Green Dot Corp. (GDOT) reported Tuesday that revenues climbed 9% during the first quarter from a year earlier as customers spent more on its prepaid cards, but earnings fell 5%.
The Pasadena, Calif., prepaid card issuer is facing heavier competition than it did a year ago, and Chief Executive Officer Steve Streit's canned press release statement was notably cautious.
"Our first quarter results were better than our internal forecast," Streit said, pointing to improvements in the amount of spending and revenue generated from each Green Dot card. "While we are generally pleased with how things played out in Q1, we believe there is still a lack of certainty for the remainder of the year."
Green Dot's operating revenues totaled $155.8 million, while net income was $15.6 million, or 35 cent per diluted share, using generally accepted accounting principles. Earnings per share beat the 31-cent average of analysts polled by Bloomberg.
The purchase volume on Green Dot cards grew 3% from a year earlier, but the number of active cards fell by 4%, according to the company.
Green Dot also reported that about one-quarter of its customers are enrolled in direct deposit, and they remain customers for an average of about 20 months. The remaining 75% of the company's customers are retained for roughly nine months.
Prepaid issuers have been pushing to get more of their users enrolled in direct deposit because those customers tend to remain in the fold for longer and to generate far more profits.
As a result of its first-quarter earnings, Green Dot said it is revising its full-year revenue guidance range up to $525 million to $550 million, using non-GAAP measures. But the company kept its full-year earnings estimate unchanged.
Previously, the company forecasted full-year revenues of $510 million to $540 million.
Total operating expenses were $131 million in the first quarter, up from $116 million in the same period a year earlier. Sales and marketing expenses, compensation and benefits, and processing expenses were all higher.
Green Dot also said Tuesday that it plans to make its mobile bank account- a product known as GoBank that is currently in beta testing - available to the general public this summer.