Green Dot Corp (GDOT) Q4 2020 Earnings Call Transcript

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Green Dot Corp (NYSE:GDOT)
Q4 2020 Earnings Call
Feb 22, 2021, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the Green Dot Corp Fourth Quarter 2020 Earnings Conference Call. [Operator Instructions]. After today’s presentation there will an opportunity to ask questions. [Operator Instructions].

I would now like to turn the call over to Alison Lubert, Vice President of Communications. Please go ahead.

Alison Cahill Lubert — Vice President of Corporate Communications

Thank you, and good afternoon, everyone. Today, we are discussing Green Dot’s fourth quarter 2020 financial and operating results. Following remarks, we’ll open the call for 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’ll make reference 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 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 Green Dot Corporation and is subject to copyright protection.

Now I’d like to turn it over to Dan.

Dan Henry — President and Chief Executive Officer

Thank you, Ali, and welcome everyone to Green Dot’s Q4 2020 earnings call. We thank you all for being with us today. Once again, we are pleased to report a better than expected quarter, driven primarily by strong demand and continued growth across all account programs. We’ve got a lot to cover today. Before I pass over to Jess for a comprehensive report on our financial results, I’d like to share my perspectives on our progress to date and our plans and priorities moving forward into 2021 and beyond.

First, I look at Q4 financials. Non-GAAP revenue grew by 15%. Adjusted EBITDA increased by 59% and non-GAAP EPS of $0.31 translated to a growth of 121%. During the quarter we saw revenue growth from fees charged to our BaaS partners and we benefited from heightened deposit balances on products in our retail and direct channels as a result of the first federal government stimulus and to a lesser degree second stimulus.

While the various federal government programs contributed to growth in 2020, it’s important to note that COVID-19 also had a negative impact on growth trajectories of several of our businesses, including Paycard and Uber cash. We also faced some revenue headwinds during the quarter in our Money Processing business as well as in interest income. We will share more on that in a bit, but overall, I’m very pleased, we delivered another strong quarter and are making the necessary investments for Green Dot to continue playing in a central role in banking and payments for low-to-moderate income consumers.

I’d like to take a few minutes to focus on key areas of progress and achievement over the past year. First, we built and launched GO2bank, our flagship challenger bank designed to address the unique needs and challenges of today’s low to moderate income consumers who are struggling to make ends meet and can truly benefit from better banking and payment Solutions.

We built this platform from the ground up, offering a…