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Item 2. Management’s Discussion and Analysis

2026-08-10 compared with 2026-05-11 · 224 added, 129 removed, 345 unchanged (51% of the section changed)

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

This Quarterly Report on Form 10-Q, 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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In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances are forward-looking statements.

Readers are cautioned that these forward-looking statements are subject to risks, uncertainties, and assumptions that are difficult to predict, including inflation and interest rate trends and impacts and other macro-economic impacts on our business, results of operations and financial condition and governmental and our responses to such events, including those identified below, under “Part II, Item 1A.

Readers are cautioned that these forward-looking statements are subject to risks, uncertainties, and assumptions that are difficult to predict, including inflation and interest rate trends and impacts and other macro-economic impacts on our business, results of operations and financial condition and our responses to such events, including those identified below, under “Part II, Item 1A.

Risk Factors,” and elsewhere herein.

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Consolidated Financial Results and Trends

Our consolidated results of operations for the three months ended March 31, 2026 and 2025 were as follows:

Three Months Ended March 31,

2026 2025 Change %

Our consolidated results of operations for the three and six months ended June 30, 2026 and 2025 were as follows:

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

2026 2025 Change % 2026 2025 Change %

(In thousands, except percentages)

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Total operating expenses 596,644 490,777 105,867 21.6 % 1,183,853 988,906 194,947 19.7 %

Net income 53,753 25,773 27,980 108.6 %

Net (loss) income (2,087) (47,025) 44,938 (95.6) % 51,666 (21,252) 72,918 (343.1) %

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

Total operating revenues

Our total operating revenues for the three months ended March 31, 2026 increased $97.4 million, or 17%, 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.

Continued growth of certain BaaS partner programs generated an increase of 16% in our total gross dollar volume for the three months ended March 31, 2026 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 three months ended March 31, 2026 were negatively impacted by unfavorable trends and factors in our deposit account programs, driving, among other things, a decrease in the number of active accounts, purchase volume, and number of cash transfers of 4%, 8%, and 7%, respectively, from the prior year comparable period.

In our B2B Services segment, revenues increased during the three months ended March 31, 2026 by 22% 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 three months ended March 31, 2026 by 19%, and to a lesser extent, growth in the number of active accounts, which increased by 7% over the prior year comparable period.

These increases in revenues were partially offset by a decrease in interchange revenue due to a decrease in purchase volume of 3% from 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 Consumer Services segment, revenues decreased during the three months ended March 31, 2026 by 9% from the prior year comparable period.

Our gross dollar volume and purchase volume declined by 8% and 11%, respectively, for the three months ended March 31, 2026, and the number of active accounts and direct deposit accounts declined by 16% and 7%, respectively.

While we saw some moderation in these declining trends in 2025, 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.

Our total operating revenues for the three and six months ended June 30, 2026 increased $91.7 million, or 18%, and $189.1 million, or 18%, 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 19% and 18% in our total gross dollar volume for the three and six months ended June 30, 2026, respectively, over the prior year comparable periods, which increased our total operating revenues year-over-year.

However, as discussed below, our total operating revenues for the three and six months ended June 30, 2026 were negatively impacted by unfavorable trends and factors in our deposit account programs, driving, among other things, a decrease in the number of active accounts during the three months ended June 30, 2026 by 1%, as compared to the prior year period, and a decrease in purchase volume and the number of cash transfers by 6% and 2%, respectively, for the three months ended June 30, 2026 and 7% and 4%, respectively, for the six months ended June 30, 2026 from the prior year comparable periods.

In our B2B Services segment, revenues increased during the three and six months ended June 30, 2026 by 29% and 25%, 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, 2026 by 22% and 21%, respectively, and to a lesser extent, growth in the number of active accounts, which increased by 9% over the prior year comparable period.

We recorded a net increase in segment revenue primarily due to growth in gross dollar volume attributable to certain BaaS programs that do not generate interchange fees, resulting in higher program management service fees earned from these BaaS partners.

In our Consumer Services segment, revenues decreased during each of the three and six months ended June 30, 2026 by 9% from the prior year comparable periods.

Our gross dollar volume and purchase volume declined by 7% and 10%, respectively, for the three months ended June 30, 2026, and the number of active accounts and direct deposit accounts declined by 12% and 7%, respectively.

Similarly, gross dollar volume and purchase volume each declined for the six months ended June 30, 2026 by 8% and 11%, respectively.

While we saw some moderation in these declining trends in recent periods, 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.

These decreases in segment revenues were partially offset by fees generated from our overdraft protection programs due to expanded usage by our accountholders.

In our Money Movement Services segment, revenues increased during the three months ended March 31, 2026 by 19% from the prior year comparable period.

The increase in our Money Movement Services segment during the three months ended March 31, 2026 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 3% for the three months ended March 31, 2026, as compared to the prior year period, our tax processing revenues increased due to the expansion of our taxpayer advance programs.

In our Money Movement Services segment, revenues decreased during the three months ended June 30, 2026 by 8% and increased by 10% during the six months ended June 30, 2026, from the prior year comparable periods.

The decrease in our Money Movement Services revenue during the three months ended June 30, 2026 was driven primarily by a decrease in our tax processing revenues due to a 23% decrease in the number of tax refunds processed, principally attributable to our online tax preparation partners and the timing of when tax refunds were processed between interim periods during the first half of the year.

This decrease in our Money Movement Services revenue was partially offset by an increase in cash transfer revenues during the three months ended June 30, 2026 primarily due to higher disbursements revenue per transaction from a platform partner despite a 2% decrease in cash transfers processed.

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, partially offset by a higher

number of cash transfers processed for third-party programs, which continued to represent the majority of our total cash transfers as of June 30, 2026.

The increase in revenue in our Money Movement Services segment during the six months ended June 30, 2026 was driven primarily by an increase in our tax processing revenues and, to a lesser extent, an increase in cash transfer revenues.

Although the number of tax refunds processed decreased by 9% for the six months ended June 30, 2026, as compared to the prior year period, our tax processing revenues increased due to the expansion of our taxpayer advance programs.

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

The increase in tax processing revenues for the three months ended March 31, 2026 was partially offset by a 7% decrease in the number of cash transfers processed 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 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.

Although the number of cash transfers from third-party programs decreased slightly year over year, they continue to represent the majority of our total cash transfers as of March 31, 2026.

Revenues within our Corporate and Other segment were driven primarily by net interest income earned by Green Dot Bank, which increased by 26% for the three months ended March 31, 2026, over the prior year comparable period.

The increase in net interest income was primarily the result of both the size of our investments portfolio and higher yielding investments therein from our bond repositioning strategy, as well as a decrease in interest shared with certain BaaS partners (a reduction of revenue).

Our cash transfer revenues increased during the six months ended June 30, 2026 despite a 4% decrease in the number of cash transfers processed due to the same reasons discussed above.

Revenues within our Corporate and Other segment increased during the three and six months ended June 30, 2026 by 31% and 67%, respectively, from the prior year comparable periods, driven primarily by a decrease in interest profit sharing arrangements with certain BaaS partners (a reduction of revenue).

In addition, the increase during the six months ended June 30, 2026 was driven by an increase in net interest income earned by Green Dot Bank, primarily the result of both the size of our investments portfolio and higher yielding investments therein from our bond repositioning strategy.

Total operating expenses

Our total operating expenses for the three months ended March 31, 2026 increased $89.1 million, or 18%, over the prior year comparable period.

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, which is discussed above.

Our total operating expenses for the three and six months ended June 30, 2026 increased $105.9 million, or 22%, and $194.9 million, or 20%, respectively, over the prior year comparable periods.

For the three months ended June 30, 2026, 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, which is discussed above.

To a lesser extent, our total operating expenses increased due to an increase in other general and administrative expenses, driven primarily by higher professional services fees associated with our proposed transactions with CommerceOne and Smith Ventures, as well as our anti-money laundering ("AML") regulatory compliance initiatives, and an increase in depreciation and amortization expense and software licenses and hosting costs due to investments in our platform and operations.

In addition, the increase in other general and administrative expenses reflects a reserve established for unclaimed property obligations.

No comparable expense was recorded in the prior year period.

These increases in other general and administrative expenses were partially offset by a decrease in overall transaction losses attributable to a decrease in customer dispute volume across our portfolios and a favorable reduction in our dispute loss rates.

Total operating expenses were partially offset by a decrease in compensation and benefits expenses, driven primarily by a reduction in third-party call center support costs associated with certain of our BaaS account programs discussed above, and a decrease in salary and wage expenses and rent expense due to the closure of our China operations announced in September 2025, partially offset by higher employee stock-based compensation expense due to forfeitures of certain awards in the prior year comparable period.

Total operating expenses were partially offset by a decrease in compensation and benefits expenses, driven primarily by a reduction in third-party call center support costs associated with certain of our BaaS account programs discussed above, a decrease in employee stock-based compensation expense due to a reduction in new grants of equity awards during the pendency of our proposed transactions with CommerceOne and Smith Ventures, and lower accrued bonus compensation expense due to our financial performance in the prior year period exceeding our bonus targets.

Our total operating expenses for the six months ended June 30, 2026 increased over the prior year comparable period, driven by similar factors as discussed above for the three months ended June 30, 2026.

Our processing expenses and other general and administrative expenses increased during the six months ended June 30, 2026, due to the same reasons discussed above.

Compensation and benefits expenses also decreased 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 and a decrease in salary and wage expenses due to the closure of our China operations announced in September 2025.

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, partially offset by an increase in revenue-sharing arrangements in our tax processing business.

Other income and expense, net

Other income and expense, net for the three months ended March 31, 2026 decreased $25.9 million, from the prior year comparable period.

During the first quarter of 2025, we determined we would sell certain available-for-sale securities in order to reposition the proceeds into higher yielding assets, which resulted in a realized loss of $24.5 million for the three months ended March 31, 2025.

Additionally, our equity method losses associated with TailFin Labs, LLC ("TailFin") decreased during the three months ended March 31, 2026 from the comparable prior year period due to lower operating expenses incurred.

Our income tax benefit for the three months ended March 31, 2026 increased by $6.0 million over the prior year comparable period primarily due to an increase in income before taxes.

Our effective tax rate for the three months ended March 31, 2026 was 20.5%, a decrease from 23.4% for the prior year comparable period.

The decrease in our effective tax rate was due to several factors, including a higher tax rate benefit from increased general business credits, a decrease in state income taxes expense, net of federal benefits, a higher tax rate benefit from the increase in cash surrender value in bank-owned life insurance policies, and a decrease in tax expense associated with shortfalls from stock-based compensation.

These decreases in our effective tax rate were partially offset by an increase in the amount of compensation expense that was subject to the IRC Section 162(m) limitation on the deductibility of certain executive compensation and an increase in the valuation allowance on our deferred tax assets.

Other income and expense, net for the three and six months ended June 30, 2026 decreased $74.7 million and $100.6 million, respectively, from the prior year comparable periods.

These decreases resulted principally from charges that did not recur in the current period, including a $70 million incentive payment made by TailFin Labs, LLC ("TailFin") in connection with the extension of the Walmart MoneyCard agreement and related agreements in May 2025.

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, 2026 decreased by $15.6 million from the prior year comparable period primarily due to an increase in income before taxes.

Our effective tax rate for the six months ended June 30, 2026 was 20.9%, a decrease from 27.4% for the prior year comparable period.

The decrease in our effective tax rate was due to several factors, including a higher tax rate benefit from increased general business credits, a higher tax rate benefit from the increase in cash surrender value in bank-owned life insurance policies, and a decrease in tax expense associated with shortfalls from stock-based compensation.

These decreases in our effective tax rate were partially offset by an increase in state income taxes expense, net of federal benefits, an increase 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 in nondeductible transaction related costs, and an increase in the valuation allowance on our deferred tax assets.

Outlook and Other Trends Affecting Our Business

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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, 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.

Our growth-oriented investments are focused on, among other things, accelerating our ability to onboard new partners in our B2B Services and Money Movement Services 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.

In 2025, we 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.

these re-alignments, including the exit from our operational activities in China, 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 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.

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

Three Months Ended March 31,

2026 2025 Change %

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

2026 2025 Change % 2026 2025 Change %

(In millions, except percentages)

Gross dollar volume $ 45,906 $ 38,545 $ 7,361 19.1 % $ 89,123 $ 75,797 $ 13,326 17.6 %

Number of active accounts* 3.43 3.58 (0.15) (4.2) %

Number of active accounts* 3.45 3.48 (0.03) (0.9) % n/a n/a n/a n/a

Purchase volume $ 4,704 $ 4,991 $ (287) (5.8) % $ 9,410 $ 10,104 $ (694) (6.9) %

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Number of tax refunds processed 2.89 3.73 (0.84) (22.5) % 10.67 11.71 (1.04) (8.9) %

* Represents the number of active accounts as of March 31, 2026 and 2025, respectively.

* Represents the number of active accounts as of June 30, 2026 and 2025, respectively.

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

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Critical Accounting Estimates

There have been no material changes during the three months ended March 31, 2026 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, 2025.

Comparison of Consolidated Results for the Three Months Ended March 31, 2026 and 2025

There have been no material changes during the six months ended June 30, 2026 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, 2025.

Comparison of Consolidated Results for the Three Months Ended June 30, 2026 and 2025

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 March 31,

Three Months Ended June 30,

Amount % of Total

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Total operating revenues $ 595,883 100.0 % $ 504,176 100.0 %

Card Revenues and Other Fees — Card revenues and other fees totaled $448.7 million for the three months ended March 31, 2026, an increase of $72.7 million, or 19%, from the comparable prior year period.

Card Revenues and Other Fees — Card revenues and other fees totaled $476.9 million for the three months ended June 30, 2026, an increase of $95.7 million, or 25%, 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.

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Decreases in accountholder fees were partially offset by an increase in fees generated from our overdraft protection programs due to expanded usage by our accountholders.

Cash Processing Revenues — Cash processing revenues totaled $136.4 million for the three months ended March 31, 2026, an increase of $23.0 million, or 20%, from the comparable prior year period.

In our Money Movement Services segment, our tax processing revenues increased due to the expansion of our taxpayer advance programs, partially offset by a 7% decline in the number of cash transfers processed from the prior year comparable period.

We generated an increase in our tax processing revenues during the three months ended March 31, 2026 despite a 3% decrease in the number of tax refunds processed.

Cash Processing Revenues — Cash processing revenues totaled $53.3 million for the three months ended June 30, 2026, a decrease of $1.2 million, or 2%, from the comparable prior year period.

Cash processing revenues decreased as a result of lower tax processing revenues, which decreased due to a 23% decrease in the number of tax refunds processed and lower ancillary tax program fees that are associated with tax refund transfers.

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

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 $44.0 million for the three months ended March 31, 2026, a decrease of $3.9 million, or 8%, from the comparable prior year period.

This decrease was partially offset by an increase in cash transfer revenues primarily due to higher disbursements revenue earned per transaction from a platform partner despite a 2% decrease in cash transfers processed.

The decline in the number of cash transfers processed was primarily due to a lower number of active accounts within our Consumer Services segment, partially offset by a higher number of cash transfers processed for third-party programs.

Interchange Revenues — Interchange revenues totaled $44.2 million for the three months ended June 30, 2026, a decrease of $2.8 million, or 6%, from the comparable prior year period.

The decrease was primarily due to a decrease in purchase volume of 6% as our effective interchange rate earned from the comparable prior year period remained consistent.

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 $27.2 million for the three months ended March 31, 2026, an increase of $5.6 million, or 26%, from the comparable prior year period.

Interest Income, net — Net interest income totaled $21.5 million for the three months ended June 30, 2026, consistent with the comparable prior year period.

The changes in net interest income was primarily the result of an increase in the size of our investments portfolio and higher yielding investments therein from our bond repositioning strategy, which was offset by 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 March 31,

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:

Three Months Ended June 30,

Amount % of Total

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Total operating expenses $ 596,644 100.1 % $ 490,777 97.4 %

Sales and Marketing Expenses — Sales and marketing expenses totaled $59.3 million for the three months ended March 31, 2026, a decrease of $0.4 million, or 1%, from the comparable prior year period.

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 our marketing expenses in our Consumer Services business, partially offset by an increase in revenue-sharing arrangements in our tax processing business.

Compensation and Benefits Expenses — Compensation and benefits expenses totaled $59.8 million for the three months ended March 31, 2026, a decrease of $6.4 million, or 10%, from the comparable prior year period.

The decrease was driven primarily by a decrease in third-party call center support costs associated with certain BaaS account programs within our B2B Services segment, a decrease in salary and wage expenses due to the closure of our China operations announced in September 2025, partially offset by higher employee stock-based compensation expense due to forfeitures of certain awards in the prior year comparable period.

Processing Expenses — Processing expenses totaled $374.6 million for the three months ended March 31, 2026, an increase of $89.3 million, or 31%, from the comparable prior year period.

Sales and Marketing Expenses — Sales and marketing expenses totaled $49.4 million for the three months ended June 30, 2026, a decrease of $0.8 million, or 2%, from the comparable prior year period.

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 our revenue-sharing arrangements in our Consumer Services business.

Compensation and Benefits Expenses — Compensation and benefits expenses totaled $59.0 million for the three months ended June 30, 2026, a decrease of $4.8 million, or 8%, from the comparable prior year period.

The decrease was driven primarily by a decrease in third-party call center support costs associated with certain BaaS account programs within our B2B Services segment, a decrease in employee stock-based compensation expense due to a reduction in new grants of equity awards during the pendency of our proposed transactions with CommerceOne and Smith Ventures, and lower accrued bonus compensation expense due to our financial performance in the prior year period exceeding our bonus targets.

Processing Expenses — Processing expenses totaled $394.7 million for the three months ended June 30, 2026, an increase of $101.5 million, or 35%, 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 $93.4 million for the three months ended March 31, 2026, an increase of $6.5 million, or 7%, from the comparable prior year period.

Other General and Administrative Expenses — Other general and administrative expenses totaled $93.5 million for the three months ended June 30, 2026, an increase of $9.9 million, or 12%, from the comparable prior year period.

This increase was driven primarily by higher professional services fees associated with our proposed transactions with CommerceOne and Smith Ventures, and our AML regulatory compliance initiatives, and an increase in depreciation and amortization expense and software licenses and hosting costs due to investments in our platform and operations.

In addition, the increase in other general and administrative expenses reflects a reserve established for unclaimed property obligations.

No comparable expense was recorded in the prior year period.

These increases were partially offset by a decrease in overall transaction losses attributable to a decrease in customer dispute volume across our portfolios and a favorable reduction in our dispute loss rates.

Restructuring and Other Charges — Restructuring and other charges totaled $0.1 million for the three months ended March 31, 2026, 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.

Restructuring and Other Charges — Restructuring and other charges totaled $0.1 million for the three months ended June 30, 2026, due to our previously announced restructuring plan.

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 Income and Expense, net

Other income and expense, net totaled $0.2 million for the three months ended March 31, 2026, a decrease of $25.9 million, from the prior year comparable period.

Other income and expense, net totaled $0.01 million for the three months ended June 30, 2026, a decrease of $74.7 million, from the prior year comparable period.

This decrease 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 in May 2025.

The incentive payment, which did not recur in the current period, was recorded as a component of equity in losses attributable to TailFin during the second quarter of 2025 under our HLBV method of accounting.

Income Tax Expense and Benefit

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

Three Months Ended March 31,

Three Months Ended June 30,

federal statutory tax rate 21.0 % 21.0 %

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Change in valuation allowance (4.9) —

Global intangible low-tax income tax — 0.1

Other (0.8) (0.1)

Effective tax rate 11.4 % 25.3 %

Our income tax expense totaled $13.9 million for the three months ended March 31, 2026, representing an increase of $6.0 million from the prior year comparable period, primarily due to an increase in our income before taxes.

The net decrease in our effective tax rate for the three months ended March 31, 2026 from the prior year comparable period was due to several factors, including a decrease of $0.5 million in state income taxes expense, net of federal benefits, a decrease of $1.1 million in tax expense associated with shortfalls from stock-based compensation, an increase of $1.0 million in the tax benefit from the cash surrender value in bank-owned life insurance policies, and a higher tax rate benefit due to an increase of $1.0 million in general business credits.

These decreases were partially offset by an increase of $0.9 million in the amount of compensation expense that was subject to the IRC 162(m) limitation on the deductibility of certain executive compensation and an increase in the valuation allowance recorded against our 2026 federal and state research credits.

For the three months ended March 31, 2026, we recorded valuation allowances of $1.4 million against our 2026 federal research credits, which is reflected in change in valuation allowance, and $1.1 million against our 2026 state research credits, reflected in state income taxes, net of federal tax benefit in our effective tax rate reconciliation.

Our income tax benefit totaled $0.3 million for the three months ended June 30, 2026, representing a decrease of $15.6 million from the prior year comparable period, primarily due to an increase in our income before taxes.

The net decrease in our effective tax rate for the three months ended June 30, 2026 from the prior year comparable period was due to several factors, including a decrease of $0.3 million in tax expense associated with shortfalls from stock-based compensation and a decrease of $0.5 million in the amount of compensation expense that was subject to the IRC 162(m) limitation on the deductibility of certain executive compensation.

These decreases were partially offset by an increase of $3.1 million in state income taxes expense, net of federal benefits, a decrease of $0.1 million in the tax benefit from the cash surrender value in bank-owned life insurance policies, an increase of $0.4 million in nondeductible transaction related costs, and an increase in the valuation allowance recorded against our 2026 federal and state research credits.

For the three months ended June 30, 2026, we recorded valuation allowances of $0.1 million against our 2026 federal research credits, which is reflected in change in valuation allowance, and $0.1 million against our 2026 state research credits, reflected in state income taxes, net of federal tax benefit in our effective tax rate reconciliation.

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, 2026 and 2025

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,

Amount % of Total

Operating Revenues Amount % of Total

Operating Revenues

(In thousands, except percentages)

Operating revenues:

Card revenues and other fees $ 925,579 73.9 % $ 757,177 71.2 %

Cash processing revenues 189,674 15.1 167,857 15.8

Interchange revenues 88,145 7.1 94,886 8.9

Interest income, net 48,732 3.9 43,130 4.1

Total operating revenues $ 1,252,130 100.0 % $ 1,063,050 100.0 %

Card Revenues and Other Fees — Card revenues and other fees totaled $925.6 million for the six months ended June 30, 2026, an increase of $168.4 million, or 22%, 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, 2026 and 2025—Operating Revenues—Card Revenues and Other Fees."

Cash Processing Revenues — Cash processing revenues totaled $189.7 million for the six months ended June 30, 2026, an increase of $21.8 million, or 13%, from the comparable prior year period.

Cash processing revenues increased primarily due to an increase in our tax processing revenues and to a lesser extent, an increase in cash transfer revenues.

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

Our cash transfer revenues increased during the six months ended June 30, 2026 primarily due to higher disbursements revenue earned per transaction from a platform partner despite a 4% decrease in the number of cash transfers.

Interchange Revenues — Interchange revenues totaled $88.1 million for the six months ended June 30, 2026, a decrease of $6.8 million, or 7%, from the comparable prior year period.

The decrease was primarily due to a decrease in purchase volume of 7% and for the same reasons as discussed under “Comparison of Three-Month Periods Ended June 30, 2026 and 2025—Operating Revenues—Interchange Revenues."

Interest Income, net — Net interest income totaled $48.7 million for the six months ended June 30, 2026, an increase of $5.6 million, or 12%, from the comparable prior year period.

The increase in net interest income was primarily the result of both the size of our investments portfolio and higher yielding investments therein from our bond repositioning strategy.

Operating Expenses

Six Months Ended June 30,

Amount % of Total

Operating Revenues Amount % of Total

Operating Revenues

(In thousands, except percentages)

Operating expenses:

Sales and marketing expenses $ 108,672 8.7 % $ 109,847 10.3 %

Compensation and benefits expenses 118,774 9.5 130,061 12.2

Processing expenses 769,286 61.4 578,530 54.4

Other general and administrative expenses 186,943 14.9 170,468 16.0

Restructuring and other charges 178 — — —

Total operating expenses $ 1,183,853 94.5 % $ 988,906 92.9 %

Sales and Marketing Expenses — Sales and marketing expenses totaled $108.7 million for the six months ended June 30, 2026, a decrease of $1.1 million, or 1%, from the comparable prior year period.

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, partially offset by an increase in revenue-sharing arrangements in our tax processing business.

Compensation and Benefits Expenses — Compensation and benefits expenses totaled $118.8 million for the six months ended June 30, 2026, a decrease of $11.3 million, or 9%, from the comparable prior year period.

The decrease was driven primarily by a decrease in third-party call center support costs associated with certain BaaS account programs within our B2B Services segment, a decrease in salary and wage expenses and related severance costs due to the closure of our China operations and lower employee stock-based compensation expense due to a reduction in new grants of equity awards during the pendency of our proposed transactions with CommerceOne and Smith Ventures.

Processing Expenses — Processing expenses totaled $769.3 million for the six months ended June 30, 2026, an increase of $190.8 million, or 33%, 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, 2026 and 2025—Operating Expenses—Processing Expenses."

Other General and Administrative Expenses — Other general and administrative expenses totaled $186.9 million for the six months ended June 30, 2026, an increase of $16.4 million, or 10%, 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, 2026 and 2025—Operating Expenses—Other General and Administrative Expenses."

Restructuring and Other Charges — Restructuring and other charges totaled $0.2 million for the six months ended June 30, 2026, due to our previously announced restructuring plan.

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 Income and Expense, net

Other income and expense, net totaled $0.2 million for the six months ended June 30, 2026, a decrease of $100.6 million, from the prior year comparable period.

This decrease was driven primarily by the same factors discussed above under “Comparison of Three-Month Periods Ended June 30, 2026 and 2025—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.

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,

federal statutory tax rate 21.0 % 21.0 %

State income taxes, net of federal tax benefit 1.5 5.7

Foreign tax rate differential — 0.3

General business credits (2.2) 1.6

Stock-based compensation (0.1) (4.9)

IRC 162(m) limitation (0.4) 2.3

Bank-owned life insurance income (2.3) 2.0

Nondeductible expenses 0.3 (0.3)

Nondeductible transaction related costs 0.7 —

Change in valuation allowance 2.3 —

Global intangible low-tax income tax — (0.2)

Other 0.1 (0.1)

Effective tax rate 20.9 % 27.4 %

Our income tax expense totaled $13.6 million for the six months ended June 30, 2026, representing an increase of $21.6 million from the prior year comparable period, primarily due to an increase in our income before taxes.

The net decrease in our effective tax rate for the six months ended June 30, 2026 from the prior year comparable period was due to several factors, including a decrease of $1.4 million in tax expense associated with shortfalls from stock-based compensation, an increase of $0.9 million in the tax benefit from the cash surrender value in bank-owned life insurance policies, and a higher tax rate benefit due to an increase of $1.0 million in general business credits.

These decreases were partially offset by an increase of $2.7 million in state income taxes expense, net of federal benefits, an increase of $0.4 million in the amount of compensation expense that was subject to the IRC 162(m) limitation on the deductibility of certain executive compensation, an increase of $0.4 million in nondeductible transaction related costs, and an increase in the valuation allowance recorded against our 2026 federal and state research credits.

For the six months ended June 30, 2026, we recorded valuation allowances of $1.1 million against our 2026 federal research credits, which is reflected in change in valuation allowance, and $1.1 million against our 2026 state research credits, reflected in state income taxes, net of federal tax benefit in our effective tax rate reconciliation.

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

Segment Results

The results of operations and key metrics of our B2B Services segment for the three months ended March 31, 2026 and 2025 were as follows:

Three Months Ended March 31,

2026 2025 Change %

The results of operations and key metrics of our B2B Services segment for the three and six months ended June 30, 2026 and 2025 were as follows:

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

2026 2025 Change % 2026 2025 Change %

(In thousands, except percentages)

5 unchanged sentences

Gross dollar volume $ 42,253 $ 34,620 $ 7,633 22.0 % $ 81,591 $ 67,634 $ 13,957 20.6 %

Number of active accounts* 1.91 1.78 0.13 7.3 %

Number of active accounts* 1.98 1.81 0.17 9.4 % n/a n/a n/a n/a

Purchase volume $ 2,025 $ 2,000 $ 25 1.3 % $ 3,942 $ 3,986 $ (44) (1.1) %

* Represents total number of active accounts as of March 31, 2026 and 2025, respectively.

* Represents total number of active accounts as of June 30, 2026 and 2025, respectively.

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

Q1 Q4 Q3 Q2 Q1

Q2 Q1 Q4 Q3 Q2 Q1

(In millions)

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

Segment revenues within our B2B Services for the three months ended March 31, 2026 increased $75.6 million, or 22%, over the prior year comparable period, while our segment expenses for the three months ended March 31, 2026 increased $74.0 million, or 24%.

Our gross dollar volume and number of active accounts increased during the three months ended March 31, 2026 by 19% and 7%, respectively, over the comparable prior year period, while purchase volume decreased by 3% year over year.

Segment revenues within our B2B Services for the three and six months ended June 30, 2026 increased $99.8 million, or 29%, and $175.3 million, or 25%, respectively, from the prior year comparable periods, while our segment expenses for the three and six months ended June 30, 2026 increased $95.3 million, or 30%, and $169.3 million, or 27%, respectively.

Our gross dollar volume and number of active accounts increased during the three months ended June 30, 2026 by 22% and 9%, respectively, over the comparable prior year period, while purchase volume increased by 1% year over year.

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 months ended March 31, 2026 over the comparable prior year period, principally due to higher processing expenses associated with the growth of certain BaaS account programs, partially offset by lower third-party call center support costs as a result of decreases in call volume and lower transaction losses due to decreases in our dispute loss rates and incoming volume.

As a result of these factors, our segment profit increased for the three months ended March 31, 2026 by approximately 6% over the prior year comparable period.

The growth in gross dollar volume from these BaaS programs resulted in a net increase in segment revenue for the three and six months ended June 30, 2026 due to higher program management service fees earned from these BaaS partners.

Segment expenses increased for the three and six months ended June 30, 2026 over the comparable prior year periods, principally due to higher processing expenses associated with the growth of certain BaaS account programs, partially offset by lower third-party call center support costs as a result of decreases in call volume and lower transaction losses due to decreases in our dispute loss rates and incoming volume.

As a result of these factors, our segment profit increased for the three and six months ended June 30, 2026 by approximately 16% and 11%, respectively, from the prior year comparable periods.

However, 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 three months ended March 31, 2026 and 2025 were as follows:

Three Months Ended March 31,

2026 2025 Change %

The results of operations and key metrics of our Consumer Services segment for the three and six months ended June 30, 2026 and 2025 were as follows:

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

2026 2025 Change % 2026 2025 Change %

(In thousands, except percentages)

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Gross dollar volume $ 3,653 $ 3,925 $ (272) (6.9) % $ 7,532 $ 8,163 $ (631) (7.7) %

Number of active accounts* 1.52 1.80 (0.28) (15.6) %

Direct deposit active accounts* 0.38 0.41 (0.03) (7.3) %

Number of active accounts* 1.47 1.67 (0.2) (12.0) % n/a n/a n/a n/a

Direct deposit active accounts* 0.38 0.41 (0.03) (7.3) % n/a n/a n/a n/a

Purchase volume $ 2,679 $ 2,991 $ (312) (10.4) % $ 5,468 $ 6,118 $ (650) (10.6) %

* Represents total number of active and direct deposit active accounts as of March 31, 2026 and 2025, respectively.

* Represents total number of active and direct deposit active accounts as of June 30, 2026 and 2025, respectively.

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

Q1 Q4 Q3 Q2 Q1

Q2 Q1 Q4 Q3 Q2 Q1

(In millions)

4 unchanged sentences

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

Segment revenues within Consumer Services for the three months ended March 31, 2026 decreased $8.8 million, or 9%, from the comparable prior year period, while our segment expenses for the three months ended March 31, 2026 decreased by $0.6 million, or 1%.

Our gross dollar volume and purchase volume declined by 8% and 11%, respectively, for the three months ended March 31, 2026 from the prior year comparable period, and the number of active accounts and direct deposit accounts declined by 16% and 7%, respectively, 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.

Segment revenues within Consumer Services for the three and six months ended June 30, 2026 decreased $8.3 million, or 9%, and $17.1 million, or 9%, respectively, from the comparable prior year periods, while our segment expenses for the three and six months ended June 30, 2026 decreased by $1.1 million, or 2%, and $1.7 million, or 1%, respectively.

Our gross dollar volume and purchase volume declined by 7% and 10%, respectively, for the three months ended June 30, 2026 from the prior year comparable period, and the number of active accounts and direct deposit accounts declined by 12% and 7%, respectively, 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, 2026.

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.

These decreases in segment revenues were partially offset by fees generated from our overdraft protection programs due to expanded usage by our accountholders.

Segment expenses for the three months ended March 31, 2026 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, lower supply chain material expenses due to fewer active accounts, and a decrease in sales commissions from lower revenues on products subject to tiered revenue-sharing agreements.

Overall, segment profit decreased for the three months ended March 31, 2026 by approximately 24% from the prior year comparable period.

Segment expenses for the three and six months ended June 30, 2026 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, lower supply chain material expenses due to fewer active accounts, and a decrease in sales commissions from lower revenues on products subject to tiered revenue-sharing agreements.

Overall, segment profit decreased for the three and six months ended June 30, 2026 by approximately 22% and 23%, 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 months ended March 31, 2026 and 2025 were as follows:

Three Months Ended March 31,

2026 2025 Change %

The results of operations and key metrics of our Money Movement Services segment for the three and six months ended June 30, 2026 and 2025 were as follows:

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

2026 2025 Change % 2026 2025 Change %

(In thousands, except percentages)

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

Q1 Q4 Q3 Q2 Q1

Q2 Q1 Q4 Q3 Q2 Q1

(In millions)

1 unchanged sentence

Number of tax refunds processed 2.89 7.78 0.11 0.20 3.73 7.98

Segment revenues within our Money Movement services for the three months ended March 31, 2026 increased $20.5 million, or 19%, from the prior year comparable period.

Segment expenses for the three months ended March 31, 2026 increased $8.8 million, or 26%.

The increase in segment revenues for the three months ended March 31, 2026 was driven by higher tax processing revenues, which increased due to the expansion of our taxpayer advance programs, partially offset by a 7% decline in the number of cash transfers processed from the prior year comparable period.

We generated an increase in our tax processing revenues during the three months ended March 31, 2026 despite a 3% decrease in the number of tax refunds processed.

Segment revenues within our Money Movement Services decreased $4.0 million, or 8%, during the three months ended June 30, 2026, and increased $16.5 million, or 10%, during the six months ended June 30, 2026 from the prior year comparable period.

Segment expenses for the three months ended June 30, 2026 remained consistent with the prior year comparable period and for the six months ended June 30, 2026 increased $8.8 million, or 18%.

The decrease in segment revenues for the three months ended June 30, 2026 was driven by lower tax processing revenues, which decreased due to a 23% decrease in the number of tax refunds processed and lower ancillary tax program fees that are associated with tax refund transfers.

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

This decrease was partially offset by an increase in cash transfer revenues, which increased primarily due to higher disbursements revenue earned per transaction from a platform partner despite a 2% decrease in cash transfers processed.

The increase in segment revenues for the six months ended June 30, 2026 was driven by an increase in our tax processing revenues and to a lesser extent, an increase in cash transfer revenues.

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

Segment expenses increased during the three months ended March 31, 2026 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 for the three months ended March 31, 2026 by approximately 15% from the prior year comparable period.

Segment expenses during the three months ended June 30, 2026 remained consistent year over year, but increased during the six months ended June 30, 2026 primarily from an increase in third-party costs and related expenses due to growth across our tax processing services and taxpayer advance programs.

Overall, segment profit decreased for the three months ended June 30, 2026 by 12%, but increased for six months ended June 30, 2026 by approximately 7% from the prior year comparable period.

Corporate and Other

The results of operations and key metrics of our Corporate and Other segment for the three months ended March 31, 2026 and 2025 were as follows:

Three Months Ended March 31,

2026 2025 Change %

The results of operations and key metrics of our Corporate and Other segment for the three and six months ended June 30, 2026 and 2025 were as follows:

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

2026 2025 Change % 2026 2025 Change %

(In thousands, except percentages)

8 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 26% for the three months ended March 31, 2026, from the comparable prior year period.

Unallocated corporate expenses for the three months ended March 31, 2026 increased by approximately 4%, over the prior year comparable period.

The increase in unallocated corporate expenses for the three months ended March 31, 2026 was driven primarily by higher professional services fees related to our AML regulatory compliance initiatives and higher software licenses and hosting costs due to investments in our platform and operations, partially offset by a decrease in salary and wage expenses and rent expense due to the closure of our China operations announced in September 2025.

Unallocated corporate expenses for the three and six months ended June 30, 2026 increased by approximately 2% and 3%, respectively, over the prior year comparable periods.

The increase in unallocated corporate expenses for the three and six months ended June 30, 2026 was driven primarily by higher professional services fees related to our AML regulatory compliance initiatives and higher software licenses and hosting costs due to investments in our platform and operations, partially offset by a decrease in salary and wage expenses due to the closure of our China operations announced in September 2025 and lower accrued bonus compensation expense due to our financial performance in the prior year period exceeding our bonus targets.

Liquidity and Capital Resources

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

Three Months Ended March 31,

Six Months Ended June 30,

(In thousands)

3 unchanged sentences

Financing activities 154,797 40,762

Increase in unrestricted cash, cash equivalents and restricted cash $ 224,679 $ 180,453

For the three months ended March 31, 2026 and 2025, we financed our operations primarily through our cash flows provided by operating activities, customer funds held on deposit and net borrowings from the Federal Home Loan Bank ("FHLB").

As of March 31, 2026, our primary source of liquidity was unrestricted cash and cash equivalents totaling $1.6 billion.

(Decrease) increase in unrestricted cash, cash equivalents and restricted cash $ (278,308) $ 720,127

For the six months ended June 30, 2026 and 2025, we financed our operations primarily through our cash flows provided by operating activities and customer funds held on deposit.

As of June 30, 2026, our primary source of liquidity was unrestricted cash and cash equivalents totaling $1.1 billion.

We also consider our $3.0 billion of available-for-sale investment securities to be highly liquid instruments.

1 unchanged sentence

We believe that our current unrestricted cash and cash equivalents, cash flows from operations, borrowing capacity under our revolving line of credit, and our ability to access borrowings from the FHLB will be sufficient to meet our working capital, capital expenditures, and any other capital needs for at least the next 12 months.

We are currently not aware of any trends or demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in our liquidity increasing or decreasing in any material way that will impact our capital needs during or beyond the next 12 months.

We are currently not aware of any trends or demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in our liquidity increasing or

decreasing in any material way that will impact our capital needs during or beyond the next 12 months.

We continue to monitor the impact of material trends on our business to ensure our liquidity and capital resources remain appropriate throughout this period of uncertainty.

Cash Flows from Operating Activities

Our $95.1 million of net cash provided by operating activities during the three months ended March 31, 2026 was the result of $53.8 million of net income, adjusted for certain non-cash operating items of $50.2 million and decreases in net changes in our working capital assets and liabilities of $8.9 million.

Our $108.7 million of net cash provided by operating activities during the three months ended March 31, 2025 was the result of $25.8 million of net income, adjusted for certain non-cash operating items of $62.8 million and increases in net changes in our working capital assets and liabilities of $20.2 million.

Our $194.7 million of net cash provided by operating activities during the six months ended June 30, 2026 was the result of $51.7 million of net income, adjusted for certain non-cash operating items of $86.9 million and increases in net changes in our working capital assets and liabilities of $56.1 million.

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.

Cash Flows from Investing Activities

Our $566.6 million of net cash used in investing activities during the three months ended March 31, 2026 was primarily due to purchases of available-for-sale securities, net of proceeds from sales and maturities, of $508.3 million, and to a lesser extent, the acquisition of property and equipment of $19.0 million, net changes in loans of $16.1 million, and net purchases of FHLB activity stock for $22.5 million necessitated by our short-term borrowings from the FHLB.

Our $63.5 million of net cash used in investing activities during the three months ended March 31, 2025 was primarily due to purchases of available-for-sale securities, net of maturities and sales, of $25.9 million, the acquisition of property and equipment of $19.4 million and net changes in loans of $17.6 million.

Our $627.8 million of net cash used in investing activities during the six months ended June 30, 2026 was primarily due to purchases of available-for-sale securities, net of proceeds from sales and maturities, of $575.6 million, and to a lesser extent, the acquisition of property and equipment of $38.9 million, and net changes in loans of $12.3 million.

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.

Cash Flows from Financing Activities

Our $696.2 million of net cash provided by financing activities during the three months ended March 31, 2026 was principally the result of net short term borrowings from the FHLB of $500.0 million in support of our tax refund processing business, a net increase in customer deposits of $112.4 million and a net increase in obligations to customers of $87.9 million.

Refer to additional discussion below for our borrowings and repayments from our liquidity sources, including the FHLB.

Our $135.2 million of net cash provided by financing activities during the three months ended March 31, 2025 was principally the result of a net increase in customer deposits of $159.8 million partially offset by a net decrease in obligations to customers of $36.6 million.

Our $154.8 million of net cash provided by financing activities during the six months ended June 30, 2026 was principally the result of a net increase in customer deposits of $185.6 million, partially offset by a net decrease in obligations to customers of $26.4 million.

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.

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

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 March 31, 2026.

We had no outstanding balance as of June 30, 2026.

Other Sources

2 unchanged sentences

These sources may be used from time to time to support our short-term liquidity needs and lines of business.

We had $500 million outstanding in advances from the FHLB as of March 31, 2026, which was subsequently repaid in full on April 1, 2026.

We had no outstanding in advances from the FHLB as of June 30, 2026.

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 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.

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 are 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.

7 unchanged sentences

Contractual Obligations

There have been no material changes during the three months ended March 31, 2026 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, 2025.

There have been no material changes during the six months ended June 30, 2026 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, 2025.

Capital Requirements for Bank Holding Companies

Our subsidiary bank, Green Dot Bank, is a member bank of the Federal Reserve System and our primary regulators are the Federal Reserve Board and the Utah Department of Financial Institutions.

Our subsidiary bank, Green Dot Bank, is a member bank of the Federal Reserve System and our primary regulators are the Federal Reserve and the Utah Department of Financial Institutions (the "Utah DFI").

We and Green Dot Bank are subject to various regulatory capital requirements administered by the banking agencies.

12 unchanged sentences

Basel III Rules.

As of March 31, 2026 and December 31, 2025, we and Green Dot Bank were categorized as "well-capitalized" under applicable regulatory standards.

As of June 30, 2026 and December 31, 2025, 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 March 31, 2026, which management believes would have changed our category as "well-capitalized."

There were no conditions or events since June 30, 2026, 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 March 31, 2026 and December 31, 2025 were as follows:

March 31, 2026

The actual amounts and ratios, and required "well-capitalized" minimum capital amounts and ratios at June 30, 2026 and December 31, 2025 were as follows:

June 30, 2026

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