Green Dot Corporation

Good afternoon and welcome to the Green Dot Corp. Second Quarter 2020 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Sean Rowan, Senior Vice President of Marketing. Please go ahead.

Thank you and good afternoon, everyone. On today's call, we'll discuss Green Dot's second quarter 2020 financial and operating results. Following the remarks, we'll open the call for questions. For those of you who haven't accessed our earnings release that accompanies this call and webcast, It can be found at ir.greendot.com. As a reminder, our comments include forward-looking statements and our expectations regarding future results and performance. Please refer to the cautionary language in the earnings release and in Green Dot's filings with the Securities and Exchange Commission, including our most recent form 10-K and 10-Q, for additional information concerning factors that could cause actual results to differ materially from the forward-looking statements. During the call, we'll make reference to our financial measures that do not conform to generally accepted accounting principles. For the sake of clarity, unless otherwise noted, all numbers we talk about today will be on a non-GAAP basis. Information may be calculated differently than similar non-GAAP data presented by other companies. Quantitative reconciliation of our non-GAAP financial information to the directly comparable GAAP financial information appears in today's press release. The content of this call is property of the Green Dot Corporation and is subject to copyright protection. Now, I'd like to turn the call over to Dan.

Thank you, Sean. Welcome, everyone, to the Q2 earnings call for Green Dot. I've had the pleasure and responsibility of being CEO here for just a bit more than four months, and we have been pretty busy. In addition to dealing with the occasional pandemic, we have been moving very quickly to realign the organization, bring in some great new leaders, and focus on driving efficiencies and uncovering opportunities. Even with some legacy issues and a few negative surprises, as one would expect, I am very pleased with all the early signs of the progress we are making. During the last earnings call, we were still in the early stages of the coronavirus pandemic. The team at Green Dot really came through in dealing with such unprecedented challenges. We enacted business continuity plans in Shanghai and across the U.S., mandated work from home for all employees, and implemented strict travel restrictions to help protect the health of our employees and their families. Our employees have been successful in maintaining our operations in a remote work environment, and our offices in Shanghai have since reopened. During all of this, employee engagement and productivity have been high. Like most other financial institutions, we did experience a disruption in staffing levels at our third-party call centers across the globe during March and through the second quarter of 2020, resulting in longer-than-average wait periods for our customers and increased costs, for the quarter. I'm pleased to report that we and our partners have since restored our staffing to appropriate levels and are currently meeting or exceeding SLA's established for our call centers. During this incredibly unfortunate pandemic, we are proud that our products and services were used and relied upon by millions of consumers and small businesses directly and through our partners to receive much needed funds and support from various government entities, and to do so safely is limited to no contact. This unprecedented crisis also clearly illustrates the strength of the diversified business of Green Dot, as well as the long-term opportunities for widespread digital payments adoption. While Jess will provide you with the specific details related to our financial results, I'd like to start by providing my perspective. Overall, Non-GAAP revenue increased 13% compared to the second quarter of the prior year. This higher revenue and increase in active accounts are primarily due to new and existing customers using GreenDot products to electronically receive COVID-related government stimulus payments. Non-GAAP revenue also benefited from significant growth in our BAS business. It is important to note that COVID caused revenue pressure in other areas of our business, namely one of our more significant BAS partners and our pay card program. Our co-operating expenses for the second quarter of 2020 increased by $64.4 million compared to the second quarter in the prior year. It is important to highlight that a big component of such an increase is related to growth of our BAS business, as well as increased revenue share with one of our key retail partners. We also suffered from COVID-related operational expenses and transaction losses. We expect the COVID-related operational expense and losses to be temporary, and related expense lines will revert back to normal by the end of this year. I'm very optimistic about the potential we have and thrilled about the leadership team we have put together over these past three months. We are focused on five key initiatives here at Green Dot, with the overall objective of delivering bottom-line growth and strong free cash flow. I will speak more about this after Jess provides more detail on our financial results. Jess, over to you. Thanks, Dan.