Green Dot enjoys revenue rebound as card use soars
In a turnaround from a year earlier, strong revenue growth in the fourth quarter enabled Green Dot to record net income of $12.2 million.
The prepaid card issuer reported operating revenues of $213 million, up 31% from the same period a year earlier.
The fourth quarter of 2016 was part of a tough stretch for Green Dot, which took a hit from its earlier decision to discontinue a product that had proven to be popular with fraudsters. The Pasadena, Calif., company recorded a net loss of $1.3 million in the final quarter of 2016.
But over the next year, Green Dot’s revenue streams rebounded. The purchase volume on the company’s prepaid cards, gift cards and checking accounts climbed to $5.64 billion in the fourth quarter of 2017, a 40% increase from the same period a year earlier.
Green Dot had 5.26 million active prepaid cards and checking accounts at the end of last year, up 27% from the end of the previous year.
The company’s ability to generate revenue has been helped by its February 2017 acquisition of UniRush LLC, which offered a competing prepaid card.
But that deal has also added to the company’s expense base. In the fourth quarter, Green Dot recorded operating expenses of $209 million, up 26% from the same period a year earlier.
Green Dot, an early pioneer of the prepaid card, has been looking to diversify its business in recent years. The company offers a mobile checking account called GoBank in partnership with various companies including the ride-sharing giant Uber.
In a press release, Green Dot CEO Steve Streit called the firm’s fourth-quarter results “very strong.”