GDOT - Earnings call transcript Q3 2020

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Operator

Good afternoon, and welcome to the Green Dot Corp Third Quarter 2020 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Alison Lubert, Vice President of Communications. Please go ahead.

Alison Lubert

Thank you, and good afternoon, everyone. Green quarter discussing operating financial are results. we Dot's XXXX third and Today,

open questions. call remarks, the Following we'll for

Our most recent and webcast earnings release that be at accompanies found ir.greendot.com. can this call

and concerning recent Please refer Commission, Securities information the our for include that comments and As earnings in and Form including to cause actual XX-Q future filings in additional a performance. forward-looking Exchange Green cautionary reminder, Dot's statements XX-K could and and results expectations to the factors the may most release materially differ language our forward-looking regarding the with statements. results from

During generally our financial accepted the measures with reference principles. conform not call, we'll accounting make that to do

a otherwise all is press reconciliation Dot copyright be in clarity, of the content may of information talk non-GAAP information our non-GAAP non-GAAP calculated protection. financial call of appears of the directly differently For than financial on presented subject numbers Quantitative basis. noted, release. to companies. The sake and by other similar GAAP is Information about property unless comparable we data the be today today's to this Corporation will Green

Now turn over the to I'd Dan. call to like

Dan Henry

a Dot's months Ali. to you, everyone, It's productive XXXX since and Green Welcome, call. earnings been we Thank last busy few QX gathered.

report across to marketplace. and eliminated new products banking efficiencies pandemic other payments accelerated our from drive and We digital shift on retail the BXB which and in taking offerings. we place the and third continued work We further was cash remain demand opportunities factors, consumer, to the dynamics and on unlocking better-than-expected for are capitalizing attribute focused pleased which of and to by quarter, lower a our to a including number our increased cost

quarter. but pass of cost we end, highlights benefits walk over our details both are our few you by through results, recruitment Jess from my like few three a to I In to will to a our and and new initiative and sharing of contributed this a on to and the going lasting financial we perspective I'm progress solid BaaS I'd focus start talent earlier the perspective. our already strategy, what minutes, financial refocusing improving out performance a it areas from savings to I'll These As work-from-anywhere on year. to laid seeing third enhancing and and launching execution, include to stem bank objectives back challenger key initiative. our

compared the the provide was Non-GAAP and cover This While will financial quarter. my let the with take revenue Jeff increased detail, with you XX% on the third by in higher the quarter me results driven for revenue of year. performance prior combination fees using from of balances Dot partner and receive growth stimulus your products in for accelerated products. elevated digital banking QX, our new demand Green customers and payments BaaS income, funds existing deposit in electronically received to a

started by in recovery also negatively areas business of see our were to COVID-XX. We that impacted

points. basis expenses Our year, XXX third total the big to million margins of the increase increased prior expenses the growth of was $XX XXXX in to business. compared component BaaS the our by A expanded operating quarter quarter related of operating and third by our for of approximately

marketing lower quarter. had also the in We expenses

the Dot its XXXX majority spent Green full marketing of in recall, you a XXXX. If of budget half second

on the and key increased had margins, losses one revenue our a volume purchase for compensation timing-related share incentive an especially our headwinds transaction retail partners, our to employees. associated with expenses higher we Finally, with few of

to BaaS business. our Moving on

and products, Wage, small Empower it now and Wage's their enabling to launch of plus potential We're new is Gig opportunity. rapidly this fast-growing new number financial Led officially to also that and Green familiar, proud and relationships now to creating Through their Gig this earlier that we will movement, may Intuit be We're goals about could entrepreneurs. a for and kicked segment Express. small year, and incredibly those announcement businesses. American banking together. America's we part cash very business management million expanding have that more to a and will Gig and safe for owners these in Kabbage's their third we workers cash off access accelerated Dot updates for industry is Lewis, a for account and QuickBooks have announced, that similar and strategic solutions On a plans Kabbage X,XXX parts more financial with and who forward may seen SMB value-driven round, look of the you and we start-up, Kabbage have visions to a met with as with immense, and Wage be the and excited the businesses for our and an investment funding for a Green we we and future. serve not Intuit to to new Intuit providing a note, regarding lot the better ecosystem customers exciting announced economy. businesses Dot on Green week Kabbage services for became Green announced for you look Dot forward positions clear Craig Gig A Wage's to Series this partnership its employers. plans impressive designed small focused are for which their I Kabbage quarter, with the Leveraging quickly there and do gig partner, infrastructure bank last more founder launch We deepening the of which our partnerships checking. in believe As doing capabilities opportunity offer vast about Dot's previously to seamless, very further serve XX

partnering very reiterate their focus are the solution differentiate grow wherever list bank new for banking be and I to this network for fraud go-to One or consider move and a not a end-to-end strategic a will target which and know go-to tremendous they brand acting, bank areas As providing spanning with go. and officially a more designed simplified challenger as just a I benefit are money designed program and go-to start-ups progress high-impact management, that entirely which fruition to and value our Last the one bank come meaning Gig Dot. very year, looking and the differentiator the but to reach to time. a important transact. have direct-to-consumer true exciting we chose that exciting for for everyone bank. we plan because Green consumers Brands vertical we retail been highly meaningful company respected bank, BaaS a Select least, effortlessly. and and payment but a the over an that manage and a primarily the to solutions impressive launched has Dot moderate-income by investor for to banking ourselves save partner, low Last offer unlocking technology, product wait partner, which can companies, as pretty was potential an features the features better who economy. be growing and as powerful we one from new and And Also, BaaS week, capitalize goals most not our and new services research they will and and thing center and enhance demand for high-potential to new support, set digital to for on want destination of Go-to of better has Green and also will We banking money this our be provider recognize. we will want extensive we will a opportunity by sponsorship, will we doing with as people certainly everyone for support, money call as is this modern and way brands with and some experience expand time huge and vision of potential, market partners movement of our few to bank, we Earlier to commitment soon. the introduce our announcing product soon. is

Dot. set the launch of profitably. will XX times new member aggressively Green plan As can a comes and a where in mobile banks go-to with we offer API is manage including quickly will commitment to set quickly. to an bank and average up rewards. features one compete protection position the fees Green security features those other long-term national you of meaningful a to Go-to our we for year, FDIC proposition and customers, use ATMs, and monthly to actually range brand and represent experience valuable intuitive wide next challenger bank, expand value be When that account, early compelling product deposit, no on This a bank, direct strategy when and only And network a and and Dot and free your app

So to of you a beyond. more expect can in this XXXX lot see and

for we our acquire Apple, brands. While through develop know history million a expectations investment proud based many on everyone. a marketing more to data-driven make strategy intuitive serving our Dot the partners and dollars products Go-to our rigorous bank spend and by and innovative requirements Walmart, banking of to driven and direct on customers, brand more movement access and for products return has other through We XX-year XX to retail over safe well-known intend will consumer Green to be marketing seamless, how customers build and and Uber lifetime thoughtful money and like value.

the a change I list. underserved join financial We that to of visit that weight and also gotobank.com have you continues our to know with we the by to there is our opportunity population go-to-bank. be services encourage and industry significant

leverage, As I deliver our walk delivering directly challenging laying to through pass established through time And to foundation right-size and I'll we our valuable have create At be to value employees valuable well our customers operating we the cost tirelessly as shareholders. as would the the working been Jess through which to our been have and with will to same structure you are products incredibly our able like busy tell, to numbers. our value-added BaaS services over to commitment partners. who that on these times. thank it you, sustainable to may

Jess Unruh

QX from had the and quarter we expectations saw carried platform significantly Thanks Overall, results stimulus the benefits funds, into Dot momentum everyone. on in and The in financial ago. QX. our exceeded new Green months from unemployment three Dan. users strong Good internal afternoon,

benefit platform our in market are of to that adoption a position us reach, of pleased scale puts We in the from payments. the accelerated our digital

of QX, to adjusted we quarter the the consolidated in we significant that non-GAAP EBITDA strength and EPS revenue of delivered tailwinds Overall, through. a XXXX of as walk experienced $XXX I'll $X.XX. and $XX headwinds pleased non-GAAP performance. million few We million grew well Our XX% with as were the you

transaction. top-line Focusing The driven programs due levels account account part refund average results Since unlimited in interchange was interchange federal July segment dollar offsetting fees in monthly quarter, larger the maintenance revenue QX down by ticket management related fees by volume moment, our of increased a was cash on to such interchange accounts. to due extension revenue. we filing gross the transactions. the purchase both deposit in and to per elevated in Altogether increase quarter in with volume. variable the XX% in earn account in balances growth the in Partially benefits non-GAAP an performance in growth revenue increased partners the smaller was service BaaS previous in Dot deposits we driven Consistent primarily are key tax this strong the fixed our fees growth terms rewards size account the fees of as deadlines for tax and with a rate our have percentage was volume XXXX. year-over-year increase dollar and programs increase on gross of our in in resulted metrics higher to Green and components onto unemployment our extension from in acquisition, from

transactions tax in growth of the to services continued in disbursement money introduced from growth this paid a growth the due processing filing transfers, the and in a processed offsetting COVID-XX. year-over-year significant of as new shift the cash We our in X% number in in also services, result deadline growth this movement was primarily disruption year. tax refunds ride-sharing revenue we a business a Partially tax of in the the effects decline simply from growth experienced

in of decline on on Another lower due this the prior and income our headwind discussed calls year. to cash year-over-year the was investment rate as by Federal balances net a interest cuts earlier Reserve yields result

our expenses to my attention and turn me Let margins.

$XX expenses by to or XXX by non-GAAP basis X% QX in year-over-year. marketing lower marketing margins expanded XX% million total declined operating year-over-year expenses grew Our expenses due Sales our approximately points. and and

concentrated this more spend XXXX. expenses revenue by COVID-XX. MoneyCard XX% with industry's half back in program. administrative we Processing caused with XX%, XXXX was our commentary increased Consistent customer on our on have interchange volumes to to Other customer result higher year, incentivize of increase remainder on by compensation incentive with as QX, continue in of our priorities losses transactional general expense and to and in due likely the and in heavily share Compensation we earnings the serve on loss marketing renewal expenses fees of pandemic. expenses Our last with efforts a transactions basis whereas evenly BaaS the in increased partially extraordinary spend studying we a offset the and and to of for practices increase navigate points the due the will be and our diligently experienced of line our their customers in across work and losses the in significant In revenue marketing call, reward headwind we benefits line experience increased processes sales share revenue in year, reinvested our best to planned was execute XX% the including SG&A associated our our operational mainly of In a rate to employees. disruptions as with a prior non-executive fraud prevention increased an performance. employees improving some for from QX, margins year's for are Walmart the partners, of transaction our an corresponding primarily of increase and increase we the revenue. as through Lower disputes.

support due normalize to strategic increased QX year-over-year rates begin Depreciation the loss development expense several to costs our will expect XXXX. capitalization initiatives. increased past in to We in XX% over years

to expense by overall then consolidating million development margins. strategic short-term during of we and of flatten We operating products operating focusing to expect as out depreciation QX liquidity based development and impact on $XXX perspective, From our $XX begin on on million level of and prioritizing increase incremental cash in we reduce flow the a some and the spend our generated year-to-date.

we $XXX million quarter is us strategic the end was million. $XXX Our needed in holding available cash at at to company initiatives. revolver The should to invest

remainder like Now of to focus on for the year. the I'd expectations

we remember our and important As ahead, elevated very follow-on look billion approximately remains from from deposits. stimulus a from business QX volume while $X gross it's healthy, to that QX funds had dollar benefited benefit of

and well digital federal the benefited aggregate positioned Act accelerated benefits under continue of billion in of adoption from benefit the to incremental from are QX CARES approximately afforded QX Additionally, to payments. unemployment while we $X

We roll expire. continue unemployment the expect disbursements to our normalize benefits that enhanced federal KPIs to stimulus off and

expect the the do historical QX, agreement partner QX cash terms processing channel While this we revenue our that QX, for renew decided not with contribution reload given overall account the each occur that XXXX. large we transfer trends, of year-over-year note One impacted, our our associated volume not anticipate because a actually profitability long-term we will of and and did dollar improve. gross in in margin Thus, our more will of purchase to expectations. We volumes throughout to decline item post top-line in but acquisition expect margins meet a contract. volume transfers, and lower money above an normalization related renewal be percentage to cash

the expect be As full revenues $X.XXX about in we to the $X.XXX we billion. range of think billion will non-GAAP XXXX, our year

goal operations of this of range COVID-XX. and to in $XXX to we leverage the in in of to us non-GAAP do and nor impact decisions EPS with a range come. year years be These million beyond. the $XXX operating reducing $X.XX focused stimulus the expect We the believe EBITDA on the of conclusion, significant our complexity to We XXXX overall to begin $X.XX. they another slowdown In benefit we'll from economic the federal of generating in further anticipate million adjusted anticipate made ranges, be not consistent remain program to do

when guidance XXXX, in our year February. Speaking we formal the of QX, for expect we results to provide XXXX report

consider build our provide we While process, you in like we're your still models. budget some to would as insights really

First, we'll efficiencies. have including positive new and costs impact well from as discussed go-to-bank as initiatives earlier, various BaaS capital partnerships and

discussed line benefits positively With that, results XXXX look to We next as We questions. that will forward operator, for we earnings earlier. headwinds the also government the on providing detailed associated our have let's more call. open with discussion year-over-year our impacted

Operator

first of Please the And Napoli Bob Blair. comes ahead. Instructions] question [Operator go from William

Bob Napoli

first a mean, deposit there it a Is on the direct penetration just prior is of any on? idea it's mean, a direct maybe big about you strategy I was I here. focus. accounts. success question, rate roles. program know that on And If deposit is The direct rate with focus and a building your kind a would big penetration customer metrics or I Just deposit. deposit around what - at rate? of currently what a so, the faster base direct other judge XX%

Dan Henry

Yes, The customer and I direct think valuable is from Bob, customer. the extremely we question, do. deposit knowledge awareness of your illustrates think, what I like

early next direct that that So we as year, deposit be very our on Bank launch we product. - with when growth we challenger initiative focused driving will

of our give to yes, those sort growth. But on cornerstone focus success, our metrics you going terms it's to strategy of and or point? can't in this any to So levels at of a be

Bob Napoli

or startups and large would versus And more view? small a some partnerships approach maybe a the just it Is Dot different it to there partners, partnership of partners, partners like as of has sounds the And brands. ROIs as well-known then maybe had past than this new follow-up, mentioned, you new the what and Green new a we generate in in the pipeline past? as higher have is those you

Dan Henry

No. The to service. instead more my a don't know access I logistic we is mean collection a have you our And than now, of if because I think BaaS approach we We our I'll think was say to in at unique We've We of about bring can approach terms partners. banking us different. of Green of is got we much quantity a have I right a a is quality or my partners very like acronym but I - bring as shared of issuing from understanding don't give file And bin, the stack. lot what just so assets. publicly, what a very terms for do can tech a bank. our plastic. expertise partnerships Dot, in

a reload network. have We

We call We've management expertise. service have got management centers, customer expertise. fraud

So we whole bring collection of a services.

and powerful adoption the a for work to products nobody that in solutions built the of like to bring of to because want kind and the And of bring we at in to Wage, of assets and we invest deepen and in able have, charging. And play can with of new our And on got - more low economy. can of partnerships prospects spectrum, and relationship the who It's any growing along come grow let tremendous the collection He's us approach a have he's solutions. that scale nobody founder with want being to Gig in has hard like for to partner masses of like of their ones so see all-encompassing really many we economy. a us Gig truly help take that some our looking entrepreneur, them terms relationship, an large just that Craig wave our with a time are platform. a on that, and be those drive solution and other business, a for partners one but He's more service, partners, in not company approach. of we partner great of is offer then fintech and look kind else those the really Wage. That's piece large a the great grow side Gig CEO that Lewis, companies of the the Gig strategy we do them else

potential. large tremendous powerful is I as what just reach, with read said, with I either are partners growth tremendous it's partners small, very So

Operator

comes ahead. next go The George question from of Craig-Hallum. Please Sutton

George Sutton

for Congratulations wake the I'm Challenger to offering. me. the Bank latest new customer less

Dan Henry

Go-to-bank.

all will frictionless and for your financial your be go-to-bank seamless services. We

board. glad So on you to have

George Sutton

you can all very wife handle If impressed. my needs,

had entrance So a question large just Goldman up competitively. rev customer into work two they a because Axos Sachs market. share. to size with announced couldn't give and the reached had BaaS

issue. the I think Goldman have will same

larger And of sort how defining space. but curious specifically you're you're might then happy - at when opportunities I'm and issues more bigger at that competitively, some of little some So capabilities look that in of I a that run I your and the some curious, look bit the into. landscape the

help question. pipeline understand Just to like follow-up don't when us competitive this is. I it how and need also a you're add, would up building And I

and So didn't away forward how might you customers moving be this deal with will demonstrates that go follow-up from? renewal be that my The question. you

Dan Henry

Sure.

renewal we the a that our only on was was reload passed So using partner network. with

willing there solution high our we to as And and an not demanding so was - all sometimes volume go what negative were reload wanted was I who with we no doing were a they just Especially, said, was carte use there. la to network. next service we to in somebody where margin, margin, saw they

So I will walk from that partner.

And the time financial if now on are jumping just We banks want Sachs lot bank. assets. We whatever $XX but long, that of on our that, we for types long across as out of our our the your grows very you with In other can say, question and structure in Greg the how all level other of than there into be bank are the we to banks new we compare as entirely run now Goldman with, our Cores, maintain billion institutions in can a thing, billion want very lending, of asset significant stay sorts how share or a asset BaaS institution. these Really a - don't volume to that business, to bank. terms we banking level. different that with of do get traditional banks our partners, to Those regards they below CEO confident detail we're who's the $XXX bank all other million, Those are. and do wagon. are coming $XXX that

so billion And different a we'll by protect will with able higher or they $XX our asset size. maintaining - that's issue, less our have be and interchange to revenue

Operator

The next question comes from Andrew Jeffrey of Truth Securities. Please go ahead.

Andrew Jeffrey

the I guess, regard wonder on question the George, go-to bank cash wait cash looking are products, a it's or regard us back despite ROI the as incentives maybe I competitive I'll get that And whether quite these if I products taking returns there. Dan, say. Those I at build and good rich, you the behind, really deposit. consumer focus could specifically with list, those more on I maybe are unit Bob's X% look as can other with a far appreciate pretty some to getting bit to on rewards, pretty but economics, X% some - back? site, seem direct little and should at juicy just give are comfort or

Dan Henry

question, to be glad you - ask kind but right? almost really that skepticism, of hear seriously No, what that because... I'm will

Andrew Jeffrey

often Skeptical also okay. I'm

Dan Henry

funded have Green returns at issuing now absolutely. product and know, those currently. be living. than, And make Dot cash economics that you I we are back rewards, I know by are the to reward stronger how on going X% this any those programs. think, I your are who merchants X% product The

won't as So cost come to us. those a

good propositions embrace that we and still how we creative love So on designing consumer be the can products our it's really really which about and for and very they preserve opportunities value economics

Andrew Jeffrey

as getting got I skeptic. one that obviously there a mean feel just given example, the that's you that's I a sort guess but sneak follow-up, to just product. again terms mean the feel positive in the today pressing clear bit of of hasn't the mean of of frame-up, I that term announced, mean do Flex I around rewards. sustainable and I as a model I economic if little a a long like advantage maybe if example, is like yesterday that's - you wonder press luck Amazon like size do been of that's funding means a in my peek participate a customers? a over we customers Okay, the product you I'll could With for a

Dan Henry

that's think have the sort explore part of our to of solutions And can partner new partners. going it's around that of let's we I an of - we Yes, is example retailer. partner things just how want say with approach compelling create we're strategy to our our a who a

have bank. a We

credit create on like can with We partners to, consumer. products our with apps actually with up can can the very that small open create the as as just our loan partners. digital for partners a we have We the wallet tools ability rewards partners. We and low that's create can of could risk products do building together even our friction with consumers mentioned our reside little what for we now. we And you

what doing here we're you I if about excited okay. about think bank that go So get that's to really is, where

reach direct-to-consumer and can focused some own. our those our of us million can partners, in be whereas that of we are XX consumers have the solutions We X, time. millions we created customers tens create, offer our can or and in We products our can very market solutions business. we hundreds a to solutions X, some take then products reaching and on bringing we the of products a X, Those at easily creating that X, for we and partners couple, expand powerful we and can and X,

- of in with consumers an we terms in number very, engage on the these to spot have you're country. large this yes, very being a So a work able perspective of opportunity to with from reach partners, long-term

Operator

El-Assal The Please Barclays. question from of go ahead. Ramsey comes next

Ramsey El-Assal

about this an as I wanted already Gig XX.XX strategic for given opportunity you kind product have BaaS sort Amazon kind economy and full about company, of to mean out developing Gig this product almost you of to real there? is specific into opportunity and I of the new the investment your of, soon? a talked the view announcing Should Uber primary company. Wage the Is product pipeline that ask we kind and potentially for you partners the for that this when opportunity spent? pivot

Dan Henry

important It's is, a Ramsey. it but not It's an for not not it's channel it direction us. pivot. new a No, is growth

kind wave in I to I'd rather I Cano. - ride of, So like Paola a

wave to the And so it's a me growth economy is Gig I and look for waves a wave.

partnership you Uber with our think so in out partnership other that can, this about And potential Gig we and investment with there. are if if solutions Wage

becoming the are we, work. working well well well consumer Gig to equipped to as serve to serve of very serve are income small load to as equipped a a just are be just we business. very modern We And equipped

so that bank, a common broad leverage all and avenues will of reload cetera. And of network, customer that controls service, the have et those denominators we

with top It drive of and have and we've take On how great is It's schizophrenic. or that's way the I'm clear, stack I do it's that just switch to built a to we incremental So basically question revenue be absolutely. them these that so skills is assets pivot. want new attractive a we margins. is This opportunities. to a a not not over not - this decades

Ramsey El-Assal

you for is first GoBank, My was a mobile us. offering on to kind structure relative sort if and I more little different. and you What other encapsulate go-to-bank of about could this wondering of unlimited is follow-up there just is a the wondering is like it Green products different just of I'm if bit? distribution prior itself kind elaborate could of Dot product

Dan Henry

bank we are more the you go difference a our Dot is savings. Green with account take that it is bank There's go-to-bank in because Dot is go-to-bank. okay, different our by The is thank account Puppy want functionality Bank. to be no launched all to this the solutions because very there's this no and Green so it's Yes Dog there's Cards, I it's is bank to from history that this that unlimited bank to for to way, cards Ramsey. go go going it's to - commitment real product. go And of products it, to more this And other no going is feature there's have tied forward, issued to consumer go by NASCAR. And question, point more be been right. for big to mean

been. So and we it a really company hanging as full financial else will serve someone create we to products needs not a that is our the has able solutions to can, to of go it's customers. off marketing bank issued so This product, be is

product new will our our from single Dot. and goal launch is a hearing here be So Green every intent year you not

You'll on be basis to product about come. regular to a additions feature the functionality years hearing GoBank for

Operator

The next Citi. Schmidt question comes of Please from ahead. go Andrew

Andrew Schmidt

appreciated? that you be will so those customers if a belt, organic quarters about elevated talk stimulus we now new quarter seeing account customer term net the Are growth of benefit help have acquisitions in could that you lack wonder meaning. from question First for much any non-unemployment what you're couple of level on better new terms our seeing ads under non-stimulus post in

Dan Henry

It's a question good Andrew.

so products we direct amount were cost strength the part just in to in and the The think significant I QX, retail can in to versus stimulus. system. our really of QX the we what is hard and and better an what have new we both say better for I the apart of non-stimulus dissect across coming of to pull digital but sort and new business, hard which additional give of stimulus acquisition of And have in coming a part. is acceleration. reason, better this seen marketing that funds the again non-stimulus large elevated customers yes funded whether it's saw attractiveness they're stimulus amount into efforts and

Andrew Schmidt

of I'll about just capabilities. there ask scale how you my then just obviously follow-up acquisitions an lot is about it And I out there. news was about view your hoping feel to get maybe versus M&A Dan, philosophically,

get philosophically interested just you point just M&A on to the kind Just of front? view

Dan Henry

just or My you're of we through acquisitions not am are what - to real asking? like view I point in looking grow clear what terms

Andrew Schmidt

growing organically. Yes, doing would I scale acquisitions be and we're a capability is And know is focused? open the how more you for M&A or to question much then priority of M&A, then versus more are

Dan Henry

without is organic front your potential about Dot growth really at on what I in growth any of is ROE is it, Green acquired have we what opportunities And real much us and I've higher like growth. have significant we So, acquisitions. than said always

So It I'm me a it with organic whatever you're culture not comes to problems, your growth. out of believer big - fan integrate and with comes lot of trying there. to new

your competency. land using you've signing on customers when your customers you're core what infrastructure and existing and know got, You in growing

And need grow. so, don't to acquisitions we

to that's So I perfectly want sure make clear.

absolutely our open functionality, standpoint enhance a we some acquisitions are of, opportunities. from that accelerate grab We're However, open our to to ability will absolutely.

of current to like Just our incrementally kind add volume.

larger And we're what - be would even to transformational. yes, those and might so small add-ons be - from

Operator

from Please ahead. The Steven comes go of KBW. next Kwok question

Steven Kwok

indications first and early any margins Thanks. The - round we as can roughly what I into of was you had $XX as just then now, a unemployment just like you a you And And the like feel benefit around headwind is that know like a be. mentioned businesses tailwind rate? should $X next of there called X% the think new you around roughly on I XXXX. if stimulus be is headwind early one - - - like there the the around those could out being million look offset right of revenue like that exchange headwinds essentially year? billion use do what for could positive the positive

Dan Henry

me Jess, to to good it take you you Sure, that? want or take question. want

Jess Unruh

there had were lot We impacted. I center of Yes, negatively I a higher portion associated our dispute of COVID can XXXX think take is in costs. call puts business it. and Look, with takes

payments for business While the benefits, portions the sort of our impacted direct really accelerated digital positively other and demand and of by it's hard government specifically. impact the of isolate to were benefit government

So associated Ultimately, think you place what GDV proactive things as of normalize can - on that the our to we we'll but XXXX start of fees and about I long-term you QX think I interchange. will from in means in digital more necessarily other call. be GDV speak about sort dollar guidance I because in what for gross better really think what believe to with there we Because think next think in volume opposed yield it, about as QX. to just a I seen and is trend that XXXX adoption. And it

Steven Kwok

an that. there business. would was Intuit helping given tax possibly have article guys the know it input be look credit separately, just that card that guys is at. around out there wondering, separately, and was well. I you something And this I a with where around perhaps as would And you buying the relationship

Just relationships Intuit for? thing Thanks. locked your with one in terms long how contracts like up of are those

Dan Henry

Intuit that announced contract. the we recently We renewed

business. So the we don't now, preparation have we a of and years contract want get remaining that tax new to number

So - across sweet but growth opportunity and in again our that But spot see skills, we of - did our that's come - as not desk. we capabilities did potential. we our decided where

Operator

from The ahead. next Mihalos go question George of Please Cowen. comes

Georgios Mihalos

over to to the missed an lower the or line sort XXXX. in Would quarter, we've with I I transaction partner I'll was of will back can an you in quantify off. Thanks hop the impact quarter just impact think larger interchange it, fourth of more much then attributed of hop then questions. and off. in reload the expect and much of tick I'll in And modeling first, sort what non-renewal that's going the ask to ask from maybe to fourth two yield, up guess size. wake be How two and cadence was I which that expected have be? quick half I the of the seen first you of how

Dan Henry

one. I'll Yes, that take

right say already see point. starting basis on of we've in latter we're question normalize interchange seen let's to what yes, XXX to So the some yield, that back the past

interchange stimulus we're coming When your the on further on those need the year-over-year. means question from strong first you generating of think deals. be cash to the of To margins obviously that away expect the from we rate flows more down reload to cash focused get volumes and I we walk normalizing. transfer around So, partner, funds sometimes QX,

be partners then pipeline as to new for go-to-bank as of expect year. future, network products. up. the using the think on a margins general partners our own third-party we we more reload business our us the have reloads to our in we cetera. do We And about and you products of processing new money tend BD it to reload consumer our as and back will pretty active in add reload about off think some products in and we our despite BaaS profit And partnerships health margin We bringing third-party volume believe et grow that because make improve money we next

Operator

question Sabadra next Deutsche The of ahead. Bank. from comes Ashish Please go

Ashish Sabadra

on to focus wanted business accounts. small I the

addressable Intuit you about wondering just was and help talked the if us, market strategy if can you is and talk big You going could Kabbage. about I but forward. how been

small directly. a to - go-to-banking Thanks. more go - is or up solution finally address to sign and small to then expect try We for also customers? the business And is the strategy that partners the but the businesses to also direct

Dan Henry

not solution the is the Yes, hi Go-to-bank Ashish. for customers. small business

sole small However, this lot individual. in are if country proprietors of businesses you think about and a

sole it product. the very of go-to-bank account, pick or design definitely may intent on functionality that product small is possible not So, feature their proprietors our up operators, go-to-bank the make but the that's the independent and

Our opportunity large. it around I country, there very is States. mean is United small the business mean in of millions small I in businesses

they businesses Our X have their use partner small million alone that QuickBooks solution.

the QuickBooks. about base we of So, research off customers, basically They our XX% Bank. is will million growth receive platform. the penetration potential million account, call as that's numbers. account a in that in those account on I accounts operated offering X their into that XX%, very be do can by small with Green enthusiastic and And just we're business - cash which QuickBooks income Dot we and release it we are think bank But is and you talked see - last was press QuickBooks

bigger it growth of right our for issued I is a where than Kabbage, being American with debit there part now, that and behind bank exciting. Kabbage of marketing American product - the businesses you for quantify opportunity but Can some it And impact card account Express. is Express breadbox? very with potential Kabbage a small of we The now have

Ashish Sabadra

think unbanked - just impact, good. outcomes lot at and any the about the segment? of election credit on question bank, under Dot second but That's of just a on Green because should the a small And How great, for customers stimulus? end that's we potential maybe are the lower a if

Dan Henry

adopt how from been and come revenue will to be Green for in are impetus But additional a customers cash-based we nature we'll consumers by the additional also create stimulus term of And change and Green Dot. would be to unbanked, kind already our check so accelerated and spent generate electronic and our have positive ways positive bring will in positive, of immediate Dot. payments. is benefiting in Dot consumer the to our will in customers yours the in positive the believe prior behavior just ones the would longer be product to they stimulus believe product like - account engage another methods, for Green onto a payment which of around electronic and funds we the we Well, be - and

Operator

The ahead. from Please Jeff next go comes Cantwell of Securities. Guggenheim question

Jeff Cantwell

conversely that. noticed very more And Where getting then Dot's more confident? think after are businesses, which some touch performing about of you're the nice you company? but a where more well have have comments are been revenue for on are I here quarter. you two simple guys forward? to past managing to see thinking a certainly what going this your We've response? but you confident opportunity key can the about just small learnings themes get this as are pandemic? hope of couple timely, where a Green I tell you quarter example, questions, are very Can follow-up you asking And serious it's you this Dan, by the growing about dramatically First, through I I us

Dan Henry

said going You a said you non-lipid to maybe think you're or serious get, answer. to a question ask and like, you the hope I

that all in sector The here America care thing. company talented - do light pick company. more of economy amount have headwind. a - why need trying I areas why care change of everyone And direction that. on job. to we good lot - going growth not to who mean grain across I'm really starting do. have seismic is And as people our So providing Even here a do leaders bad bulbs to revenue and shift because I other of about the a think to we myself how a we areas I'll of is kind across not the are potential margin the doing We've got I is in an do a the lot a retail as habits feeling will and about believes of the is today, feel all work that retail I'm being what the online important. have is to I'm to organization. clear much sugarcoat as still business. are I tremendous right really here's a in off of inside But we - terms about and just we they I'm generate are I what entire people see - and where of and we got or going in with to we've really shift we feeling as some confident

just expand expand can in we consumers, daily can their offerings lives in to business, and retailers. and number our challenges we're and is the our their so I services store, some But how of not of their traffic as a foot we're the our we partners And very dropping interesting but for customers - financial into now, mean, how retail not in footprint immune from partnership. conversations with

growth technology all disruptive a large operations, mass network of terms striking and bank certainly that retail believe our lot already the controls, that I our opportunities tax I that, in ran business center you us bank, love about And all powerful, potential assets fraud direct-to-consumer of affords in about we've in have out got call advantage what partners. business, is on We've business. think and a Relo our that So competitive business our Paycard got the stack. our a with

businesses, with are are solutions those of All existing all "bought core and paid our growing. for" which

creative aggressive world", the so and so to And if get change that partners, "collectively got major we some we we've can opportunity. now want with

Jeff Cantwell

color. go-to-bank, to hearing product. a go-to my down follow-up. customer bit can rationale you bank drill on great making That on that value I'm proposition, leads for Okay. And there little this the strategic understanding us acquisition? for you With strategy go-to I'm the the for to

have options, a options So XXXX, have a in I newer have I traditional Green bank Dan, and I right? these of Dot. if I'm consumer number your options, have bank

in and to customers you you to going investors you're experience Green is I want question drive how - if my industry, to new help your all the Dot? understand to ask can So given

Dan Henry

Sure.

it's I've I what's the that the zero-sum is to game. think not or mean, I for important XX last XX market years, tremendous, available And say a it right? and said total

number there And if as Bank so in BBVA, mean, Wells is is there Fargo you and significant I to Compass and room a offering just of of America Chase and FIs, for will, solutions consumers.

a in market we're better, fashion going my it to to to research. money spend our do we're we traditional opinion, in effectively. done, will it significant of we smarter. going We amount our going do do have so And that much, We're

research the We around bank products how name design of Go-to tremendous have and them. bank research around Go-to the offering we're and and a pricing amount of the

my the that know this customers. know spend. marketing that this at - of on you sitting Board fair your solid a you you market prepaid the will an every get build and just from share I it companies years I know other get know from investor and product on we'll of And one So a effectively, better days over being Netspend. this good in the I return dollars I we this.

of have And yes, fair solution And our business. others, to between share so choose customers. us choose get that few will will a we our our grow get we'll customers fair and offerings. other and over customers of And we will share will

Operator

The now now you concluded. also you question-and-answer Thank may for disconnect. This concludes attending today's our conference and has session. presentation

Green Dot (GDOT) 4 Nov 202020 Q3 Earnings call transcript