Green Dot (GDOT) Stock Plunges 15% Despite Q2 Earnings Beat
Green Dot Corporation GDOT reported strong second-quarter 2023 results, wherein earnings and revenues beat the Zacks Consensus Estimate. However, the better-than-expected results appeared to have failed to please investors as the stock has dipped 15% since the earnings release on Aug 3.
Quarterly non-GAAP earnings (excluding 36 cents from non-recurring items) of 37 cents per share surpassed the consensus estimate by 8.8%. Nonetheless, the bottom line decreased 50% on a year-over-year basis. Non-GAAP operating revenues of $361.1 million also outpaced the consensus mark by 8.7% but declined marginally year over year.
Segmental Revenues
The Consumer Services segment’s revenues totaled $129.1 million, down 14.5% from the year-ago quarter’s level. The metric outshined our estimate of $121.9 million.
Green Dot Corporation Price, Consensus and EPS Surprise
Green Dot Corporation price-consensus-eps-surprise-chart | Green Dot Corporation Quote
B2B Services revenues increased 26% year over year to $180.7 million. Our model predicted the metric to be $152.9 million.
Money Movement Services’ revenues decreased 7.7% year over year to $49.97 million. We suggested the metric to be $56.6 million.
Key Metrics
Gross dollar volume rose 6% year over year to $24.7 billion. Purchase volume fell 6.7% from the prior-year quarter’s level to $5.7 billion. GDOT ended the quarter with 3.71 million active accounts, down 3.4% year over year.
Operating Results
Adjusted EBITDA was $38.87 million, down 42% on a year-over-year basis. Adjusted EBITDA margin of 10.8% was down from the year-ago quarter’s level of 19%.
Balance Sheet
Green Dot exited the quarter with an unrestricted cash and cash equivalent balance of $661.5 million compared with $722 million reported at the end of the prior quarter. GDOT had no long-term debt. It generated $27.3 million in cash from operating activities in the quarter under review.
2023 Guidance
GDOT expects non-GAAP EPS in the range of $1.80-$1.90 (prior view: $1.77-$1.93). The midpoint of the guided range ($1.85) is above the current Zacks Consensus Estimate of $1.83.
Non-GAAP total operating revenues are still anticipated to be between $1.376 billion and $1.462 billion. The midpoint of the guided range ($1.419 billion) is below the Zacks Consensus Estimate of $1.44 billion.
Adjusted EBITDA is projected in the range of $182 million and $188 million (prior view: $180-$190 million).
Zacks Rank
Green Dot currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Earnings Snapshots of Some Service Providers
Omnicom OMC reported mixed second-quarter 2023 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
OMC’s earnings of $1.81 per share beat the consensus estimate by 0.6% and climbed 7.7% year over year. Total revenues of $3.6 billion lagged the consensus estimate by 0.3% but inched up 1.2% year over year.
Equifax EFX reported mixed second-quarter 2023 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same.
EFX’s adjusted earnings came in at $1.71 per share, outpacing the consensus mark by 2.4%. Yet, the bottom line tumbled 18.2% from the year-ago figure. Total revenues of $1.32 billion fell short of the consensus estimate by 0.4% but matched the prior-year figure on a reported basis.
Interpublic’s IPG second-quarter 2023 earnings surpassed the Zacks Consensus Estimate while revenues lagged the same.
IPG’s adjusted earnings reached 74 cents per share, outshining the Zacks Consensus Estimate by 23.3%. Nonetheless, the metric declined 17.5% on a year-over-year basis. Net revenues of $2.33 billion missed the consensus estimate by 2.9% and plunged 14.9% on a year-over-year basis. Total revenues of $2.67 billion decreased 2.6% year over year.
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