CA-based prepaid card specialist Green Dot reported financial reported consolidated GAAP and non-GAAP total operating revenues of $146.4 million and $146.5 million, respectively, following the major loss of MoneyPak. Green Dot generated net cash from operations of $114 million year to date.
This quarter’s results and the outlook for the remainder of the year reflect the significant change we made to our business when we discontinued MoneyPak earlier this year. The direct and indirect loss of revenue caused by the loss of MoneyPak is contributing to year-over-year declines in our legacy business lines, which are being offset by the contributions from our recently acquired businesses. Looking forward, however, we are feeling more optimistic. The MoneyPak related declines have now been stable for a number of months and we’re seeing the ecosystem effects now stabilizing, as well. So we believe that, taking into account the new initiatives planned for next year, we expect to have the opportunity to turn the corner and get back to growth as we head into 2017. The new initiatives for next year include, among others, new product offerings in our branded and private label business lines that have the potential to generate higher unit sales and better unit economics, in addition to introducing a new version of our MoneyPak product with enhanced risk controls. We also expect to begin to realize revenue synergies from our TPG acquisition with the deployment of an integrated Green Dot Account/TPG tax refund program distributed through a number of TPG’s tax preparation partners in Q1 next year,” said Steve Streit, Green Dot Chairman and Chief Executive Officer.
Green Dot Interim CFO Mark Shifke further stated, “As we incorporate our Q3 results with trends through October, we expect to finish the full year slightly below our previous non-GAAP total operating revenue guidance range. Meanwhile, our adjusted EBITDA and non-GAAP EPS continue to track within the ranges we provided at the beginning of the year despite the strong headwinds presented by lower revenues due to the MoneyPak discontinuation and higher Walmart commissions. While it is premature to formally guide 2016, we expect to enter the year at a lower year-over-year revenue run rate on our legacy business given the need to lap the full effects of MoneyPak-related declines. Consequently, we expect to have about a 5% revenue headwind going into the year. So, while we believe that the breadth and scale of our new, organic initiatives beginning in Q1 can enable us to generate incremental revenue over the course of next year, we are not expecting very much absolute revenue growth, if any at all, in the aggregate, because we first need enough growth to make up for that headwind. The expected revenue ramp over the course of 2016 should position us well heading into 2017. In terms of capital management, we intend to execute additional share repurchases next year, and we continue to aggressively look for accretive acquisitions.”
For data, background and forecasts on Green Dot: Search CardWeb.com’s CardFlash® Library of more than 58,000 archived articles; Access CardWeb.com’s CardData® for current and historical Performance, Portfolios, Profiles, etc. Visit RAM Research® (ramresearch.com) for quarterly and annual forecasts covering more than 150 metrics. [complimentary or deeply discounted access to CardWeb.com subscribers].
Additional database resources include CardWeb.com’s CardExecs® – comings & goings of payments movers & shakers; CardWeb.com’s CardWatch® – ears & eyes on marketing globally (57K items); and CardWeb.com’s CardPixes® – form & function of card design (7K items).