PASADENA – Green Dot Corporation (NYSE: NYSE:GDOT), a financial technology and bank holding company, saw its stock price tumble following a weaker-than-expected earnings report for the third quarter. The company's shares took a significant hit, dropping 34% after the initial earnings release on Thursday.
The detailed quarterly results, which were released today, showed non-GAAP operating revenues of $348.6 million, beating estimates by 5.2% and marking a slight increase of 1.4% compared to the same period last year. Despite this revenue growth, Green Dot's earnings were disappointing, with non-GAAP earnings of 14 cents per share—excluding 26 cents from non-recurring items—missing expectations by 30% and plummeting by 68.2% year-over-year.
A closer look at the segmental revenues reveals contrasting performances across different areas of the business:
- Consumer Services generated $118.2 million in revenue, down 13% from last year.
- B2B Services saw a substantial rise of 25.9%, reaching $199.2 million.
- Money Movement Services experienced a decline of 14.8%, with revenues at $32.1 million.
Key financial metrics indicated mixed signals, as Green Dot reported a gross dollar volume surge of 32.8% year-over-year to $24.8 billion. However, this was overshadowed by declines in purchase volume and active accounts compared to the previous year. Additionally, adjusted EBITDA dropped significantly by 48% to $23.74 million, with a reduced margin of 6.8%, down from last year's figures.
On a positive note, Green Dot ended the third quarter with a robust unrestricted cash balance of $711.4 million and no long-term debt on its balance sheet. The company also generated $4.7 million in cash from operating activities during the quarter.
In light of recent performance, Green Dot has adjusted its full-year 2023 guidance. The company now anticipates non-GAAP earnings per share to be in the range of $1.62 to $1.69 and expects total operating revenues between $1.465 billion and $1.480 billion.
The Pasadena-based company currently holds a Zacks Rank #5 (Strong Sell), indicating analysts' bearish outlook on the stock.
Today's financial disclosures also included Q3 results from IPG and EFX, both of which missed their respective Zacks Consensus Estimates, underscoring a challenging quarter for several firms within the industry.
InvestingPro Insights
Based on the latest InvestingPro data, Green Dot Corporation (GDOT) currently has a market cap of 405.98 million USD and a P/E ratio of 11.24. As of Q3 2023, the company's revenue was 1475.48 million USD, reflecting a growth of 2.62% over the last twelve months. Despite experiencing a significant price drop recently, the company's return on assets stands at 0.77%.
InvestingPro Tips suggest that while Green Dot's stock has experienced high volatility and significant price drops over the last year, the company has demonstrated high earnings quality with free cash flow exceeding net income. Furthermore, revenue growth has been accelerating. However, the stock is currently in oversold territory, which could present an opportunity for investors looking for potential value buys.
For more insightful tips and real-time data, consider exploring the InvestingPro platform, which offers a wealth of additional information to help you make informed investment decisions.
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