Green Dot reported net income of $2 million in the third quarter as the prepaid card issuer sought to overcome the revenue it lost by discontinuing one of its most popular products.
Profits at Green Dot rose from the third quarter of last year, when the Pasadena, Calif.-based firm recorded net income of $200,000.
Operating revenues totaled $154.5 million during the third quarter, up from $146.4 million a year earlier. That increase came in spite of the fact that the number of active Green Dot prepaid cards fell by 410,000 during the same one-year period.
Green Dot discontinued its MoneyPak product last year amid concerns that the offering was ripe for exploitation by fraudsters. The company made changes to MoneyPak and relaunched it in April 2016.
Green Dot said Wednesday that its third-quarter results were aided by the success of ongoing cost savings initiatives as well as higher margin revenue from legacy business lines. The firm was also helped in the third quarter by an income tax benefit of $2.3 million.
"We started this year with an approximate $35 million revenue headwind that we said we would need to grow past just to break even in 2016 on a year-over-year basis," Chief Financial Officer Mark Shifke said in a press release. "As we look at our improving quarterly year-over-year revenue performance trends over the first three quarters of the year, it's evident our growth plans are working."
Green Dot also said Wednesday in a securities filing that Chief Revenue Officer Konstantinos Sgoutas is leaving that role later this month and is expected to depart from the company by May.