GDOT - Earnings call transcript Q2 2021

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Operator

Good day, and welcome to the Green Dot Corporation Second Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [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. ahead. go Please

Alison Lubert

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

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

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

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

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

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

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

Dan Henry

thank and for you, greetings Ali, Thank everyone joining us. you

some share our We timing three significantly exceeded considerations of our contributed are expectations. pleased the forecast, second also to the All our outperformed our of results quarter, upside. QX internal which reporting to segments

belief new quarter and the those ongoing and we impacted good forward. platforms strength momentum strengthen partners. that QX of shortly. The circumstances, digital $XXX moving to evidenced is and our would is unprecedented for reinforced working. our a a initiatives deliver our and down Last results, stimulus, time and $X.XX. and shifting intention year, together plan And we our operations and year be the the results capable We'll to Jess XX% payment and our our and dynamics delivered our these other strategy to exceptional bring to factors based non-GAAP and our a when $XX second customers continues We news streamline in fundamentals, board. on by core remarkable grew confidence our normalizing and our industry showed us which revenue take annual our to including highly bear team, across to said solutions banking financial as for deadlines, million be on is customer stripping fruit. non-GAAP slightly shared consolidated taxes This million that will EBITDA these results, and Our and EPS guidance expand behaviors filing of raising some trends leadership

it take highlights over few him, the from I'd to share I to Before the opportunity a like quarter. pass to

consumer which our segment, money also Network, processing segment. GDN. Starting normalized for our This to as which stimulus, As banking includes services, now segments: into known our movement solid Dot's numbers businesses; business, our breakdown and and includes which of our reminder, and Green year-on-year growth. Dot we our when first, TPG, network business second, with three employer consumer direct money as third, key Rapid; segment, BAS, BXB business, for deliver platform or branded our and our segment, area Green retail our tax continues processing includes

to X million X consumer close Our active and has deposit segment nearly overall accounts direct million accounts.

is decline saw direct X% which deposit we stimulus we active believe to purchase in and at a due Although accounts year-over-year. accounts volume our X% up timing, we increased experienced X%,

a advantages and retail best-in-class in was our meaningful exciting most tremendous Green network. products when our power capabilities and GOXbank reach Dot's a launch illustrates achievements the with One this retail. This of competitive in of segment clearly and combining of

available year. and we the living General, adding half Americans designed Dollar rated Walmart, that GOXbank digital and is top XX,XXX and in in be X-Eleven to locations more retail for paycheck Dollar than the second hundred in plus our million of the will to aggressively Family bank is showcased Now nationwide. paycheck now list

is XX,XXX for its all products than locations ability trust reach network is market more in loyalty. our more display brand business. combined. than a in This unsurpassed retail and our It competitive is powerful nationwide. branches awareness, America retail fast to and with the Our as across builds The GOXbank bank advantage network growing

overdraft giving We friendly also more charge. features access see more announced account now and to MoneyCard by more to used and traditional been consumer customers customers Walmart's million that MoneyGuard accounts are demand pleased our plus checking and Walmart no accounts being deposit banking have we at

In consumer fee-free. Tools a Wrapping points fact, is offer paycheck overdraft intuitive hundred do. financial unable tools from and otherwise it, channels. customers designed a paycheck control XX% giving our needs, is we announced exactly be the used cover of the at who solutions more second encouraging quarter, customers addressing to helping and barriers and features overdraft like customers. our illustrate critical pain a which plus and affecting situations, you given with GOXbank best their by to consumers them financial seen, would feature, These be belief for partnerships to that recently It the million leads to seamless aimed prove use them have Americans seamless, consumer new up leg-up. segment, credit living flexibility understanding and using accountability are in to the And can may Finicity, to our lifeline Experian that's tools and secure commitment overall customers and and real expenses. and this to our outcomes what the who the and that

their Walmart Green platform of and a Intuit, owners Uber, much-anticipated new banking over announced world, made our which to Express sized Apple, its the some as for services to Rapid. and strides of services, is business this partners platform medium powered to and platform banking checking and Starting quarter checking services. which highly frictionless Dot Dot. Kabbage fee-free We account, are deliver includes innovative small checking segment launch most brands Kabbage Green as employer customers. or BXB, to Moving gives some Banking-as-a-Service, the business Kabbage banking notable design the business and respected account American payment with such by in second solutions Amazon, seamless In in well.

are financial demand are like to small for results the serving tools companies behalf excited and of and We to better important to in our customer power segment space. other this types Checking solutions Early and committed and and meet needs. Kabbage their innovating is and partnering economy strong growth thrilled on these companies are and from continue are for others medium-sized benefit investing engine millions of of small and our designed that a services and with to will we this be products show for to innovating business Kabbage

strengthening We in are progress partners making relationships. great with and these we continue our investing as

third during This movement, XXXX. actives This four to important had with Dabble our partners, second processing new than Dot additional contracted nearly year-on-year saw with brand a as Rapid. were and We processing growth I'll and PayActiv saw partners, tax X,XXX the GDN. year-over-year. total progress QX. And and money of to our Network or milestones. to two businesses. the bringing quarter, up our and GDN platform programs Now our Greenwood XX% up employer solid wrap also results Fair over XXX ADP making business with the small referred businesses. employers was in We QX, to were compared money launched X% medium business as and in number higher segment Revenues increase comprised Starting expected quarter. on year-over-year. a sized an including while Fintech, a We new quarterly Green LendUp processing of money current a XX% during

to GDN’s, make our to payment expanded footprint reloads. due expansion. launches customers capture we with seen product eCash more quarters. has new geolocation year-on-year introducing coming to to control partner capabilities PayNearMe and millions to bills it barcode, And also fraud we pay for cash this XX% GDN Walmart reload, And at retailer major a growth partnered retailers in on extend and plan increase by Walmart easier networking, known We using stores. of convenience

We adding Green And retailers the with further usefulness are eCash others, and and and new in some of consistently continue value Dot PayNearMe, world. integrations network. the of like rolling enhanced the out we'll solutions increasing the largest

looking Now, tax at our processing business.

that Before working we're has jumping share in our to of performance, acquisition the and to Bank's Republic very we DOJ pleased QX the quarter's closing. Business, approved Refund toward Tax a

up us we this lending strong and long-term our we and prepare to acquisition opportunities, As tax shared also capabilities, our growth clients. tax products and business, platform further underwriting core scale including strengthening as It tax and particularly, success. new processing tax solutions introduce strong related RA diversity to earlier, significant to set adds growth and while synergies presents with

million deliver XXXX, support the We additional as to to we'll incremental quickly We close million appreciate $XX possible. beyond. in business on transaction TR’s and expect $XX regulators as updated working the in keep of we to in as and this our hard process with are you XXXX EBITDA the synergies part

processing in acknowledging Setting be TPG, important to the to impacted segment XXXX has and TPG. at we each XXXX. note, effort dynamics results I’ll full our year filing how by this and these in and of team tax warp for to in compared volumes group As for IT XXXX, delays business and it’s business our and quarter. our platforms QX aside, shifts expect by results the relatively the shifts tax gone this volumes deadlines, enhancing strengthening flat much the for for other how quarterly in part and

repairs bolster are investments XX,XXX to to their sustain TRS, significantly better We with growth. made which aimed before, bottom business ultimately I've benefit acquisition will our this the particularly helping plus come, and as investment of rely products line. tax and the to clients. both services and and launching XXXX new To years us our we summarize, is on and The capabilities, at serve a of year said reach in us expands

our areas stronger marked with affords growth anticipated by on results number are the like quarter us that into second back This opportunity been great reinvest and milestones. in potential progress to pleased important significant of a a than and We present and ability has GOXbank. the it quarter,

leaner, There's of large-scale capitalize are opportunities lot are plethora work to on a becoming company. stronger, We the more ahead still of focused pursuing. we a

to breakdown hard it see it exciting and to numbers. With momentum you turnaround the a over evidence our that, to and the off. build pass materializing continues to begin give our pay However, show work our new I'll and Jess to of mindset dramatic that is is

Jess Unruh

volumes in refund to a significantly for EBITDA grew $XXX season Good which emphasis non-GAAP Thanks X% second of around year-over-year on growth was million, raising Dan. strong from our and QX. our saw a all the our including exceptionally performance which an an afternoon, to margins rebound cover XX% our year, $X.XX. revenue the cost second revenue our three delayed in the remainder thoughts tax guidance million consolidated revenue of quarter, provide financial QX. delivered fixed for We reporting EPS quarter earnings. maintaining structure, tax were results growth. non-GAAP adjusted Illustrating and contribution both in $XX and everyone. I'll from All-in, the In of strong, resulted acceleration segments

our two Our during earnings a covering the into pieces. provided The of the results broken for to moment spend like guidance And our can down quarter on categories. some we beat adjusted call. I'd EBITDA guidance moving exceeded the primary be last

The million. $X first of performance better-than-anticipated is

Certainly, of continue now guidance COVID We effects cautious it with ago. a economy have to is the in be been more economy. stable was than lingering year our of light on the and the

a are has all challenge. forecasting still we been a very However, dynamic therefore and variables environment experiencing potential the

the growth services better strong each related and Our perform and due on the BXB stimulus gross margin volume a normalizing segments to we better than dollar through consumer services revenue. for anticipated, flow

recovered half support of marketing second to platform and The The QX the $X into modern from growth our roughly timing in pushed than the And portions anticipated. the earnings and of banking QX million. season we plans upside hiring $XX faster as such material million XXXX. investments, to from driving the shifted spend QX tax were new of our oriented was benefit category tax processing business, second of forecasted our

Turning to liquidity.

continue large at holding We tax million was generating produce operating the $XXX cash of to company to corporate cash at flow, in flow And of timing our substantial year-over-year payments. due quarter-end $XXX year-to-date, part the million. cash down

with initiatives. our strength strategic to with together in cash the million provide cash and us our revolver of Our to $XXX flow invest available balance liquidity operating us, sufficient our

acquisition Dan from tax business with to we As received mentioned, the approval DOJ proceed from of our the Republic processing Bancorp.

revolver our that on balance sheet. fund of combination to when a expect and We acquisition cash

our in X% the were XXXX. active X% comparisons challenging of and These programs and year-over-year very respectively. results, timing due largely created services Focusing declined gross number on our consumer stimulus segment to declines the segment, in versus dollar by volume of accounts XXXX by

our gross funds increased XXXX, stimulus segment Excluding in year-over-year. dollar X% Consumer volume in Services

And quarter actives gross first higher direct our purchase dollar the quarter largely funds in of XXXX a both protection of few Despite provided attributable years. a the headwind tailwind, my prior earnings customer being the increased contrast segment strategic volume received is higher while to Consumer XXXX Services calls, segment new in revenue momentum. this Lastly, Expenses from the focus call support because our rates of has meet last revenue XX% deposit direct to X%, creating Services our on increased Consumer over our result X%. on is growth stimulus organic declined center volume our our the a rollout stimulus in margin from declining and the of our in as retail remarks of stimulus, the continued programs. performance grew increased second and to undoubtedly the spent the and reiterate overdraft of organic And in growth divisions demand program. To products service impressive in center stark our in federal third-party segment relief costs year-over-year.

of stimulus our expenses segment, segment in revenue we transaction million Services BXB our gross programs, revenue. declined face and purchase we XX%. even growth and Consumer X% promote we the quarter number revenue X%. grew in Services in call, on respectively, accounts increased in marketing. or ecosystem year-over-year Expenses that active experienced transaction growth-oriented in grew BXB and mentioned focal in resulted interchange of in an losses segment and and decline a volume result increase our our improving with our second GOXbank experience The of a one to dollar last the increases purchase customer's is declining experienced timing to corresponding of headwinds Overall, growth-oriented a our GDV year-over-year due BXB segment, segment in stimulus half. driven be also volume product handling BaaS accounts in and by by timing our Overall, point of of dollar Overall, associated believe heightened investments fees grew in consumer active was investments a segment while as I losses to our segment, overall expenses prioritize the $X X% experience in the marketing Consumer the Employer investments second XXXX. of service due the As Like capable infrastructure our fund. year-over-year Like our the continued building line and and in processing purchase partner in growth profit larger is programs recently growth BaaS from with launched $X And volume volume. will million XXXX the by volume in our our In customer gross profit or growth. XX% increase of XX%. our the and

As year-over-year expected, partner arrangements tax Money rebound in BaaS Movement a declined our segment that contain QX with was the up year-over-year, profit. fixed margin the X% consistent segment driven from season. in the by Revenue

the volumes XXX% processed down XX%. tax flat. In due XX% quarter year-to-date processed in refund recovered year-over-year You we XXXX our number may QX, of our a tax processed of the first the and in cash first transfers tax to were by number quarter The of that was delay significant refunds were down the up basis, on have to recall the half season. in

our headwind partner QX associated a with reload earnings we last discussed in renew call, on not to significant XXXX. we have As decision a our

million and came volume Overall, been profit lost at so the has or margin, bottom However, a revenue $XX XX%. segment low the muted. impact line increased

Now, to I guidance of like XXXX. to focus the remainder would for on

in trends We are we in light to are and billion. early QX of range non-GAAP our $X.XX a raising revenue of to $X.XX performance seeing our QX billion guidance

to of on $XXX Based approximately range also earnings to EBITDA $X.XX. our are EBITDA EPS million. $XXX half the adjusted midpoint our raising implied $XX the is to guidance million range, range million $X.XX We second non-GAAP adjusted for our and to

last and As back profit believe in customer two we reinvest earnings to our we platform, have strategic upside into shared GOXbank. in modern banking opportunities calls, XXXX our exist service

of previously $XX to I half second the second matters timing platform. modern increase other Additionally, making expect half. mind as the discussed shifted our corporate that from year of new million and first the profits to costs we the in invest in Keep half in we our

have XXXX. reduction that reaccelerating delivering The the processing positive thus to expect far. a which we're milestones become right in the is a line payback we in the XXXX excited progress in begin more investment track. a indicator We on we've expenses, are and about this making substantial We're achieved top with

and mission investments questions. believe committed will product operator businesses to it growth-oriented the for and deliver compelling partner returns. their These of map financial turn help being well-being. our in further for are will We innovation, us our Americans over with expected focused financial road go-to coupled empower to it on small hardworking investments, With our the XXXX I'll that, for and

Operator

come will [Operator ahead. William our Blair. Napoli Bob first Please Instructions] And go from of question

Bob Napoli

Dan Jess, you. to quarter, good see. Congratulations. Nice and Thank

Dan Henry

Bob. Thanks,

Bob Napoli

there. what So you how our I the on that to you upside revenue the the lot and just maybe if services, I there? But retold had – a BaaS in growth more – where of you think business, Can give And – relative mean largest kind color would? you to the I a into expectations. mean, partners little BXB things dig that's of

Jess Unruh

performance the on and Jess, is this Bob, side. comment, the can I Yes. revenue

growth BXB house. strong of XX% quarter, you So there the that can in up was side first in gross the foremost, volume really see dollar and the

late from newer – late is on largely campaigns, GDV coming through launched headwinds mature GDV their COVID some coming stimulus, predominantly, we of expand used in QX, of that's our programs help accounts in And the the platform. influx some see impacted continuing but that's even some portfolios early we of mature ramp. with by large – expansion programs are just headwind QX, that their QX. And a of So some continued offset cetera. to the Others programs still to some growth – the marketing programs some of and PXP with active and continue programs from our by being a partially of as were starting that et our it's with

coming So growth all some of newer programs. mature with in organic from sort from help those programs the

Bob Napoli

thank relates the conversion of Okay. of on Money conversion just Walmart like the metrics if DDA you. you don't I accounts, but I specifically, Then love as to be the meaningful, Card, in follow-up mean, GOXbank strategy real maybe a the more on little I that seems Walmart it to that a Money give Card, to there, the – some maybe, shift on bank color I'd meaningful. the mean, growth could it how GOXbank, that. know can

Dan Henry

Sure the getting of longer Walmart deposit prepay demand Money accounts bank it's clearly no issued switch a to Cards Bob, it's the account, on card. that – a now that's

consumer and products with can And friendly that, their now have then Walmart card that that holders. we've the extend so to launched, created very overdraft

customers we them true embrace. so it's mean, that, Walmart that be the a that and going a program customers rolling to value a out the it's very their And few sign protective – have. I serve of it's the really a sign is things. and of really products really of One,

points product Walmart a fee got them benefit are even well then product it's bringing fee. in profitable evidence team cure of still Walmart because having how the the we've are really relationship but Money – and The overdrafts other customers real with can And financial of at of solutions is, both challenges pain this important the it. XX% and So customers I bringing, and to it's to free, the all help we're there. speaks is we and wonderful services so us the Walmart think by partners, more though it me, without program, just solve really, of building Card out a country. new use It's Americans for the it not the Walmart, our working the

Bob Napoli

GOXbank? the And

Dan Henry

doing is really GOXbank well.

out as I'm put better we but Dot the you mean, share sleep call, once, we now. then going don't at in the we realized I we're My myself, awake, metrics I I and So, next everybody inside narrative on products. consumer that one. to action lessons. I'll try myself retail I gosh, some think Green that is Bob, at to take specific segment that during do appreciate still GOXbank products speech I apologize say that, the I or and What this illustrate with that josh, have I right to to and that listened do better time I staying

in So Challenger we've I I'm across that. script. think can GOXbank I the it in And got there and locations Bank they're don't do or mean, retail XX,XXX rack out sorry, came but now I'm an sorry, that

our consumer display messages talk when TV build brand build card brand so And when to and going you see power GOXbank, online or and extremely getting how also on to powerful through the of and direct you're we're on about awareness retail, reach the through that for GOXbank. we ability inside an of us segment a you we with

Bob Napoli

Appreciate Thank it. you, Dan.

Dan Henry

Bob. you, Thank Yeah.

Operator

Securities. next ahead, of question from Pease Truist comes Jeffrey go The Andrew

Andrew Jeffrey

Dan. Hi,

Fortunately we're so a I've me coffee to next cup all sitting good. got of here,

Dan Henry

That's great. Thank you.

Andrew Jeffrey

Can just you a to this if and past you've point as elaborate a about unit and investments a of you we break how maybe I little they I and you and a where the just up evens think thinking year story frame the just down extended perspective? XXXX, six-month in then the and think share, unit little even, on kind mentioned wonder, should focused for are invest XXXX bit, could from back get the perhaps it's we a elaborate those at come detail more perhaps peers. than bit that neo and I break in GOXbank a compelling, bank economics? in

Dan Henry

that go-forward a able generate “prime economics, get I will free program, fund to the talk unit flow we that the the you will marketing, shared direct but play on a can I And that's on a the when like the that go-to a in bank deposit we have of what about that terms times because we basis, pump” unit and I out to of share with before is and a talk certain the many entire base and get kind customer offer customers just of access and it's direct access Sure. we because profitability then kind also becomes and handed to we had customers of cash also of be the to if our nuance they're to customers it secure – credit friendly fee to offer card deposit. consumer a overdraft, free card, on to –

looking $XX unit on at together, group blend deposit use unit then go-to and per the $XX from of look our right customer of contribution. new if bank; economics, per looking secured group just a at could the so we're on contribution the average them be not of consumer And account, some revenue, but cards, customers we of economics When the a to direct at the credit we that overdraft. month portion

that's $XXX of and is we a of a generating month year. the market. just available paycheck-to-paycheck on competition bullish a $XX fear so this believe customer is Americans, and total million this a $XXX where also don't program, living And market, that's I the if we contribution get So business have working have I because

in from to a cut us. get generate conservative I'll our $XXX; get $XXX contribution pool a we it $XXX like make that deposit year If million raise of by those for a engine, a always – So at direct a customer are customer. as end contribution and people an And in lot we X% a to less of the and year total try cost incremental what out direct deposit than I they're that market. of see And the cut available there's direct who we of ultimately of acquire customer press ways cost see million day, money $XXX deposit on them, company, to customer that's at acquire what's the for there, they'll look other their trying – low us number. folks they'll you'll quote to the acquisition fund numbers. to look it And we of a very to the

XX up. out we smaller acquire customers. So may a certain XX, direct Those customers deposit still go of ship certain are funded become those that percentage cards, and get percentage and XX and gets funded

costs direct So look deposit customer. at and one-single we direct between all deposit acquire it $XXX acquire ranges a when the in to customer, to $XXX

a your direct there's So math, month hope on I payback where a to that customer. deposit it's helps. Andrew, about six

Andrew Schmidt

help. does It Yes.

as understand. that's And sorry… I really think important just to just a follow-up,

Dan Henry

Yes, go ahead.

Andrew Schmidt

that Just or as I smaller exempt Fed on Do my amendment [indiscernible]. carve-out ready have discussion to them, the some Durbin to, you follow-up, for any there's view been interchange? for viewing I are debit prepaid any know specific the think I I deny of mean, many, Durbin of two chatter but and kind of risk is don’t there is

Dan Henry

we're to Durbin I exemption. that's view able there. I kind base now. size our of below don't well comment the that, that on don't really, What this other have on from maintain be a, I right asset out same see chatter at any than the any have point, to I

Andrew Schmidt

Got it. I it. Thanks. appreciate

Dan Henry

Yes. Thank you, Andrew.

Operator

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

Ramsey El-Assal

Dan, Hi, can there's per I'm our you versus this the revenue of thanks model, just that I just of and stimulus, wondering active Should with parts, it's my we continuing read years. was shall it we seems as if kind I account – for Should there metric segment, think evening. lot question, consumer comment going and a kind but months moving In engagement? especially a more forward. taking increased of of time, on like picked – increased that we, over the that as that Is up know northward? over

Jess Unruh

you Ramsey, said… I’ll give,

Dan Henry

Go Jess. ahead,

Jess Unruh

to you – base. answer though want active I’ll I would Jess, you're accounts CEO you see if Ramsey, optimistic say all. Yes, have our give that, the yes, the consumer million run then can in we and it now X

kind of one whenever that out And evaluations. get terms compared I some to of want size chances – her the are out want that get I other business, of there getting there so some our consumer that I give to offerings just context in again, are to to

So our are million is direct them a roughly current and X of deposit. $X base on million

accounts by As total they we a best increase continue to percentage that their and deposit direct of Americans. when the customers as will be expect customer grow our drive bank as nature GOXbank increasing make for on per revenue our and bank our deposit active account will they the the account. there. product, direct invest Yes, I in that you working plan and their

So are the be correct average revenue I account would should say in active that segment the consumer that upward. trending per you

Ramsey El-Assal

similar trading along conception stuff or might bank? kinds the, or add stock a, platform is might with medium Bitcoin can product think over functionality add lines, that I pipeline there's of GOXbank or Should we it. with announcements talk roadmap? you GOXbank to you'll kind guess, term? know things I near time. a you about don't that I related some the kind Is or in of to PXP can you all that what whatever still the Okay. product that be associated originally there's expect of

Dan Henry

feature adding be continually. product expect and benefits Yes, you to should the functionality we'll

and focused creating income we along this moderate in solve and answer, consumers. low right of the intend year, add – to mind all be needs we pain doing to working half are So, we will to second feature and certainly product the on of Americans that a keep benefits some functionality will and we points serve to so the and

things and don't a absolutely. functionality got we yes, customer would It's looking We've in near out expect to roadmap. us for high income really and very powerful a so really, benefits to be be things offering the product that unique more base, very robust And but directed towards products consumer. that of rolling a We'll term. be, our be more plan

Ramsey El-Assal

Great. Terrific. Thank you.

Dan Henry

Thank you. Yes.

Operator

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

Andrew Schmidt

which the between tough think around and account bit. my can of of I Jess. we obviously the like sort Once, to Dan. over question, from dig overdraft, actually this active fairly in normalize well. Thanks period way growth, and about more for direct this acquisition, Hey, a lines to intermediate growth more get improving help active Hey, the you’re like same an of Hope last through comps things and perspective, the quarter, deposit, direct adding comp wanted tough functionality along product account once account things customer doing but, taking questions. active that. distribution, the What's term? deposit, to start a right retention but

Dan Henry

about Andrew, deposit when think accounts what's right to you direct ask way I the just mean… –

Andrew Schmidt

service Consumer specifically.

Dan Henry

because and almost, in kind only of like I stimulus to that quarter-on-quarter customers, they're there's you from we're get and season. increase direct What of QX this seasonal tax deposit mean, say, QX. then use and QX our growth who the for of of delayed to we four, base during see direct direct product first always count. then QX, customers one kind is four such. point to a drop from but to then that to on deposit not for see deposit see season. tax they're Yes. you'll the to been from And basis that customer drop three, tax in a a and slight then then consistent through – deposit taxes which, quarter-on-quarter direct forward, of two to a And acquisition strong historically And the expect see QX percentage I going is payments three of quarter. then QX typically, customers kind always there's pretty they're they a you and refund anomaly their And quarter get

it last historically how see Dot seen follow. to have it's tremendous. time businesses Green what That's fully around. expect I I at total is I that's the again, I that other here available what market that's and And So see

that sound, to spend we marketing and acquire see as know to consistent. and our service We're good that is direct our going customers customer properly provided dollars, we have retention. spend growth going decent and and we long deposit dollars marketing thoughtfully. quarter to We're a each product going we're deposit when is We of as is those our customers. spend, And number have certain direct

Andrew Schmidt

helpful. That's Okay.

So consistently [Multiple deposit Speakers]. positive direct

Dan Henry

it Yes. We've marketing fundamentals, did need you spend bank is out since it arrogant. it's got really mean, I coming a No, absolutely. and I've because not tried the there and get is you this millions I sound there just plenty adults here, done year, is account. also them of hard dollars, become just every before, there – customers, in there the works.

the – just is there there. is market So

if you just and the it's acquire get keep the the it's not If able that's money, customer confidence simple. that's And growth. you that to customer, but spend is the easy, just – you that grow dollar believe the and such the simple. be will we and spend – they it's really business, that just It your I Andrew why that simple, have I

Andrew Schmidt

right. platform, was selected an Got you implementation we the when – update Thanks. simple, then And for work we the banking the modern Makes expect then And where sense. XXXX? follow-up, with where just of started. on hoping give my complete you it us stand vendors could that, Keep it. should hopefully I bulk

Dan Henry

Yes.

we're our and me kind our both work I and probably with quarter bulk we're And when have platform. first and selected products to working we expect year them. We that – and just and by keep active work XXXX we we begin we on in quarter, of honest be of is software has vendors – are will the but having this work before say new conservatives be the to of second done begun of expect here, would over, is

Jess Unruh

phases with QX Yes. Migrating complete being of substantially the of having in intention XXXX.

Andrew Schmidt

Dan you, and it. Appreciate Got it. Jess. Thank

Dan Henry

Andrew. you, Thank

Operator

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

Steven Kwok

Hi, taking thanks my questions. for

shifted things the between between around one first third I quarter were the quarter. fourth should think we cadence that how were was given just Just third and second have and there some that about quarter,

be help, that could would you great. If

Jess Unruh

expect, from further evenly in and be tax talked Sure, And EBITDA that QX, stimulus as spread And quarters. high by QX I'd QX – see From about Steven. naturally get revenue From of we it. you across crack the we'd up as to anticipate an the year-over-year I'll end on half. single-digits the the in in second you'll the some well. essentially we a completed implied expect standpoint, a is just if could take a EBITDA sequentially decrease million perspective, being a basis year-over-year. two $XX QX at then season QX, an and

Steven Kwok

and you That's what seeing just good like Dan, type stuff. Got of Could the your investment helpful. you like mentioned about has opportunities time then ROIs perhaps since you're And changed that at it. talk and about Green Dot?

Dan Henry

opportunities in Steven, bank, you are I'm investment referring sorry can you, marketing investment – what or to? go-to explain

Steven Kwok

Just that including go-to around on, you which mentioned. the bank you areas focused

Dan Henry

is marketing so what think refer when I invest bank, acquisition dollars opportunities, that. Yes, talk in already customer a of about driving with to we investment understand. I've and terms we given economics yes, bank I on go-to driving unit go-to

is return the that there investment think I very on So strong.

is the we will operational systems be with of investing then and internal areas the in investing And very improvements those other dollars. aggressive So internal business. in more of

platform tools So service around the one modern customer is example, is another banking example.

when of So that's to. that's speak what – we're we investing referring

Steven Kwok

Understood. for taking Thanks questions. the

Dan Henry

Steven. Absolutely. Thank you,

Operator

back This question-and-answer Henry turn like concludes closing remarks. any our I to would session. over the conference Dan to for

Dan Henry

of putting of think since some very, the this really I really what Everyone, that just my to root. thank has that I'm are you that the want to here. place proud fundamentals And quarter and Yes. we're beginning in for I very time team the take interest accomplished the arrival. illustrates all

delivered you we all. excited quarter, this journey what excited Thank very continues. So this as

Operator

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

Green Dot (GDOT) 4 Aug 212021 Q2 Earnings call transcript