Green Dot Corporation

Good afternoon and welcome to the Green Dot Corporation fourth quarter 2024 conference call. All participants will be in listen-only mode. Should you need assistance, please signal your 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 Tim Willey, Senior Vice President, Finance and Corporate Development. Please go ahead.

Thank you, and good afternoon, everyone. Today, we are discussing Green Dot's fourth quarter 2024 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, and thank you for joining our fourth quarter 2024 earnings call. Today, I will start with some comments on the quarter and 2024 overall, and I will then turn it over to Jeff to discuss our results in greater detail and provide some color and guidance on our outlook for 2025. After Jeff has finished his comments, our Chief Revenue Officer, Chris Ruppel, will join us to discuss the evolution and progress of our growth strategy, including updates to our business development organization. And I will then conclude with some final comments and observations before taking your questions. So, let's get started. In the fourth quarter, we delivered results that were in line with our revised expectations. Adjusted revenue was up 25% year-over-year, while adjusted EBITDA was up 70%. with over 200 basis points of margin expansion. The results reflect the improved momentum in our businesses as we continue moving past headwinds associated with deconversions in 2023 and elevated expense growth in areas such as compliance and risk. Like the third quarter, our fourth quarter results were driven by growth in the B2B segment, and they were aided by moderating rates of decline in our retail business and notable improvements in our transaction and dispute costs. I am particularly happy to point out that our average active accounts were up 3% year-over-year, marking the first quarter in year-over-year active account growth in almost four years. Looking back at 2024, we have navigated a challenging first half marked by significant headwinds related to client deconversions and elevated spending in regulatory and compliance infrastructure, followed by a second half that delivered improved performance marked by revenue growth, new partner wins, and launches, including PLS, a significant new partner in our retail channel, the introduction of our new embedded finance brand, ARK by Green Dot, and importantly, a return to EBITDA growth. Overall, I am proud of how the team effectively navigated ongoing challenges and remained focused on expense management, risk management, and business development and growth to help ensure we meet our financial targets and expectations. The progress that we demonstrated in our financial performance as we moved through the year was a welcome event that required a lot of work, but more importantly, it points to the improvements that we have made in how we operate the company. Throughout the year, we remain focused on three pillars of our strategy, investing in compliance and risk management infrastructure, improving our cost structure, and building an engine of stable and predictable revenue growth. As I have indicated on prior calls, our goal is not just to return Green Dot to a path of predictable financial performance, but also provide our partners and customers valuable solutions and deliver them in a highly secure, compliant, and scalable way. Over the long term, this will solidify our competitive position while also ensuring we are meeting the expectations of all of our stakeholders. Now, let me briefly provide some comments on our guidance for 2025, and Jess will provide you with more detail on our outlook. We currently anticipate non-GAAP revenue of $1.85 billion to $1.9 billion, and adjusted EBITDA of $145 million to $155 million. We expect solid momentum in B2B and money movement, reflecting the secular opportunities in those markets and the benefits of the investments we are making. However, we still face challenges in our consumer segment from secular headwinds in the retail channel. We will also see some modest elevation in corporate expenses primarily related to compliance-related initiatives. While these results imply a decline in earnings compared to last year, I am encouraged by the outlook and progress that we are seeing in B2B and money movement as we continue to reposition the revenue and growth drivers of the company. Now, I will turn it over to Jeff to provide insights on our fourth quarter financials and discuss our guidance in more detail.