Q4 2024 Green Dot Corp Earnings Call

February 27, 2025

By zero after today's presentation there'll be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad.

Speaker Change: To withdraw your question. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to Tim Willi Senior Vice President Finance and corporate development. Please go ahead.

Tim Willi: Thank you and good afternoon, everyone. Today, we are discussing green dots fourth quarter 2024 financial and operating results.

Speaker Change: Following our remarks, we'll open the call for your questions.

Speaker Change: Our most recent earnings release that accompanies this call and webcast can be found at IR, Scott Green Dot Dot com.

Speaker Change: As a reminder, our comments may include forward looking statements and expectations regarding future results and performance.

Speaker Change: Please refer to the cautionary language in the earnings release and in Green dots filings with the Securities and Exchange Commission, including our most recent Form 10-K and 10-Q for additional information concerning factors that could cause actual results to differ materially from the forward looking statements.

Speaker Change: During the call we will refer to our financial measures that do not conform with generally accepted accounting principles.

Speaker Change: The sake of clarity unless otherwise noted all numbers, we talk about today will be on a non-GAAP basis information may be calculated differently consumable or non-GAAP data presented by other companies quanta.

In performance.

Please refer to the cautionary language in the earnings release and in Green dots filings with the Securities and Exchange Commission, including our most recent Form 10-K and 10-Q for additional information concerning factors that could cause actual results to differ materially from the forward looking statements.

Speaker Change: Quantitative reconciliation of our non-GAAP financial information to the directly comparable GAAP financial information appears in today's press release.

George: The content of this call is property of the Green Dot Corporation and is subject to copyright protection now I'd like to turn the call over to George.

During the call we will refer to our financial measures that do not conform with generally accepted accounting principles.

George: Good afternoon, and thank you for joining our fourth quarter 2024 earnings call.

George: Today, I will start with some comments on the quarter and 2024 overall.

For the sake of clarity unless otherwise noted all numbers, we talk about today will be on a non-GAAP basis.

George: We'll then turn it over to Jeff to discuss our results in greater detail and provide some color and guidance on our outlook for 2025.

Information may be calculated differently than similar non-GAAP data presented by other companies quantitative.

A quantitative reconciliation of our non-GAAP financial information to the directly comparable GAAP financial information appears in today's press release the.

Speaker Change: After Justice has finished his comments, our chief revenue officer, Chris Ruble will join us to discuss the evolution and progress of our growth strategy, including updates to our business development organization.

The content of this call is property of the Green Dot Corporation and is subject to copyright protection now I'd like to turn the call over to George.

Speaker Change: And I will then conclude with some final comments and observations before taking your questions.

Speaker Change: Let's get started.

George: Good afternoon, and thank you for joining our fourth quarter 2024 earnings call.

Speaker Change: In the fourth quarter, we delivered results that were in line with our revised expectations adjusted.

Speaker Change: Today, I will start with some comments on the quarter and 2024 overall.

Speaker Change: Adjusted revenue was up 25% year over year, while adjusted EBITDA was up 70% with over 200 basis points of margin expansion.

Speaker Change: We'll then turn it over to Jeff to discuss our results in greater detail and provide some color and guidance on our outlook for 2025.

Speaker Change: The results reflect the improved momentum in our businesses as we continue moving past headwinds associated with the conversions in 2023, and an elevated expense growth in areas, such as compliance and risk.

Jeff: After Justice has finished his comments, our chief revenue officer, Chris Ruble will join us to discuss the evolution and progress of our growth strategy, including updates to our business development organization.

Speaker Change: Like the third quarter, our fourth quarter results were driven by growth in the <unk> segment.

Speaker Change: And I will then conclude with some final comments and observations before taking your questions.

Speaker Change: And they were aided by moderating rates of decline in our retail business and notable improvements in our transaction in dispute costs.

Jeff: Let's get started.

Jeff: In the fourth quarter, we delivered results that were in line with our revised expectations adjusted.

Jeff: Adjusted revenue was up 25% year over year, while adjusted EBITDA was up 70% with over 200 basis points of margin expansion.

Speaker Change: I am, particularly happy to point out that our average active accounts were up 3% year over year, marking the first quarter and year over your active account growth in almost four years.

Jeff: The results reflect the improved momentum in our businesses as we continue moving past headwinds associated with the conversions in 2023, and an elevated expense growth in areas, such as compliance and risk.

Speaker Change: Looking back at 2024, we have navigated a challenging first half marked by significant headwinds related to client de conversions and elevated spending and regulatory and compliance infrastructure.

Jeff: Like the third quarter, our fourth quarter results were driven by growth in the <unk> segment.

Speaker Change: Followed by the second half the delivered improved performance marked by revenue growth, new partner wins and launches, including Pls to significantly partner in our retail channel.

Jeff: And they were aided by moderating rates of decline in our retail business and notable improvements in our transaction in dispute costs.

Speaker Change: The introduction of our new embedded finance brand arc by Green Dot and importantly, a return to EBITDA growth.

Jeff: I am, particularly happy to point out that our average active accounts were up 3% year over year, marking the first quarter and year over your active account growth in almost four years.

Speaker Change: Overall, I am proud of how the team effectively navigated ongoing challenges and remain focused on expense management risk management and business development and growth.

Jeff: Looking back at 2024, we have navigated a challenging first half marked by significant headwinds related to client de conversion and elevated spending and regulatory and compliance infrastructure.

Speaker Change: Ensure we meet our financial targets and expectations.

Speaker Change: The progress that we demonstrated in our financial performance as we move through the year was a welcome event that required a lot of work, but more importantly, it points to the improvements that we've made in how we operate the company.

Followed by the second half the delivered improved performance marked by revenue growth, new partner wins and launches, including a significant new partner in our retail channel.

Speaker Change: The year, we remain focused on three pillars of our strategy investing in compliance and risk management infrastructure improve.

Jeff: The introduction of our new embedded finance brand arc by Green Dot and importantly, a return to EBITDA growth.

Speaker Change: Improving our cost structure and building an engine of stable and predictable revenue growth.

Jeff: Overall, I am proud of how the team effectively navigated ongoing challenges and remain focused on expense management risk management and business development and growth.

Speaker Change: As I have indicated on prior calls our goal is not just to return green dot to a path of predictable financial performance, but also provide our partners and customers viable solutions and deliver them in a highly secure compliant and scalable way.

Jeff: Ensure we meet our financial targets and expectations.

Jeff: The progress that we demonstrated in our financial performance as we move through the year was a welcome event that required a lot of work, but more importantly, it points to the improvements that we've made in how we operate the company.

Speaker Change: Over the long term this will solidify our competitive position while also ensuring we are meeting the expectations of all of our stakeholders.

Speaker Change: Now let me briefly provide some comments on our guidance for 2025, and Jess will provide you with more detail on our outlook. We currently.

Jeff: Out the year, we remain focused on three pillars of our strategy investing in compliance and risk management infrastructure improve.

Jeff: Improving our cost structure and building an engine of stable and predictable revenue growth.

Jess: We anticipate non-GAAP revenue of $1 85 billion to $1 9 billion and adjusted EBITDA of 145 million to $155 million.

Jeff: As I have indicated on prior calls our goal is not just to return green dot to a path of predictable financial performance, but also provide our partners and customers viable solutions and deliver them in a highly secure compliant and scalable way.

Jess: We expect solid momentum in <unk> and money movement, reflecting the secular opportunities in those markets and the benefits of the investments we are making however, we still face challenges in our consumer segment from secular headwinds in the retail channel you will also see some modest elevation in corporate expenses, primarily related to compliance related initiatives.

Jeff: Over the long term this will solidify our competitive position while also ensuring we are meeting the expectations of all of our stakeholders.

Jeff: Now let me briefly provide some comments on our guidance for 2025, and Jess will provide you with more detail on our outlook.

Jess: While these results imply a decline in earnings compared to last year I am encouraged by the outlook and progress that we're seeing in <unk> and money movement, and we continue to reposition the revenue and growth drivers of the company.

Jess: We currently anticipate non-GAAP revenue of $1 85 billion to $1 9 billion and adjusted EBITDA of 145 million to $155 million.

Jess: Now I will turn it over to Josh to provide insights on our fourth quarter financials and discuss our guidance in more detail.

Josh: Thank you George and good afternoon, everyone.

Josh: In the fourth quarter, our non-GAAP revenue grew 25% year over year and adjusted EBITDA increased 70% primarily from continued growth in our <unk> segment and strong margin performance from our consumer segment.

Jess: While these results imply a decline in earnings compared to last year.

Josh: non-GAAP EPS of <unk> 40, <unk> grew 190% from last year due to the strong performance on earnings.

Jess: Encouraged by the outlook and progress that we're seeing in <unk> and money movement as we continue to reposition the revenue and growth drivers of the company.

Josh: It should be noted however that the fourth quarter, adjusted EBITDA and non-GAAP EPS growth rate benefited from favorable comparisons as last year's fourth quarter had higher than expected transaction and dispute loss rates that negatively impacted adjusted EBITDA and non-GAAP EPS improved performance this quarter was 80.

Jess: Now I will turn it over to Josh to provide insights on our fourth quarter financials and discuss our guidance in more detail yes.

Josh: Thank you George and good afternoon, everyone.

Josh: By these easier comparisons.

Now I'll touch on the factors that influenced the performance of our segments and we'll refer you to both our press release and quarterly slide deck for segment results and key metrics.

Josh: non-GAAP EPS of <unk> 40, <unk> grew 190% from last year due to the strong performance on earnings.

Josh: First is our consumer services segment, which is comprised of our retail and direct channels.

Josh: While the consumer segment remains under pressure due to secular headwinds in the retail channel.

Josh: Declines in active accounts and revenue have eased largely due to our new partnership with Pls. The launch of Pls positively impacted the retail channel, resulting in sequential growth in active accounts following similar growth in the third quarter. Additionally, key metrics such as purchase volume and revenue per active account and retail showed.

Josh: By these easier comparisons.

Josh: Now I'll touch on the factors that influenced the performance of our segments and we'll refer you to both our press release and quarterly slide deck for segment results and key metrics.

Josh: Movements compared to the third quarter and prior year.

Josh: Our efforts to reposition the direct channel continue and we've now seen stabilization in the revenue for the last six quarters. While revenue has been stable. We have prioritized profitability was solid improvements observed over the course of the year, particularly in the fourth quarter active.

Josh: First is our consumer services segment, which is comprised of our retail and direct channels.

Josh: The consumer segment remains under pressure due to secular headwinds in the retail channel the.

Josh: The declines in active accounts and revenue have eased largely due to our new partnership with Pls. The launch of Pls positively impacted the retail channel, resulting in sequential growth in active accounts following similar growth in the third quarter.

Josh: Active accounts in the quarter increased compared to last year. However, a portion of those accounts have been subsequently blocked by our risk management team typically these accounts do not generate significant revenue as they're shut down quickly. The focus remains on investing in the platforms feature functionality and positioning this channel for revenue growth while may.

Josh: Additionally, key metrics such as purchase volume and revenue per active account and retail showed improvements compared to the third quarter and prior year.

Josh: Containing vigilance on risk and compliance.

Josh: Overall segment margins and profitability increased significantly due to our efforts to manage operating expenses, including substantial improvements in transaction and fraud management expenses compared to last year.

Josh: Now I will turn into the <unk> segment, which is comprised of our bass and rapid pay card channels.

Josh: Revenue growth continues to be driven by a significant vast partner with additional growth in the rest of the vast portfolio.

Josh: Key metrics in the vast division such as purchase volume and active accounts are increasing due to new and existing partners I am optimistic that this momentum will continue as we work with current partners to further growth while also anticipating the launch of several new partners in 2025.

Josh: Maintaining vigilance on risk and compliance.

Josh: Our rapid pay car channel experienced modest revenue declines as we lap the benefits of some pricing strategies, while active accounts and volumes declined primarily due the pressures on the staffing industry.

Josh: Now I'll turn to the <unk> segment, which is comprised of our bass and rapid pay card channels.

Josh: Revenue growth continues to be driven by a significant bass partner with additional growth in the rest of the vast portfolio.

Josh: As previously discussed the staffing industry one of our largest verticals has faced challenges for almost two years and has not yet seen a recovery while the weakness in staffing is beyond our control or new sales activity in the year was solid the team.

Josh: Key metrics in the bass division such as purchase volume inactive accounts are increasing due to new and existing partners I'm optimistic that this momentum will continue as we work with current partners to further growth while also anticipating the launch of several new partners in 2025.

<unk> is continuously designing and implementing programs and strategies designed to boost employer and employee engagement enhanced activations and improve retention.

Josh: And pay card profitability improved as we lapped deconversion headwinds experienced revenue growth and maintained our focus on efficiency and driving scale, it's worth noting that despite experiencing modest declines in pay card revenue, we achieved a significant reduction in transaction losses, and fraud management expenses, allowing our pay card.

Josh: To show profit growth.

Josh: The decline in revenue.

Josh: And our money movement segment, which comprises our tax processing business and our money processing business.

Josh: Lawyer, and employee engagement enhanced activations and improve retention.

Josh: Tax business experienced revenue growth in the seasonally slow fourth quarter.

And pay card profitability improved as we lapped deconversion headwinds experienced revenue growth and maintained our focus on efficiency and driving scale.

Josh: While money processing is down slightly our money processing business, which is largely driven by cash transfer volume continues to face headwinds that stem from the decline in our own active account base, mainly in the consumer segment.

Josh: It's worth noting that despite experiencing modest declines in pay card revenue, we achieved a significant reduction in transaction losses, and fraud management expenses, allowing our pay card channel to show profit growth. Despite the decline in revenue.

Josh: While these challenges are lessening to some extent they still exist, notably our third party cash transfer volumes increased double digits due to existing and new partners with a strong pipeline anticipated for 2025.

And our money movement segment, which comprises our tax processing business and our money processing business.

Josh: Profitability in this segment remains solid the alert to the third quarter the tax business experienced margin declined due to timing of expenses in preparation for the 2025 tax season, while money processing saw a modest increase in margins as the team continues to manage expenses and positioned for revenue growth.

Tax business experienced revenue growth in the seasonally slow fourth quarter.

Josh: While money processing was down slightly our.

Josh: Our money processing business, which is largely driven by cash transfer volumes continues to face headwinds that stem from the decline in our own active account base, mainly in the consumer segment.

Josh: The corporate and other segment reflects the interest income we earn at our bank net of the revenue share on interest we pay to bass partners as well as salaries technology and administrative costs and some smaller intercompany adjustments.

Josh: Revenue increased year over year due to rate cuts and improve the balance between yield on our cash and investments and interest shared with partners.

Josh: Profitability in this segment remains solid.

Josh: Alert to the third quarter the tax business experienced margin declined due to timing of expenses in preparation for the 2025 tax season, while money processing saw a modest increase in margins as the team continues to manage expenses and positioned for revenue growth.

Josh: Expenses increased as expected last year, we reversed bonus accruals, which led to a decrease in fourth quarter expenses in 2023, while the fourth quarter of 2024 is more indicative of our normal run rate.

Josh: Let me finish by providing our outlook for 2025, we.

Josh: We expect non-GAAP revenue of $1 85 billion to $1 9 billion representing growth of 10% at the midpoint.

Josh: We expect adjusted EBITDA of $145 million to $155 million, representing a decline of 9% at the midpoint.

Josh: Revenue increased year over year due to rate cuts and improve the balance between yield on our cash and investments and interest shared with partners.

Josh: And non-GAAP EPS of $1 five to $1 20, driven primarily by our adjusted EBITDA expectations.

Josh: We expect consolidated revenue to grow mid to upper teens through the first three quarters with mid to upper single digits in the fourth quarter due to normalized comparisons.

Josh: Let me finish by providing our outlook for 2025, we.

Josh: <unk> segment revenue is projected to see about 30% growth in the first half of the year moderating in the second half leading to low 20% growth for 2025.

Josh: We expect non-GAAP revenue of $1 85 billion to $1 9 billion representing growth of 10% at the midpoint.

Josh: We expect adjusted EBITDA of $145 million to $155 million, representing a decline of 9% at the midpoint.

Josh: The consumer segment revenue is expected to decline by mid single digits in the first three quarters an improvement over 2024 in large part from the positive impact of the Pls launch. However, we anticipate revenue declines to drop further in the fourth quarter to the mid teens, primarily due to lapping the pls launch.

Josh: And non-GAAP EPS of $1 five to $1 20, driven primarily by our adjusted EBITDA expectations.

Josh: We expect consolidated revenue to grow mid to upper teens through the first three quarters with mid to upper single digits in the fourth quarter due to normalized comparisons.

Josh: And the secular headwinds and retail are expected to persist.

Josh: Do you expect to launch new partners in retail through financial Service Center partners those programs won't be material in 2025.

Josh: <unk> segment revenue is projected to see about 30% growth in the first half of the year moderating in the second half leading to low 20% growth for 2025.

Josh: All in we expect that consumer segment revenue decline of mid to upper single digits in 2025.

Josh: The consumer segment revenue is expected to decline by mid single digits in the first three quarters an improvement over 2024 in large part from the positive impact of the Pls launch.

Josh: Money movement segment revenue should grow low single digits in 2025 with the continuing trend of cash transfer volume from third parties offsetting declines in transactions from our own account base and moving this operation back to sustainable revenue growth after several years of transition.

Josh: However, we anticipate revenue declines to drop further in the fourth quarter to the mid teens, primarily due to lapping the pls launch and the secular headwinds and retail are expected to persist.

Josh: In our corporate segment, we plan to use corporate financing proceeds to reposition our investment portfolio into higher yielding floating rate assets, reducing our overall duration exposure. This repositioning combined with organic balance sheet growth should result in approximately $10 million of revenue growth.

Do you expect to launch new partners in retail through financial Service Center partners those programs won't be material in 2025.

Josh: All in we expect that consumer segment revenue decline of mid to upper single digits in 2025.

Josh: We expect adjusted EBITDA to grow in the mid teens in the first half of the year due to our revenue momentum and favorable comparisons and decline in the second half of the year due to continued headwinds in retail combined with a negative mix shift and profit margins in that channel as a result, we expect.

In our corporate segment, we plan to use corporate financing proceeds to reposition our investment portfolio into higher yielding floating rate assets, reducing our overall duration exposure.

Josh: Consumer segment margins to be comparable to 2023.

Josh: We anticipate roughly flat margins in both our <unk> segment, and our money movement segment.

Josh: This repositioning combined with organic balance sheet growth should result in approximately $10 million of revenue growth.

Josh: We also expect a mid single digit increase in expenses in our corporate segment to reflect ongoing investments in our regulatory compliance and infrastructure.

Josh: We expect adjusted EBITDA to grow in the mid teens in the first half of the year due to our revenue momentum and favorable comparisons and decline in the second half of the year due to continued headwinds in retail combined with a negative mix shift in profit margin in that channel as a result, we expect consumer.

Josh: In summary, while we still anticipate declines in our consumer segment I am encouraged by our outlook for growth in both the B to B and money movement segments. This marks the second consecutive year, where these segments are expected to show growth. This expectation reinforces my confidence that our investments in these areas are enabling.

Josh: Segment margins to be comparable with the 2023.

Josh: US to capitalize on the vast opportunities within those markets. Additionally, we continue to invest in platform features and functionality that can help reduce the rate of decline in the consumer segment, while pursuing niche opportunities with financial service Center partners.

Josh: We anticipate roughly flat margins in both our <unk> segment, and our money movement segment.

Josh: We also expect a mid single digit increase in expenses in our corporate segment to reflect ongoing investments in our regulatory compliance and infrastructure.

Josh: Our capital allocation philosophy, prioritizes organic growth, particularly given the significant addressable markets in our <unk> and money movement segments and the attractive returns our investments primarily focus on business development enhancing cycle times for Onboarding and launching partners and creating a central features and.

Josh: <unk> on our platform we.

Josh: US to capitalize on the vast opportunities within those markets. Additionally, we continue to invest in the platform features and functionality that can help reduce the rate of decline in the consumer segment, while pursuing niche opportunities with financial service Center partners.

Josh: We plan to maintain our direct to consumer marketing investments in 2025 with an emphasis on improving retention by leveraging our platform investments.

Josh: As a final note we expect our GAAP net income in 2025 to reflect the impact of realized losses in our investment portfolio from our repositioning strategy.

Josh: Our capital allocation philosophy, prioritizes organic growth, particularly given the significant addressable markets in our <unk> and money movement segments and the attractive returns on our investments primarily focus on business development enhancing cycle times for Onboarding and launching partners and creating a central features and functionality.

Chris Ruble: Now, let me turn the call over to Chris to discuss the evolution of our business development and revenue organization.

Chris Ruble: Thank you Jess and good afternoon, everyone.

Speaker Change: As George mentioned in his opening comments building revenue engine that will deliver sustainable predictable and profitable revenue growth is one of the three key pillars of our operating strategy.

Josh: On our platform.

Josh: We plan to maintain our direct consumer marketing investments in 2025 with an emphasis on improving retention by leveraging our platform investments.

Speaker Change: Want to spend a couple of minutes updating you on the evolution of our business development organization.

Speaker Change: Where the priorities lie as we move into 2025 and beyond and some of our successes.

Josh: As a final note we expect our GAAP net income in 2025 to reflect the impact of realized losses in our investment portfolio from our repositioning strategy now.

Speaker Change: Since assuming this role in December of 'twenty, two we've made substantial progress in creating an enterprise grade business development engine.

Josh: Now, let me turn the call over to Chris to discuss the evolution of our business development and revenue organization.

When I stepped into this role the company had siloed business development teams with varying degrees of Burger and formality.

Chris Ruble: Thank you Jess and good afternoon, everyone.

Speaker Change: Since then we've focused on several key areas.

Chris Ruble: As George mentioned in his opening comments building revenue engine that will deliver sustainable predictable and profitable revenue growth is one of the three key pillars of our operating strategy.

Speaker Change: Beginning with organizing and identifying the markets and types of customers who want to pursue additionally.

Speaker Change: Additionally, we have focused on building an enterprise business development team led by a proven sales leader and strategy supporting our batch and money movement businesses.

Chris Ruble: Want to spend a couple of minutes updating you on the evolution of our business development organization.

Chris Ruble: The priorities lie as we move into 2025 and beyond and some of our successes.

Speaker Change: We also launched arc or embedded finance platform of services that delivers comprehensive and configurable banking and money movement capabilities and have invested in driving pipeline growth.

Chris Ruble: Since assuming this role in December of 'twenty, two we've made some substantial progress in creating an enterprise grade business development engine.

Speaker Change: As an organization, we have improved our alignment across key functional areas like product technology and operations to ensure we have the capabilities needed to onboard customers and support their growth plans.

Chris Ruble: When I stepped into this role the company had siloed business development teams with varying degrees of rigor and formality.

Chris Ruble: Since then we've focused on several key areas.

Chris Ruble: Beginning with organizing and identifying the markets and types of customers who want to pursue additionally.

Speaker Change: And we have further intensified our process to assess the risk profile of our pipeline and.

Chris Ruble: Additionally, we have focused on building an enterprise business development team led by a proven sales leader and strategy supporting our batch and money movement businesses.

Speaker Change: And balance that with the potential reward.

Speaker Change: In particular, we are applying more rigor to understanding the opportunities and structuring contracts in ways that reduce risk while maximizing financial opportunity.

Chris Ruble: We also launched arc or embedded finance platform of services that delivers comprehensive and configurable banking and money movement capabilities and have invested in driving pipeline growth.

Speaker Change: We're in a position to be selective reiterating our commitment to leveraging compliance leadership as a competitive advantage.

Chris Ruble: As an organization, we have improved our alignment across key functional areas like product technology and operations to ensure we have the capabilities needed to onboard customers and support their growth plans.

Speaker Change: We're already seeing the benefits from this progress and investment.

Speaker Change: Our pipelines have been growing.

Speaker Change: Both total and probability adjusted pipeline up over 50% year over year and up 120% in the last two years.

Chris Ruble: And we have further intensified our process to assess the risk profile of our pipeline and.

Speaker Change: We're signing significant new partners.

Speaker Change: With expectations to launch them in 2025.

Chris Ruble: And balance that with the potential reward.

Chris Ruble: In particular, we are applying more rigor to understanding the opportunities and structuring contracts in ways that reduce risk while maximizing financial opportunity.

Speaker Change: You may have seen earlier. This week, we are partnering with dolphin Tech, a leading FSC and money transfer company with over 5500 locations nationwide to deliver banking services to their customers.

Chris Ruble: We're in a position to be selective reiterating our commitment to leveraging compliance leadership as a competitive advantage.

Speaker Change: The signing of Dol Fintech. In addition to our recent launch of Pos.

Chris Ruble: We're already seeing the benefits from this progress and investment.

Speaker Change: Points to the opportunity in the broader FSC channel.

Speaker Change: I would note that while these relationships are recognized as part of the retail channel, they're very bath like in nature and supportive of our outlook for embedded finance business.

Chris Ruble: Our pipelines have been growing.

Chris Ruble: Both total and probability adjusted pipeline up over 50% year over year and up 120% in the last two years.

Speaker Change: We also recently announced a new Judy on partners, including borrow a leading digital bank.

Chris Ruble: We're signing significant new partners.

Chris Ruble: With expectations to launch them in 2025.

Speaker Change: Money, a fintech focused on serving small businesses illustrating.

Chris Ruble: You may have seen earlier. This week, we are partnering with dolphin Tech, a leading FSC and money transfer company with over 5500 locations nationwide to deliver banking services to their customers.

Speaker Change: Illustrating the emerging opportunity to serve and empower small businesses.

Speaker Change: And tomorrow, we will announce that marchetta will join our list of GDN partners focused on facilitating and expanding cash services and access for customers.

Chris Ruble: The signing of Dol Fintech. In addition to our recent launch of Pos.

Chris Ruble: Points to the opportunity in the broader FSC channel.

Speaker Change: In addition to these recently signed and are preparing to launch new partners in areas, such as auto Finance financial services point of sale solutions and other leading brands with sizable user basis that are looking for embedded PTP solutions.

Chris Ruble: I would note that while these relationships are recognized as part of the retail channel, they're very bath like in nature and supportive of our outlook for embedded finance business.

Chris Ruble: We also recently announced new Judy on partners, including borrow a leading digital bank and clip money Fintech focused on serving small businesses.

Speaker Change: We look forward to sharing more on these significant new partners and growth opportunities very soon.

Speaker Change: As we look ahead, we see tremendous opportunity in the FSC industry and in the broader embedded finance market.

Chris Ruble: Illustrating the emerging opportunity to serve and empower small businesses.

Chris Ruble: And tomorrow, we will announce that Mercado will join our list of GDN partners focused on facilitating and expanding cash services and access for customers.

Speaker Change: Typically in SaaS solutions for SMB gig economy, and consumer services and marketplace.

Speaker Change: While much work has been done there remains much work to do looking ahead to 2025 and beyond our focus will be on improving our ability to launch partners with greater efficiency and speed building brand awareness for arc are embedded finance platform.

Chris Ruble: In addition to these recently signed and are preparing to launch new partners in areas, such as auto Finance financial services point of sale solutions and other leading brands with sizable user basis that are looking for embedded PTP solutions.

Speaker Change: Growing EW eight platform integrations that are enabling us to onboard employers from our existing 7000, plus corporate pay card clients and aligning corporate resources to support our growing <unk> segments that are now routinely betting and launching partners.

Chris Ruble: We look forward to sharing more on these significant new partners and growth opportunities very soon.

Chris Ruble: As we look ahead, we see tremendous opportunity in the FSC industry and in the broader embedded finance market.

Speaker Change: This has not been an issue in the past, but I believe it will be a high class problem to stay in front of <unk>.

Speaker Change: Typically in SaaS solutions for SMB gig economy, and consumer services and marketplace.

Speaker Change: In summary, we have made significant progress in building our revenue engine to attract close onboard and manage partners. We look forward to sharing our progress as we continue to build the foundational capabilities that will deliver long term revenue and earnings growth.

George: With that let me turn it back to George.

George: Thank you Chris before we take your questions I wanted to provide some closing thoughts and observations.

George: We accomplished a lot in 2024 throughout the course of the year and I have talked about how we would execute against three key pillars of our strategy.

Speaker Change: This has not been an issue in the past, but I believe it will be a high class problem to stay in front of them and.

George: We have and will continue to invest in our compliance and risk management infrastructure. We are stewards of our depositors capital and our mission our purpose and our strategy is to ensure we treat our customers right.

George: That well, we will also be a market leading enterprise in compliance and risk management activities, resulting in a market differentiator as we go to market, providing embedded finance solutions to the world's best companies.

George: With that let me turn it back to George.

George: Thank you Chris before we take your questions I wanted to provide some closing thoughts and observations.

George: We have made progress in improving our customers experience by dramatically reducing transaction in fraud losses stabilizing our delivery platforms and improving customer service, but this journey is evergreen and will always be our focus our.

George: We accomplished a lot in 2024 throughout the course of the year and I have talked about how we would execute against three key pillars of our strategy.

George: We have and will continue to invest in our compliance and risk management infrastructure.

George: Our cost structure has been burdened by complex technology and platforms distributed delivery models and expensive vendor relationships.

George: Stewards of our depositors capital and our mission our purpose and our strategy is to ensure we treat our customers right.

George: Even while increasing our investment materially in compliance and risk management, we have consolidated technology platforms, renegotiated major vendor relationships, while consolidating and eliminating others and streamlined our organization.

George: Do that well, we will also be a market leading enterprise in compliance and risk management activities, resulting in a market differentiator as we go to market, providing embedded finance solutions to the world's best companies.

George: We have made progress in improving our customers' experience by dramatically reducing transaction in fraud losses stabilizing our delivery platforms and improving customer service, but this journey is evergreen and will always be our focus.

George: Everyone at Green Dot knows how critical it is to operate a scalable organization and there remains significant additional consolidation activities that will be executed in 2025, and 2026 investing in great compliance capabilities and efficient cost structures does not get us very far without a strong engine of revenue growth.

George: Our cost structure has been burdened by complex technology and platforms distributed delivery models and extensive vendor relationships.

Chris Ruble: Chris discussed we have been methodical in building out an enduring repeatable capabilities in this area.

George: We're now seeing success from those efforts.

George: We have not always been able to discuss pipeline strength and business wins, but now as we enhance our risk management capabilities, our onboarding and have the right people selling into the market. We are ready for the next steps in our journey. The success, we are seeing in pursuing and signing new partners is driven by the market's recognition of our product roadmap and.

George: <unk> as well as our commitment to investing in compliance and risk management infrastructure.

George: Our ability to win is also impacted by our ability to understand and deliver our products and services at prices that deliver value to partners, while also enabling us to generate profitable growth that benefits all of our stakeholders.

George: <unk> discussed we have been methodically building, our enduring repeatable capabilities in this area.

George: And are now seeing success from those efforts.

George: We have not always been able to discuss pipeline strength of business wins, but now as we enhance our risk management capabilities, our onboarding and have the right people selling into the market. We are ready for the next steps in our journey. The success, we are seeing in pursuing and signing new partners is driven by the market's recognition of our product roadmap and.

George: It remains true that we face headwinds in our consumer business in 2025, and we are updating the user experience and consolidating technology platforms in this space to improve performance.

George: Concurrently we look for the second consecutive year of growth in <unk> and money movement, which over the longer term, our key to repositioning and driving sustainable revenue and earnings growth.

George: <unk> as well as our commitment to investing in compliance and risk management infrastructure.

George: As a company we have made and continue to make investments in the right set of priorities across the company.

George: I would like to thank the team across the entire green Dot enterprise for their efforts and commitment.

George: One has played a pivotal role in driving the improvements that we have seen as a company and with that I'm happy to take your questions.

George: It remains true that we faced headwinds in our consumer business in 2025, and we are updating the user experience and consolidating technology platforms in this space to improve performance.

George: We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing the keys to withdraw your question. Please press Star then two.

George: Concurrently we look for the second consecutive year of growth in <unk> and money movement.

George: Over the longer term, our key to repositioning and driving sustainable revenue and earnings growth.

George: At this time, we will pause momentarily to assemble our roster.

George: As a company we have made and continue to make investments in the right set of priorities across the company.

George: I would like to thank the team across the entire green Dot enterprise for their efforts and commitment to everyone who has played a pivotal role in driving the improvements that we have seen as a company and with that I'm happy to take your questions.

Speaker Change: First question comes from Ramsey El <unk> with Barclays. Please go ahead.

Speaker Change: Hi, This is trey on for Ramsey. Thanks for taking my question I was wondering if you guys could comment on the magnitude of macro pressure that's factored into the 2025 guide.

Speaker Change: And if it is contemplating any further deterioration of the backdrop or more of a steady state.

Speaker Change: I'll take that one I think to some extent our range allows for a potential macroeconomic factors.

George: At this time, we will pause momentarily to assemble our roster.

Speaker Change: For example, if <unk>.

Ramsey El: First question comes from Ramsey El <unk> with Barclays. Please go ahead.

Speaker Change: We have if we go back to an inflationary environment that could affect ticket sizes and offer.

Speaker Change: Hi, This is trey on for Ramsey. Thanks for taking my question I was wondering if you guys could comment on the magnitude of macro pressure that's factored into the 2025 guide.

Speaker Change: For our customer base, which then impacts our interchange rates.

Speaker Change: In addition to that I would say any inflation.

Speaker Change: That changes the yield curve could affect the interest income earned at our bank. So certainly we've thought about those considerations when setting our guidance for.

Speaker Change: And if it is contemplating any further deterioration of the backdrop or more of a steady state.

Slide 25.

Speaker Change: Got it. Thank you and then a quick follow up for me. So both the consumer services and <unk> segments are forecasting margin declines in 2025. So I was wondering if you guys could walk us through the building blocks to get those segments back to the flat to positive margin margin expansion range.

Speaker Change: I'll take that one I think to some extent our range allows for a potential macroeconomic factors.

Speaker Change: For example, if.

Speaker Change: We have if we go back to an inflationary environment that could affect ticket sizes and offer.

Speaker Change: For our customer base, which then impacts our interchange rates.

Speaker Change: Could you just comment on your so b to B and money movement. We mentioned in the prepared remarks that those margins would be relatively flat on year over year basis, So really the margin pressures in the <unk>.

Speaker Change: In addition to that I would say any inflation.

Speaker Change: That changes the yield curve.

Speaker Change: Affect the interest income earned at our bank. So certainly we've thought about those considerations when setting our guidance for.

Speaker Change: Consumer business is going to stop there and make sure I heard your question correctly.

Slide 25.

Speaker Change: Right. So could you just walk us through the building blocks to get consumer services back to back with summer arrange that youre seeing in b to B and money movement.

Speaker Change: Yes.

Speaker Change: Over time.

Speaker Change: As we focused on financial service centers and AD partners, there generally that.

Speaker Change: Acquisition channel is slightly different than traditional retail in the sense that it's sort of an assisted sale and in doing so you generally get a higher direct deposit penetration. So I think yes.

Speaker Change: Can you just comment on your so b to B and money movement. We mentioned in the prepared remarks that those margins would be relatively flat on year over year basis. So really the margin pressures in the consumer business is going to stop there and make sure I heard your question correctly.

Speaker Change: We're adding more FSC partners into the mix, we have a greater chance of having a higher direct deposit penetration rate within retail and that will ultimately improve margins long term of course, we will look at the cost structure of the consumer segment overall.

Speaker Change: So could you just walk us through the building blocks to get consumer services back to back with some or a range that youre seeing in b to b and money movement.

Speaker Change: Yes.

Speaker Change: Over time.

Speaker Change: And optimize it as we have done in 'twenty, four and 'twenty three.

Speaker Change: As we focused on financial service centers and AD partners, there generally batch.

Speaker Change: And surely from a marketing perspective, we're always looking to optimize the returns on our marketing dollars.

Speaker Change: Very helpful. Thanks, guys.

Speaker Change: To add a few comments to that.

The.

Speaker Change: So if you think about the consumer business.

Speaker Change: We have a large element of that business is there is the retail distribution channel.

Speaker Change: For the most part that channel.

Speaker Change: Has.

Speaker Change: And optimize it as we have done in 'twenty four 'twenty three.

Speaker Change: Not received the benefit of some of our recent investment due to our platform consolidation work in other areas and our investments in regulatory and associated activities risk management activities, which have been our focus as you know over the last couple of years.

Speaker Change: And surely from a marketing perspective, we're always looking to optimize the returns on our marketing dollars.

Speaker Change: Very helpful. Thanks, guys.

Speaker Change: Add a few comments to that.

Speaker Change: With.

Speaker Change: At least a portion of those investments partially behind us. This year, we're able to redirect some of that investment so the in the retail business. It runs on a legacy platform.

Speaker Change: <unk>.

Speaker Change: So if you think about the consumer business.

Speaker Change: We have a large element of that business is the retail distribution channel.

Speaker Change: Which is costly.

Speaker Change: For the most part that channel.

Speaker Change: For us to manage so in late 'twenty four and currently in 25, we're laying the groundwork so that we can retire that platform we.

Speaker Change: Has.

Speaker Change: We're also up grading updating the user experience for both our direct to consumer product go to bank and our retail products.

Speaker Change: That will be the first significant kind of product enhancement that those products have received so the consolidation of the platform the updating of the UX experiences.

Speaker Change: With.

Speaker Change: At least a portion of those investments partially behind us. This year, we're able to redirect some of that investment so the in the retail business. It runs on a legacy platform.

Speaker Change: <unk> those products to be able to now receive new product development activities, where it's been cost prohibitive for us to do that on multiple platforms in prior periods.

Speaker Change: Which is costly.

For us to manage so in late 'twenty four and currently in 25, we're laying the groundwork so that we can retire that platform we.

So we will be introducing new capabilities. Once those activities are done late 2025 and 2026.

We're also up grading and updating the user experience for both our direct to consumer product go to bank and our retail products.

Speaker Change: Those are the most important variables that we're putting into play in order to improve those businesses performance over the next couple of years.

Speaker Change: That will be the first significant kind of product enhancement that those products have received.

Speaker Change: Got it thank you.

Speaker Change: Thank you.

Speaker Change: So the consolidation of the platform the updating of the UX experiences.

Speaker Change: The next question comes from Tim Switzer with <unk>. Please go ahead.

Speaker Change: <unk> those products to be able to now receive new product development activities, where it's been cost prohibitive for us to do that on multiple platforms in prior periods.

Speaker Change: Hey, good afternoon, and thank you for taking my question.

Speaker Change: Yeah.

Tim Willi: Hi, Tim.

Speaker Change: So I'm curious about some of the partnerships you guys have announced then it sounds like the pipeline is pretty strong.

Speaker Change: So we will be introducing new capabilities. Once those activities are done late 2025 and 2026.

Speaker Change: Where are you seeing these opportunities come from a from our perspective like is it coming from other competitors or are these completely new programs.

Speaker Change: Those are the most important variables that we're putting into play in order to improve those businesses performance over the next couple of years.

Speaker Change: And what do you think of some of the catalysts that are driving.

Speaker Change: Got it thank you.

Speaker Change: Thank you.

Speaker Change: Some of these.

Speaker Change: New partners to reach out to you from the retail side and then what about from the.

Speaker Change: The next question comes from Tim Switzer with <unk>. Please go ahead.

Speaker Change: Maintenance service side.

Speaker Change: Hey, good afternoon, and thank you for taking my question.

Chris Ruble: So this is Chris Thank you for your question.

Chris Ruble: On where do we think about the business and where theyre coming from you and so it's a mix of both competitive takeaways, where there are existing programs that are with these partners that we're replacing some of them are greenfield. So we see our partners in our core verticals.

Speaker Change: Hi, Tim.

Speaker Change: So I'm curious about some of the partnerships you guys have announced then it sounds like the pipeline is pretty strong.

Speaker Change: Where are you seeing these opportunities come from a from our perspective like is it coming from other competitors or are these completely new programs.

Chris Ruble: As we look at that pipeline, which are.

Chris Ruble: Financial services.

Speaker Change: And what do you think of some of the catalysts that are driving.

Chris Ruble: Sort of wealth and investing gig economy, SMB digital wallets, we see greenfield and takeaway.

Speaker Change: Some of these are.

Speaker Change: New partners to reach out to you from the retail side and then what about from the the baked into the service side.

Chris Ruble: Opportunities in all of those verticals and are having success. There also and then as it relates to our to the GDN, we talked about our partnerships and our GDN network.

Chris Ruble: So this is Chris Thank you for your question.

Chris Ruble: On whereas we think about the business and where they're coming from and so it's a mix of both competitive takeaways, where there are existing programs that are with these partners that we're replacing some of them are greenfield. So we see our partners in our core verticals.

Chris Ruble: In that area and in many cases, we are they are greenfield opportunities, where we are engaging with some bolt on infrastructure players to bring on new program managers and new programs and so that's as we walk through our.

Chris Ruble:

Chris Ruble: As we look at that pipeline, which are.

Chris Ruble: Through our recent wins there were a mix of both takeaway and from competitors and sort of Greenfield wins.

Chris Ruble: Financial services.

Chris Ruble: Sort of wealth and investing gig economy, SMB digital wallets, we see greenfield than takeaway.

Chris Ruble: And the FSC space many of the programs there are and many of them.

Chris Ruble: Opportunities in all of those verticals and are have.

Chris Ruble: Most of the prospects in that industry have existing programs.

Chris Ruble: Success. There were also and then as it relates to our to the GDN, we talked about our partnerships and our GDN network.

Tim Willi: And Tim Let me, let me just add before you pose a follow up.

Chris Ruble: In that area and in many cases, we are they are greenfield opportunities, where we are engaging with them both from infrastructure players to bring on new program managers and new programs and so that's as we walk through our.

Tim Willi: We don't see ourselves as being pipeline constrained or opportunity constrained.

Tim Willi: It is very important however, as we bring opportunities to fruition that we can onboard those opportunities in an appropriate way with the right products and very importantly, with compliance and risk management at top of mind.

Chris Ruble:

Chris Ruble: Through our recent wins there were a mix of both takeaway and from competitors and sort of Greenfield wins.

Chris Ruble: In the FSC space many of the programs there are in many of the.

Tim Willi: And so as those capabilities of ours are developed.

Chris Ruble: Most of the year.

Chris Ruble: <unk> in that industry have existing programs.

Tim Willi: Onboarding.

And Tim Let me, let me just add before you pose a follow up.

Tim Willi: Risk management et cetera that will allow us to win and onboard partners in a more rapid pace.

Chris Ruble: We don't see ourselves as being pipeline constrained or opportunity constrained.

Tim Willi: Although we certainly have enhanced our business development capabilities, we still operate with a relatively modest size team.

Chris Ruble: It is very important however, as we bring opportunities to fruition that we can.

Tim Willi: As we go to market. So we think that as our infrastructure improves and our risk management continues to improve we'll be able to onboard more of these opportunities. So right now we happen to be in a good fortune.

Chris Ruble: Onboard those opportunities in an appropriate way with the right products and very importantly, with compliance and risk management.

Chris Ruble: Top of mind.

Chris Ruble: So as those capabilities of ours developed on.

Tim Willi: A place of good fortune, whereby we have a quite quite a bit of good opportunities in our pipeline and our objective is to be able to onboard them in a safe secure and sound way.

Chris Ruble: On boarding risk management et cetera that will allow us to win and onboard partners in a more rapid pace.

Chris Ruble: Hmm.

Chris Ruble: Although we certainly have enhanced our business development capabilities, we still operate with a relatively modest size team.

Tim Willi: Okay, Great and you guys have pretty good.

Tim Willi: Growth in your deposit base this.

Tim Willi: This year relative to the last two years, they've been a little bit more flattish is that an area that with some of your new programs do you think it'll continue to grow and what does that mean for <unk>.

Chris Ruble: As we go to market. So we think that as our infrastructure improves and our risk management continues to improve we'll be able to onboard more of these opportunities. So right now we happen to be in a good fortune.

Tim Willi: Volume growth and revenue.

Tim Willi: Yes, certainly the deposit growth is coming primarily from the <unk> segment.

Chris Ruble: A place of good fortune, whereby we have a quite quite a bit of good opportunities in our pipeline and our objective is to be able to onboard them in a safe secure and sound way.

Tim Willi: To a lesser degree.

Tim Willi: Adding pls into the mix, but in large part.

New and existing partners within the <unk> segment in particular bass continued to grow in.

Speaker Change: Okay, Great and you you guys had pretty good growth in your deposit base. This.

Tim Willi: I think that's why we believe that is the single largest opportunity in front of us in terms of deposit growth, but then of course.

Speaker Change: This year relative to the last two years, they've been a little bit more flattish is that an area that with some of your new programs do you think it'll continue to grow and what does that mean for <unk>.

Tim Willi: Along with that comes the the earnings and.

Tim Willi: Platform fees et cetera from all the new accounts onboard.

Speaker Change: Volume growth and revenue.

Speaker Change: Yes, certainly the deposit growth is coming primarily from the <unk> segment and to a lesser degree the.

Tim Willi: And then of course U S. And then I would just say that as we look to optimize the balance sheet of the bank and certainly the asset side of the house.

Speaker Change: Adding pls into the mix, but in large part new and existing partners within the <unk> segment in particular bass continued to grow and.

Tim Willi: Extract more yield from those deposits. In addition to what I would consider to be sort of a fee based subscription type revenue services.

Speaker Change: That's why we believe that is the single largest opportunity in front of us in terms of deposit growth, but then of course <unk>.

Tim Willi: Okay got it thank you guys.

Speaker Change: Thank you Tim.

Speaker Change: The next question comes from Marc Feldman with William Blair. Please go ahead.

Speaker Change: Along with that comes the the earnings and.

Speaker Change: Platform fees et cetera from all the new accounts onboard.

Speaker Change: Hey, guys. Thanks for taking the questions on for Chris today, Yes, it's good seeing some of those improving year over year and.

Speaker Change: And then of course, you guys you know as and then I would just say that as we look to optimize the balance sheet of the bank and certainly the appetite of the house.

Speaker Change: Sequential trends in the active for scrap but I wanted to see if you could provide any more color around those blocked accounts and where those sat within the business in any way to characterize the impact they had on the quarter just trying to think about how to model out the active going forward.

Speaker Change: Extract more yield from those deposits. In addition to what I would consider to be sort of a fee based subscription type revenue services.

Speaker Change: Okay got it thank you guys.

Speaker Change: Okay.

Jeff: Jeff you want to take a shot and yeah that's needed.

Tim Switzer: Thank you Tim.

Operator: The next question comes from Marc Feldman with William Blair. Please go ahead.

Speaker Change: Yeah. So in particular in the consumer business and more so in our direct to consumer channel.

Marc Feldman: Hey, guys. Thanks for taking the questions on for Chris today, Yes, it's good seeing some of those improving year over year and.

Speaker Change: I had a spike in actives in December.

Speaker Change: Those those accounts to the extent, we you know and in real time or you know shortly after they funding come through the system, we may shut them down for a variety of reasons.

Marc Feldman: Sequential trends in the active for scrap but I wanted to see if you could provide any more color around those blocked accounts and what are those sat within the business in any way to characterize the impact they had on the quarter just trying to think about how to model out the active going forward.

Speaker Change: So theres generally you know I would consider a.

Speaker Change: Relatively neutral impact on the P&L to the extent for example, we would have marketing dollars potentially.

Marc Feldman: Okay.

Speaker Change: Against those consumers they may do a reload or something.

Jeff: Jeff do you want to take a shot and yeah that's needed.

Speaker Change: And then we shut them down so there's there's not a lot of P&L benefit.

Speaker Change: Yeah. So in particular in the consumer business and more so in our direct to consumer channel.

Speaker Change: Or negative implications for those consumers, but nonetheless, they won't have any benefit to the P&L on a on a prospective basis.

Speaker Change: I had a spike in actives in December.

Those those accounts to the extent, we you know and in real time or you know shortly after they funding come through the system, we may shut them down for a variety of reasons.

Speaker Change: Got it that's helpful and then I guess could you.

Speaker Change: Talk about that.

Speaker Change: So theres generally you know I would consider a.

Speaker Change: Our still early but just updated thoughts around the regulatory environment, both for the consumer business and bass I know.

Speaker Change: Relatively neutral impact on the P&L to the extent for example, we would have marketing dollars potentially against those consumers. They may do a reload or something.

Speaker Change: Obviously, the pass has been a very large focus area for regulators over the past four years, but given.

Speaker Change: And then we shut them down so there's there's not a lot of P&L benefit.

Speaker Change: Given the new administration.

Speaker Change: Yes sure.

Speaker Change: That's a good question.

Speaker Change: Or negative implications for those consumers, but nonetheless, they won't have any benefit to the P&L on a on a prospective basis.

And a question about a complex dynamic or a quickly changing environment. So.

First to level set our primary regulator is the federal reserve.

Speaker Change: Got it that's helpful and then I guess could.

Speaker Change: And.

Speaker Change: Could you.

We've been regulated by the Federal reserve for the entire time, we've owned the bank.

Speaker Change: Talk about that.

Speaker Change: Our still early but just updated thoughts around the regulatory environment, both for the consumer business and bass I know.

Speaker Change: [laughter].

Speaker Change: So the my general view.

Obviously, the pass has been a very large focus area for regulators over the past four years, but.

Speaker Change: Kind of the regulatory landscape as we see it I think it would be safe to say and I'll make this as a general comment across CFPB OCC FDIC.

Speaker Change: Given the new administration.

Yeah.

Speaker Change: Yes sure.

Speaker Change: That's a good question.

Speaker Change: And a question about a complex dynamic or a quickly changing environment. So.

Speaker Change: B et cetera.

Speaker Change: Obviously the pace.

Speaker Change: Rich.

Speaker Change: First to level set our primary regulator is the federal reserve.

Speaker Change: New regulatory frameworks views have been issued.

Speaker Change: And.

Speaker Change: We've been regulated by the Federal reserve for the entire time, we've owned the bank.

Speaker Change: Over the last couple of years, the pace of that is unlikely to.

Speaker Change: Increase so.

Speaker Change: [noise].

Speaker Change: So the my general view.

Speaker Change: Probably the overall community has seen a.

Speaker Change: Top of.

Speaker Change: Of that.

Speaker Change: Kind of the regulatory landscape as we see it I think it would be safe to say and I'll make this as a general comment across CFPB OCC FDIC fr.

Speaker Change: However, the way we think about regulation.

Speaker Change: And the way, we try to inculcate into our culture. The way, we think about our customers as I mentioned in our script the fact that.

Speaker Change: Barbie et cetera.

Speaker Change: Obviously, the pace at which new regulatory frameworks.

We view ourselves as stewards, we are stewards of our depositor depositors capital.

Speaker Change: Views have been issued.

John: Hey, John.

We need to think first about how best to protect those depositors and take good care of those depositors.

Speaker Change: Over the last couple of years, the pace of that is unlikely to incur.

Speaker Change: Increase so.

Speaker Change: They were treated right that you know if they have a dispute that's effectively managed in a timely way.

Speaker Change: Robley.

Speaker Change: Overall community has seen a.

Speaker Change: Top of that.

Speaker Change: If there are deserving of their refunds I get them they get their calls answered et cetera, we think.

Speaker Change: However, the way we think about regulation.

Speaker Change: And the way, we try to inculcate into our culture the.

Speaker Change: Very seriously that if we do that well will be a.

Speaker Change: Very compliant with kind of the right regulatory framework.

Speaker Change: The way, we think about our customers as I mentioned in our script the fact that.

Speaker Change: And for Us.

Speaker Change: We view ourselves as stewards, we are stewards of our deposit or depositors capital.

Speaker Change: We've had an ongoing relationship with the FRB and we have a portfolio of activity that we engaged with them on that will continue we don't we don't see that changing in the near term.

Speaker Change: John.

Speaker Change: We need to think first about how best to protect those depositors and take good care of those depositors.

Speaker Change: The extent, we have investments in flight with respect to improving our capabilities, we don't see that changing.

Speaker Change: That they're treated right that you know if they have a dispute that's effectively managed in a timely way.

Speaker Change: So in that regard.

Speaker Change: If there are deserving of.

Speaker Change: Understanding that we believe the federal reserve interest is ensuring the depositors are protected that's absolutely consistent with our interest.

Speaker Change: Their refunds I get them they get their calls answered et cetera, we think very seriously that if we do that well will be a.

Speaker Change: And to the extent there is change in particular regulatory institutions, obviously, we've seen pretty dramatic change in the CFPB over the last month.

Speaker Change: Very compliant with kind of the right regulatory framework.

Speaker Change: And for Us.

Speaker Change: We've had an ongoing relationship with the FRB and we have a portfolio of activity that we engage with them on that will continue we don't we don't see that changing in the near term.

Speaker Change: Heard less about the FDIC and the OCC et cetera.

Speaker Change: But we don't expect that our relationship with the Federal reserve will change in any meaningful way as a result of the change in administrations.

Speaker Change: The extent, we have investments in flight with respect to improving our capabilities, we don't see that changing.

Speaker Change: So in that regard.

Speaker Change: Great. Thank you so much.

Speaker Change: Understanding that we believe the federal reserve's interest is ensuring that depositors are protected that's absolutely consistent with our interest.

Speaker Change: Absolutely. Thank you.

Speaker Change: Again, if you have a question. Please press Star then one.

Speaker Change: And to the extent Theres change in particular regulatory institutions, obviously, we've seen pretty dramatic change in the CFPB over the last month.

Speaker Change: Our next question comes from George Sutton with Craig Hallum. Please go ahead.

Speaker Change: Right.

Speaker Change: Hey, guys. This is Logan on for George.

Speaker Change: Maybe following up on that question regarding regulation.

Speaker Change: Appeared last about the FDIC and the OCC et cetera.

Speaker Change: Are you guys seeing anything different from customers at this point, maybe in terms of being a little more cautious.

Speaker Change: But we don't expect that our relationship with the Federal reserve will change in any meaningful way as a result of the change in administrations.

Speaker Change: More due diligence as they look to find a bass partner and I mean, you've kind of talked about investments in compliance.

Speaker Change: Great. Thank you so much.

Speaker Change: Being a competitive advantage at some point like is that something you're seeing now or is that something that comes down the road.

Speaker Change: Absolutely. Thank you.

Speaker Change: Again, if you have a question. Please press Star then one.

Speaker Change: No. That's a good question and I think I, probably was incomplete with.

Speaker Change: Our next question comes from George Sutton with Craig Hallum. Please go ahead.

With respect to my response on the last question. So as it relates to our partners are embedded finance partners.

Speaker Change: Okay.

Speaker Change: Hey, guys. This is Logan on for George.

Speaker Change: Maybe following up on that question regarding regulation are you guys seeing anything different from customers at this point, maybe in terms of being a little more cautious.

Speaker Change: We're coming through the pipeline the Christmas team has developed.

Speaker Change: I would say it is absolutely true that their diligence with.

Speaker Change: More due diligence as they look to find a best partner and I mean, you've kind of talked about investments in compliance.

Speaker Change: With respect to their bank provider is is heightened it's serious.

Speaker Change: And a competitive advantage at some point like is that something you're seeing now or is that something that comes down the road.

Speaker Change: The large organizations that we serve take compliance very seriously.

Speaker Change: They evaluate their partners very seriously.

Speaker Change: No. That's a good question and I think I, probably was incomplete with respect to my response on the last question. So as it relates to our partners are embedded finance partners as they are coming through the pipeline. The Christmas team has developed.

Speaker Change: <unk> not infrequently on calls with prospects, specifically to talk about our culture and capabilities around regulatory and compliance related matters.

Speaker Change: So.

Speaker Change: So and we haven't seen any of that change in the last four.

Speaker Change: I would say it is absolutely true that their diligence.

Speaker Change: Four to eight weeks, so I don't expect for large national companies that that's going to change.

Speaker Change: With respect to their bank provider is is heightened it's serious.

Speaker Change: The risks associated with the failures and compete.

Speaker Change: The the large organizations that we serve take compliance very seriously.

Speaker Change: Compliance and harm to customers are real risks those risks aren't going away because theres been a change in administration. So.

Speaker Change: They evaluate their partners very seriously.

Speaker Change: Our partners are very diligent on that that we want diligent partners to partner with.

Speaker Change: I'm not infrequently on calls with prospects, specifically to talk about our culture and capabilities around regulatory and compliance related matters.

Speaker Change: And we think we'll be well served and continuing to build our capabilities to attract partners just like that.

Speaker Change: So so and we haven't seen any of that change in the last you know four to eight weeks, so and I I don't expect for large national companies that that's going to change.

Speaker Change: Got it that's helpful. And then one other for me I mean, you've talked about kind of investing in go to bank and trying to build out functionality. There are you able to be any more specific in terms of what features or kind of your user aspects you'll try to invest in it sounds like that's kind of coming later this.

Speaker Change: The risks associated with the failures and.

Speaker Change: Compliance and harm to customers are real risks those risks arent going away because theres been a change in administration. So.

Speaker Change: Year, and then is it correct to assume that maybe more marketing efforts come following that.

Speaker Change: I think our partners are very diligent on that that we want diligent partners to partner with.

Speaker Change: Well I hope my my response isn't too frustrating for you, but it's a good question. The first thing that we will do and accomplish this year is to upgrade the user experience. So go go to bank is now three plus years in the marketplace.

Speaker Change: And we think will be well served and continuing to build our capabilities to attract partners just like that.

Speaker Change: Got it that's helpful. And then one other for me I mean, you've talked about kind of investing in go to bank and trying to build out functionality. There are you able to be any more specific in terms of what features or kind of your user aspects youll try to invest in it sounds like that's kind of coming later this.

Speaker Change: There have been some modest adjustments to the product over that time, but no no material updates that material update is coming in the first half of this year that's important to have the right.

Speaker Change: Sumer experience in order to also provide subsequent products and services.

Speaker Change: This year and then is it correct to assume that maybe more marketing efforts come following that.

Speaker Change:

I won't answer your question about precisely what those products and services may be although we are looking at adding.

Speaker Change: Well I hope my my response isn't too frustrating for you, but it's a good question. The first thing that we will do and accomplish this year is to upgrade the user experience. So.

Speaker Change: Capabilities that would be more akin to a marketplace.

Speaker Change: Over late 2025 and 2026.

Speaker Change: Go go to bank is now three plus years in the marketplace.

Speaker Change: Primarily offered through third parties that will make our customers' lives better.

Speaker Change: There have been some modest adjustments to the product over that time, but no no material updates that material update is coming in the first half of this year. That's important to have the right consumer experience in order to also provide subsequent products and services.

Speaker Change: So that's on the roadmap I don't want to be too I don't want to get too far ahead of ourselves here and try to detail those out pretty right now, but that's the general direction, we're headed.

Speaker Change: Understood I appreciate you guys, taking my questions. That's all for me.

Speaker Change: I won't answer your question about precisely what those products and services may be although we are looking at adding a case.

Speaker Change: Thank you Logan.

Speaker Change: This concludes our question and answer session I would like to turn the conference back over to George Gresham for any closing remarks.

Speaker Change: Capabilities that would be more akin to a marketplace over late 2025 and 2026.

George Gresham: Well, thank you operator and in closing let me just summarize green.

Speaker Change: Primarily offered through third parties that will make our customers' lives better.

George Gresham: Green Dot is just a spectacular set of assets capabilities and people.

Speaker Change: So that's on the roadmap I don't want to be too I don't want to get too far ahead of ourselves here in trying to detail those out pretty right now, but that's the general direction, we're headed.

George Gresham: We have really highly differentiated.

George Gresham: Products and services that we can sell into the market.

George Gresham: You know we've gone through a lot of change over the last couple of years, that's still continuing but I think we're getting the company in a really great position to capitalize on those changes over the years to come let me offer my gratitude and thanks to our investors.

Speaker Change: Understood I appreciate you guys, taking my questions. That's all for me.

Speaker Change: Thank you Logan.

Speaker Change: This concludes our question and answer session I would like to turn the conference back over to George question for any closing remarks.

George Gresham: And most importantly, our colleagues and associates at Green Dot, making this happen. Thank you so much and we'll talk to you next time bye bye.

George Sutton: Well, thank you operator and in closing let me just summarize.

Speaker Change: <unk> is just a spectacular set of assets capabilities and people.

George Gresham: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Speaker Change: We have really highly differentiated.

Products and services that we can sell into the market.

Speaker Change: We've gone through a lot of change over the last couple of years, that's still continuing but I think we're getting the company in a really great position to capitalize on those changes over the years to come let me offer my gratitude and thanks to our investors.

Speaker Change: And most importantly, our colleagues and associates at Green Dot, making this happen. Thank you so much and we'll talk to you next time bye bye.

Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Q4 2024 Green Dot Corp Earnings Call

Request a DemoDemo

GDOT

Green Dot

Earnings