Interim CEO Bill Jacobs told investors that Green Dot “has stabilized” and is positioned for what he said was “sustainable growth,” adding that the firm has realigned resources.
He cited the company’s internal Project 30 initiative, designed to cut partner implementation time to 30 days, as evidence of its operational discipline and agility.
Embedded Finance Partnerships
Jacobs said the quarter’s strength reflected both new and expanding relationships. Green Dot launched Crypto.com’s Cash Earn feature, enabling real-time savings functionality within its partner’s embedded banking experience, and deepened its reach in employer and SMB markets through new agreements with Workday and Stripe.
Shares were up 4% in after-hours trading on Monday (Nov. 10th).
Chris Ruppel, chief revenue officer noted on the call that the integration with Stripe allows small business customers on Stripe’s platform to make cash deposits at more than 50,000 Green Dot Network locations. Ruppel said the partnership helps “open up the SMB market,” which Green Dot sees as a new revenue stream with meaningful scale potential.
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Workday chose Green Dot to power its earned wage access (EWA) marketplace product. Ruppel said the technical integration is complete, allowing Green Dot to serve employers nationwide through the Workday ecosystem.
Chief Financial Officer Jess Unruh said third-quarter revenue growth of 21% to $492 million was driven by the B2B segment, where revenue climbed just over 30%. Within that segment, active accounts and purchase volume on the ARC embedded finance platform continued to rise as the company expanded with existing partners and brought new ones online.
Although adjusted EBITDA fell 17%, Unruh said the decline was “substantially less than anticipated,” thanks to high-margin revenue and disciplined expense management.
Green Dot maintained full-year revenue guidance of $2 billion to $2.1 billion and raised adjusted EBITDA guidance to $165 million to $175 million, up from prior expectations of $160 million to $170 million. Segment projections call for low-30% growth in B2B revenue, flat performance in money movement, and low-double-digit declines in consumer services.
Unruh noted that interest income is becoming a larger earnings contributor as deposits rise in the BaaS business.
Money Movement and Consumer Dynamics
Revenue in the money movement segment declined as overall transaction volume softened, but average revenue per transaction rose because of a healthier mix that excludes lower-yield third-party activity. Management said this shift, coupled with new cash-transfer partnerships such as Stripe, should position the business to regain momentum in upcoming quarters.
In the consumer business, retail active accounts fell 4%, a notable moderation from prior years.
Future growth drivers of the company, as management noted on the call, will come from the B2B division and money movement operations that benefit from the embedded finance marketplace.
