GREEN DOT CORP

Previous 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.

Current wording

Green Dot Corporation is a financial technology platform and registered bank holding company 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 consolidated results of operations for the three months ended March 31, 2025 and 2024 were as follows:

Current wording

Our consolidated results of operations for the three and six months ended June 30, 2025 and 2024 were as follows:

Previous 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.

Current wording

Our total operating revenues for the three and six months ended June 30, 2025 increased $97.1 million, or 24%, and $203.9 million, or 24%, respectively, over the prior year comparable periods, driven primarily by higher revenues in our B2B Services segment, partially offset by lower revenues earned in our Consumer Services segment. Continued growth of certain BaaS partner programs generated an increase of 20% in our total gross dollar volume for each of the three and six months ended June 30, 2025, and increased the number of consolidated active accounts during the three months ended June 30, 2025 by 2%, 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 in purchase volume and the effective interchange rates we earn thereon, and a reduction in the number of cash transfers of 8% and 6% for the three and six months ended June 30, 2025, respectively, over the prior year comparable periods.

Previous 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.

Current wording

In our Consumer Services segment, revenues decreased during the three and six months ended June 30, 2025 by 4% and 5%, respectively, over the prior year comparable periods. Our gross dollar volume and purchase volume declined by 2% and 1%, respectively, for the three months ended June 30, 2025, and the number of active accounts and direct deposit accounts declined by 5% and 9%, respectively. Similarly, gross dollar volume and purchase volume each declined for the six months ended June 30, 2025 by 4%. While these declining trends have begun to moderate, we believe these decreases in our Consumer Services segment remain attributable to several factors, including macro-economic factors affecting consumer behavior and other competitive trends that have impacted account acquisition. 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.

Previous 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.

Current wording

In our B2B Services segment, revenues increased during the three and six months ended June 30, 2025 by 38% and 40%, 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 the three and six months ended June 30, 2025 by 23% and 24%, respectively, and to a lesser extent, growth in purchase volume, which increased by 1% and 2%, respectively, over the prior year comparable periods. The number of active accounts for the three months ended June 30, 2025 increased by 10% 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.

Previous 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.

Current wording

In our Money Movement Services segment, revenues decreased during the three months ended June 30, 2025 by 4% and increased by 3% during the six months ended June 30, 2025, over the prior year comparable periods. The decrease in our Money Movement Services revenue during the three months ended June 30, 2025 was driven by decreases in both our tax processing revenues and cash transfer revenues. Our tax processing revenues decreased during the three months ended June 30, 2025 due to an 11% decrease in the number of tax refunds processed and from lower ancillary tax program fees that are associated with tax refund transfers. Our money processing revenues decreased during the three months ended June 30, 2025 primarily due to an 8% decrease in the number of cash transfers processed from the comparable prior year period, partially offset by the mix of cash transfer types and locations where the transactions occurred, as the fees we receive vary depending on these factors. 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 June 30, 2025.

Previous 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).

Current wording

Revenues within our Corporate and Other segment were driven primarily by net interest income earned by Green Dot Bank, which increased by 46% and 57% for the three and six months ended June 30, 2025, respectively, over the prior year comparable periods. The increase in net interest income was primarily the result of yields earned from an increase in cash from deposit programs with our partners and net proceeds from investment securities sold, and to a lesser extent, higher yielding investments from our bond repositioning strategy, partially offset by an increase in interest shared with certain BaaS partners (a reduction of revenue).

Previous wording

Our total operating expenses for the three months ended March 31, 2025 increased $56.7 million, or 13%, over the prior year comparable period. The increase in our total operating expenses was driven primarily by an increase in processing expenses within our B2B Services segment, partially offset by a decrease in other general and administrative expenses, sales and marketing expenses and to a lesser extent, a decrease in compensation and benefits expenses, each as discussed in more detail below.

Current wording

Our total operating expenses for the three and six months ended June 30, 2025 increased $60.0 million, or 14%, and $116.7 million, or 13%, respectively, over the prior year comparable periods. The increase in our total operating expenses for the respective periods was driven primarily by an increase in processing expenses within our B2B Services segment, and to a lesser extent, an increase in compensation and benefits expenses, partially offset by a decrease in other general and administrative expenses and a reduction in sales and marketing expenses, each as discussed in more detail below for the respective periods.

Previous 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.

Current wording

For the three months ended June 30, 2025, the increase in total operating expenses was driven primarily by an increase in our processing expenses from the growth in gross dollar volume associated with certain BaaS account programs within our B2B Services segment discussed above. To a lesser extent, total operating expenses 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 our BaaS account programs discussed above, and higher accrued bonus compensation expense due to our current financial performance relative to our annual targets, partially offset by a decrease in employee stock-based compensation expense due to forfeitures of awards. These increases were partially offset by lower other general and administrative expenses, which decreased during the three months ended June 30, 2025 primarily due to the timing of accruals in the prior year related to the civil money penalty under our Consent Order from the Federal Reserve Board, and to a lesser extent, a decrease in overall transaction losses attributable to lower customer dispute volume across our portfolios and favorable reductions in our dispute loss rates, and lower professional services fees related to our anti-money laundering ("AML") programs due to the year-over-year timing of spend on certain initiatives. These decreases were partially offset by an increase in software licenses and hosting costs due to investments in our platform and operations, and an increase from expenses associated with our strategic review process. Our sales and marketing expenses also decreased, principally due to a decrease in supply chain materials expenses, which are comprised of debit card plastics and related materials costs, from lower active accounts.

Previous wording

Other expense, net totaled $25.7 million for the three months ended March 31, 2025, an increase of $23.9 million, from the prior year comparable period. In April 2025, we sold certain available-for-sales securities in order to reposition the proceeds into higher yielding assets. As a result, we recorded a realized loss of $24.5 million for the three months ended March 31, 2025 because we no longer had the intent to hold the securities until recovery of their amortized cost bases. This increase was partially offset by a decrease in equity method losses in TailFin Labs, LLC due to lower marketing expenses, and higher income earned from bank-owned life insurance policies.

Current wording

Other expense, net for the three and six months ended June 30, 2025 increased $70.2 million and $94.1 million, respectively, from the prior year comparable periods. These increases resulted principally from a $70 million incentive payment made by TailFin Labs, LLC ("TailFin") in connection with the extension of the Walmart MoneyCard agreement and related agreements, partially offset by higher income earned from bank-owned life insurance policies. In addition, during the first quarter of 2025, we determined we would sell certain available-for-sales securities in order to reposition the proceeds into higher yielding assets, which resulted in a realized loss of $24.8 million for the six months ended June 30, 2025.

Previous 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.

Current wording

Our income tax benefit for the three months ended June 30, 2025 increased by $15.1 million from the prior year comparable period primarily due to an increase in our loss before taxes and a decrease in nondeductible expenses and penalties primarily related to the tax effect associated with the civil money penalty we incurred in 2024 for our Consent Order received from the Federal Reserve Board. Our effective tax rate for the six months ended June 30, 2025 was 27.4%, an increase from (8.0)% for the prior year comparable period. The increase in our effective tax rate was due to several factors, including a lower tax rate benefit from reduced general business credits, an increase 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 lower tax rate benefit from the cash surrender value in bank-owned life insurance policies. These increases in our effective tax rate were partially offset by a decrease in state income taxes expense, net of federal benefits, a decrease in tax expense associated with shortfalls from stock-based compensation, and a decrease in tax expense from nondeductible expenses and penalties primarily related to the civil money penalty under our Consent Order discussed above.

Previous wording

In December 2021, the Organization for Economic Cooperation and Development ("OECD") released model rules introducing a 15% global minimum tax rate for large multinational corporations ("Pillar Two"). Certain countries in which we operate have enacted legislation consistent with the OECD model rules effective beginning in 2024. We are monitoring legislative developments and continuing to evaluate the potential impact of Pillar Two on our consolidated financial statements, but do not expect it will have a material impact on our results of operations in future periods.

Current wording

In December 2021, the Organization for Economic Cooperation and Development ("OECD") released model rules introducing a 15% global minimum tax rate for large multinational corporations ("Pillar Two"). Our foreign subsidiary operates in China which has enacted legislation consistent with the OECD model rules effective beginning in 2024. The results of this legislation do not have a material impact on our consolidated financial statements. We are monitoring further legislative developments and continuing to evaluate the potential impact of Pillar Two on our consolidated financial statements, but do not expect it will have a material impact on our results of operations in future periods.

Previous wording

In March 2025, we announced that we had initiated a process to explore potential strategic alternatives. No assurances can be given as to the outcome or timing of the strategic review process, including without limitation that such process will result in a transaction or that any transaction, if pursued, will be successfully completed. We do not intend to disclose further developments regarding the process unless and until it is determined that further disclosure is appropriate.

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 and non-operating items such as our equity method losses in TailFin, we expect our core results of operations will stabilize on a full year basis year-over-year in 2025 based on our anticipated initiatives and cost reduction measures we have implemented. In March 2025, we announced that we had initiated a process to explore potential strategic alternatives. No assurances can be given as to the outcome or timing of the strategic review process, including without limitation that such process will result in a transaction or that any transaction, if pursued, will be successfully completed. We do not intend to disclose further developments regarding the process unless and until it is determined that further disclosure is appropriate.

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. 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.

Current wording

We have created synergies 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 improve our operating efficiency. We expect this re-alignment to further improve our cost structure year-over-year.

Previous 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.

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. While expenses related to our AML programs have decreased through the first half of 2025 on a year-over-year basis, this is in part a timing matter, and we expect to incur higher expenses in this area during the second half of the year. We believe investments in our AML program will ultimately help us 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 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.

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. To address some of this dynamic, we have begun to reposition 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

Other General and Administrative Expenses — Other general and administrative expenses consist primarily of professional services fees, telephone and communication costs, depreciation and amortization of our property and equipment, amortization of our intangible assets, impairment charges of long-lived assets, transaction losses (losses from customer disputed transactions, unrecovered customer purchase transaction overdrafts and fraud), rent and utilities, and insurance. We incur telephone and communication costs primarily from customers contacting us through our toll-free telephone numbers. These costs vary with the total number of active accounts in our portfolio, as do losses from customer disputed transactions, unrecovered customer purchase transaction overdrafts and fraud. Costs associated with professional services, depreciation and amortization of our property and equipment, amortization of our acquired intangible assets, impairment charges of long-lived assets, rent and utilities vary based upon our investment in infrastructure, business development, risk management and internal controls and are generally not correlated with our operating revenues or other transaction metrics.

Current wording

Other General and Administrative Expenses — Other general and administrative expenses consist primarily of professional services fees, telephone and communication costs, depreciation and amortization of our property and equipment, amortization of our intangible assets, impairment charges of long-lived assets, transaction losses (losses from customer disputed transactions, unrecovered customer purchase transaction overdrafts and fraud), rent and utilities, and insurance. We incur telephone and communication costs primarily from customers contacting us through our toll-free telephone numbers. These costs vary with the total number of active accounts in our portfolio, as do losses from customer disputed transactions, unrecovered customer purchase transaction overdrafts and fraud. Costs associated with professional services, depreciation and amortization of our property and equipment, amortization of our acquired intangible assets, impairment charges of long-lived assets, rent and utilities vary based upon our investment in infrastructure, business development, risk management, internal controls and strategic review process and are generally not correlated with our operating revenues or other transaction metrics.

Previous 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.

Current wording

Our income tax expense and benefit 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 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.

Current wording

There have been no material changes during the six months ended June 30, 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 $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.

Current wording

Card Revenues and Other Fees — Card revenues and other fees totaled $381.2 million for the three months ended June 30, 2025, an increase of $95.1 million, or 33%, 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 certain 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.

Previous 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.

Current wording

Interchange Revenues — Interchange revenues totaled $47.0 million for the three months ended June 30, 2025, a decrease of $2.6 million, or 5%, from the comparable prior year period. The decrease was primarily due to a lower effective interchange rate earned for the comparable periods, which 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

Compensation and Benefits Expenses — Compensation and benefits expenses totaled $66.2 million for the three months ended March 31, 2025, a decrease of $0.6 million, or 1%, from the comparable prior year period. The decrease was 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 within our B2B Services segment.

Current wording

Compensation and Benefits Expenses — Compensation and benefits expenses totaled $63.8 million for the three months ended June 30, 2025, an increase of $2.5 million, or 4%, from the comparable prior year period. The increase was driven primarily by an increase in third-party call center support costs associated with the growth of the BaaS account programs within our B2B Services segment, and higher accrued bonus compensation expense due to our current financial performance relative to our annual targets, partially offset by a decrease in employee stock-based compensation expense due to forfeitures of awards.

Previous 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.

Current wording

Processing Expenses — Processing expenses totaled $293.2 million for the three months ended June 30, 2025, an increase of $85.3 million, or 41%, 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

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.

Current wording

Cash Processing Revenues — Cash processing revenues totaled $167.9 million for the six months ended June 30, 2025, an increase of $4.3 million, or 3%, from the comparable prior year period. In our Money Movement Services segment, although the number of tax refunds processed decreased by 13% during the six months ended June 30, 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 6% decline in the number of cash transfers processed during the six months ended June 30, 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

Sales and Marketing Expenses — Sales and marketing expenses totaled $59.7 million for the three months ended March 31, 2025, a decrease of $2.7 million, or 4%, from the comparable prior year period. This decrease was primarily driven by 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.

Current wording

Sales and Marketing Expenses — Sales and marketing expenses totaled $109.8 million for the six months ended June 30, 2025, a decrease of $5.5 million, or 5%, from the comparable prior year period. This decrease was primarily driven by a decrease in supply chain materials expenses and 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.

Previous 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.

Current wording

Other General and Administrative Expenses — Other general and administrative expenses totaled $170.5 million for the six months ended June 30, 2025, a decrease of $54.7 million, or 24%, from the comparable prior year period. This decrease was driven primarily by the same factors discussed above under “Comparison of Three-Month Periods Ended June 30, 2025 and 2024—Operating Expenses—Other General and Administrative Expenses." In addition, other general and administrative expenses decreased due to the settlement payment and impairment charges related to the termination of our partnership agreement to develop a new core banking system in the prior year comparable period that did not recur in the current period.

Previous wording

The decrease in our effective tax rate for the three months ended March 31, 2025 from the prior year comparable period was due to several factors, including the impact of general business credits, an increase of $0.1 million in tax benefits from bank owned life insurance policies, a decrease of $0.3 million in the tax expense associated with shortfalls from stock-based compensation, a decrease of $0.7 million in the amount of compensation expense that was subject to the IRC Section 162(m) limitation on the deductibility of certain executive compensation, a decrease of $0.1 million in tax expense due to nondeductible expenses, and a decrease of $0.7 million related to our bank owned life insurance 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 of $1.3 million for the three months ended March 31, 2025 .

Current wording

The increase in our effective tax rate for the six months ended June 30, 2025 from the prior year comparable period was due to several factors, including an increase of $1.0 million in the amount of compensation expense that was subject to the IRC 162(m) limitation on the deductibility of certain executive compensation, a reduced tax rate benefit due to a decrease of $0.6 million in general business credits, an increase of $0.9 million in state income taxes expense, net of federal benefits, and a lower tax rate benefit from the cash surrender value in bank-owned life insurance policies. These increases were partially offset by a decrease of $0.8 million in tax expense associated with shortfalls from stock-based compensation, a decrease of $0.7 million related to bank-owned life insurance surrender penalties we incurred in connection with the surrender and restructuring of our existing bank-owned life insurance policies in 2024, and a decrease of $14.5 million in tax expense from nondeductible expenses and penalties associated with the civil money penalty we incurred in 2024 for our Consent Order.

Previous 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:

Current wording

The results of operations and key metrics of our Consumer Services segment for the three and six months ended June 30, 2025 and 2024 were as follows:

Previous 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%.

Current wording

Segment revenues within Consumer Services for the three and six months ended June 30, 2025 decreased $3.5 million, or 4%, and $8.9 million, or 5%, respectively, from the prior year comparable periods, while our segment expenses for the three and six months ended June 30, 2025 decreased by $2.2 million, or 3%, and $7.9 million, or 6%, respectively.

Previous 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.

Current wording

Our gross dollar volume and purchase volume declined by 2% and 1%, respectively, for the three months ended June 30, 2025, and the number of active accounts and direct deposit accounts declined by 5% and 9%, respectively, from the comparable prior year periods, 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 account acquisition. Our gross dollar volume and purchase volume decreased year-over-year by similar levels during the six months ended June 30, 2025. 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 for the comparable period, and a lower average spend per transaction.

Previous 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.

Current wording

Segment expenses for the three and six months ended June 30, 2025 decreased from the comparable prior year periods 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, and lower supply chain material expenses due to lower active accounts, partially offset by an increase in sales commissions from higher revenues on products subject to tiered revenue-sharing agreements. Overall, segment profit decreased for the three and six months ended June 30, 2025 by approximately 4% and 1%, respectively, from the prior year comparable periods.

Previous 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:

Current wording

The results of operations and key metrics of our B2B Services segment for the three and six months ended June 30, 2025 and 2024 were as follows:

Previous 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%.

Current wording

Segment revenues within our B2B Services for the three and six months ended June 30, 2025 increased $96.6 million, or 38%, and $197.4 million, or 40%, respectively, compared to the prior year periods, while our segment expenses for the three and six months ended June 30, 2025 increased $87.7 million, or 38%, and $179.6 million, or 39%, respectively.

Previous 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.

Current wording

Our gross dollar volume, purchase volume, and number of active accounts increased during the three months ended June 30, 2025 by 23%, 1%, 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.

Previous 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.

Current wording

Segment expenses increased for the three and six months ended June 30, 2025 from the comparable prior year periods, 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 and six months ended June 30, 2025 by approximately 47% and 48%, respectively, from the prior year comparable periods. Although limited, our segment profit margin increased year-over-year from improvement in our cost structure and revised economics of certain partnerships, despite the impact of certain BaaS partnerships largely providing for a fixed profit.

Previous 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:

Current wording

The results of operations and key metrics of our Money Movement Services segment for the three and six months ended June 30, 2025 and 2024 were as follows:

Previous 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.

Current wording

The increase in segment revenues for the six months ended June 30, 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. These increases were partially offset by a 6% decline in the number of cash transfers processed during the six months ended June 30, 2025 from the prior year comparable period. The decline in the number of cash transfers processed was due to the same reasons discussed above.

Previous wording

Segment expenses decreased during the three months ended March 31, 2025 primarily due to a decrease in revenue-sharing arrangements in our tax processing business.

Current wording

Segment expenses decreased during the three and six months ended June 30, 2025 primarily due to a decrease in revenue-sharing arrangements in our tax processing business.

Previous 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:

Current wording

The results of operations and key metrics of our Corporate and Other segment for the three and six months ended June 30, 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, 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).

Current wording

Revenues within our Corporate and Other segment were driven primarily by an increase in net interest income, which increased by 46% and 57% for the three and six months ended June 30, 2025, respectively, from the prior year comparable periods. The increase in net interest income was primarily the result of yields earned from an increase in cash from deposit programs with our partners and net proceeds from investment securities sold, and to a lesser extent higher yielding investments from our bond repositioning strategy, partially offset by an increase in interest shared with certain BaaS partners (a reduction of revenue).