Good day, and welcome to the Green Dot Corporation First Quarter 2025 Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your touch-tone phone. And to withdraw your question, please note this event is being recorded. I would now like to turn the call over to Mr. Timothy Willi, of Investor Relations. Please go ahead, sir.

Thank you, and good afternoon, everyone. Today, we are discussing Green Dot's first quarter 2025 financial and operating results. Following our remarks, we will open the call for your questions. Our most recent earnings release that accompanies this call and webcast can be found at ir.green.com. As a reminder, our comments may include forward-looking statements and expectations regarding future results and performance. Please refer to the cautionary language in the earnings release and in Green Dot's filings with the Securities and Exchange Commission, including our most recent Form 10-Ks and 10-Q, for additional information concerning factors that could cause actual results to differ materially from the forward-looking statements. During the call, we will refer to our financial measures that do not conform with generally accepted accounting principles. For the sake of clarity, unless otherwise noted, all numbers we talk about today will be on a non-GAAP basis. Information may be calculated differently than similar non-GAAP data presented by other companies. Quantitative reconciliation of our non-GAAP financial information to the directly comparable GAAP financial information appears in today's press release. The content of this call is property of Green Dot Corporation and is subject to copyright protection. Now I would like to turn the call over to Bill.

Good afternoon, and thank you for joining our first quarter 2025 earnings call. Today, I will start with some comments on the quarter and some corporate updates. Then I will turn it over to Chris to provide an update on our business development efforts and the success we are seeing there, including new business wins and key renewals. Jess will then discuss our financials in more detail. After Jess has finished discussing our financials, I will conclude with some final comments and observations before taking your questions. First, I would like to provide you with some context on why we decided to undergo the process of evaluating our strategic alternatives, which we announced in early March. The board has an obligation and a fiduciary duty to ensure that we create and maximize value for the company's shareholders. It is something that boards do on a regular basis whether it is known to the public or not. In the case of Green Dot, we firmly believe that we have unique and valuable assets and a strong management team. The company has a strategy that the board believes in and there are some very good things happening that validate the strategy and its potential. As you will hear throughout this call, however, given market dynamics, the board and management team agreed that it makes sense to review the strategic alternatives to gain a better understanding of the company's inherent value and potential in the marketplace. And to help ensure that we are delivering the highest value to our shareholders. That said, there is not much more to say at this time, but we will provide updates when appropriate. Now let me turn to the quarter. It was a strong quarter and start to the year with results outpacing our internal expectations. Adjusted…

Thank you, Bill, and good afternoon, everyone. As Bill highlighted, it was a solid start to the year as we continued building on the momentum of recent quarters and have begun to see signs of a return to growth. Over the last couple of years, I have discussed with you our efforts to develop strong efficient business development capabilities that would be an engine for sustainable long-term revenue growth. We continue to see progress across the enterprise. Pipelines remain robust. In fact, year to date, we have signed nearly the same amount of revenue as we did throughout all of 2024. In addition to signing new business, we also renewed existing partners, with a recent highlight being the renewal of our Walmart distribution agreements. This was a strong quarter and an exciting start to 2025. And we expect these trends to continue with additional business wins and partner launches, which we look forward to updating you on in the coming months. Now let me turn to some new business wins. As you may have seen earlier this week, Samsung announced the launch of the new Samsung wallet features that are powered in part by ARC, Green Dot's comprehensive and configurable embedded finance platform. Through this partnership, Samsung's wallet nearly 12 million US users will have access to tap to transfer, a peer-to-peer tool enabling users to quickly transfer funds from Samsung wallets to other digital wallets or contactless debit cards. As one of the world's largest and most well-known consumer electronics brands, we are thrilled they have entrusted us to help deliver their product vision and look forward to building upon the relationship and leveraging the breadth of our embedded finance platform with Samsung. We are already collaborating and have identified additional features and functionality that can drive value for…

Thank you, Chris, and good afternoon, everyone. In the first quarter, our non-GAAP revenue grew 24% year over year and adjusted EBITDA increased 53%. For the first time in many years, segment profit was up across all three of our segments. Our B2B and money movement segments delivered particularly strong results. Non-GAAP EPS of 1.6 was up 80% from last year, driven by this strong performance. Now let me touch on the factors that influenced the performance of our segments. Refer to our press release and quarterly slide deck for segment results and key metrics. First up is our B2B segment, which is comprised of our BaaS channel, powered by our ARC platform, and our rapid employer services. Revenue growth of over 40% continues to be driven by a significant BaaS partner, along with growth in the rest of the BaaS portfolio. Key operating metrics within the BaaS channel, such as active accounts and purchase volume, continue to show solid growth as we collaborate with existing partners and launch new ones. As Chris mentioned, we are dedicated to helping partners expand their programs and identify opportunities to broaden the range of products and services offered to their customers. We are seeing notable progress in these efforts. And as we launch new partners, we are heavily engaged with them on this front. Based upon the success we are experiencing with existing partners, coupled with a pipeline of new launches and prospects, I am optimistic that we will continue to see momentum in our BaaS channel. Our rapid employer services channel continued to experience revenue declines due to decreased active accounts and volumes, primarily because of the challenges faced by our larger staffing industry partners. As previously discussed, the staffing industry, one of our largest verticals, has struggled for nearly two years…

Thank you, Jess. It was a strong start to the year. And as Chris indicated, we are winning in the marketplace. We are thrilled to welcome new customers such as Crypto.com and Samsung with more to be announced in the coming months. Just as important, those customers that have worked with us for many years continue to place their trust in us to help them deliver on their own aspirations for embedded finance, and we are thrilled that they recognize the value of partnering with us. Over the years, Green Dot has evolved and responded to many changes. And I think our results are beginning to show that we have made the right decisions. During the last several years, the company has undertaken numerous initiatives and made substantial investments to position Green Dot to return to sustainable predictable growth. We have made investments in modernizing our technology stack, building a more robust platform of products and services, and invested in our business development efforts. We are also continuing to make investments to ensure that our infrastructure can support the requirements of a growing customer base, including critical areas such as onboarding, customer care, and risk management. I am increasingly confident that we are positioned to win in the embedded finance and build on our recent momentum. I would like to thank the team for all their hard work serving our customers and stakeholders. With that, we are happy to take your questions. Operator?

Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed, you would like to withdraw your question, please press star then 2. And at this time, we will pause momentarily to assemble our roster. And the first question will come from Tim Switzer with KBW. Please go ahead.

Thanks, sir. Congratulations on some of the new partnerships you guys have announced and the renewal with Walmart. And I am a little curious on for Crypto.com and Samsung, can you clarify maybe which segments the revenue for this will run through? And then what does the ramp for these look like over the next, say, year or two as they come on board?

Sure. Tim, yeah. Thank you for the question. I think, so the revenue for these clients will run through either our BaaS or money movement channels, depending on the services that they are taking advantage of on the ARC platform. We do believe that the revenue from these partnerships and our ability to work with these partners and expanding the services will have an impact over time. To their businesses and will scale. I do not at this point, though, I do not think we want to get into the details of either partnership and where we think that that might lead. But I believe we have a strong belief in their partners and their businesses and the strength of their user bases and believe that they will both have the ability to grow with us and on the ARC platform for many years. So appreciate the question.

Okay. And, are you able to provide any details qualitative or not on the economics of the new money card deal with Walmart versus the previous terms? And as you guys were going through the renewal process, what kind of discussions were there in regards to potentially offering new capabilities or products that Green Dot can deliver for them?

So I can also appreciate the question and, you know, we value our partnership with Walmart and believe that we have a significant runway and opportunity to improve the programs within Walmart, both with the Walmart MoneyCard extension in conjunction with our Tailfin JV to be able to invest in product capabilities and bring those to Walmart consumers, in addition to as we improve our Green Dot products as we do in the normal course of our business and have been a focus for us and as we have been improving our platform to look at products and feature sets that can have even greater appeal for consumers. So we have the ability now over the longer term to distribute those products through Walmart locations. So we believe there is, you know, our discussions with Walmart continue on ways that we can use Tailfin planning to improve the customer experience and innovate. We have talked before about some of that being a refresh of the UI that the customers will be able to experience and move forward with the in the Walmart MoneyCard program as we finish that project, which you know, we are actively involved in with on the program. So we believe there is quite a bit of ability to continue to innovate, use leverage the Tailfin funding to improve the programs in Walmart. So excited about that opportunity.

Yeah. You know, I would add that now that we have signed a long-term extension, the relationship between two companies is even stronger. And I am sure that our ability to deliver additional products for the customers is going to grow as time goes by.

And just one last comment would be outside of the health and capital that we talked about in the prepared remarks, there are no other changes to the economics on the MoneyCard program.

Got it. Okay. That is helpful. Thank you. If I could squeeze in one more, could you guys maybe review your different divisions in terms of maybe which ones have less synergies or connections with the other divisions and how things like the tech stack for each division would go make it either easier or a little bit more complicated in terms of, like, a potential divestment. For example, I think the pay card and the tax business are both on kind of, like, different tech stack than the rest of the company.

By and large, we have, over the last couple of years, tried to bring our tech into focus and there are a couple divisions, you have named the two, that are somewhat autonomous more so the tax business than anything else. But we, as a company, are always looking at what is the best way to deliver value to our shareholders. And if it turns out that it made sense for us to divest of a division, that is something that the company would always look at. That is kind of the reason that we embarked upon our strategic review. We feel that the assets that the company has are pretty terrific. And we thought that the market was not giving the value that we think is appropriate, so we started this strategic review to sort of look at all these questions including the one that you asked.

Got it. Appreciate all the color there. Very helpful. Thank you.

The next question will come from Ramsey El-Assal with Barclays. Please go ahead.

Hi. Thank you so much for taking my question tonight. I wanted to ask about consumer services and active accounts came in a bit higher than we expected in the quarter. Taking a step back, can you give us some of your thoughts on sort of what inning we are in for consumer active account growth and what are the sort of building blocks to see a return to positive growth there?

Well, I would say in the prepared remarks, Ramsey, I mentioned that certainly the growth or the decline, I should say, is definitely moderating. PLS is a big contributor to that moderation. I would say there are a few other players in the FSC channel, which is relatively niche for us, that we are focused on from a business development pipeline. Certainly, if we win those deals, those could also further moderate the declines. And then as Chris just mentioned, with the renewal of Walmart, certainly, we are focused on expanding our capabilities and offerings there. So, you know, I do not anticipate a return to growth in the consumer business in 2025, but certainly, some of our business development efforts and work with some of our existing partners can certainly help.

We have talked about over the last several years as we are modernizing the platform and as we look at starting to get closer to the completion of that modernization over the next twelve months, we hope that we can start to focus and apply resources, and we are seeing more and more capabilities to that. On product innovation. And do think that will help us in our embedded finance business and bringing new products and services to partners, but also direct to consumers. As we move towards a consolidated platform. So I think we will start to see some benefits of that as we can bring new product features into the market and scenarios that we have not in some time. But we do not have at this point a great indication of the impact of those, and so we want to allow some time for that to take effect. But we are optimistic about being able to improve the appeal of our products and in particular, the products in some of our legacy businesses.

Got it. One follow-up for me, and apologies if you already covered off on this in your prepared remarks, if a great deal which I missed, unfortunately. Can you comment on the macro backdrop that sort of baked into your guidance and your annual guidance? Are you contemplating any further deterioration or more of a steady state from what we are seeing today?

What we have said in our prepared remarks is that looking at the macro environment as we see it today, that is what the numbers we have talked about. So a change in the macro environment would obviously have us re-look at those numbers, but what we put out is based upon how we see the environment today.

Got it. Thank you very much.

The next question will come from Cristopher Kennedy with William Blair. Please go ahead.

Can you just talk broadly about the operating environment for Embedded Finance and banking as a service today versus a couple of years ago?

Sure, Chris. I would be happy to take that. I appreciate the question. I think that we have seen, obviously, a pretty significant change in the market. There are and I would say it is characterized by sort of three key factors. The first is that there is a growing awareness of what was the survey a disconnect between technology platforms and issuing banks. And some of the negative outcomes that that can cause. And so we said, you know, that certainly has adjusted the market, put a risk premium on having a sort of a secondary relationship with the sponsoring banks and programs relative to a technology platform. That favors our value proposition first. The second is that the partners that we see coming to us are less exploratory and have a better sense of what they would like to do with embedded finance. Have a fuller strategy around how to grow that business, their business, and how it is going to improve. What they are trying to do in their overall strategy and customer journey. And so they have very strong, I said, opinions and strategic plans on how they want to improve their customer experience with embedded finance. So we see that in terms of them maturing in the market and understanding of how it could be leveraged. And then the third is that we see just because of that, maturing increasing demand. So we are seeing a market that still has a very long runway of possibility to it. And so we see that partners here are looking at the space are increasing their investments both on their side and looking at ways that they can improve it. Relationship. And so that is, you know, I think we see that in the market. Our research supports that. And we think that it is also evidenced by we will talk in the past earning calls about our pipeline and the growth we have seen over multiple years in our pipeline. So I think all of those things point to having the right value proposition relative to the macro market, the market itself. Maturing in people's expectations and understanding of how to utilize embedded finance to improve their customer value proposition. And then the depth of that market.

Yep. Really appreciate that. And then just a quick follow-up. Can you also throw in what you are seeing on the competitive environment within embedded finance? Thanks again.

So competitively, we are seeing that, you know, it is an active marketplace. There are key providers in the market that we see regularly. But I do believe there is, you know, in the selection process of value placed on at-scale partners that are established and that have offer a level of expertise and capability. Beyond just a, you know, a large tech investment. Platform that might have been made. And so we see the level of the maturity is also looking for partners that have the same level of maturity the same level of organizational capability to support at-scale partners. And so the marketplace, although it continues to be competitive, we see that we are having an ability to have our value proposition, our capabilities, and resonate in the market. We are able to differentiate ourselves because of the vertical integration of our embedded finance platform, the bank or program management services. And risk programs. And so that is helpful in the market. But it is a competitive marketplace and one that we see as a growing, you know, continuing to be a growing market.

Great. Thanks for taking the questions.

This concludes our question and answer session. I would like to turn the conference back over to Mr. William Jacobs for any closing remarks. Please go ahead, sir.

Thank you. And thank you, everybody, for joining our call today. This has been an exciting quarter for Green Dot, and I hope you all see the progress the company has made, and we look forward to talking to you more often. Thanks a lot.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.