Partnerships and technology drive Green Dot's earnings rebound
Green Dot's financial performance has improved substantially over the past year, enough for the prepaid card issuer to raise its outlook for the rest of the year.
"Our performance is being driven from both double-digit organic and consolidated growth and strong business momentum," Steve Streit, Green Dot's founder and CEO, said in a press release. "Also of note this quarter is the advancement of Green Dot's 'Product and Platform' business strategy."
The strategy drives Green Dot's "Banking as a Service" platform, which enables consumers, financial services and technology companies to design and develop banking applications to distribute to their own channels. The platform powers programs for Walmart, Apple, Uber and Intuit, Streit said. Green Dot should also get a boost from the growth of Apple Cash, a P-to-P service that launched Tuesday in beta and is powered through a partnership with Green Dot.
The Intuit partnership is new, and will launch in the first quarter of 2018. Intuit will use Green Dot's platform to create a branded prepaid card for TurboTax customers.
Green Dot's earnings were notably better than the prior year when it discontinued its popular MoneyPak cash-loading product out of concerns for fraud.
For the third quarter, Green Dot reported operating revenue of $201.6 million and net income of $13.6 million, or 26 cents a share. Operating revenue on generally accepted accounting principles rose 30%, from $154.5 million, the prior year, while GAAP net income was up 570% from $2 million during third quarter 2016.
Earnings per share rose 550% year over year, from 4 cents a share. Non-GAAP net income was $17.8 million for third quarter 2017, up 64% from $10.9 million in third quarter 2016, while non-GAAP diluted earnings per share were 34 cents, versus 21 cents per share a year earlier. Green Dot's earnings began to recover in earnest as revenue from its acquisition of RushCard started to impact Green Dot's balance sheet.
Green Dot now expects its full-year operating revenue to be between $878 million and $882 million, up from an earlier forecast range of $855 million to $865 million; while full year non GAAP earnings per share will be $2.10 to $2.12, up from prior guidance of $1.99 to $2.03.