GREEN DOT CORP

Previous wording

Green Dot Corporation is a financial technology and registered bank holding company ("BHC") committed to giving all people the power to bank seamlessly, affordably, and with confidence. Our technology platform enables us to build products and features that address the most pressing financial challenges of consumers and businesses, transforming the way they manage and move money, and making financial empowerment more accessible for all. Through Green Dot Bank, our wholly-owned subsidiary, we offer a suite of financial products to consumers and businesses including debit, prepaid, checking, credit and payroll cards, as well as robust money processing services, such as tax refund processing, cash deposits and disbursements.

Current wording

Green Dot Corporation is a financial technology platform and registered bank holding company ("BHC") that builds banking and payment solutions to create value, retain and reward customers, and accelerate growth for businesses of all sizes. For more than two decades, we have delivered financial tools and services that address the most pressing financial needs of consumers and businesses, and that transform the way people and businesses manage and move money. Through Green Dot Bank, our wholly-owned subsidiary, we deliver a broad spectrum of financial products to consumers and businesses through our portfolio of brands, including debit, checking, credit, prepaid, and payroll cards, as well as robust money processing services, such as tax refunds, cash deposits and disbursements.

Previous wording

Our Chief Operating Decision Maker (our "CODM" who is our Chief Executive Officer) organizes and manages our businesses primarily on the basis of the channels in which our product and services are offered and uses net revenue and segment profit to assess profitability. Segment profit reflects each segment's net revenue less direct costs, such as sales and marketing expenses, processing expenses, third-party call center support and transaction losses. Our operations are aggregated amongst three reportable segments: 1) Consumer Services, 2) Business to Business ("B2B") Services, and 3) Money Movement Services. Net interest income, certain other investment income earned by our bank, interest profit sharing arrangements with certain BaaS partners (a reduction of revenue), eliminations of inter-segment revenues and expenses, and unallocated corporate expenses that are not considered when our CODM evaluates the performance of our three reportable segments are recorded in Corporate and Other expenses. Refer to our 2023 Annual Report on Form 10-K "Part I, Item 1. Business" for more detailed information about our operations and Note 19—Segment Information in the notes to the accompanying unaudited consolidated financial statements.

Current wording

Our Chief Operating Decision Maker (our “CODM” who is our Chief Executive Officer) organizes and manages our businesses primarily on the basis of the channels in which our product and services are offered and uses net revenue and segment profit to assess profitability. Segment profit reflects each segment's net revenue less direct costs, such as sales and marketing expenses, processing expenses, transaction losses and fraud management, and customer support and related expenses. Our operations are aggregated amongst three reportable segments: 1) Consumer Services, 2) Business to Business ("B2B") Services, and 3) Money Movement Services. Net interest income, certain other investment income earned by our bank, interest profit sharing arrangements with certain BaaS partners (a reduction of revenue), eliminations of inter-segment revenues and expenses, and unallocated corporate expenses that are not considered when our CODM evaluates the performance of our three reportable segments are recorded in Corporate and Other expenses. Refer to our 2024 Annual Report on Form 10-K "Part I, Item 1. Business" for more detailed information about our operations and Note 19—Segment Information in the notes to the accompanying unaudited consolidated financial statements.

Previous wording

Our consolidated results of operations for the three and nine months ended September 30, 2024 and 2023 were as follows:

Current wording

Our consolidated results of operations for the three months ended March 31, 2025 and 2024 were as follows:

Previous wording

Our consolidated total operating revenues increased year-over-year due to the continued growth of certain BaaS partner programs, which generated an increase in our total gross dollar volume for the three and nine months ended September 30, 2024 of 35% and 32%, respectively. However, our total operating revenues were negatively impacted by several other factors impacting our deposit account programs, as discussed below, that impacted the number of consolidated active accounts, purchase volume, and number of cash transfers, each of which decreased for the three months ended September 30, 2024 by 6%, 9%, and 1% respectively. For the nine months ended September 30, 2024, purchase volume and the number of cash transfers decreased by 12% and 6%, respectively, over the prior year comparable period.

Current wording

Our total operating revenues for the three months ended March 31, 2025 increased $106.9 million or 24%, over the prior year comparable period, driven primarily by higher revenues in our B2B Services segment and to a lesser extent in our Money Movement Services segment, partially offset by lower revenues earned in our Consumer Services segment. Continued growth of certain BaaS partner programs generated an increase in our total gross dollar volume and number of consolidated active accounts for the three months ended March 31, 2025 of 21% and 2%, respectively, which increased our total operating revenues year-over-year. However, as discussed below, our total operating revenues were negatively impacted by unfavorable trends and factors in our deposit account programs, driving, among other things, a reduction of approximately 3% to each of our purchase volume and number of cash transfers for the three months ended March 31, 2025, as compared to the prior year period.

Previous wording

In our Consumer Services segment, revenues decreased during the three and nine months ended September 30, 2024 by 17% and 24%, respectively, over the prior year comparable periods. Gross dollar volume, the number of active accounts, the number of direct deposit active accounts and purchase volume each declined year-over-year for the three months ended September 30, 2024 by 14%, 18%, 15% and 18%, respectively. Similarly, gross dollar volume and purchase volume declined for the nine months ended September 30, 2024 by 19% and 22%, respectively. We believe these decreases in our Consumer Services segment are attributable to several factors, including our decision to wind-down many of our legacy accountholder programs in support of GO2bank, macro-economic factors leading to economic challenges for consumers and other competitive trends that have impacted acquisition at retail locations, and the non-renewal of one of our retail partner programs, as previously disclosed. These factors had a corresponding impact on the amount of accountholder fee revenue we earn from accounts, including monthly maintenance fees, new card fees, ATM fees and interchange fees. Revenues within this segment were also adversely impacted by a decrease in breakage revenue on our gift card portfolios for each of the comparable periods.

Current wording

In our Consumer Services segment, revenues decreased during the three months ended March 31, 2025 by 5% from the prior year comparable period. Our gross dollar volume and purchase volume each declined by 6% for the three months ended March 31, 2025, and the number of active accounts and direct deposit accounts declined by 7% and 11%, respectively. We believe these decreases in our Consumer Services segment are attributable to several factors, including macro-economic factors affecting consumer behavior and other competitive trends that have impacted acquisition at retail locations, and the non-renewal of one of our retail partner programs in a prior period. These factors had a corresponding impact on the amount of accountholder fee revenue we earn from accounts, including monthly maintenance fees, ATM fees and interchange fees. Revenues within this segment were also adversely impacted by a decrease in breakage revenue on our gift card portfolios for the comparable period.

Previous wording

In our B2B Services segment, revenues increased by 39% and 40% during the three and nine months ended September 30, 2024, respectively, over the prior year comparable periods. The increase was driven by strong year-over-year growth in our gross dollar volume, which increased during each of the three and nine months ended September 30, 2024 by 46%, and to a lesser extent, growth in purchase volume, which also increased during each of the respective periods by 10%. The number of active accounts for the three months ended September 30, 2024 increased by 11% over the prior year comparable period. The growth in gross dollar volume was driven primarily by certain BaaS programs that do not generate interchange fees and resulted in a net increase in segment revenue due to higher program management service fees earned from these BaaS partners, partially offset by the non-renewals of certain other BaaS partners, as previously disclosed.

Current wording

In our B2B Services segment, revenues increased during the three months ended March 31, 2025 by 42% over the prior year comparable period. The increase was driven by strong year-over-year growth in our gross dollar volume, which increased by 26%, and to a lesser extent, growth in purchase volume, which increased by 3%, and the number of active accounts for the three months ended March 31, 2025, which increased by 13%. The growth in gross dollar volume was driven primarily by certain BaaS programs that do not generate interchange fees and resulted in a net increase in segment revenue due to higher program management service fees earned from these BaaS partners.

Previous wording

The increase in segment revenues for the nine months ended September 30, 2024 was driven primarily by an increase in our tax processing revenues, partially offset by a decrease in cash transfer revenues. While the number of tax refunds processed decreased by 2% during the nine months ended September 30, 2024, our tax processing revenues increased due to a favorable mix-shift in the distribution channel in which the tax refund was processed and from the expansion of our taxpayer advance programs. These increases were partially offset by a 6% decline in the number of cash transfers processed during the nine months ended September 30, 2024. This decline was due to a lower number of active accounts within our Consumer Services segment discussed above. The Green Dot Network is a service provider to accountholders in both our Consumer Services and B2B Services segments, as well as third-party programs.

Current wording

In our Money Movement Services segment, revenues increased during the three months ended March 31, 2025 by 7% from the prior year comparable period. This increase in revenue was driven primarily by an increase in our tax processing revenues. Although the number of tax refunds processed decreased by 14% for the three months ended March 31, 2025, as compared to the prior year period, our tax processing revenues increased due to the expansion of our taxpayer advance programs and a favorable mix-shift in the distribution channel in which the tax refund was processed. The decrease in the number of tax refunds processed is principally attributable to our online tax preparation partners. The increase in tax processing revenues was partially offset by a 3% decline in the number of cash transfers processed for the three months ended March 31, 2025 from the prior year comparable period. The decline in the number of cash transfers processed was due to a lower number of active accounts within our Consumer Services segment discussed above. The Green Dot Network is a service provider to accountholders in both our Consumer Services and B2B Services segments, as well as third-party programs. We continued to experience an increase in the number of cash transfers processed for third-party programs, which has grown steadily on a year-over-year basis, and represented the majority of our total cash transfers as of March 31, 2025.

Previous wording

Net interest income earned by Green Dot Bank, a component of our Corporate and Other segment, increased for the three and nine months ended September 30, 2024 by 92% and 50%, respectively, over the prior year comparable periods. The increase in net interest income was primarily the result of an increase in cash from deposit programs with our partners and yields earned at the Federal Reserve, partially offset by an increase in interest shared with certain BaaS partners (a reduction of revenue).

Current wording

Revenues within our Corporate and Other segment were driven primarily by net interest income earned by Green Dot Bank, which increased by 70% for the three months ended March 31, 2025, over the prior year comparable period. The increase in net interest income was primarily the result of an increase in cash from deposit programs with our partners and yields earned at the Federal Reserve, partially offset by an increase in interest shared with certain BaaS partners (a reduction of revenue).

Previous wording

The increase in our total operating expenses for the three months ended September 30, 2024 was driven primarily by an increase in processing expenses associated with the growth of certain BaaS account programs within our B2B Services segment as discussed above, partially offset by reductions in processor costs realized from the processor migration to our in-licensed card management platform. To a lesser extent, our total operating expenses also increased due to an increase in compensation and benefits expenses, driven primarily by an increase in third-party call center support costs associated with the growth of the BaaS account programs discussed above, partially offset by lower salary and wages driven by the reduction in employee workforce we initiated in February 2024, as previously disclosed (the "Headcount Reduction"). These increases were partially offset by lower sales and marketing expenses, principally due to decreases in sales commissions from lower revenues on products subject to tiered revenue-sharing agreements, and lower other general and administrative expenses, primarily driven by a decrease in transaction losses due to a decrease in the amount of customer dispute volume across our portfolios and favorable reductions in our dispute loss rates. This decrease in other general and administrative expenses was partially offset by higher professional services fees related to our anti-money laundering ("AML") programs, including improvements to our compliance controls, policies and procedures.

Current wording

The increase in our processing expenses for the three months ended March 31, 2025 was driven primarily by the growth in gross dollar volume associated with certain BaaS account programs within our B2B Services segment discussed above. This increase was partially offset by lower other general and administrative expenses, which decreased during the three months ended March 31, 2025 primarily due to a decrease in overall transaction losses attributable to lower customer dispute volume across our portfolios and favorable reductions in our dispute loss rates, the settlement payment and impairment charges related to the termination of our partnership agreement to develop a new core banking system that were incurred in the first quarter of 2024 that did not recur in the current period, and lower professional services fees related to our anti-money laundering ("AML") programs, due to the completion of certain initiatives. Our sales and marketing expenses also decreased, principally due to a decrease in revenue-sharing arrangements in our tax processing business, partially offset by an increase in sales commissions from higher revenues on products subject to tiered revenue-sharing agreements in our Consumer Services segment. To a lesser extent, total operating expenses decreased due to a decrease in compensation and benefits expenses, driven primarily by a decrease in employee stock-based compensation due to forfeitures of awards from certain employees and severance benefits not recurring at the same magnitude in the current period as a result of our reduction in employee workforce in the comparable prior year period, partially offset by an increase in third-party call center support costs associated with the growth of the BaaS account programs discussed above.

Previous wording

Our effective tax rate for the nine months ended September 30, 2024 was 5%, a decrease from 26% for the comparable prior year period. The decrease in our effective tax rate was primarily due to a decrease in state income taxes expense, net of federal benefits, the impact of general business credits, tax benefits from bank owned life insurance policies, and a reduction in the amount of compensation expense that was subject to the Internal

Current wording

Our income tax expense for the three months ended March 31, 2025 increased by $5.3 million, or 211%, from the prior year comparable period primarily due to an increase in our pre-taxable income, partially offset by a decrease in our effective tax rate. Our effective tax rate for the three months ended March 31, 2025 was 23.4%, a decrease from 34.8% for the prior year comparable period. The decrease in our effective tax rate was due to several factors, including the impact of general business credits, tax benefits from bank owned life insurance policies, a decrease in tax expense associated with shortfalls from stock-based compensation, a decrease in tax expense from nondeductible expenses, a reduction in the amount of compensation expense that was subject to the Internal Revenue Code (the "IRC") Section 162(m) limitation on the deductibility of certain executive compensation, and a reduction of the incremental taxes and penalties ("surrender penalties") we incurred in connection with the surrender and restructuring of our existing bank owned life insurance policies completed in 2024. These decreases in our effective tax rate were partially offset by an increase in state income taxes expense, net of federal benefits.

Previous wording

Based on the overall macro-economic environment, the effect of elevated inflation and interest rates, our commitment to making growth-oriented investments and the timing of the related expense savings from our processor migration to our in-licensed card management platform, the previously-disclosed non-renewals in our Consumer Services and B2B Services segments, our decision to wind-down many of our legacy accountholder programs in support of GO2bank, trends occurring within our retail channel in our Consumer Services segment, and our investments in our compliance programs, we have experienced declining trends in our consolidated operating results in recent periods. However, we do not expect some of these trends or events to persist, such as partner non-renewals and the discontinuation of certain legacy accountholder programs. After taking into consideration the one-time nature of our Consent Order accrual and other charges, we expect our results of operations will stabilize on a year-over-year basis over the remainder of 2024 based on our anticipated initiatives and cost reduction measures we have implemented.

Current wording

While we are still experiencing a difficult macro-economic environment, competitive headwinds and other factors that have contributed to declining trends in our consolidated operating results in recent periods, excluding any impact from our strategic review process, we expect our results of operations will stabilize on a year-over-year basis in 2025 based on our anticipated initiatives and cost reduction measures we have implemented.

Previous wording

We intend to continue to make growth-oriented investments and incur other expenditures that we believe will benefit our long-term financial results. Our growth-oriented investments are focused on, among other things, cost-effectively re-engaging in strategic marketing initiatives in support of our GO2bank product and other initiatives across our account programs with the objective of returning to active account growth.

Current wording

We intend to continue to make growth-oriented investments and incur other expenditures that we believe will benefit our long-term financial results. Our growth-oriented investments are focused on, among other things, accelerating our ability to onboard new partners in our B2B Services and Money Movement segments, adding new features and functionality to our Arc platform, cost-effectively re-engaging in strategic marketing initiatives in support of our GO2bank product and other initiatives across our account programs with the objective of returning to active account growth.

Previous wording

We have seen reductions in our processing expenses from our processor conversion and expect the implementation of our card management platform will allow us to continue to realize reductions in our processing expenses as we seek to expand account programs.

Current wording

We have seen reductions in our processing expenses from our processor conversion and expect the implementation of our card management platform will allow us to continue to realize reductions in our processing expenses as we seek to expand account programs. In March 2025, we also initiated a re-alignment of teams and resources across the enterprise in a continual effort to better support our strategic priorities and growth channels, and to improve our operating efficiency. We expect this re-alignment to further improve our cost structure year-over-year.

Previous wording

We have seen our cost reduction initiatives partially offset by increases in other areas, as we have incurred additional expenses in connection with our continued investments in our AML program, including improvements to our compliance controls, policies and procedures, which we believe will ultimately help us to continue to remediate matters identified in the Consent Order and mitigate and reduce our fraud losses over the long term.

Current wording

Despite the meaningful reductions to our cost structure we have achieved across our organization through our various initiatives, we are incurring increased expenses in other areas as we conduct our strategic review process, incur or accrue for additional retention and interim officer compensation expenses and incur additional expenses in connection with our ongoing investments in our AML program, including improvements to our compliance controls, policies and procedures. We believe investments in our AML program will ultimately help us to continue to remediate matters identified in the Consent Order from the previous year, reduce our fraud losses over the long term and cost-efficiently scale our compliance and regulatory programs as we look to grow our business.

Previous wording

In September 2024, the Federal Reserve decreased interest rates by 50 basis points, the first rate cut in over four years, and further reduced interest rates by an additional 25 basis points in early November 2024. Although we remain in an elevated interest rate environment, the general market consensus is that interest rates will gradually decrease further over the near term. The Federal Reserve's decision-making policies for short-term interest rates will continue to impact the amount of net interest income we earn in the future. In general, while increases in short-term interest rates benefit the yield we earn on our cash, certain of our BaaS partner arrangements allow for the BaaS partner to share in a significant portion of the interest earned from accountholder deposits (which are recorded as a reduction of revenue in our consolidated financial statements), and yields on our investment portfolio tend to lag interest rate increases as securities mature and proceeds are reinvested. Accordingly, the net effect has had and may continue to have a negative impact on our consolidated financial statements and will be dependent upon future interest rate changes enacted by the Federal Reserve.

Current wording

In September 2024, the Federal Reserve decreased interest rates by 50 basis points, the first rate cut in over four years, and further reduced interest rates by an additional 50 basis points during the fourth quarter of 2024. The Federal Reserve's decision-making policies for short-term interest rates will continue to impact the amount of net interest income we earn in the future. In general, while higher short-term interest rates benefit the yield we earn on our cash, certain of our BaaS partner arrangements allow for the BaaS partner to share in a significant portion of the interest earned from accountholder deposits (which are recorded as a reduction of revenue in our consolidated financial statements), and yields on our investment portfolio tend to lag interest rate increases as securities mature and proceeds are reinvested. Accordingly, the net effect has had and we expect will continue to have a negative impact on our consolidated financial statements and will be dependent upon future interest rate changes enacted by the Federal Reserve. However, we are also beginning to shift a portion of our investment securities portfolio into variable rate debt securities to improve net yields and balance the effect of our interest sharing arrangements with BaaS partners.

Previous wording

Our income tax expense (benefit) consists of the federal and state corporate income taxes accrued on income resulting from the sale of our products and services.

Current wording

Our income tax expense consists of the federal and state corporate income taxes accrued on income resulting from the sale of our products and services. Our effective income tax rate may differ from the 21% U.S. federal statutory rate due to a number of factors, including state income taxes, general business credits, non-deductible expenses and penalties, increases or decreases in valuation allowances and liabilities for uncertain tax positions, excess tax benefits or shortfalls on stock compensation awards, audit developments, and legislative changes. See Note 10—Income Taxes to the Consolidated Financial Statements included herein for a discussion of the significant tax differences that impacted our effective tax rate.

Previous wording

There have been no material changes during the nine months ended September 30, 2024 to the critical accounting estimates disclosed in Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2023.

Current wording

There have been no material changes during the three months ended March 31, 2025 to the critical accounting estimates disclosed in Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Previous wording

Card Revenues and Other Fees — Card revenues and other fees totaled $310.4 million for the three months ended September 30, 2024, an increase of $57.0 million, or 22%, from the comparable prior year period. Card revenues and other fees increased primarily due to growth in gross dollar volume in our B2B Services segment programs, which resulted in higher program management service fees earned from our BaaS partners. These increases were partially offset by decreases in accountholder fees, such as monthly maintenance fees, ATM fees and new card fees for the reasons discussed above in "Overview." In addition, the increase in card revenues and other fees was partially offset by a decrease in breakage revenue on our gift card portfolios.

Current wording

Card Revenues and Other Fees — Card revenues and other fees totaled $376.0 million for the three months ended March 31, 2025, an increase of $94.5 million, or 34%, from the comparable prior year period. Card revenues and other fees increased primarily due to growth in gross dollar volume in our B2B Services segment programs, which resulted in higher program management service fees earned from our BaaS partners. These increases were partially offset by decreases in accountholder fees, such as monthly maintenance fees and ATM fees, as a result of a decline in active accounts in our Consumer Services segment during the current period, and lower breakage revenue on our gift card portfolio.

Previous wording

Cash Processing Revenues — Cash processing revenues totaled $198.4 million for the nine months ended September 30, 2024, an increase of $6.5 million, or 3%, from the comparable prior year period. Although the number of tax refunds processed decreased by 2% during the nine months ended September 30, 2024, our tax processing revenues increased due to a favorable mix-shift in the distribution channel in which the tax refund was processed and from the expansion of our taxpayer advance programs. These increases were partially offset by a 6% decline in the number of cash transfers processed during the nine months ended September 30, 2024 due to a lower number of active accounts within our Consumer Services segment, as discussed above in "Overview."

Current wording

Cash Processing Revenues — Cash processing revenues totaled $113.4 million for the three months ended March 31, 2025, an increase of $6.6 million, or 6%, from the comparable prior year period. Although the number of tax refunds processed decreased by 14% during the three months ended March 31, 2025, our tax processing revenues increased from the expansion of our taxpayer advance program and a favorable mix-shift in the distribution channel in which the tax refund was processed. The decrease in the number of tax refunds processed is principally attributable to our online tax preparation partners. The increase in tax processing revenues was partially offset by a 3% decline in the number of cash transfers processed during the three months ended March 31, 2025 from the prior year comparable period. The decline in the number of cash transfers processed was due to a lower number of active accounts within our Consumer Services segment.

Previous wording

Interchange Revenues — Interchange revenues totaled $48.4 million for the three months ended September 30, 2024, a decrease of $6.6 million, or 12%, from the comparable prior year period. The decrease was primarily due to a decrease in purchase volume of 9% during the three months ended September 30, 2024, as well as a lower effective interchange rate earned for the comparable periods. Our interchange rate declined due to a mix-shift toward categories of consumer purchases with lower effective rates. In addition, our interchange fees have both fixed and variable components, and as a result, the effective rate we earn may vary based on the size of transactions, among other factors.

Current wording

Interchange Revenues — Interchange revenues totaled $47.9 million for the three months ended March 31, 2025, a decrease of $3.1 million, or 6%, from the comparable prior year period. The decrease was primarily due to a decrease in purchase volume of 3% during the three months ended March 31, 2025, as well as a lower effective interchange rate earned for the comparable periods. Our interchange rate declined due to a mix-shift toward categories of consumer purchases with lower effective rates. In addition, our interchange fees have both fixed and variable components, and as a result, the effective rate we earn may vary based on the size of transactions, among other factors.

Previous wording

Interest Income, net — Net interest income totaled $16.1 million for the three months ended September 30, 2024, an increase of $7.7 million, or 92%, from the comparable prior year period. The increase in net interest income was primarily the result of an increase in cash from deposit programs with our partners and yields earned at the Federal Reserve, partially offset by an increase in interest shared with certain BaaS partners (a reduction of revenue).

Current wording

Interest Income, net — Net interest income totaled $21.6 million for the three months ended March 31, 2025, an increase of $8.9 million, or 70%, from the comparable prior year period. The increase in net interest income was primarily the result of an increase in cash from deposit programs with our partners and yields earned at the Federal Reserve, partially offset by an increase in interest shared with certain BaaS partners (a reduction of revenue).

Previous wording

Processing Expenses — Processing expenses totaled $228.2 million for the three months ended September 30, 2024, an increase of $65.8 million, or 41%, from the comparable prior year period. This increase was principally due to growth in certain BaaS account programs within our B2B Services segment, partially offset by reductions in processor costs realized from the processor migration to our in-licensed card management platform.

Current wording

Processing Expenses — Processing expenses totaled $285.3 million for the three months ended March 31, 2025, an increase of $89.6 million, or 46%, from the comparable prior year period. This increase was principally due to growth in gross dollar volume on certain BaaS account programs within our B2B Services segment.

Previous wording

Other General and Administrative Expenses — Other general and administrative expenses totaled $295.2 million for the nine months ended September 30, 2024, an increase of $56.9 million, or 24%, from the comparable prior year period. This increase was primarily due to penalties paid under the Consent Order and higher professional services fees related to our AML program, including improvements to our compliance controls, policies and procedures. Other general and administrative expenses also increased due to an increase in overall transaction losses attributable to an increase in the amount of customer dispute volume across our portfolios, and the settlement payment and impairment charges related to internal-use software and other related assets associated with the termination of our partnership agreement to develop a new core banking system, as previously disclosed during the first quarter of 2024.

Current wording

Other General and Administrative Expenses — Other general and administrative expenses totaled $86.9 million for the three months ended March 31, 2025, a decrease of $29.7 million, or 25%, from the comparable prior year period. This decrease was primarily due to a decrease in overall transaction losses attributable to lower customer dispute volume across our portfolios and favorable reductions in our dispute loss rates, the settlement payment and impairment charges related to the termination of our partnership agreement to develop a new core banking system that were incurred in the first quarter of 2024 that did not recur in the current period, and lower professional services fees related to our AML programs, due to the completion of certain initiatives.

Previous wording

The results of operations and key metrics of our Consumer Services segment for the three and nine months ended September 30, 2024 and 2023 were as follows:

Current wording

The results of operations and key metrics of our Consumer Services segment for the three months ended March 31, 2025 and 2024 were as follows:

Previous wording

Segment revenues within Consumer Services for the three and nine months ended September 30, 2024 decreased $20.2 million, or 17%, and $91.9 million, or 24%, respectively, from the prior year comparable periods, while our segment expenses for the three and nine months ended September 30, 2024 decreased by $17.1 million, or 23%, and $59.5 million, or 24%, respectively.

Current wording

Segment revenues within Consumer Services for the three months ended March 31, 2025 decreased $5.4 million, or 5%, from the prior year comparable period, while our segment expenses for the three months ended March 31, 2025 decreased by $5.7 million, or 9%.

Previous wording

Our gross dollar volume, number of active accounts, number of direct deposit active accounts and purchase volume each decreased during the three months ended September 30, 2024 by 14%, 18%, 15% and 18%, respectively, from the comparable prior year period, primarily due to each of the several factors discussed above in "Overview." These factors include macro-economic factors leading to economic challenges for consumers and other competitive trends that have impacted acquisition at retail locations, our decision to wind-down many of our legacy accountholder programs in support of GO2bank, as well as the non-renewal of one of our retail partner programs, as previously disclosed. Our gross dollar volume and purchase volume decreased year-over-year by similar levels during the nine months ended September 30, 2024 for the same reasons discussed above. As a result of these decreases in each of our key metrics, our monthly maintenance fee revenues, new card fee revenues, ATM fee revenues and interchange revenues decreased year-over-year. In addition, our interchange rate declined due to a mix-shift toward categories of consumer purchases with lower effective rates, as well as a decrease in breakage revenue on our gift card portfolios for each of the comparable periods.

Current wording

Our gross dollar volume and purchase volume each declined by 6% for the three months ended March 31, 2025, and the number of active accounts and direct deposit accounts declined by 7% and 11%, respectively, from the comparable prior year period, primarily due to each of the factors discussed above in "Overview." These factors include macro-economic factors leading to economic challenges for consumers and other competitive trends that have impacted acquisition at retail locations, as well as the non-renewal of one of our retail partner programs in a prior period. Our gross dollar volume and purchase volume decreased year-over-year by similar levels during the three months ended March 31, 2025 for the same reasons discussed above. As a result of these decreases in each of our key metrics, our monthly maintenance fee revenues, ATM fee revenues and interchange revenues decreased year-over-year. In addition, our interchange rate declined due to a mix-shift toward categories of consumer purchases with lower effective rates, as well as a decrease in breakage revenue on our gift card portfolios for the comparable period.

Previous wording

Consumer Services segment expenses for the three and nine months ended September 30, 2024 decreased from the comparable prior year periods due to several factors, including a decrease in sales commissions from lower revenues on products subject to tiered revenue-sharing agreements, and a decrease in processing expenses from lower volumes in this segment, as well as our processor migration, as discussed above in "Overview." Transactions losses for the three and nine months ended September 30, 2024 decreased from the prior year comparable periods, attributable to a decrease in the amount of customer dispute volume across our portfolios in this segment and favorable reductions in our dispute loss rates. Overall, segment profit decreased for the three and nine months ended September 30, 2024 by approximately 7% and 23%, respectively, from the prior year comparable periods.

Current wording

Segment expenses for the three months ended March 31, 2025 decreased from the comparable prior year period primarily due a decrease in overall transaction losses attributable to lower customer dispute volume across our portfolios and favorable reductions in our dispute loss rates, partially offset by an increase in sales commissions from higher revenues on products subject to tiered revenue-sharing agreements. Overall, segment profit increased for the three months ended March 31, 2025 by approximately 1%, from the prior year comparable period.

Previous wording

The results of operations and key metrics of our B2B Services segment for the three and nine months ended September 30, 2024 and 2023 were as follows:

Current wording

The results of operations and key metrics of our B2B Services segment for the three months ended March 31, 2025 and 2024 were as follows:

Previous wording

Segment revenues within our B2B Services for the three and nine months ended September 30, 2024 increased $77.2 million, or 39%, and $218.5 million, or 40%, respectively, compared to the prior year periods, while our segment expenses for the three and nine months ended September 30, 2024 increased $68.3 million, or 38% and $212.2 million, or 43%, respectively.

Current wording

Segment revenues within our B2B Services for the three months ended March 31, 2025 increased $100.8 million, or 42%, compared to the prior year period, while our segment expenses for the three months ended March 31, 2025 increased $91.9 million, or 41%.

Previous wording

Our gross dollar volume, number of active accounts and purchase volume each increased during the three months ended September 30, 2024 by 46%, 11% and 10%, respectively, from the prior year comparable period. We have continued to experience organic growth from both new and existing users concentrated in certain BaaS programs that tend to yield higher gross dollar volume per active user but do not generate comparable levels of interchange fees. The growth in gross dollar volume from these BaaS programs resulted in a net increase in segment revenue due to higher program management service fees earned from these BaaS partners. This increase was partially offset by the non-renewals of certain other BaaS partners, as previously disclosed. Our gross dollar volume and purchase volume increased year-over-year by similar levels during the nine months ended September 30, 2024 for the same reasons discussed above.

Current wording

Our gross dollar volume, purchase volume, and number of active accounts increased during the three months ended March 31, 2025 by 26%, 3%, and 13%, respectively, from the prior year comparable period. We have continued to experience organic growth from both new and existing users concentrated in certain BaaS programs that tend to yield higher gross dollar volume per active user but do not generate comparable levels of interchange fees. The growth in gross dollar volume from these BaaS programs resulted in a net increase in segment revenue due to higher program management service fees earned from these BaaS partners.

Previous wording

B2B Services segment expenses increased for the three and nine months ended September 30, 2024 from the comparable prior year periods, principally due to higher processing expenses with the growth of certain BaaS account programs, as well as higher third-party call center support costs as a result of an increase in gross dollar volume and the number of active accounts. Transaction losses decreased during the three months ended September 30, 2024 due to favorable reductions in our dispute loss rates, and increased during the nine months ended September 30, 2024 on a year over year basis. Overall, our segment profit increased for the three and nine months ended September 30, 2024 by approximately 47% and 11%, respectively, from the prior year comparable periods. This segment also experienced margin compression during each period because certain BaaS partnerships are structured based on a fixed profit and, therefore, our segment profit for certain arrangements will not scale with revenue growth.

Current wording

Segment expenses increased for the three months ended March 31, 2025 from the comparable prior year period, principally due to higher processing expenses associated with the growth of certain BaaS account programs, as well as higher third-party call center support costs as a result of an increase in gross dollar volume and the number of active accounts, partially offset by lower transaction losses due to favorable reductions in our dispute loss rates. As a result of these factors, our segment profit increased for the three months ended March 31, 2025 by approximately 49%, from the prior year comparable period. Segment profit margin increased year-over-year from improvement in our cost structure, although it was limited because certain BaaS partnerships were structured based largely on a fixed profit and, therefore, our segment profit for certain arrangements will not scale with revenue growth.

Previous wording

The results of operations and key metrics of our Money Movement Services segment for the three and nine months ended September 30, 2024 and 2023 were as follows:

Current wording

The results of operations and key metrics of our Money Movement Services segment for the three months ended March 31, 2025 and 2024 were as follows:

Previous wording

The increase in our Money Movement Services segment during the nine months ended September 30, 2024 was driven primarily by an increase in our tax processing revenues, partially offset by a decrease in cash transfer revenues. Although the number of tax refunds processed decreased for the nine months ended September 30, 2024 by 2%, our tax processing revenues increased due to a favorable mix-shift in the distribution channel in which the tax refund was processed and from the expansion of our taxpayer advance programs. These increases were partially offset by a 6% decline in the number of cash transfers processed for the nine months ended September 30, 2024 from the prior year comparable period. The decline in the number of cash transfers processed was due to a lower number of active accounts within our Consumer Services segment discussed above. The Green Dot Network is a service provider to accountholders in both our Consumer Services and B2B Services segments, as well as third-party programs.

Current wording

The increase in segment revenues for the three months ended March 31, 2025 was driven by higher tax processing revenues despite a lower number of tax refunds processed, due to the expansion of our taxpayer advance program and a favorable mix-shift in the distribution channel in which the tax refund was processed. partially offset by lower cash transfer revenues. The decrease in the number of tax refunds processed is principally attributable to our online tax preparation partners. These increases were partially offset by a 3% decline in the number of cash transfers processed during the three months ended March 31, 2025 from the prior year comparable period. The decline in the number of cash transfers processed was due to a lower number of active accounts within our Consumer Services segment discussed above. The Green Dot Network is a service provider to accountholders in both our Consumer Services and B2B Services segments, as well as third-party programs.

Previous wording

The results of operations and key metrics of our Corporate and Other segment for the three and nine months ended September 30, 2024 and 2023 were as follows:

Current wording

The results of operations and key metrics of our Corporate and Other segment for the three months ended March 31, 2025 and 2024 were as follows:

Previous wording

Revenues within our Corporate and Other segment were driven primarily by an increase in net interest income for the three and nine months ended September 30, 2024 by 92% and 50%, respectively, over the prior year comparable periods, partially offset by the portion of interest shared with certain BaaS partners (a reduction of revenue). Net interest income increased as a result of an increase in cash from deposit programs with our partners and yields earned at the Federal Reserve.

Current wording

Revenues within our Corporate and Other segment were driven primarily by an increase in net interest income, which increased by 70% for the three months ended March 31, 2025, from the prior year comparable period. Net interest income increased as a result of an increase in cash from deposit programs with our partners and yields earned at the Federal Reserve, partially offset by the portion of interest shared with certain BaaS partners (a reduction of revenue).

Previous wording

For the nine months ended September 30, 2024 and 2023, we financed our operations primarily through our cash flows provided by operating activities, and from time to time, our short-term working capital activities through our borrowings under our credit facility. As of September 30, 2024, our primary source of liquidity was unrestricted cash and cash equivalents totaling $1.5 billion. We also consider our $2.2 billion of available-for-sale investment securities to be highly liquid instruments.

Current wording

For the three months ended March 31, 2025 and 2024, we financed our operations primarily through our cash flows provided by operating activities, customer funds held on deposit and borrowings from our senior unsecured notes. As of March 31, 2025, our primary source of liquidity was unrestricted cash and cash equivalents totaling $1.8 billion. We also consider our $2.1 billion of available-for-sale investment securities to be highly liquid instruments.

Previous wording

We use trend and variance analysis as well as our detailed budgets and forecasts to project future cash needs, making adjustments to the projections when needed. We believe that our current unrestricted cash and cash equivalents, cash flows from operations, and net proceeds from the issuance and sale of our senior unsecured notes will be sufficient to meet our working capital, capital expenditures, and any other capital needs for at least the next 12 months. We are currently not aware of any trends or demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in our liquidity increasing or decreasing in any material way that will impact our capital needs during or beyond the next 12 months. We continue to monitor the impact of material trends on our business to ensure our liquidity and capital resources remain appropriate throughout this period of uncertainty.

Current wording

We use trend and variance analysis as well as our detailed budgets and forecasts to project future cash needs, making adjustments to the projections when needed. We believe that our current unrestricted cash and cash equivalents, cash flows from operations, borrowing capacity under our revolving line of credit, and net proceeds from the issuance and sale of our senior unsecured notes will be sufficient to meet our working capital, capital expenditures, and any other capital needs for at least the next 12 months. We are currently not aware of any trends or demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in our liquidity increasing or decreasing in any material way that will impact our capital needs during or beyond the next 12 months. We continue to monitor the impact of material trends on our business to ensure our liquidity and capital resources remain appropriate throughout this period of uncertainty.

Previous wording

Our $132.4 million of net cash provided by operating activities during the nine months ended September 30, 2023 was the result of $30.3 million of net income, adjusted for certain non-cash operating items of $121.8 million and decreases in net changes in our working capital assets and liabilities of $19.7 million.

Current wording

Our $108.7 million of net cash provided by operating activities during the three months ended March 31, 2025 was the result of $25.8 million of net income, adjusted for certain non-cash operating items of $62.8 million and increases in net changes in our working capital assets and liabilities of $20.2 million.

Previous wording

Our $104.4 million of net cash provided by operating activities during the nine months ended September 30, 2024 was the result of $31.8 million of net losses, adjusted for certain non-cash operating items of $139.5 million and decreases in net changes in our working capital assets and liabilities of $3.3 million, which includes the payment of $44 million for the civil money penalty included in our Consent Order.

Current wording

Our $89.2 million of net cash provided by operating activities during the three months ended March 31, 2024 was the result of $4.8 million of net income, adjusted for certain non-cash operating items of $47.2 million and increases in net changes in our working capital assets and liabilities of $37.2 million.

Previous wording

Our $18.4 million of net cash provided by investing activities during the nine months ended September 30, 2023 was primarily due to proceeds from maturities of available-for-sale securities of $131.8 million, partially offset by capital contributions related to our investment in TailFin Labs, LLC of $35.0 million, the acquisition of property and equipment of $55.5 million and net changes in loans of $21.6 million.

Current wording

Our $63.5 million of net cash used in investing activities during the three months ended March 31, 2025 was primarily due to purchases of available-for-sale securities, net of maturities and sales, of $25.9 million, the acquisition of property and equipment of $19.4 million and net changes in loans of $17.6 million.