Prepaid card king Green Dot reported Q1/15 of 43% year-on-year (YOY) to $227 million. The Company was negatively impacted by approximately $12 million resulting from fewer reload transactions. Greendot also shuffled its CFO.
The Company says it feels confident in its adjusted EBITDA and non-GAAP EPS forecasts for the year because the cost savings being generated from the discontinuation of MoneyPak, the efficiencies being generated from the integration of our recent acquisitions, and the lower operating costs being realized across the enterprise as a result of a number of efficiency initiatives, are all coming together to more than offset the additional revenue headwinds expected for the full year, attributed to the discontinuation of MoneyPak,
The Company also announced the Company’s Chief Financial Officer, Grace Wang, transitioned to the new role of SVP, Corporate Finance/Business Intelligence. Concurrently with this change, the Company has appointed Mark Shifke to the position of Acting CFO. The Company has retained an executive search firm to conduct a search for a new CFO.
Mr. Shifke has served as a senior executive at Green Dot for the past four years and most recently led the acquisitions of TPG, AccountNow, and Achieve Financial Services, in addition to organizing the debt syndicate and raising the debt necessary for the acquisition of TPG. Prior to joining Green Dot, Mr. Shifke had a 27 year career in law and investment banking, holding the position of partner at the law firm of Davis Polk in New York and serving in senior roles at JPMorgan, Goldman Sachs, and KPMG.
Green Dot says it is seeing some early trends that lead it to believe that the discontinuation of the MoneyPak product could have a greater negative impact on the number of reload sales throughout the year, thus lowering full year expectations for cash transfer revenues. While lower reload sales had a limited effect on its card portfolios in Q1, Green Dot believes over the course of the year the pacing of lost reload transactions could ultimately result in an incremental negative impact to the revenue-generating activity of its active card portfolios or could negatively impact the size of those active portfolios beyond the Company’s initial forecast. Green Dot says it believes in aggregate the ecosystem impact from the discontinuation of MoneyPak could be $20 to $25 million more than the original $40 million forecasted.
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