less any withholding and without interest.

Also on November 23, 2025, we entered into a separation agreement (the “Separation Agreement”), with New CommerceOne and Green Dot OpCo, LLC, a newly formed Delaware limited liability company and affiliate of Smith Ventures LLC, an Alabama limited liability company (“Payments Buyer”), pursuant to which, upon the terms and subject to the conditions therein, following the First Mergers, (i) Green Dot Corporation will convert into a limited liability company, (ii) Green Dot Corporation will distribute the stock of Green Dot Bank to Compass Sub Northwest, Inc., a Delaware corporation and direct, wholly owned subsidiary of New CommerceOne, and (iii) Payments Buyer will acquire Green Dot Corporation and its non-bank financial technology and related assets and operations (the “Payments Business”) for $690 million (the “Payments Sale”), the proceeds of which will be paid to New CommerceOne and are expected to be used to fund the Per Share Cash Consideration and to retire certain indebtedness of Green Dot Corporation.

The Merger Agreement and the Separation Agreement were unanimously approved by our Board of Directors.

The closing of the transactions contemplated by the Merger Agreement and the Separation Agreement remains subject to the receipt of required regulatory approvals, approval by the stockholders of Green Dot Corporation and CommerceOne and the satisfaction of other customary closing conditions.

For additional information regarding potential risks and uncertainties associated with such transactions, please see Part I, Item 1A, Risk Factors above.

Consolidated Financial Results and Trends

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Total operating expenses 2,066,832 1,725,544 341,288 19.8 %

Net (loss) income (26,702) 6,722 (33,424) (497.2) %

Net loss (98,866) (26,702) (72,164) 270.3 %

Refer to "Segment Results" below for a summary of financial results of each of our reportable segments.

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Our total operating revenues for the year ended December 31, 2025 increased $356.6 million , or 21% over the prior year comparable period, driven primarily by higher revenues in our B2B Services segment and to a lesser extent in our Money Movement Services segment, partially offset by lower revenues earned in our Consumer Services segment.

Our consolidated total operating revenues increased year-over-year due to the continued growth of certain BaaS partner programs, which generated an increase in our total gross dollar volume of 33% for the year ended December 31, 2024.

However, as discussed below, our total operating revenues were negatively impacted by unfavorable trends and factors in our deposit account programs that reduced the average number of consolidated active accounts, purchase volume and number of cash transfers for the year ended December 31, 2024 by 5% , 10% and 5%, respectively, from the prior year comparable period.

In our Consumer Services segment, revenues decreased during the year ended December 31, 2024 by 19% from the prior year comparable period.

Gross dollar volume and purchase volume declined for the year ended December 31, 2024 by 16% and 19%, respectively, and the average number of active accounts and direct deposit accounts for the fiscal year declined by 18% and 19%, respectively.

We believe these decreases in our Consumer Services segment are attributable to several factors, including our decision to wind-down many of our legacy accountholder programs in support of GO2bank, macro-economic factors affecting consumer behavior and other competitive trends that have impacted acquisition at retail locations, and the non-renewal of one of our retail partner programs in a prior period.

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

Revenues within this segment were also adversely impacted by a decrease in breakage revenue on our gift card portfolios for the comparable period.

In our B2B Services segment, revenues increased by 40% during the year ended December 31, 2024 over the prior year comparable period.

The increase was driven by strong year-over-year growth in our gross dollar volume, which increased during the year ended December 31, 2024 by 45%, and to a lesser extent, growth in purchase volume, which also increased year-over-year by 9%.

Continued growth of certain BaaS partner programs generated an increase of 18% in our total gross dollar volume for the year ended December 31, 2025 over the prior year comparable period, which increased our total operating revenues year-over-year.

However, as discussed below, our total operating revenues for the year ended December 31, 2025 were negatively impacted by unfavorable trends and factors in certain deposit account programs, driving, among other things, a small reduction in the average number of consolidated active accounts, and a decrease in purchase volume and number of cash transfers of 4%, and 8%, respectively, from the prior year comparable period.

In our B2B Services segment, revenues increased during the year ended December 31, 2025 by 33% over the prior year comparable period.

The increase was driven by strong year-over-year growth in our gross dollar volume, which increased during the year ended December 31, 2025 by 22%, and to a lesser extent, growth in purchase volume, which increased year-over-year by 1%.

The average number of active accounts for the year ended December 31, 2025 increased by 11% 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, partially offset by the non-renewals of certain other BaaS partners in prior periods.

In our Consumer Services segment, revenues decreased during the year ended December 31, 2025 by 9% from the prior year comparable period.

Gross dollar volume and purchase volume each declined for the year ended

December 31, 2025 by 7%, and the average number of active accounts and direct deposit accounts for the fiscal year declined by 10%.

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 acquisition at retail locations.

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.

Revenues within this segment were also adversely impacted by a decrease in breakage revenue on our gift card portfolio for the comparable period, as the program has been discontinued.

In our Money Movement Services segment, revenues increased for the year ended December 31, 2025 by 3% from the prior year comparable period.

The increase in revenues 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 2% during the year ended December 31, 2024, our tax processing revenues increased due to a favorable mix-shift in the distribution channel in which the tax refund was processed and from the expansion of our taxpayer advance programs.

These increases were partially offset by a 5% decline in the number of cash transfers processed during the year ended December 31, 2024 from the prior year comparable period.

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

Although the number of tax refunds processed decreased by 13% during the year ended December 31, 2025, 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 was principally attributable to the performance of our online tax preparation partners.

These increases in tax processing revenues was partially offset by an 8% decline in the number of cash transfers processed during the year ended December 31, 2025 from the prior year comparable 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 as 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 December 31, 2024.

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, as the majority of our total cash transfers were attributable to these programs as of December 31, 2025.

Revenues within our Corporate and Other segment were driven primarily by net interest income earned by Green Dot Bank, which increased by 44% for the year ended December 31, 2025 from the prior year comparable period.

The increase in net interest income was the result of an increase in cash from deposit programs with our partners and yields earned at the Federal Reserve, partially offset by an increase in interest shared with certain BaaS partners (a reduction of revenue).

The increase in net interest income was primarily the result of yields earned from an increase in cash from deposit programs with our partners, 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 year ended December 31, 2025 increased $341.3 million, or 20%, over the prior year comparable period.

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

The increase in our processing expenses for the year ended December 31, 2024 was driven primarily by the growth in gross dollar volume associated with certain BaaS account programs within our B2B Services segment discussed above, partially offset by reductions in processor costs realized from the migration to our in-licensed card management system.

Our total operating expenses also increased due to an increase in compensation and benefits expenses, driven primarily by an increase in third-party call center support costs associated with the growth of the BaaS account programs, as discussed above, and higher accrued bonus compensation expense, partially offset by lower salary and wages driven by the reduction in employee workforce we initiated in February 2024 (the "Headcount Reduction") and lower employee stock-based compensation expense, primarily due to fluctuations in the expected achievement of certain performance-based equity awards.

Other general and administrative expenses increased during the year ended December 31, 2024 due to a civil money penalty paid, as discussed further below, higher professional services fees related to our anti-money laundering program ("AML") programs, including improvements to our compliance controls, policies and procedures, and the settlement payment and impairment charges related to internal-use software and other related assets associated with the termination of our partnership agreement to develop a new core banking system.

These increases in other general and administrative expenses were partially offset by a decrease in overall transaction losses attributable to a decrease in the amount of customer dispute volume across our portfolios and favorable reductions in our dispute loss rates, as well as lower losses from purchase overdraft transactions.

These increases in total operating expenses were partially offset by lower sales and marketing expenses, principally due to decreases in sales commissions due to lower revenues generated from certain products that are subject to tiered revenue-sharing agreements, and to a lesser extent, reduced marketing spend within our Consumer Services segment.

On July 19, 2024, we and our subsidiary bank entered into a consent order (the "Consent Order") with the Federal Reserve Board relating principally to various aspects of compliance risk management, including consumer compliance and compliance with anti-money laundering regulations.

Included in the Consent Order was a civil money penalty related to these issues in the amount of $44 million which was subsequently paid in July 2024.

We previously accrued an estimated liability of $20 million related to the Consent Order during the three months ended December 31, 2023, and the remaining portion was accrued during the three months ended June 30, 2024.

For further discussion, see the headings " As a bank holding company, we are subject to extensive and potentially changing regulation and are required to serve as a source of strength for Green Dot Bank " and “ Litigation or investigations could result in significant settlements, sanctions, fines or penalties ” included as part of our risk factor disclosures in Part I, Item 1A, "Risk Factors."

The increase in our total operating expenses was driven primarily by an increase in processing expenses from the growth in gross dollar volume associated with certain BaaS account programs within our B2B Services segment, which is discussed above.

To a lesser extent, our total operating expenses increased due to a net increase in our compensation and benefits expenses, driven primarily by higher accrued bonus compensation expense due to our current financial performance relative to annual performance targets, as well as an increase in third-party call center support costs associated with the growth of our BaaS account programs discussed above, partially offset by a decrease in employee stock-based compensation expense due to forfeitures of awards and a decrease in salary and wage expenses due to the closure of our China operations announced in September 2025.

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

The increases in total operating expenses were partially offset by lower other general and administrative expenses, which decreased due to several factors, including 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, 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 also did not recur, and a decrease in overall transaction losses attributable to lower customer dispute volume across our portfolios and favorable reductions in our dispute loss rates.

These decreases in other general and administrative expenses were partially offset by higher professional services fees associated with our strategic review process, the proposed transactions with CommerceOne and Smith Ventures, and our anti-money laundering ("AML") regulatory compliance initiatives, an increase in software licenses and hosting costs due to investments in our platform and operations, and an increase in federal deposit insurance due to higher deposit balances and the rates we pay thereon.

Additionally, sales and marketing expenses decreased, 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, and a decrease in revenue-sharing arrangements in our Money Movement business primarily due to a decrease in cash transfer revenues.

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.

result of this transition, we recorded restructuring and other charges of approximately $22.1 million during the year ended December 31, 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 our restructuring activities were completed during the fourth quarter of 2025, and all significant expenses we expected to incur from this plan were paid prior to December 31, 2025.

Other expense, net

Other expense, net for the year ended December 31, 2025 increased $89.4 million from the prior year comparable period.

The increase in other expense, net was driven primarily by an increase in equity method losses associated with TailFin Labs, LLC ("TailFin") due to a $70 million incentive payment made by TailFin in connection with our extension of the Walmart MoneyCard program and related agreements in the second quarter of 2025.

In addition, we sold certain available-for-sales securities during the first half of the year in order to reposition the proceeds into higher yielding assets, which resulted in a realized loss of $24.8 million for the year ended December 31, 2025.

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

Our income tax expense for the year ended December 31, 2025 decreased $2.6 million, or 62%, from the prior year comparable period.

The decrease in our income tax expense was due primarily to a decrease in our pre-taxable income.

The decrease in our income tax expense was primarily due to an increase in our pre-tax loss for the year ended December 31, 2025.

Our effective tax rate for the years ended December 31, 2025 and 2024 was (1.6)% and (18.5)%, respectively.

The decrease in our effective tax rate was primarily attributable to a decrease in state income taxes expense, net of federal benefits, the impact of general business credits, and a reduction in the amount of compensation expense that was subject to the Internal Revenue Code (the "IRC") Section 162(m) limitation on the deductibility of certain executive compensation.

These decreases were partially offset by incremental taxes and penalties ("surrender penalties") we incurred in connection with the surrender and restructuring of our existing bank owned life insurance policies, an increase in the valuation allowance on a portion of our unrealized loss on equity securities, an increase in tax expense associated with shortfalls from stock-based compensation, and an increase in tax expense due to nondeductible expenses and penalties.

The increase in nondeductible expenses and penalties for the year ended December 31, 2024 is primarily related to the tax effect associated with the civil money penalty for the Consent Order.

The increase in our effective tax rate was primarily attributable to an increase in the amount of compensation expense subject to the IRC 162(m) limitation on the deductibility of certain executive compensation, a decrease in research and development tax credits, an increase in the valuation allowance on the deferred tax assets of our China subsidiary, an increase in nondeductible transaction related costs, an increase in tax expense from our examination settlement with the Internal Revenue Service ("IRS"), and an increase in state income tax expense, net of federal benefits, primarily resulting from an increase in the valuation allowance on state deferred tax assets related to state business credits and certain state net operating loss carryforwards.

These increases were partially offset by a decrease in the expense related to tax shortfalls from stock-based compensation, a decrease in tax expense from nondeductible penalties associated with the civil money penalty incurred in 2024 for our Consent Order from the Federal Reserve Board, an increase in the cash surrender value of our banked owned life insurances policies, a decrease in the reserve on our unrecognized tax benefits, and a decrease in 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.

On July 4, 2025, H.R.

1, commonly referred to as the “One Big Beautiful Bill Act" (“OBBBA”) was signed into law, enacting significant changes to the U.S.

federal tax code with various effective dates from 2025 to 2027.

The OBBBA introduced several significant provisions impacting us, including an elective deduction for domestic research expenditures and reinstatement of elective 100% first year bonus depreciation.

These provisions of the OBBBA primarily affected the timing and the mix of current versus deferred income tax expense, and were not material to total income tax expense for the year ended December 31, 2025.

In December 2021, the Organization for Economic Cooperation and Development ("OECD") released model rules introducing a 15% global minimum tax rate for large multinational corporations ("Pillar Two").

Certain countries in which we operate have enacted legislation consistent with the OECD model rules effective beginning in 2024.

We are monitoring legislative developments and continuing to evaluate the potential impact of Pillar Two on our

consolidated financial statements, but we do not expect that it will have a material impact on our results of operations in future periods.

Our foreign subsidiary operated in China, which enacted legislation consistent with the OECD model rules effective beginning in 2024.

The results of this legislation did not have a material impact on the Consolidated Financial Statements included herein.

We are monitoring further legislative developments and continuing to evaluate the potential future impact of Pillar Two on our consolidated financial statements, but do not expect it will have any material impact on our results of operations in future periods.

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, we expect our results of operations will stabilize on a year-over-year basis in 2025 based on our anticipated initiatives and cost reduction measures we have implemented.

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 impacts from the proposed transactions with CommerceOne and Smith Ventures and other 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 2026 based on our anticipated initiatives and cost-reduction measures we have implemented.

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

Our growth-oriented investments are focused on, among other things, cost-effectively re-engaging in strategic marketing initiatives in support of our GO2bank product and other initiatives across our account programs with the objective of returning to active account growth.

We have seen reductions in our processing expenses from our processor conversion and expect the implementation of our card management platform will allow us to continue to realize reductions in our processing expenses as we seek to expand account programs.

Despite the meaningful reductions to our cost structure we have achieved across our organization through our various initiatives, we are incurring increased expenses in other areas, as we have incurred additional expenses in connection with our continued investments in our AML program, including improvements to our compliance controls, policies and procedures.

We believe these investments will ultimately help us to continue to remediate matters identified in the Consent Order and mitigate and reduce our fraud losses over the long term.

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.

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 implementing 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 are benefiting from synergies achieved through our processor conversion in 2024 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 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 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 in our cost structure that we have achieved across our organization through our various completed and ongoing initiatives, we are incurring increased expenses in other areas as we endeavor to complete the proposed transactions with CommerceOne and Smith Ventures, incur or accrue for additional retention and officer compensation expenses and incur expenses in connection with our ongoing investments in our AML program, including improvements to our compliance controls, policies and procedures.

We believe investments in our AML program will ultimately help us continue to remediate matters identified, 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 December 2025, the Federal Reserve decreased interest rates by an additional 25 basis points to a current range of 3.50% to 3.75%.

The Federal Reserve's decision-making policies for short-term interest rates will continue to impact the amount of net interest income we earn in the future.

In general, while increases in short-term interest rates benefit the yield we earn on our cash, certain of our BaaS partner arrangements allow for the BaaS partner to share in a significant portion of the interest earned from accountholder deposits (which are recorded as a reduction of revenue in our consolidated financial statements), and yields on our investment portfolio tend to lag interest rate increases as securities mature and proceeds are reinvested.

In general, while higher short-term interest rates benefit the yield we earn on our cash, certain of our BaaS partner arrangements allow for the BaaS partner to share in a significant portion of the interest earned from accountholder deposits (which are recorded as a reduction of revenue in our consolidated financial statements), and yields on our investment portfolio tend to lag interest rate increases as securities mature and proceeds are reinvested.

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.

In an effort to reduce these impacts, 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.

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Operating Expenses

We classify our operating expenses into the following four categories:

Sales and Marketing Expenses — Sales and marketing expenses consist primarily of the commissions we pay to our retail distributors, brokers and partners, advertising and marketing expenses, and the costs of manufacturing and distributing card packages, placards and promotional materials to our retail distributors and personalized debit cards to consumers who have activated their cards.

We classify our operating expenses into the following categories:

cards to consumers who have activated their cards.

We generally establish commission percentages in long-term distribution agreements with our retail distributors and partners.

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These costs vary with the total number of active accounts in our portfolio, as do losses from customer disputed transactions, unrecovered customer purchase transaction overdrafts and fraud.

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 that vary based upon our investment in infrastructure, business development, risk management, internal controls and activities relating to acquisitions, divestitures and other strategic transactions, such as our strategic review process and the proposed transactions with CommerceOne and Smith Ventures, 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

Other expense, net includes income and expenses we generally do not consider normal operating activities, such as earnings, losses or impairment attributable to equity method investments, realized gains or losses on investment securities, income earned on bank-owned life insurance policies, and changes in valuation allowances on loans held for sale, amongst other similar items that may arise from time to time.

Income Tax Expense

Our income tax expense consists of the federal and state corporate income taxes accrued on income resulting from the sale of our products and services.

Income Tax Expense and Benefit

Our income tax expense and benefit consists of the federal and state corporate income taxes accrued on income resulting from the sale of our products and services.

Our effective income tax rate may differ from the 21% U.S.

federal statutory rate due to a number of factors, including state income taxes, general business credits, non-deductible expenses and penalties, increases or decreases in valuation allowances and liabilities for uncertain tax positions, excess tax benefits or shortfalls on stock compensation awards, audit developments, and legislative changes.

federal statutory rate due to a number of factors, including state income taxes, research and development tax credits, non-deductible expenses and penalties, increases or decreases in valuation allowances and liabilities for uncertain tax positions, excess tax benefits or shortfalls on stock compensation awards, audit developments, and

legislative changes.

See Note 14—Income Taxes to the Consolidated Financial Statements included herein for a discussion of the significant tax differences that impacted our effective tax rate.

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Our estimated cash-back rewards are recorded as a reduction to card revenues and other fees on our consolidated statements of operations and as a component of other accrued liabilities on our consolidated balance sheets.

Cash rewards have decreased by approximately 15% for the year ended December 31, 2024 compared to the prior year period, as our cash-back programs have declined, principally from our shift from our legacy products to our GO2bank product which does not have a cash rewards feature.

Our cash-back programs have declined, principally from our shift from our legacy products to our GO2bank product which does not have a cash rewards feature.

Increases or decreases in our estimate of cash-back rewards is dependent upon accountholder behavioral changes and we periodically evaluate our estimation process and assumptions based on developments in redemption patterns, dollars redeemed and other accountholder behavioral trends.

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See Note 9—Goodwill and Intangible Assets to the Consolidated Financial Statements included herein for more information.

Deferred Tax Asset Valuation Allowance

Under ASC 740, Income Taxes , deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to net operating loss carryforwards, tax credit carryforwards, and capital losses, as well as temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, which will result in taxable or deductible amounts in the future.

Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled.

A valuation allowance is established when necessary to reduce deferred tax assets to the net amount that is more likely than not to be realized.

Significant judgment is required in determining any valuation allowance recorded against deferred tax assets.

In assessing the need for a valuation allowance, we consider all available evidence, both positive and negative, including our historical operating results, the existence of cumulative losses in recent years, projections of future taxable income, and the feasibility of tax planning strategies.

Estimating future taxable income is inherently uncertain and our actual operating results in future years could differ from our current assumptions, judgments and estimates.

In the event that we change our determination of the amount of deferred tax assets that can be realized, we adjust our valuation allowance with a corresponding impact to the provision for (or benefit from) income taxes in the period in which such determination is made.

See Note 14—Income Taxes to the Consolidated Financial Statements included herein for more information.

Results of Operations

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Such omitted discussion can be found under "Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 29, 2024.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 4, 2025.

Comparison of Consolidated Results for the Years Ended December 31, 2025 and 2024

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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 accountholder fees, such as monthly maintenance fees, ATM fees, and new card fees, and lower breakage revenue on our gift card portfolios.

These increases were partially offset by decreases in accountholder fees, such as monthly maintenance fees and ATM fees, as a result of a decline in the number of active accounts in our Consumer Services segment during the current year and lower breakage revenue on our gift card portfolio, as the program has been discontinued.

Cash Processing Revenues — Cash processing revenues totaled $240.2 million for the year ended December 31, 2025, an increase of $8.4 million, or 4%, from the comparable prior year period.

These increases were partially offset by a 5% decline in the number of cash transfers processed during the year ended December 31, 2024 from the prior year comparable period.

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

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 the performance of our online tax preparation partners.

The increase in tax processing revenues was partially offset by an 8% decline in the number of cash transfers processed during the year ended December 31, 2025 from the prior year comparable 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 and to a lesser extent, a lower number of cash transfers processed for third-party programs.

Interchange Revenues — Interchange revenues totaled $184.6 million for the year ended December 31, 2025, a decrease of $13.7 million, or 7%, from the comparable prior year period.

The decrease was primarily due to a 10% decrease in purchase volume during the year ended December 31, 2024, as well as a lower effective interchange rate for the comparable periods.

Our interchange rate declined due to a mix-shift toward categories of consumer purchases with lower effective rates.

The decrease was primarily due to a 4% decrease in purchase volume during the year ended December 31, 2025, as well as a lower effective interchange rate 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 $89.8 million for the year ended December 31, 2025, an increase of $27.4 million, or 43%, from the comparable prior year period.

The increase in net interest income was primarily the result of an increase in cash from deposit programs with our partners and yields earned at the Federal Reserve, partially offset by an increase in interest shared with certain BaaS partners (a reduction of revenue).

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:

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

Year Ended December 31,

8 unchanged sentences

Other general and administrative expenses 351,993 16.9 370,041 21.5

Restructuring and other charges 22,125 1.1 % — —

Total operating expenses $ 2,066,832 99.3 % $ 1,725,544 100.2 %

Sales and Marketing Expenses — Sales and marketing expenses totaled $207.9 million for the year ended December 31, 2025, a decrease of $9.3 million, or 4%, compared to the year ended December 31, 2024.

This decrease was primarily driven by a decrease in sales commissions due to lower revenues generated from certain products that are subject to tiered revenue-sharing agreements, and to a lesser extent, reduced marketing spend within our Consumer Services segment.

This decrease was driven primarily by a decrease in supply chain materials expenses, which are comprised of card packages and personalized debit cards, from fewer active accounts, and a decrease in revenue-sharing arrangements in our Money Movement Services segment primarily due to a decrease in cash transfer revenues.

Compensation and Benefits Expenses — Compensation and benefits expenses totaled $254.4 million for the year ended December 31, 2025, an increase of $3.4 million, or 1%, compared to the year ended December 31, 2024.

The increase was driven primarily by an increase in third-party call center support costs associated with the growth of certain BaaS programs within our B2B Services segment and higher accrued bonus compensation expense, partially offset by lower salary and wages driven by the Headcount Reduction and lower employee stock-based compensation expense, primarily due to fluctuations in the expected achievement of certain performance-based equity awards.

The increase was driven primarily by an increase in accrued bonus compensation expense due to our current financial performance relative to annual performance targets and an increase in third-party call center support costs associated with the growth of the BaaS account programs within our B2B Services segment, partially offset by a decrease in employee stock-based compensation expense due to forfeitures of awards and a decrease in salary and wage expenses due to the closure of our China operations announced in September 2025.

Processing Expenses — Processing expenses totaled $1,230.4 million for the year ended December 31, 2025, an increase of $343.2 million, or 39%, compared to the year ended December 31, 2024.

This increase was principally due to growth in gross dollar volume on certain BaaS account programs within our B2B Services segment, partially offset by reductions in processor costs realized from the migration to our in-licensed card management system.

Other General and Administrative Expenses — Other general and administrative expenses totaled $370.0 million for the year ended December 31, 2024, an increase of $14.4 million, or 4%, from the comparable prior year period.

The increase in other general and administrative expenses during the year ended December 31, 2024 was due to a civil money penalty paid under the Consent Order, higher professional services fees related to our AML program, including improvements to our compliance controls, policies and procedures and the settlement payment and impairment charges related to internal-use software and other related assets associated with the termination of our partnership agreement to develop a new core banking system.

These increases in other general and administrative expenses were partially offset by a decrease in overall transaction losses attributable to a decrease in the amount of customer dispute volume across our portfolios and reductions in our dispute loss rates, as well as lower losses from purchase overdraft transactions.

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 $352.0 million for the year ended December 31, 2025, a decrease of $18.0 million, or 5%, from the comparable prior year period.

The decrease in other general and administrative expenses was due to several factors, including the timing of accruals in 2024 related to the civil money penalty under our Consent Order from the Federal Reserve Board that did not recur in 2025, the settlement payment and impairment charges related to the termination of our partnership agreement to develop a new core banking system in 2024 that also did not recur in 2025, and a decrease in overall transaction losses attributable to lower customer dispute volume across our portfolios and favorable reductions in our dispute loss rates.

These decreases were partially offset by higher professional services fees associated with our strategic review process, the proposed transactions with CommerceOne and Smith Ventures, and AML regulatory compliance initiatives, an increase in software licenses and hosting costs due to investments in our platform and operations, and an increase in federal deposit insurance due to higher deposit balances and the rates we pay thereon.

Restructuring and Other Charges — Restructuring and other charges totaled $22.1 million for the year ended December 31, 2025, and were due to our previously announced restructuring plan relating to our China operations, which is discussed further above under "Overview." Additionally, refer to Note 23 — 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 $104.8 million for the year ended December 31, 2025, an increase of $89.4 million, or 582%, from the prior year comparable period.

The net increase in other expenses was driven primarily from an increase in equity method losses in TailFin Labs, LLC ("TailFin") of $8.1 million, which was comprised of a $10.1 million increase in compensation and related professional services to support project initiatives undertaken during the current year period, partially offset by interest income earned.

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 our extension of the Walmart MoneyCard program and related agreements in the second quarter of 2025.

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.

In addition, during the first half of 2025, we sold certain available-for-sale securities in order to reposition the proceeds into higher yielding assets, which resulted in a realized loss of $24.8 million for the year ended December 31, 2025.

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

Income Tax Expense

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

The following table presents a breakdown of our effective tax rate among federal, state and other after the adoption of Accounting Standards Update 2023-09, "Income Taxes (Topic 740):

Improvements to Income Tax Disclosures."

Year Ended December 31,

(In thousands except % data) Amount ($) Percent (%) Amount ($) Percent (%)

federal statutory tax rate $ (20,427) 21.0 % $ (4,733) 21.0 %

State income taxes, net of federal tax benefit* 14,966 (15.4) (543) 2.4

Foreign tax rate differential 1.0 (1.5)

General business credits 10.2 (25.0)

Foreign tax effects

Statutory tax rate difference between China and U.S.

1,295 (1.3) (244) 1.1

Changes in valuation allowance 3,393 (3.5) — —

Other (68) 0.1 117 (0.6)

Effect of changes in tax laws or rates enacted in the current period — — — —

Effect of cross-border tax laws

Global intangible low-taxed income tax — — 309 (1.4)

Research and development tax credits (1,010) 1.0 (2,489) 11.0

Changes in valuation allowance — — 434 (1.9)

Nontaxable or nondeductible items

Stock-based compensation 1,629 (1.7) 7,086 (31.4)

1 unchanged sentence

Bank owned life insurance surrender — — 2,253 (10.0)

Nondeductible transaction related costs 875 (0.9) — —

Nondeductible penalties — — 5,056 (22.4)

Global intangible low-tax income tax (1.4) 2.0

IRC 162(m) limitation 413 (0.4) (2,856) 12.7

Change in valuation allowance (1.9) —

Other 72 (0.1) 97 (0.5)

Changes in unrecognized tax benefits (1,928) 2.0 255 (1.1)

Other adjustments

IRS examination settlement 3,016 (3.1) — —

Expiration of tax attributes 430 (0.4) — —

Other 252 (0.3) — —

Effective tax rate $ 1,594 (1.6) % $ 4,163 (18.5) %

* State taxes in California, Florida, Pennsylvania, Georgia, Alabama, and Louisiana made up the majority (greater than 50 percent) of the tax effect in this category.

Our income tax expense totaled $1.6 million for the year ended December 31, 2025, representing a decrease of $2.6 million from the comparable prior year period.

The decrease in income tax expense was primarily driven by the decrease in our taxable income and a lower effective tax rate.

The net decrease in the effective tax rate for the year ended December 31, 2024 from the prior year comparable period was primarily due to a decrease of $2.9 million in the amount of compensation expense subject to the IRC 162(m) limitation on the deductibility of certain executive compensation, a decrease of $0.8 million in state income tax expense, net of federal benefits, and the impact of general business credits.

These decreases were partially offset by an increase of $2.9 million in the expense related to tax shortfalls from stock-based compensation, an increase of $0.8 million in the expense related to nondeductible penalties, an increase of $0.4 million in the valuation allowance on a portion of our unrealized loss on equity securities, and the surrender of our existing bank owned life insurance policies which resulted in a tax charge of $1.5 million and surrender penalties of $0.7 million.

The increases in nondeductible penalties for the years ended December 31, 2024 and 2023 are primarily related to the tax effect associated with the civil money penalty under the Consent Order.

The decrease in our income tax expense was primarily driven by the increase in our pre-tax loss.

The net increase in the effective tax rate for the year ended December 31, 2025 from the prior year comparable period was primarily due to an increase of $3.3 million in the amount of compensation expense subject to the IRC 162(m) limitation on the deductibility of certain executive compensation, a decrease of $1.5 million in research and development tax credits, an increase of $3.4 million in the valuation allowance on the deferred tax assets of our China subsidiary, an increase of $0.9 million in nondeductible transaction related costs, an increase of $3.0 million

from our examination settlement with the IRS, and an increase of $15.5 million in state income tax expense, net of federal benefits, primarily resulting from an increase of $17.7 million in the valuation allowance on state deferred tax assets related to state business credits and certain state net operating loss carryforwards.

These increases were partially offset by a decrease of $5.5 million in the expense related to tax shortfalls from stock-based compensation, a decrease of $5.1 million in tax expense from nondeductible penalties primarily associated with the civil money penalty incurred in 2024 for our Consent Order from the Federal Reserve Board, an increase of $0.7 million in the cash surrender value of our banked owned life insurances policies, a decrease of $2.2 million in the reserve on our unrecognized tax benefits, and a decrease of $2.3 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.

Our effective tax rate for the year ended December 31, 2025 is lower than our statutory federal income tax rate primarily due to a reduction in the expense related to tax shortfalls from stock-based compensation, cash value growth in our banked owned life insurances policies, and a decrease in the reserve on our unrecognized tax benefits, partially offset by an increase in the amount of compensation expense subject to the IRC 162(m) limitation on the deductibility of certain executive compensation, a decrease in research and development tax credits, an increase in the valuation allowance on the deferred tax assets of our China subsidiary, an increase in nondeductible transaction related costs, an increase from our examination settlement with the IRS, and an increase in state income tax expense, net of federal benefits, primarily resulting from an increase in the valuation allowance on state deferred tax assets related to certain state tax attributes.

Our negative effective tax rate for the year ended December 31, 2025 was the result of our loss before income taxes of $97.3 million and the tax effect of our examination settlement with IRS, the increase in the valuation allowance on the deferred tax assets of our China subsidiary, and the increase in the valuation allowance on state deferred tax assets related to state business credits and certain state net operating loss carryforwards.

Our effective tax rate for the year ended December 31, 2024 is lower than our statutory federal income tax rate primarily due to a reduction in the amount of compensation expense that was subject to the IRC Section 162(m) limitation on the deductibility of certain executive compensation, cash value growth in bank owned life insurance policies, and higher tax benefits from general business credits partially offset by the expense associated with tax shortfalls from stock-based compensation, the expense related to nondeductible penalties, an increase in the valuation allowance on a portion of our unrealized loss on equity securities, and the expense from the surrender of our existing bank owned life insurance policies.

Our negative effective tax rate for the year ended December 31, 2024 was the result of our loss before income taxes of $22.5 million and the tax effect of the civil money penalty under the Consent Order.

Our effective tax rate for the year ended December 31, 2023 is higher than our statutory federal income tax rate primarily due to the expense associated with tax shortfalls from stock-based compensation, the expense related to nondeductible penalties, and higher expenses related to state taxes, net of federal benefits, partially offset by higher tax benefits from general business credits and cash value growth in bank owned life insurance policies.

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 years ended December 31, 2024 and 2023 were as follows:

The results of operations and key metrics of our B2B Services segment for the years ended December 31, 2025 and 2024 were as follows:

Year Ended December 31,

8 unchanged sentences

Number of active accounts* 1.93 1.79 0.14 7.8 %

Direct deposit active accounts* 0.43 0.49 (0.06) (12.2) %

Purchase volume $ 8,027 $ 7,964 $ 63 0.8 %

* Represents number of active and direct deposit active accounts as of December 31, 2024 and 2023, respectively.

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

* Represents number of active accounts as of December 31, 2025 and 2024, respectively.

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

Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1

2 unchanged sentences

Number of active accounts* 1.93 1.89 1.81 1.78 1.79 1.68 1.65 1.58

Direct deposit active accounts* 0.43 0.44 0.45 0.46 0.49 0.52 0.59 0.60

Purchase volume 2,035 2,006 2,000 1,986 2,070 1,983 1,976 1,935

* Represents number of active and direct deposit active accounts as of each period end.

Segment revenues within Consumer Services for the year ended December 31, 2024 decreased $96.2 million, or 19%, compared to the prior year comparable period, while our segment expenses for the year ended December 31, 2024 decreased $80.9 million, or 25%.

Our gross dollar volume, purchase volume, the average number of active accounts and the average number of direct deposit active accounts across the year decreased during the year ended December 31, 2024 by 16%, 19%, 18% and 19%, respectively, from the comparable prior year period, primarily from each of the several factors discussed above in "Overview." These factors include macro-economic factors affecting consumer behavior and other competitive trends that have impacted acquisition at retail locations, our decision to wind-down many of our legacy accountholder programs in support of GO2bank, as well as the non-renewal of one of our retail partner programs in a prior period.

As a result of these decreases in each of our key metrics, our monthly maintenance fee revenues, new card fee revenues, ATM fee revenues and interchange revenues decreased year-over-year.

In addition, our interchange rate declined due to a mix-shift toward categories of consumer purchases with lower effective rates, as well as a decrease in breakage revenue on our gift card portfolios for each of the comparable periods.

Segment expenses for the year ended December 31, 2024 decreased year-over-year due to several factors, including a decrease in sales commissions from lower revenues on products subject to tiered revenue-sharing agreements, a decrease in marketing spend on GO2bank, lower processing expenses from our processor migration, and a decrease in transactions losses attributable to a decrease in the amount of customer dispute volume across our portfolios in this segment and favorable reductions in our dispute loss rates.

Despite the year-over-year decline in segment expenses, our segment profit for the year ended December 31, 2024 decreased by approximately 9% from the prior year comparable period.

The results of operations and key metrics of our B2B Services segment for the years ended December 31, 2024 and 2023 were as follows:

* Represents number of active accounts as of each period end.

Segment revenues within our B2B Services for the year ended December 31, 2025 increased $358.6 million, or 33%, over the prior year comparable period, while our segment expenses for the year ended December 31, 2025 increased $338.5 million, or 34%.

Our gross dollar volume, purchase volume, and the average number of active accounts during the year ended December 31, 2025 increased by 22%, 1%, and 11%, respectively, over the prior year comparable period.

We have continued to experience organic growth from both new and existing users in certain BaaS programs that tend to yield higher gross dollar volume per active user but do not generate comparable levels of interchange fees.

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 year ended December 31, 2025 over the comparable prior year period, principally due to higher processing expenses associated with the growth of certain BaaS account programs and 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 a decrease in transaction losses due to favorable reductions in our dispute loss rates on a full year basis.

As a result of these factors, our segment profit for the year ended December 31, 2025 increased by approximately 22% from the prior year comparable period.

This segment also experienced margin compression because certain BaaS partnerships are largely structured based on a fixed profit and therefore, our segment profit for certain arrangements will not scale with revenue growth.

Consumer Services

The results of operations and key metrics of our Consumer Services segment for the years ended December 31, 2025 and 2024 were as follows:

Year Ended December 31,

8 unchanged sentences

Number of active accounts* 1.49 1.88 (0.39) (20.7) %

Direct deposit active accounts* 0.39 0.43 (0.04) (9.3) %

Purchase volume $ 11,518 $ 12,361 $ (843) (6.8) %

* Represents number of active accounts as of December 31, 2024 and 2023, respectively.

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

* Represents number of active and direct deposit active accounts as of December 31, 2025 and 2024, respectively.

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

Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1

2 unchanged sentences

Number of active accounts* 1.49 1.62 1.67 1.80 1.88 1.78 1.76 1.93

Direct deposit active accounts* 0.39 0.40 0.41 0.41 0.43 0.44 0.45 0.46

Purchase volume 2,670 2,730 2,991 3,127 3,082 2,904 3,036 3,339

* Represents number of active accounts as of each period end.

Segment revenues within our B2B Services for the year ended December 31, 2024 increased $308.8 million, or 40%, compared to the prior year period, while our segment expenses for the year ended December 31, 2024 increased $293.7 million, or 42%.

Our gross dollar volume, purchase volume, and the average number of active accounts during the year ended December 31, 2024 increased by 45%, 9%, and 15%, respectively, from the prior year comparable period.

This increase was partially offset by the non-renewals of certain other BaaS partners in prior periods.

Segment expenses increased for the year ended December 31, 2024 from the comparable prior year period, principally due to higher processing expenses with the growth of certain BaaS account programs, as well as higher third-party call center support costs as a result of an increase in gross dollar volume and the number of active accounts.

As a result of these factors, our segment profit for the year ended December 31, 2024 increased by approximately 19% from the prior year comparable period.

This segment also experienced margin compression because certain BaaS partnerships were structured based on a fixed profit and therefore, our segment profit for certain arrangements will not scale with revenue growth.

* Represents number of active and direct deposit active accounts as of each period end.

Segment revenues within Consumer Services for the year ended December 31, 2025 decreased $38.1 million, or 9%, from the prior year comparable period, while our segment expenses for the year ended December 31, 2025 decreased $6.9 million, or 3%.

Our gross dollar volume and purchase volume each decreased during the year ended December 31, 2025 by 7% from the comparable prior year period, and the average number of active accounts and average number of direct deposit active accounts across the year each decreased by 10%, primarily due to each of the factors discussed above in "Overview." These factors include macro-economic factors affecting consumer behavior and other competitive trends that have impacted acquisition at retail locations.

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.

Segment expenses for the year ended December 31, 2025 decreased from the comparable prior year period 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, which are comprised of card packages and personalized debit cards, 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 for the year ended December 31, 2025 decreased by approximately 19% from the prior year comparable period.

Money Movement Services

15 unchanged sentences

Number of tax refunds processed 0.11 0.20 3.73 7.98 0.15 0.19 4.20 9.28

Segment revenues within our Money Movement services for the year ended December 31, 2024 increased $8.0 million, or 4%, from the comparable prior year period, and segment expenses for the year ended December 31, 2024 decreased $1.4 million, or 1%.

The increase in segment revenues for the year ended December 31, 2024 was driven primarily by an increase in our tax processing revenues, partially offset by a decrease in cash transfer revenues.

These increases were partially offset by a 5% decline in the number of cash transfers processed during the year ended December 31, 2024 from the prior year comparable period.

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

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.

Segment expenses decreased for the year ended December 31, 2024 by 1% from the comparable prior year period primarily from decreases in sales commissions from lower cash transfer revenues, partially offset by third-party costs and related expenses due to growth across our tax processing services.

As a result of these factors, our segment profit increased by approximately 8% year-over-year.

Segment revenues within our Money Movement services for the year ended December 31, 2025 increased $7.6 million, or 3%, from the comparable prior year period, and segment expenses for the year ended December 31, 2025 increased $1.7 million, or 2%.

The increase in segment revenues for the year ended December 31, 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 year ended December 31, 2025 tax was principally attributable to the performance of our online tax preparation partners.

These increases were partially offset by an 8% decline in the number of cash transfers processed during the year ended December 31, 2025 from the prior year comparable period.

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

Segment expenses increased for the year ended December 31, 2025 by 2% from the comparable prior year period primarily from an increase in third-party costs and related expenses due to growth across our tax processing services, partially offset by lower sales commissions from lower cash transfer revenues.

Overall, segment profit increased by approximately 5% from the prior year comparable period.

Corporate and Other

13 unchanged sentences

Revenues within our Corporate and Other segment were driven primarily by an increase in net interest income, which increased by 43% for the year ended December 31, 2025 from the prior year comparable period.

Net interest income increased as a result of an increase in cash from deposit programs with our partners and yields earned at the Federal Reserve, partially offset by the portion of interest shared with certain BaaS partners (a reduction of revenue).

Unallocated corporate expenses for the year ended December 31, 2025 increased by approximately 9% over the prior year comparable period.

The increase was driven primarily from higher professional services fees related to our AML program, including improvements to our compliance controls, policies and procedures, and higher accrued bonus compensation, partially offset by lower salary and wages from the Headcount Reduction.

The increase was driven primarily by an increase in accrued bonus compensation expense due to our current financial performance relative to annual performance targets, higher professional services fees associated with our strategic review process, the proposed transactions with CommerceOne and Smith Ventures, and our AML regulatory compliance initiatives, an increase in software licenses and hosting costs due to investments in our platform and operations, and an increase in federal deposit insurance due to higher deposit balances and the rates we pay thereon.

Capital Requirements for Bank Holding Companies

72 unchanged sentences

Financing activities 141,275 743,148

Increase (decrease) in unrestricted cash, cash equivalents and restricted cash $ 905,933 $ (133,343)

During the years ended December 31, 2024 and 2023, we financed our operations primarily through our cash flows provided by operating activities and customer funds held on deposit, and, from time to time, our short-term working capital activities through our borrowings under our credit facility.

(Decrease) increase in unrestricted cash, cash equivalents and restricted cash $ (170,701) $ 905,933

During the years ended December 31, 2025 and 2024, we financed our operations primarily through our cash flows provided by operating activities and customer funds held on deposit, borrowings from our senior unsecured notes and, from time to time, our short-term working capital activities through our borrowings under our credit facility.

As of December 31, 2025, our primary source of liquidity was unrestricted cash and cash equivalents totaling $1.4 billion.

6 unchanged sentences

Cash Flows from Operating Activities

Our $81.4 million of net cash provided by operating activities during the year ended December 31, 2024 principally resulted from $26.7 million of net losses, adjusted for certain non-cash operating expenses of $170.3 million, and a decrease in net working capital assets and liabilities of $62.2 million, which includes the payment of $44 million for the civil money penalty included in the Consent Order.

Our $97.5 million of net cash provided by operating activities during the year ended December 31, 2023 principally resulted from $6.7 million of net income, adjusted for certain non-cash operating expenses of $158.9 million, and a decrease in net working capital assets and liabilities of $68.1 million.

Our $138.6 million of net cash provided by operating activities during the year ended December 31, 2025 principally resulted from $98.9 million of net losses, adjusted for certain non-cash operating expenses of $258.5 million, and a decrease in net working capital assets and liabilities of $21.1 million.

Our $81.4 million of net cash provided by operating activities during the year ended December 31, 2024 principally resulted from $26.7 million of net loss, adjusted for certain non-cash operating expenses of $170.3 million, and a decrease in net working capital assets and liabilities of $62.2 million, which includes the payment of $44 million for the civil money penalty included in the Consent Order.

Cash Flows from Investing Activities

Our $450.5 million of net cash used in investing activities during the year ended December 31, 2025 primarily reflects purchases of our available-for-sale investment securities, net of proceeds from sales and maturities of $332.5 million, payments for property, equipment and internal-use software of $72.5 million, and net changes in loans of $43.2 million.

Our $81.4 million of net cash provided by investing activities during the year ended December 31, 2024 primarily reflects net proceeds from sales and maturities of our available-for-sale investment securities of $221.1 million, partially offset by payments for property, equipment and internal-use software of $74.3 million, net changes in loans of $27.9 million, and capital contributions related to our investment in TailFin of $35.0 million.

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

The year-over-year increase in our net cash provided by investment activities during the year ended December 31, 2024 is principally associated with maturities of our investment securities and our decision not to reinvest the proceeds into new investment securities.

Our $33.2 million of net cash provided by investing activities during the year ended December 31, 2023 primarily reflects net proceeds from sales and maturities of our available-for-sale investment securities of $176.9 million, partially offset by payments for property, equipment and internal-use software of $75.9 million, net changes in loans of $29.0 million, and capital contributions related to our investment in TailFin of $35.0 million.

Cash Flows from Financing Activities

Our $743.1 million of net cash provided by financing activities for the year ended December 31, 2024 was principally the result of a net increase in customer deposits of $718.0 million and a net increase in obligations to customers of $35.6 million.

Our $141.3 million of net cash provided by financing activities for the year ended December 31, 2025 was principally the result of a net increase in customer deposits of $404.8 million and the issuance and sale of our notes payable of $14.9 million, partially offset by a net decrease in settlement assets and obligations to customers of $278.5 million.

Our $743.1 million of net cash provided by financing activities for the year ended December 31, 2024 was principally the result of a net increase in customer deposits of $718.0 million, and a net increase in settlement assets and obligations to customers of $35.6 million.

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

Our $264.0 million of net cash used in financing activities for the year ended December 31, 2023 was principally the result of a net decrease in customer deposits of $159.4 million, and a net decrease in obligations to customers of $132.2 million, partially offset by net borrowings on our revolving credit facility of $26.0 million.

Other Sources of Liquidity

Senior Unsecured Notes

In September and October 2024, we issued and sold senior unsecured notes (the "Notes") in an aggregate principal amount of $50 million.

In 2024 and 2025, we issued and sold senior unsecured notes (the "Notes") in an aggregate principal amount of $65 million.

The Notes have a five-year term, maturing September 15, 2029.

1 unchanged sentence

The net proceeds of the offering were used to repay outstanding indebtedness under our revolving credit facility discussed below, and for general corporate purposes.

In February 2025, we issued and sold additional Notes in an aggregate principal amount of $15 million.

2025 Revolving Facility

2 unchanged sentences

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

We had no outstanding balance as of December 31, 2025.

2019 Revolving Facility

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The credit facility provided for a $100.0 million five-year revolving line of credit (the "2019 Revolving Facility"), which matured in October 2024.

The proceeds of any borrowings under the 2019 Revolving Facility were used for working capital and other general corporate purposes, subject to the terms and conditions set forth in the credit agreement.

The proceeds of any borrowings under the 2019 Revolving Facility were used for working capital and other general corporate purposes, subject to the terms and

conditions set forth in the credit agreement.

As of September 30, 2024, the then-outstanding balance on the 2019 Revolving Facility was repaid in full, and the 2019 Revolving Facility terminated at its maturity date.

Material Cash Requirements

While the overall macro-economic environment, the effect of high inflation and interest rates, and other factors described in "Outlook and Other Trends Affecting Our Business" above have created economic uncertainty and impacted how we manage our liquidity and capital resources, we anticipate that we will continue to develop and invest in property, equipment and internal-use software as necessary in the normal course of our business.

The amount and timing of these payments and the related cash outflows in future periods is difficult to predict and is dependent on a number of factors including the rate of change of computer hardware and software used in our business and our business outlook as a result of macro-economic uncertainties.

We intend to continue to invest in new products and programs, including GO2bank, new features for our existing products and IT infrastructure in order to scale and operate effectively to meet our strategic objectives.

We expect our capital expenditures in 2025 to be lower compared to our capital expenditures in 2024, but at similar levels compared to our annual investments in recent years.

While the overall macro-economic environment, the effect of high inflation and interest rates, and other factors described in "Outlook and Other Trends Affecting Our Business" above have created economic uncertainty and impacted how we manage our liquidity and capital resources, we intend to continue to invest in growth and cost efficiency initiatives in the normal course of business, subject to the consummation of the proposed transactions with CommerceOne and Smith Ventures.

The amount and timing of these investments and the related cash outflows in future periods is difficult to predict and is dependent on a number of factors including the rate of change of computer hardware and software used in our business and our business outlook as a result of macro-economic uncertainties.

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.

However, we expect our capital expenditures in 2026 to be lower compared to our annual investments in 2025.

We expect to fund these capital expenditures primarily through our cash flows provided by operating activities.

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The nature of these transactions, however, makes it difficult to predict the amount and timing of such cash requirements.

Additionally, we may make periodic cash contributions to our subsidiary bank, Green Dot Bank, to maintain its capital, leverage and other financial commitments at levels we have agreed to with our regulators.

If another economic relief package is signed into law that provides for substantial additional direct payments and unemployment benefits, we may need to increase the size of our cash contributions to Green Dot Bank to maintain its capital, leverage and other financial commitments.

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.

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

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See Note 7—Equity Method Investment to the Consolidated Financial Statements included herein for additional information.

Our remaining leases have terms of less than 1 year to approximately 8 years, subject to renewal options of varying terms, and as of December 31, 2024, we had a total lease liability of $11.1 million.

Our remaining leases have terms between approximately 1 and 7 years, subject to renewal options of varying terms, and as of December 31, 2025, we had a total lease liability of $1.9 million.

See Note 20—Leases to the Consolidated Financial Statements included herein for additional information regarding our lease liabilities as of December 31, 2025.

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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-K

Item 7. Management’s Discussion and Analysis