Green Dot Stock Gains 20% Despite Q2 Earnings Miss

Green Dot Corporation GDOT reported mixed second-quarter 2024 results, with earnings missing the Zacks Consensus Estimate but revenues surpassing the same.

The stock has gained 19.8% since the earnings release on Aug 8 due to the raised revenue guidance.

For 2024, GDOT hiked its guidance for total operating revenues to $1.60-$1.70 billion from the $1.58-$1.62 billion provided at the end of the preceding quarter. The mid-point of the guided range ($1.65 billion) is higher than the Zacks Consensus Estimate of $1.62 billion.

Quarterly earnings per share (excluding 79 cents from non-recurring items) of 25 cents missed the consensus estimate by 10.7% and declined 32.4% from the year-ago quarter. Revenues of $402.6 million beat the Zacks Consensus Estimate by 8.5% and increased 10% on a year-over-year basis.

The company's shares have gained 20.4% in the past year, outperforming the 18.8% rally of the industry it belongs to.

Green Dot Corporation Price and EPS Surprise

Segmental Revenues

B2B Services revenues increased 39.5% from the second quarter of 2024 to $252.1 million. Growth in PayCard channels and other vast partnerships are anticipated to have led to a rise in this segment's revenues.

Money Movement Services' revenues increased 6% from the year-ago quarter to $53 million. Revenues in this segment were driven by the tax processing division, which had a strong tax season.

The Consumer Services segment's revenues amounted to $96.6 million, down 25.1% on a year-over-year basis. The impacts of continued headwinds in the retail channel on several active accounts on the company's platform resulted in this segment's downfall.

Corporate and Other revenues plummeted 35.7% from the year-ago quarter to $917 thousand. The rising interest rate and seasonal declines in bank deposits are expected to have affected this segment's revenues.

Key Metrics

GDOT's gross dollar volume grew 30% from the year-ago quarter to $32.1 billion. Purchase volume declined 12.6% year over year to $5 billion. The company ended the quarter with 3.4 million active accounts, down 8.8% on a year-over-year basis.

Operating Results

Adjusted EBITDA totaled $34 million, declining 13% on a year-over-year basis. The adjusted EBITDA margin plummeted 240 basis points to 8.4%.

Balance Sheet & Cash Flow

Green Dot exited the second quarter with unrestricted cash and cash equivalent balance of $1.3 billion compared with $1.1 billion in the first quarter of 2024. GDOT had no long-term debt. It generated $31.5 million of cash from operating activities. Its capital expenditure was $17 million.

Other Guidance

For 2024, adjusted earnings per share are anticipated to be $1.45-$1.59. The mid-point ($1.52) is lower than the consensus estimate of $1.54. The adjusted EBITDA is expected to be $170-$180 million.

Green Dot currently carries a Zacks Rank #3 (Hold).

Earnings Snapshot

Automatic Data Processing, Inc. ADP reported impressive fourth-quarter fiscal 2024 results.

ADP's earnings per share of $2.1 beat the consensus estimate by 1% and increased 10.6% from the year-ago quarter. Total revenues of $4.8 billion surpassed the consensus estimate by a slight margin and grew 6.5% from the year-ago quarter.

Booz Allen Hamilton Holding Corp. BAH posted mixed first-quarter fiscal 2025 results.

BAH's quarterly adjusted earnings per share of $1.4 missed the Zacks Consensus Estimate by 9.2% and decreased 6.1% from the year-ago quarter. The company reported revenues of $2.9 billion, which beat the consensus estimate marginally and increased 10.8% on a year-over-year basis. Revenues, excluding billable expenses, were $2 billion, up 8.4% on a year-over-year basis.

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