Green Dot Corporation

Hello and welcome to the Green Dot Corporation second quarter earnings conference call. All participants will be in the 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 must press star, the number one on your touch-tone phone. 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 Tim Willey, Senior Vice President for Finance. Please go ahead.

Thank you, and good afternoon, everyone. Today, we are discussing Green Dot's second quarter 2023 financial and operating results. Following our remarks, we'll open the call for your questions. Our most recent earnings release that accompanies this call and webcast can be found at ir.greendot.com. As a reminder, our comments may include forward-looking statements and 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 will refer to our financial measures that do not conform with 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 George.

Good afternoon, everyone, and thank you for joining our second quarter 2023 earnings call. At Green Dot, our mission is to give consumers and businesses the power to bank seamlessly, affordably, and with confidence. We recognize that access to the banking system should not be a privilege. Our core value is stewardship, since we take care of something for others that is critically important to them, whether they are depositors or investors. To fulfill this mission and live up to our values, we are executing a strategy of integrating banking, technology, and network platforms so that we may provide market-leading financial tools at low cost. Each of these platforms are already in place. We own the bank, we own the technology, and we own one of, if not the largest cash money movement and payment networks in the U.S. with our Green Dot Network. In addition, we own a diverse set of distribution channels where we distribute demand deposit accounts directly to consumers or through retail locations. We also support all sizes of businesses through our distribution of rapid pay card demand deposit accounts. We facilitate cash flow management through our tax products group for thousands of additional businesses. And we support some of the largest companies in the world with sophisticated embedded financial solutions tailored to their particular needs. To fully realize the potential of this strategy, we are highly focused on integrating these assets, enhancing our technology, and optimizing our product roadmap so we can bring products to market in a more agile and timely way. So how are we doing on this journey? Jess will cover our financial results in more detail, but for the second quarter, our non-GAAP revenue was up 2% compared to the same quarter in the prior year, while both non-GAAP and GAAP earnings metrics declined. This decline is attributable to a variety of factors, namely the deconversion of several partners, the ongoing evolution of our direct business as we let several legacy brands attrit or sunset, while we focus on the growth of GoToBank. the impact on partner interest sharing from higher interest rates, and difficult year-on-year comparisons as we realized several one-time benefits and expenses last year. Despite these challenges and headwinds, as we move forward, we see evidence of stabilizing account trends, a growing pipeline, and no shortage of opportunities for Green Dot as the market for embedded finance continues to evolve and grow. Along these lines, I am pleased to confirm our newest Bass-embedded finance partner, which we have referenced in previous calls. Ceridian, a global leader in human capital management technology, has selected Green Dot as a U.S. banking partner for Day 4 Swallet, Ceridian's market-leading on-demand pay solution. We look forward to announcing a national launch and sharing more details of this program and partnership in the coming months. I am also very pleased to announce we have signed a meaningful new partner in our financial service center channel, which is part of our consumer segment. We are thrilled to launch a new partnership with the PLS family of financial service companies to offer demand positive account among other tools and features to their customers. PLS is one of the nation's largest community-based financial service providers, and we have a shared commitment to providing the services and tools that empower consumers, particularly those in the LMI community. Green Dot could not be more proud to be working with Ceridian and PLS, and I look forward to sharing more details on our partnerships in the coming quarters. Business development more broadly remains a key priority, and as we complete the technology conversions, this is one of the areas where we are redirecting our energies and focus. While 2023 is and remains a year of execution focused on internal initiatives, 2024 will be the year of execution focused on building enduring revenue streams. On last quarter's call, our Chief Revenue Officer, Chris Ruppold, spoke about how we are instituting a more uniform, regimented approach to how we go about identifying and pursuing opportunities. And we are making significant strides in proving this model and our pipeline, which is strong. As it relates to our long-discussed technology transformation, I am pleased to share we are now nearly complete with this process, having executed seven conversion events from our legacy processor to our new platform. with the final activities expected to be completed this month. The finalization of this effort puts us in a position to operate as a more efficient, nimble, and scalable company going forward. This has been a two-plus year journey driven by our legacy processors' exit from the business. It has been a challenging road for many of our team members and a consuming focus for management. While we will have post-conversion cleanup work remaining, Bringing this phase of work to completion allows us to redirect our focus and energy to other priorities and opportunities, including additional enhancements to our technology and product offerings, and of course, growth. In addition to being stewards of consumer deposits, a responsibility we take extremely seriously, we are also stewards of shareholder capital, which is why we continue to focus on making expense management and margin expansion a part of our corporate DNA. We are making significant strides in evolving our culture to having a dedicated focus on managing cost and allocating capital with a considerate and thoughtful approach. While the current period is carrying excess costs due to the technology conversion, we expect those costs to abate as we move into 2024. We will, of course, continue to make investments in our regulatory responsibilities and obligations in order to better serve customers. In summary, we are making important strides on our journey, but we are only in the middle innings with plenty to do. I want to thank all of our team members, our partners, and our investors for coming along with us as we execute this strategy. Now, let me hand it over to Jeff.