Green Dot Corporation
03/16/2026 | Press release | Distributed by Public on 03/16/2026 15:19
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
Management's Discussion and Analysis of Financial Condition and Results of Operations
This Annual Report on Form 10-K, including this Management's Discussion and Analysis of Financial Condition and Results of Operations, contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act and the Exchange Act. All statements other than statements of historical facts are statements that could be deemed to be forward-looking statements. These statements are based on current expectations, estimates, forecasts and projections about the industries in which we operate and the beliefs and assumptions of our management. Words such as "expects," "anticipates," "targets," "goals," "projects," "intends," "plans," "believes," "seeks," "estimates," "continues," "endeavors," "strives," "may" and "assumes," variations of such words and similar expressions are intended to identify forward-looking statements. In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances are forward-looking statements. Readers are cautioned that these forward-looking statements are subject to risks, uncertainties, and assumptions that are difficult to predict, including inflation and interest rate trends and impacts and other macro-economic impacts on our business, results of operations and financial condition and governmental and our responses to such events, including those identified above, under "Part I, Item 1A. Risk Factors," and elsewhere herein. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update any forward-looking statements for any reason.
In this Annual Report, unless otherwise specified or the context otherwise requires, "Green Dot," "we," "us," and "our" refer to Green Dot Corporation and its consolidated subsidiaries.
Overview
Green Dot Corporation is a financial technology platform and registered bank holding company ("BHC") that builds banking and payment solutions to create value, retain and reward customers, and accelerate growth for businesses of all sizes. For more than two decades, we have delivered financial tools and services that address the most pressing financial needs of consumers and businesses, and that transform the way people and businesses manage and move money. Through Green Dot Bank, our wholly owned subsidiary, we deliver a broad spectrum of financial products to consumers and businesses through our portfolio of brands, including debit, checking, credit, prepaid, and payroll cards, as well as robust money processing services, such as tax refunds, cash deposits and disbursements.
Our Chief Operating Decision Maker (our "CODM" who is our Chief Executive Officer) organizes and manages our businesses primarily on the basis of the channels in which our product and services are offered and uses net revenue and segment profit to assess profitability. Segment profit reflects each segment's net revenue less direct costs, such as sales and marketing expenses, processing expenses, transaction losses and fraud management, and customer support and related expenses. Our operations are aggregated amongst three reportable segments: 1) Business to Business ("B2B") Services, 2) Consumer Services, and 3) Money Movement Services. Net interest income, certain other investment income earned by our bank, interest profit sharing arrangements with certain BaaS partners (a reduction of revenue), eliminations of inter-segment revenues and expenses, and unallocated corporate expenses that are not considered when our CODM evaluates the performance of our three reportable segments are recorded in Corporate and Other expenses. Refer to "Part I, Item 1. Business" for more detailed information about our operations and Note 25-Segment Information to the Consolidated Financial Statements included herein.
Proposed Transactions with CommerceOne Financial Corporation and Smith Ventures, LLC
In connection with a strategic review process we commenced in March 2025 (our "strategic review process"), on November 23, 2025, we entered into an Agreement and Plan of Merger (the "Merger Agreement"), with CommerceOne Financial Corporation, an Alabama corporation ("CommerceOne"), Compass Sub North, Inc., a newly formed Delaware corporation and a direct, wholly owned subsidiary of CommerceOne ("New CommerceOne"), Compass Sub East, Inc., a newly formed Delaware corporation and a direct, wholly owned subsidiary of New CommerceOne ("Merger Sub One"), and Compass Sub West, Inc., a newly formed Delaware corporation and an indirect, wholly owned subsidiary of New CommerceOne ("Merger Sub Two"), pursuant to which, upon the terms and subject to the conditions therein, (i) Merger Sub One will merge with and into CommerceOne, with CommerceOne surviving (the "CommerceOne Merger"), and Merger Sub Two will merge with and into Green Dot Corporation, with Green Dot Corporation surviving (the "Green Dot Merger," and together with the CommerceOne Merger, the "First Mergers"); and (ii) following the First Mergers, CommerceOne will merge with and into New CommerceOne, with New CommerceOne surviving under the name "CommerceOne Financial Corporation" (together with the First Mergers, the "Mergers").
Subject to the terms and conditions of the Merger Agreement, at the effective time of the First Mergers (the "First Effective Time"), each share of common stock of Green Dot Corporation, issued and outstanding immediately prior to the First Effective Time, other than certain excluded shares held by us, CommerceOne, New CommerceOne or our dissenting stockholders, will be converted into the right to receive (i) 0.2215 shares of the common stock of New CommerceOne and (ii) an amount in cash equal to $8.11 (the "Per Share Cash Consideration"), less any withholding and without interest.
Also on November 23, 2025, we entered into a separation agreement (the "Separation Agreement"), with New CommerceOne and Green Dot OpCo, LLC, a newly formed Delaware limited liability company and affiliate of Smith Ventures LLC, an Alabama limited liability company ("Payments Buyer"), pursuant to which, upon the terms and subject to the conditions therein, following the First Mergers, (i) Green Dot Corporation will convert into a limited liability company, (ii) Green Dot Corporation will distribute the stock of Green Dot Bank to Compass Sub Northwest, Inc., a Delaware corporation and direct, wholly owned subsidiary of New CommerceOne, and (iii) Payments Buyer will acquire Green Dot Corporation and its non-bank financial technology and related assets and operations (the "Payments Business") for $690 million (the "Payments Sale"), the proceeds of which will be paid to New CommerceOne and are expected to be used to fund the Per Share Cash Consideration and to retire certain indebtedness of Green Dot Corporation.
The Merger Agreement and the Separation Agreement were unanimously approved by our Board of Directors. The closing of the transactions contemplated by the Merger Agreement and the Separation Agreement remains subject to the receipt of required regulatory approvals, approval by the stockholders of Green Dot Corporation and CommerceOne and the satisfaction of other customary closing conditions.
For additional information regarding potential risks and uncertainties associated with such transactions, please see Part I, Item 1A, Risk Factors above.
Consolidated Financial Results and Trends
Our consolidated results of operations for the years ended December 31, 2025 and 2024 were as follows:
| Year Ended December 31, | |||||||||||||||||||||||
| 2025 | 2024 | Change | % | ||||||||||||||||||||
| (In thousands, except percentages) | |||||||||||||||||||||||
| Total operating revenues | $ | 2,080,491 | $ | 1,723,876 | $ | 356,615 | 20.7 | % | |||||||||||||||
| Total operating expenses | 2,066,832 | 1,725,544 | 341,288 | 19.8 | % | ||||||||||||||||||
| Net loss | (98,866) | (26,702) | (72,164) | 270.3 | % | ||||||||||||||||||
Refer to "Segment Results" below for a summary of financial results of each of our reportable segments.
Total operating revenues
Our total operating revenues for the year ended December 31, 2025 increased $356.6 million, or 21% over the prior year comparable period, driven primarily by higher revenues in our B2B Services segment and to a lesser extent in our Money Movement Services segment, partially offset by lower revenues earned in our Consumer Services segment.
Continued growth of certain BaaS partner programs generated an increase of 18% in our total gross dollar volume for the year ended December 31, 2025 over the prior year comparable period, which increased our total operating revenues year-over-year. However, as discussed below, our total operating revenues for the year ended December 31, 2025 were negatively impacted by unfavorable trends and factors in certain deposit account programs, driving, among other things, a small reduction in the average number of consolidated active accounts, and a decrease in purchase volume and number of cash transfers of 4%, and 8%, respectively, from the prior year comparable period.
In our B2B Services segment, revenues increased during the year ended December 31, 2025 by 33% over the prior year comparable period. The increase was driven by strong year-over-year growth in our gross dollar volume, which increased during the year ended December 31, 2025 by 22%, and to a lesser extent, growth in purchase volume, which increased year-over-year by 1%. The average number of active accounts for the year ended December 31, 2025 increased by 11% over the prior year comparable period. The growth in gross dollar volume was driven primarily by certain BaaS programs that do not generate interchange fees and resulted in a net increase in segment revenue due to higher program management service fees earned from these BaaS partners.
In our Consumer Services segment, revenues decreased during the year ended December 31, 2025 by 9% from the prior year comparable period. Gross dollar volume and purchase volume each declined for the year ended
December 31, 2025 by 7%, and the average number of active accounts and direct deposit accounts for the fiscal year declined by 10%. We believe these decreases in our Consumer Services segment remain attributable to several persistent factors, including macro-economic factors affecting consumer behavior and other competitive trends that have impacted acquisition at retail locations. These factors had a corresponding impact on the amount of accountholder fee revenue we earn from accounts, including monthly maintenance fees, ATM fees and interchange fees. Revenues within this segment were also adversely impacted by a decrease in breakage revenue on our gift card portfolio for the comparable period, as the program has been discontinued.
In our Money Movement Services segment, revenues increased for the year ended December 31, 2025 by 3% from the prior year comparable period. The increase in revenues was driven primarily by an increase in our tax processing revenues, partially offset by a decrease in cash transfer revenues. Although the number of tax refunds processed decreased by 13% during the year ended December 31, 2025, our tax processing revenues increased due to the expansion of our taxpayer advance programs and a favorable mix-shift in the distribution channel in which the tax refund was generated. The decrease in the number of tax refunds processed was principally attributable to the performance of our online tax preparation partners. These increases in tax processing revenues was partially offset by an 8% decline in the number of cash transfers processed during the year ended December 31, 2025 from the prior year comparable period. The decline in the number of cash transfers processed was primarily due to a lower number of active accounts within our Consumer Services segment as discussed above and to a lesser extent, a lower number of cash transfers processed for third-party programs. The Green Dot Network is a service provider to accountholders in both our Consumer Services and B2B Services segments, as well as third-party programs. Although the number of cash transfers from third-party programs decreased slightly year over year, we continue to experience a strong concentration from our third-party programs, as the majority of our total cash transfers were attributable to these programs as of December 31, 2025.
Revenues within our Corporate and Other segment were driven primarily by net interest income earned by Green Dot Bank, which increased by 44% for the year ended December 31, 2025 from the prior year comparable period. The increase in net interest income was primarily the result of yields earned from an increase in cash from deposit programs with our partners, higher yielding investments from our bond repositioning strategy, and a decrease in interest shared with certain BaaS partners (a reduction of revenue).
Total operating expenses
Our total operating expenses for the year ended December 31, 2025 increased $341.3 million, or 20%, over the prior year comparable period. The increase in our total operating expenses was driven primarily by an increase in processing expenses from the growth in gross dollar volume associated with certain BaaS account programs within our B2B Services segment, which is discussed above. To a lesser extent, our total operating expenses increased due to a net increase in our compensation and benefits expenses, driven primarily by higher accrued bonus compensation expense due to our current financial performance relative to annual performance targets, as well as an increase in third-party call center support costs associated with the growth of our BaaS account programs discussed above, partially offset by a decrease in employee stock-based compensation expense due to forfeitures of awards and a decrease in salary and wage expenses due to the closure of our China operations announced in September 2025. As discussed further below, we also recorded restructuring and other charges associated with our decision to exit our operations in China.
The increases in total operating expenses were partially offset by lower other general and administrative expenses, which decreased due to several factors, including the timing of accruals in the prior year related to the civil money penalty under our Consent Order from the Federal Reserve Board that did not recur in the current period, the settlement payment and impairment charges related to the termination of our partnership agreement to develop a new core banking system in the prior year comparable period that also did not recur, and a decrease in overall transaction losses attributable to lower customer dispute volume across our portfolios and favorable reductions in our dispute loss rates. These decreases in other general and administrative expenses were partially offset by higher professional services fees associated with our strategic review process, the proposed transactions with CommerceOne and Smith Ventures, and our anti-money laundering ("AML") regulatory compliance initiatives, an increase in software licenses and hosting costs due to investments in our platform and operations, and an increase in federal deposit insurance due to higher deposit balances and the rates we pay thereon. Additionally, sales and marketing expenses decreased, principally due to a decrease in supply chain materials expenses, which are comprised of debit card plastics and related materials costs, from fewer active accounts, and a decrease in revenue-sharing arrangements in our Money Movement business primarily due to a decrease in cash transfer revenues.
During the third quarter of 2025, we announced a plan to exit our operational activities in China by the end of 2025 as a means of reducing complexity and promoting long-term structural improvements for our business. As a
result of this transition, we recorded restructuring and other charges of approximately $22.1 million during the year ended December 31, 2025. These charges were primarily related to severance and employee benefits and other direct costs associated with the restructuring, including lease termination costs. Substantially all of our restructuring activities were completed during the fourth quarter of 2025, and all significant expenses we expected to incur from this plan were paid prior to December 31, 2025.
Other expense, net
Other expense, net for the year ended December 31, 2025 increased $89.4 million from the prior year comparable period. The increase in other expense, net was driven primarily by an increase in equity method losses associated with TailFin Labs, LLC ("TailFin") due to a $70 million incentive payment made by TailFin in connection with our extension of the Walmart MoneyCard program and related agreements in the second quarter of 2025. In addition, we sold certain available-for-sales securities during the first half of the year in order to reposition the proceeds into higher yielding assets, which resulted in a realized loss of $24.8 million for the year ended December 31, 2025. These increases were partially offset by higher income earned from bank-owned life insurance policies.
Income taxes
Our income tax expense for the year ended December 31, 2025 decreased $2.6 million, or 62%, from the prior year comparable period. The decrease in our income tax expense was primarily due to an increase in our pre-tax loss for the year ended December 31, 2025. Our effective tax rate for the years ended December 31, 2025 and 2024 was (1.6)% and (18.5)%, respectively. The increase in our effective tax rate was primarily attributable to an increase in the amount of compensation expense subject to the IRC 162(m) limitation on the deductibility of certain executive compensation, a decrease in research and development tax credits, an increase in the valuation allowance on the deferred tax assets of our China subsidiary, an increase in nondeductible transaction related costs, an increase in tax expense from our examination settlement with the Internal Revenue Service ("IRS"), and an increase in state income tax expense, net of federal benefits, primarily resulting from an increase in the valuation allowance on state deferred tax assets related to state business credits and certain state net operating loss carryforwards. These increases were partially offset by a decrease in the expense related to tax shortfalls from stock-based compensation, a decrease in tax expense from nondeductible penalties associated with the civil money penalty incurred in 2024 for our Consent Order from the Federal Reserve Board, an increase in the cash surrender value of our banked owned life insurances policies, a decrease in the reserve on our unrecognized tax benefits, and a decrease in our bank owned life insurance surrender penalties we incurred in connection with the surrender and restructuring of our existing bank owned life insurance policies completed in 2024.
On July 4, 2025, H.R. 1, commonly referred to as the "One Big Beautiful Bill Act" ("OBBBA") was signed into law, enacting significant changes to the U.S. federal tax code with various effective dates from 2025 to 2027. The OBBBA introduced several significant provisions impacting us, including an elective deduction for domestic research expenditures and reinstatement of elective 100% first year bonus depreciation. These provisions of the OBBBA primarily affected the timing and the mix of current versus deferred income tax expense, and were not material to total income tax expense for the year ended December 31, 2025.
In December 2021, the Organization for Economic Cooperation and Development ("OECD") released model rules introducing a 15% global minimum tax rate for large multinational corporations ("Pillar Two"). Our foreign subsidiary operated in China, which enacted legislation consistent with the OECD model rules effective beginning in 2024. The results of this legislation did not have a material impact on the Consolidated Financial Statements included herein. We are monitoring further legislative developments and continuing to evaluate the potential future impact of Pillar Two on our consolidated financial statements, but do not expect it will have any material impact on our results of operations in future periods.
Outlook and Other Trends Affecting Our Business
While we are still experiencing a difficult macro-economic environment, competitive headwinds and other factors that have contributed to declining trends in our consolidated operating results in recent periods, excluding impacts from the proposed transactions with CommerceOne and Smith Ventures and other non-operating items, such as our equity method losses in TailFin, we continue to expect our core results of operations will stabilize on a full year basis year-over-year in 2026 based on our anticipated initiatives and cost-reduction measures we have implemented.
We intend to continue to make growth-oriented investments and incur other expenditures that we believe will benefit our long-term financial results. Our growth-oriented investments are focused on, among other things, accelerating our ability to onboard new partners in our B2B Services and Money Movement segments, adding new features and functionality to our Arc platform, cost-effectively implementing strategic marketing initiatives in support
of our GO2bank product, and other initiatives across our account programs with the objective of returning to active account growth.
We are benefiting from synergies achieved through our processor conversion in 2024 and expect the implementation of our card management platform will allow us to continue to realize reductions in our processing expenses as we seek to expand account programs. In 2025, we also initiated a re-alignment of teams and resources across the enterprise in a continual effort to better support our strategic priorities and growth channels, and improve our operating efficiency. We expect these re-alignments, including the exit from our operational activities in China, to further improve our cost structure year-over-year.
Despite the meaningful reductions in our cost structure that we have achieved across our organization through our various completed and ongoing initiatives, we are incurring increased expenses in other areas as we endeavor to complete the proposed transactions with CommerceOne and Smith Ventures, incur or accrue for additional retention and officer compensation expenses and incur expenses in connection with our ongoing investments in our AML program, including improvements to our compliance controls, policies and procedures. We believe investments in our AML program will ultimately help us continue to remediate matters identified, reduce our fraud losses over the long term and cost-efficiently scale our compliance and regulatory programs as we look to grow our business.
In December 2025, the Federal Reserve decreased interest rates by an additional 25 basis points to a current range of 3.50% to 3.75%. The Federal Reserve's decision-making policies for short-term interest rates will continue to impact the amount of net interest income we earn in the future. In general, while higher short-term interest rates benefit the yield we earn on our cash, certain of our BaaS partner arrangements allow for the BaaS partner to share in a significant portion of the interest earned from accountholder deposits (which are recorded as a reduction of revenue in our consolidated financial statements), and yields on our investment portfolio tend to lag interest rate increases as securities mature and proceeds are reinvested. Accordingly, the net effect has had and we expect will continue to have a negative impact on our consolidated financial statements and will be dependent upon future interest rate changes enacted by the Federal Reserve. In an effort to reduce these impacts, we have begun to reposition a portion of our investment securities portfolio and our cash into variable rate debt securities to improve net yields and balance the effect of our interest sharing arrangements with BaaS partners.
Further, the duration and magnitude of the continuing effects of macro-economic factors remain uncertain and dependent on various factors outside of our control. See Part I, Item 1A, "Risk Factors," for an additional discussion of risks related to macro-economic factors.
Consolidated Key Metrics
We review a number of metrics to help us monitor the performance of, and identify trends affecting, our business. We believe the following measures are the primary indicators of our revenues:
| Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change | % | 2024 | 2023 | Change | % | ||||||||||||||||||||||||||||||||||||||||
| (In millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross dollar volume | $ | 155,828 | $ | 131,640 | $ | 24,188 | 18.4 | % | $ | 131,640 | $ | 99,204 | $ | 32,436 | 32.7 | % | |||||||||||||||||||||||||||||||
| Number of active accounts* | 3.42 | 3.67 | (0.25) | (6.8) | % | 3.67 | 3.57 | 0.1 | 2.8 | % | |||||||||||||||||||||||||||||||||||||
| Purchase volume | $ | 19,545 | $ | 20,325 | $ | (780) | (3.8) | % | $ | 20,325 | $ | 22,514 | $ | (2,189) | (9.7) | % | |||||||||||||||||||||||||||||||
| Number of cash transfers | 29.85 | 32.28 | (2.43) | (7.5) | % | 32.28 | 33.86 | (1.58) | (4.7) | % | |||||||||||||||||||||||||||||||||||||
| Number of tax refunds processed | 12.02 | 13.82 | (1.80) | (13.0) | % | 13.82 | 14.14 | (0.32) | (2.3) | % | |||||||||||||||||||||||||||||||||||||
* Represents the number of active accounts as of December 31, 2025, 2024, and 2023, respectively.
See "Segment Results" for additional information and discussion regarding key metrics performance by segment. The definitions of our key metrics are as follows:
Gross Dollar Volume- Represents the total dollar volume of funds loaded to our account products from direct deposit and non-direct deposit sources. A substantial portion of our gross dollar volume is generated from direct deposit sources. We use this metric to analyze the total amount of money moving onto our account programs, and to determine the overall engagement and usage patterns of our accountholder base. This metric also serves as a leading indicator of revenue generated through our Consumer Services and B2B Services segments, inclusive of fees charged to accountholders and interchange revenues generated through the spending of account balances.
Number of Active Accounts- Represents any bank account within our Consumer Services and B2B Services segments that is subject to the USA PATRIOT Act of 2001 compliance and, therefore, requires customer identity verification prior to use and is intended to accept ongoing customer cash or ACH deposits. This metric includes checking accounts, general purpose reloadable prepaid card accounts, and secured credit card accounts in our portfolio that had at least one purchase, deposit or ATM withdrawal transaction during the applicable quarter. We use this metric to analyze the overall size of our active customer base and to analyze multiple metrics expressed as an average across this active account base.
Our direct deposit active accounts within our Consumer Services segment, on average, have the longest tenure and generate the majority of our gross dollar volume in any period and thus, generate more revenue over their lifetime than other active accounts. Refer to sub-section entitled Consumer Services under "Segment Results" below for key metric results for direct deposit active accounts.
Purchase Volume- Represents the total dollar volume of purchase transactions made by our accountholders. This metric excludes the dollar volume of ATM withdrawals and volume generated by certain BaaS programs where the BaaS partner receives interchange fees and we earn a program management service fee. We use this metric to analyze interchange revenue, which is a key component of our financial performance.
Number of Cash Transfers- Represents the total number of cash transfer transactions conducted by consumers, such as a point-of-sale swipe reload transaction, the purchase of a MoneyPak or an e-cash mobile remittance transaction marketed under various brand names, that we conducted through our retail distributors in a specified period. This metric excludes disbursements made through our wage disbursement platform. We review this metric as a measure of the size and scale of our retail cash processing network, as an indicator of customer engagement and usage of our products and services, and to analyze cash transfer revenue, which is a key component of our financial performance.
Number of Tax Refunds Processed - Represents the total number of tax refunds processed in a specified period. The number of tax refunds processed is most concentrated during the first half of each year and is minimal during the second half of each year. We review this metric as a measure of the size and scale of our tax refund processing platform and as an indicator of customer engagement and usage of its products and services.
Key components of our results of operations
Operating Revenues
We classify our operating revenues into the following four categories:
Card Revenues and Other Fees- Card revenues consist of monthly maintenance fees, ATM fees, new card fees and other revenues. We charge maintenance fees on prepaid cards, checking accounts and certain cash transfer products, such as MoneyPak, pursuant to the terms and conditions in our customer agreements. We charge ATM fees to accountholders when they withdraw money at certain ATMs in accordance with the terms and conditions in our accountholder agreements. We charge new card fees, if applicable, when a consumer purchases a prepaid card, gift card, or a checking account product through our Retail channel. Other revenues consist primarily of revenue associated with our gift card program, annual fees associated with our secured credit card portfolio, transaction-based fees, fees associated with optional products or services, such as our overdraft protection program, and cash-back rewards we offer to accountholders. Our cash-back rewards are recorded as a reduction to card revenues and other fees. Also included in card revenues and other fees are program management service fees earned from our BaaS partners for programs we manage on their behalf.
Our aggregate monthly maintenance fee revenues vary primarily based upon the number of active accounts in our portfolio and the average fee assessed per account. Our average monthly maintenance fee per active account depends upon the mix of products in our portfolio at any given point in time and upon the extent to which fees are waived based on various incentives provided to customers in an effort to encourage higher usage and retention. Our aggregate ATM fee revenues vary based upon the number of accountholder ATM transactions and the average fee per ATM transaction. The average fee per ATM transaction depends upon the mix of products in our portfolio at any given point in time and the extent to which accountholders use ATMs within our free network that carry no fee for cash withdrawal transactions. Our aggregate new card fee revenues vary based upon the number of prepaid cards and checking accounts activated and the average new card fee. The average new card fee depends primarily upon the mix of products that we sell since there are variations in new account fees based on the product and/or the location or source where our products are purchased. The revenue we earn from each of these fees may also vary depending upon the channel in which the active accounts were acquired. For example, certain BaaS programs may not assess monthly maintenance fees and as a result, these accounts may generate lower fee revenue than other active accounts. Our aggregate other fees vary primarily based upon account sales of all types, gift card sales, purchase transactions and the number of active accounts in our portfolio.
Cash Processing Revenues- Cash processing revenues consist of cash transfer revenues, tax refund processing service revenues, disbursement revenues and other tax processing service revenues. We earn cash transfer revenues when consumers fund their cards through a reload transaction at a Green Dot Network retail location. Our aggregate cash transfer revenues vary based upon the mix of locations where reload transactions occur, since reload fees vary by location. We earn tax refund processing service revenues at the point in time when a customer of a third-party tax preparation company chooses to pay his or her tax preparation fee through the use of our tax refund processing services. We earn disbursement fees from our business partners at the point in time payment disbursements are made.
Interchange Revenues- We earn interchange revenues from fees remitted by the merchant's bank, which are based on rates established by the payment networks, at the point in time when customers make purchase transactions using our products. Our aggregate interchange revenues vary based primarily on the number of active accounts in our portfolio, the average transactional volume of the active accounts in our portfolio, the merchant category of spend, and on the mix of accountholder purchases between those using signature identification technologies and those using personal identification numbers and the corresponding rates.
Interest Income, net - Net interest income represents the difference between the interest income earned on our interest-earning assets and the interest expense on our interest-bearing liabilities held at Green Dot Bank. Interest-earning assets include cash from customer deposits, loans, and investment securities. Our interest-bearing liabilities held at Green Dot Bank include interest-bearing deposits. Our net interest income and our net interest margin fluctuate based on changes in the federal funds interest rates and changes in the amount and composition of our interest-bearing assets and liabilities.
Operating Expenses
We classify our operating expenses into the following categories:
Sales and Marketing Expenses- Sales and marketing expenses consist primarily of the commissions we pay to our retail distributors, brokers and partners, advertising and marketing expenses, and the costs of manufacturing and distributing card packages, placards and promotional materials to our retail distributors and personalized debit
cards to consumers who have activated their cards. We generally establish commission percentages in long-term distribution agreements with our retail distributors and partners. Aggregate commissions with our retail distributors are determined by the number of account products and cash transfers sold at their respective retail stores. Commissions with our partners and, in certain cases, our retail distributors are determined by the revenue generated from the ongoing use of the associated card programs. We incur advertising and marketing expenses for television, sponsorships, online and in-store promotions. Advertising and marketing expenses are recognized as incurred and typically deliver a benefit over an extended period of time. For this reason, these expenses do not always track changes in our operating revenues. Our manufacturing and distribution costs vary primarily based on the number of accounts activated by consumers.
Compensation and Benefits Expenses- Compensation and benefits expenses represent the compensation and benefits that we provide to our employees and the payments we make to third-party contractors. While we have an in-house customer service function, we employ third-party contractors to conduct call center operations, handle routine customer service inquiries and provide consulting support in the area of IT operations and elsewhere. Compensation and benefits expenses associated with our customer service and loss management functions generally vary in line with the size of our active account portfolio, while the expenses associated with other functions do not.
Processing Expenses- Processing expenses consist primarily of the fees charged to us by the payment networks, which process transactions for us, the third-party card processors that maintain the records of our customers' accounts and process transaction authorizations and postings for us and the third-party banks that issue our accounts. These costs generally vary based on the total number of active accounts in our portfolio and gross dollar volume transacted by those accounts. Also included in processing expenses are bank fees associated with our tax refund processing services and gateway and network fees associated with our disbursement services. Bank fees generally vary based on the total number of tax refund transfers processed and gateway and network fees vary based on the number of disbursements made.
Other General and Administrative Expenses- Other general and administrative expenses consist primarily of professional services fees, telephone and communication costs, depreciation and amortization of our property and equipment, amortization of our intangible assets, impairment charges of long-lived assets, transaction losses (losses from customer disputed transactions, unrecovered customer purchase transaction overdrafts and fraud), rent and utilities, and insurance. We incur telephone and communication costs primarily from customers contacting us through our toll-free telephone numbers. These costs vary with the total number of active accounts in our portfolio, as do losses from customer disputed transactions, unrecovered customer purchase transaction overdrafts and fraud. Costs associated with professional services, depreciation and amortization of our property and equipment, amortization of our acquired intangible assets, impairment charges of long-lived assets, rent and utilities that vary based upon our investment in infrastructure, business development, risk management, internal controls and activities relating to acquisitions, divestitures and other strategic transactions, such as our strategic review process and the proposed transactions with CommerceOne and Smith Ventures, are generally not correlated with our operating revenues or other transaction metrics.
Restructuring and Other Charges- Restructuring and other charges consist principally of charges related to employee severance and benefits, as well as expenses associated with the termination of our facility lease and other miscellaneous exit costs. We generally recognize employee severance costs when payments are probable and amounts are estimable or when notification occurs. Costs related to contracts without future benefit or subject to termination are recognized at the earlier of the contract termination or cease-use date. Other exit-related costs are recognized as incurred.
Other Expense, net
Other expense, net includes income and expenses we generally do not consider normal operating activities, such as earnings, losses or impairment attributable to equity method investments, realized gains or losses on investment securities, income earned on bank-owned life insurance policies, and changes in valuation allowances on loans held for sale, amongst other similar items that may arise from time to time.
Income Tax Expense and Benefit
Our income tax expense and benefit consists of the federal and state corporate income taxes accrued on income resulting from the sale of our products and services. Our effective income tax rate may differ from the 21% U.S. federal statutory rate due to a number of factors, including state income taxes, research and development tax credits, non-deductible expenses and penalties, increases or decreases in valuation allowances and liabilities for uncertain tax positions, excess tax benefits or shortfalls on stock compensation awards, audit developments, and
legislative changes. See Note 14-Income Taxes to the Consolidated Financial Statements included herein for a discussion of the significant tax differences that impacted our effective tax rate.
Critical Accounting Estimates
We prepare our consolidated financial statements in accordance with U.S. GAAP. The preparation of our consolidated financial statements requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures. We base our estimates on historical experience, current circumstances and various other assumptions that our management believes to be reasonable under the circumstances. In many instances, we could reasonably use different accounting estimates, and in some instances changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ significantly from the estimates made by our management. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected. We believe that the critical accounting estimates discussed below are critical to understanding our historical and future performance, as these estimates involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations of the registrant.
Revenue Recognition
As prescribed under Accounting Standards Codification ("ASC") 606,Revenue from Contracts with Customers, we recognize revenues when control of the promised goods or services is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services, as determined under a five-step process.
We charge new card fees, if applicable, when a consumer purchases a prepaid card, gift card, or a demand deposit account product through our Retail channel. Our new card fee provides our accountholders a material right and accordingly we defer and recognize new card fee revenues on a straight-line basis over the period commensurate with our performance obligation to our customers. We consider the performance obligation period to be the average card lifetime, which is currently less than one year for our deposit account programs acquired through our Retail channel. The average card lifetime is determined based on recent historical data using the period from sale (or activation) of the card through the date of last positive balance. We reassess average card lifetime quarterly for prepaid cards and checking accounts and annually for gift cards. Average card lifetimes may vary in the future as accountholder behavior changes relative to historical experience because customers are influenced by changes in the pricing of our services, the availability of substitute products, and other factors.
We also defer commissions paid to retail distributors related to new card sales as costs to obtain contracts and expense ratably over the average card lifetime commensurate with our deposit account programs acquired through our Retail channel.
Transaction prices related to our account services are based on stand-alone fees stated within the terms and conditions and may also include certain elements of variable consideration depending upon the product's features, such as cash-back rewards and fee assessments that may overdraw an account. We estimate such amounts using historical data and customer behavior patterns to determine these estimates which are recorded as a reduction to the corresponding fee revenue. Additionally, while the number of transactions that an accountholder may perform is unknown, any uncertainty is resolved at the end of each daily service contract.
The amount of cash-back rewards on our programs varies based on multiple factors, including the terms and conditions for accountholder eligibility, the redemption amount based on accountholder activity, and the accountholder redemption rates. Our estimated cash-back rewards are recorded as a reduction to card revenues and other fees on our consolidated statements of operations and as a component of other accrued liabilities on our consolidated balance sheets. Our cash-back programs have declined, principally from our shift from our legacy products to our GO2bank product which does not have a cash rewards feature. Increases or decreases in our estimate of cash-back rewards is dependent upon accountholder behavioral changes and we periodically evaluate our estimation process and assumptions based on developments in redemption patterns, dollars redeemed and other accountholder behavioral trends. A relatively small change in any of our assumptions could result in a sizable increase or decrease in the amount of cash-back rewards we accrue. For example, on our Green Dot Unlimited product, a combination of a 1% increase in accountholder eligibility and a $1 increase in the average redemption amount would translate to additional cash rewards of approximately $0.5 million. Differences between actual results and our estimates are adjusted in the period that each accountholder's annual rewards cycle is completed.
Reserve for Uncollectible Overdrawn Accounts
For accountholders who are not enrolled or do not meet the eligibility requirements of our overdraft protection program, we generally decline authorization attempts for amounts that exceed the available balance in an accountholder's account, however, the application of card association rules, the timing of the settlement of transactions and the assessment of the card's monthly maintenance fee, among other things, can still result in overdrawn accounts. These overdrawn account balances are deemed to be receivables due from accountholders, and are included as a component of accounts receivable, net, on our consolidated balance sheets.
We generally recover overdrawn account balances from those accountholders that perform a reload transaction and, in some cases, through enforcement of payment network rules, which allow us to recover the amounts from the merchant where the purchase transaction was conducted. However, we are exposed to losses from any unrecovered overdrawn account balances. The probability of recovering these amounts is primarily related to the number of days that have elapsed since an account had transaction activity, such as a purchase, ATM transaction or fee assessment. We generally recover approximately 50-60% of overdrawn account balances in accounts that have had transaction activity in the last 30 days and less than 10% when more than 30 days have elapsed. As such, we establish a reserve for uncollectible overdrawn accounts.
We classify overdrawn accounts by transaction type and age groups based on the number of days since the account last had activity. We then calculate a reserve factor for each transaction type and age group based on the average recovery rate for the most recent six months discussed above. These factors are applied to these groups to estimate our overall reserve. We rely on these historical rates because they have remained relatively consistent over time. Generally, when more than 60 days have passed without any activity in an account, we consider recovery to be remote and charge off the full amount of the overdrawn account balance against the reserve for uncollectible overdrawn accounts. Our actual recovery rates and related estimates thereof may change in the future in response to factors such as customer behavior, product pricing and features that impact the frequency and velocity of reloads and other deposits to such accounts. We include our provision for uncollectible overdrawn accounts related to purchase transactions in other general and administrative expenses in our consolidated statements of operations. See Note 5-Accounts Receivableto the Consolidated Financial Statements included herein for more information.
Allowance for Credit Losses
We establish an allowance for estimated credit losses inherent in our loan portfolio over the life of the loans, including our secured credit cards. For each portfolio of loans, we analyze historical loss rates and other factors to determine a loss rate, and consider if adjustments are needed for current conditions, and other reasonable and supportable forecasts beyond our balance sheet date that may differ from historical results. We also consider adjustments based on qualitative factors which in our judgment may affect the expected credit losses including, but not limited to, changes in prevailing economic or market conditions and the estimated value of the underlying collateral for collateral dependent loans. We separately establish specific allowances for impaired loans based on the present value of changes in cash flows expected to be collected, or for impaired loans that are considered collateral dependent, the estimated fair value of the collateral less estimated costs to sell, if any. Overdrawn balances associated with our overdraft protection program are subject to a similar reserve methodology discussed above under "Reserve for Uncollectible Overdrawn Accounts." See Note 6-Loans to Bank Customersto the Consolidated Financial Statements included herein for more information.
Goodwill and Intangible Assets
We review the recoverability of goodwill at least annually or whenever significant events or changes occur, which might impair the recovery of recorded costs. Factors that may be considered a change in circumstances indicating that the carrying value of our goodwill may not be recoverable include a decline in our stock price and market capitalization, declines in the market conditions of our products, reductions in our future cash flow estimates, and significant adverse industry or economic market trends. We test for impairment of goodwill by first assessing various qualitative factors with respect to developments in our business and the overall economy to determine if it is more likely than not our goodwill is impaired. In the event it is more likely than not the carrying value of our reporting units is greater than its fair value, we calculate the estimated fair value of the reporting unit and record an impairment charge for the difference between the carrying value of the reporting unit and its fair value, not to exceed the carrying amount of goodwill. When applying the quantitative assessment, we determine the fair value of our reporting units based on a weighted average of multiple valuation techniques, principally a combination of an income approach and a market approach. The income approach calculates a value based upon the present value of estimated future cash flows, while the market approach uses earnings multiples of similarly situated guideline public companies. Determining the fair value of a reporting unit requires management judgment and the use of significant estimates and assumptions, which could include, but would not be limited to, future revenues, earnings and the
probability of certain outcomes, risk-adjusted discount rates and future economic and market conditions. We completed our annual goodwill impairment test as of November 30, 2025 and concluded there was no impairment in any of our reporting units.
Intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Certain factors which may occur and indicate that an impairment exists include, but are not limited to, the following: significant underperformance relative to expected historical or projected future operating results; significant changes in the manner of use of the underlying assets; and significant adverse industry or market economic trends. In reviewing for impairment, we compare the carrying value of such assets to the estimated undiscounted future net cash flows expected from the use of the assets and their eventual disposition. In the event that the carrying value of assets is determined to be unrecoverable, we would estimate the fair value of the assets and record an impairment charge for the excess of the carrying value over the fair value. The estimate of fair value requires management to make a number of assumptions and projections, which could include, but would not be limited to, future revenues, earnings and the probability of certain outcomes. No impairment charges were recognized related to our intangible assets for the years ended December 31, 2025 and 2024. See Note 9-Goodwill and Intangible Assetsto the Consolidated Financial Statements included herein for more information.
Deferred Tax Asset Valuation Allowance
Under ASC 740, Income Taxes, deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to net operating loss carryforwards, tax credit carryforwards, and capital losses, as well as temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, which will result in taxable or deductible amounts in the future.
Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. A valuation allowance is established when necessary to reduce deferred tax assets to the net amount that is more likely than not to be realized. Significant judgment is required in determining any valuation allowance recorded against deferred tax assets. In assessing the need for a valuation allowance, we consider all available evidence, both positive and negative, including our historical operating results, the existence of cumulative losses in recent years, projections of future taxable income, and the feasibility of tax planning strategies. Estimating future taxable income is inherently uncertain and our actual operating results in future years could differ from our current assumptions, judgments and estimates. In the event that we change our determination of the amount of deferred tax assets that can be realized, we adjust our valuation allowance with a corresponding impact to the provision for (or benefit from) income taxes in the period in which such determination is made.
See Note 14-Income Taxes to the Consolidated Financial Statements included herein for more information.
Results of Operations
Pursuant to instruction 1 of the instructions to paragraph 303(b) of Regulation S-K, discussion of the results of operations for the fiscal year ended December 31, 2024 to fiscal year ended December 31, 2023 has been omitted. Such omitted discussion can be found under "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 4, 2025.
Comparison of Consolidated Results for the Years Ended December 31, 2025 and 2024
Operating Revenues
The following table presents a breakdown of our operating revenues among card revenues and other fees, cash processing revenues, interchange revenues and net interest income:
| Year Ended December 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Amount |
% of Total Operating Revenues |
Amount |
% of Total Operating Revenues |
||||||||||||||||||||
| (In thousands, except percentages) | |||||||||||||||||||||||
| Operating revenues: | |||||||||||||||||||||||
| Card revenues and other fees | $ | 1,565,932 | 75.3 | % | $ | 1,231,458 | 71.4 | % | |||||||||||||||
| Cash processing revenues | 240,186 | 11.5 | 231,753 | 13.4 | |||||||||||||||||||
| Interchange revenues | 184,595 | 8.9 | 198,300 | 11.6 | |||||||||||||||||||
| Interest income, net | 89,778 | 4.3 | 62,365 | 3.6 | |||||||||||||||||||
| Total operating revenues | $ | 2,080,491 | 100.0 | % | $ | 1,723,876 | 100.0 | % | |||||||||||||||
Card Revenues and Other Fees -Card revenues and other fees totaled $1.6 billion for the year ended December 31, 2025, an increase of $334.4 million, or 27%, from the comparable prior year period. Card revenues and other fees increased primarily due to growth in gross dollar volume in our B2B Services segment programs, which resulted in higher program management service fees earned from our BaaS partners. These increases were partially offset by decreases in accountholder fees, such as monthly maintenance fees and ATM fees, as a result of a decline in the number of active accounts in our Consumer Services segment during the current year and lower breakage revenue on our gift card portfolio, as the program has been discontinued.
Cash Processing Revenues- Cash processing revenues totaled $240.2 million for the year ended December 31, 2025, an increase of $8.4 million, or 4%, from the comparable prior year period. In our Money Movement Services segment, our tax processing revenues increased from the expansion of our taxpayer advance program and a favorable mix-shift in the distribution channel in which tax refunds were generated, despite a 13% decline in the number of tax refunds processed. The decrease in the number of tax refunds processed is principally attributable to the performance of our online tax preparation partners. The increase in tax processing revenues was partially offset by an 8% decline in the number of cash transfers processed during the year ended December 31, 2025 from the prior year comparable period. The decline in the number of cash transfers processed was primarily due to a lower number of active accounts within our Consumer Services segment and to a lesser extent, a lower number of cash transfers processed for third-party programs.
Interchange Revenues- Interchange revenues totaled $184.6 million for the year ended December 31, 2025, a decrease of $13.7 million, or 7%, from the comparable prior year period. The decrease was primarily due to a 4% decrease in purchase volume during the year ended December 31, 2025, as well as a lower effective interchange rate which declined due to a mix-shift toward categories of consumer purchases with lower effective rates. In addition, our interchange fees have both fixed and variable components, and as a result, the effective rate we earn may vary based on the size of transactions, among other factors.
Interest Income, net- Net interest income totaled $89.8 million for the year ended December 31, 2025, an increase of $27.4 million, or 43%, from the comparable prior year period. The increase in net interest income was primarily the result of yields earned from an increase in cash from deposit programs with our partners and higher yielding investments from our bond repositioning strategy, and a decrease in interest shared with certain BaaS partners (a reduction of revenue).
Operating Expenses
The following table presents a breakdown of our operating expenses among sales and marketing, compensation and benefits, processing, other general and administrative expenses and restructuring and other charges:
| Year Ended December 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Amount |
% of Total Operating Revenues |
Amount |
% of Total Operating Revenues |
||||||||||||||||||||
| (In thousands, except percentages) | |||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Sales and marketing expenses | $ | 207,893 | 10.0 | % | $ | 217,210 | 12.6 | % | |||||||||||||||
| Compensation and benefits expenses | 254,376 | 12.2 | 251,044 | 14.6 | |||||||||||||||||||
| Processing expenses | 1,230,445 | 59.1 | 887,249 | 51.5 | |||||||||||||||||||
| Other general and administrative expenses | 351,993 | 16.9 | 370,041 | 21.5 | |||||||||||||||||||
| Restructuring and other charges | 22,125 | 1.1 | % | - | - | ||||||||||||||||||
| Total operating expenses | $ | 2,066,832 | 99.3 | % | $ | 1,725,544 | 100.2 | % | |||||||||||||||
Sales and Marketing Expenses- Sales and marketing expenses totaled $207.9 million for the year ended December 31, 2025, a decrease of $9.3 million, or 4%, compared to the year ended December 31, 2024. This decrease was driven primarily by a decrease in supply chain materials expenses, which are comprised of card packages and personalized debit cards, from fewer active accounts, and a decrease in revenue-sharing arrangements in our Money Movement Services segment primarily due to a decrease in cash transfer revenues.
Compensation and Benefits Expenses- Compensation and benefits expenses totaled $254.4 million for the year ended December 31, 2025, an increase of $3.4 million, or 1%, compared to the year ended December 31, 2024. The increase was driven primarily by an increase in accrued bonus compensation expense due to our current financial performance relative to annual performance targets and an increase in third-party call center support costs associated with the growth of the BaaS account programs within our B2B Services segment, partially offset by a decrease in employee stock-based compensation expense due to forfeitures of awards and a decrease in salary and wage expenses due to the closure of our China operations announced in September 2025.
Processing Expenses- Processing expenses totaled $1,230.4 million for the year ended December 31, 2025, an increase of $343.2 million, or 39%, compared to the year ended December 31, 2024. This increase was principally due to growth in gross dollar volume on certain BaaS account programs within our B2B Services segment.
Other General and Administrative Expenses- Other general and administrative expenses totaled $352.0 million for the year ended December 31, 2025, a decrease of $18.0 million, or 5%, from the comparable prior year period. The decrease in other general and administrative expenses was due to several factors, including the timing of accruals in 2024 related to the civil money penalty under our Consent Order from the Federal Reserve Board that did not recur in 2025, the settlement payment and impairment charges related to the termination of our partnership agreement to develop a new core banking system in 2024 that also did not recur in 2025, and a decrease in overall transaction losses attributable to lower customer dispute volume across our portfolios and favorable reductions in our dispute loss rates. These decreases were partially offset by higher professional services fees associated with our strategic review process, the proposed transactions with CommerceOne and Smith Ventures, and AML regulatory compliance initiatives, an increase in software licenses and hosting costs due to investments in our platform and operations, and an increase in federal deposit insurance due to higher deposit balances and the rates we pay thereon.
Restructuring and Other Charges- Restructuring and other charges totaled $22.1 million for the year ended December 31, 2025, and were due to our previously announced restructuring plan relating to our China operations, which is discussed further above under "Overview." Additionally, refer to Note 23 - Restructuring and Other Charges in the Consolidated Financial Statements included herein for a more detailed discussion of our restructuring and other charges.
Other Expense, net
Other expense, net totaled $104.8 million for the year ended December 31, 2025, an increase of $89.4 million, or 582%, from the prior year comparable period. This increase was driven by our equity method losses associated with TailFin and resulted principally from a $70 million incentive payment that TailFin made in connection with our extension of the Walmart MoneyCard program and related agreements in the second quarter of 2025. We recorded
the incentive payment as a component of equity in losses attributable to TailFin during the second quarter of 2025 under our HLBV method of accounting. In addition, during the first half of 2025, we sold certain available-for-sale securities in order to reposition the proceeds into higher yielding assets, which resulted in a realized loss of $24.8 million for the year ended December 31, 2025. These increases were partially offset by higher income earned from bank-owned life insurance policies.
Income Tax Expense
The following table presents a breakdown of our effective tax rate among federal, state and other after the adoption of Accounting Standards Update 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures."
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| (In thousands except % data) | Amount ($) | Percent (%) | Amount ($) | Percent (%) | |||||||||||||
| U.S. federal statutory tax rate | $ | (20,427) | 21.0 | % | $ | (4,733) | 21.0 | % | |||||||||
| State income taxes, net of federal tax benefit* | 14,966 | (15.4) | (543) | 2.4 | |||||||||||||
| Foreign tax effects | |||||||||||||||||
| China | |||||||||||||||||
| Statutory tax rate difference between China and U.S. | 1,295 | (1.3) | (244) | 1.1 | |||||||||||||
| Changes in valuation allowance | 3,393 | (3.5) | - | - | |||||||||||||
| Other | (68) | 0.1 | 117 | (0.6) | |||||||||||||
| Effect of changes in tax laws or rates enacted in the current period | - | - | - | - | |||||||||||||
| Effect of cross-border tax laws | |||||||||||||||||
| Global intangible low-taxed income tax | - | - | 309 | (1.4) | |||||||||||||
| Tax credits | |||||||||||||||||
| Research and development tax credits | (1,010) | 1.0 | (2,489) | 11.0 | |||||||||||||
| Changes in valuation allowance | - | - | 434 | (1.9) | |||||||||||||
| Nontaxable or nondeductible items | |||||||||||||||||
| Stock-based compensation | 1,629 | (1.7) | 7,086 | (31.4) | |||||||||||||
| Bank owned life insurance income | (1,314) | 1.4 | (579) | 2.6 | |||||||||||||
| Bank owned life insurance surrender | - | - | 2,253 | (10.0) | |||||||||||||
| Nondeductible transaction related costs | 875 | (0.9) | - | - | |||||||||||||
| Nondeductible penalties | - | - | 5,056 | (22.4) | |||||||||||||
| IRC 162(m) limitation | 413 | (0.4) | (2,856) | 12.7 | |||||||||||||
| Other | 72 | (0.1) | 97 | (0.5) | |||||||||||||
| Changes in unrecognized tax benefits | (1,928) | 2.0 | 255 | (1.1) | |||||||||||||
| Other adjustments | |||||||||||||||||
| IRS examination settlement | 3,016 | (3.1) | - | - | |||||||||||||
| Expiration of tax attributes | 430 | (0.4) | - | - | |||||||||||||
| Other | 252 | (0.3) | - | - | |||||||||||||
| Effective tax rate | $ | 1,594 | (1.6) | % | $ | 4,163 | (18.5) | % | |||||||||
| * | State taxes in California, Florida, Pennsylvania, Georgia, Alabama, and Louisiana made up the majority (greater than 50 percent) of the tax effect in this category. | ||||
Our income tax expense totaled $1.6 million for the year ended December 31, 2025, representing a decrease of $2.6 million from the comparable prior year period. The decrease in our income tax expense was primarily driven by the increase in our pre-tax loss.
The net increase in the effective tax rate for the year ended December 31, 2025 from the prior year comparable period was primarily due to an increase of $3.3 million in the amount of compensation expense subject to the IRC 162(m) limitation on the deductibility of certain executive compensation, a decrease of $1.5 million in research and development tax credits, an increase of $3.4 million in the valuation allowance on the deferred tax assets of our China subsidiary, an increase of $0.9 million in nondeductible transaction related costs, an increase of $3.0 million
from our examination settlement with the IRS, and an increase of $15.5 million in state income tax expense, net of federal benefits, primarily resulting from an increase of $17.7 million in the valuation allowance on state deferred tax assets related to state business credits and certain state net operating loss carryforwards. These increases were partially offset by a decrease of $5.5 million in the expense related to tax shortfalls from stock-based compensation, a decrease of $5.1 million in tax expense from nondeductible penalties primarily associated with the civil money penalty incurred in 2024 for our Consent Order from the Federal Reserve Board, an increase of $0.7 million in the cash surrender value of our banked owned life insurances policies, a decrease of $2.2 million in the reserve on our unrecognized tax benefits, and a decrease of $2.3 million related to our bank owned life insurance surrender penalties we incurred in connection with the surrender and restructuring of our existing bank owned life insurance policies completed in 2024.
Our effective tax rate for the year ended December 31, 2025 is lower than our statutory federal income tax rate primarily due to a reduction in the expense related to tax shortfalls from stock-based compensation, cash value growth in our banked owned life insurances policies, and a decrease in the reserve on our unrecognized tax benefits, partially offset by an increase in the amount of compensation expense subject to the IRC 162(m) limitation on the deductibility of certain executive compensation, a decrease in research and development tax credits, an increase in the valuation allowance on the deferred tax assets of our China subsidiary, an increase in nondeductible transaction related costs, an increase from our examination settlement with the IRS, and an increase in state income tax expense, net of federal benefits, primarily resulting from an increase in the valuation allowance on state deferred tax assets related to certain state tax attributes. Our negative effective tax rate for the year ended December 31, 2025 was the result of our loss before income taxes of $97.3 million and the tax effect of our examination settlement with IRS, the increase in the valuation allowance on the deferred tax assets of our China subsidiary, and the increase in the valuation allowance on state deferred tax assets related to state business credits and certain state net operating loss carryforwards.
Our effective tax rate for the year ended December 31, 2024 is lower than our statutory federal income tax rate primarily due to a reduction in the amount of compensation expense that was subject to the IRC Section 162(m) limitation on the deductibility of certain executive compensation, cash value growth in bank owned life insurance policies, and higher tax benefits from general business credits partially offset by the expense associated with tax shortfalls from stock-based compensation, the expense related to nondeductible penalties, an increase in the valuation allowance on a portion of our unrealized loss on equity securities, and the expense from the surrender of our existing bank owned life insurance policies. Our negative effective tax rate for the year ended December 31, 2024 was the result of our loss before income taxes of $22.5 million and the tax effect of the civil money penalty under the Consent Order.
The "Other" category in our effective tax rate consists of a variety of permanent differences, none of which were individually significant.
Segment Results
B2B Services
The results of operations and key metrics of our B2B Services segment for the years ended December 31, 2025 and 2024 were as follows:
| Year Ended December 31, | |||||||||||||||||||||||
| 2025 | 2024 | Change | % | ||||||||||||||||||||
| (In thousands, except percentages) | |||||||||||||||||||||||
| Financial Results | |||||||||||||||||||||||
| Segment revenues | $ | 1,440,443 | $ | 1,081,804 | $ | 358,639 | 33.2 | % | |||||||||||||||
| Segment expenses | 1,327,919 | 989,430 | 338,489 | 34.2 | % | ||||||||||||||||||
| Segment profit | $ | 112,524 | $ | 92,374 | $ | 20,150 | 21.8 | % | |||||||||||||||
| Key Metrics | (In millions, except percentages) | ||||||||||||||||||||||
| Gross dollar volume | $ | 140,425 | $ | 115,083 | $ | 25,342 | 22.0 | % | |||||||||||||||
| Number of active accounts* | 1.93 | 1.79 | 0.14 | 7.8 | % | ||||||||||||||||||
| Purchase volume | $ | 8,027 | $ | 7,964 | $ | 63 | 0.8 | % | |||||||||||||||
* Represents number of active accounts as of December 31, 2025 and 2024, respectively.
As additional supplemental information, our key metrics within our B2B Services segment is presented on a quarterly basis as follows:
| 2025 | 2024 | ||||||||||||||||||||||||||||
| Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||||||||
| Key Metrics | |||||||||||||||||||||||||||||
| Gross dollar volume | 36,923 | 35,868 | 34,620 | 33,014 | 31,222 | 29,490 | 28,116 | 26,255 | |||||||||||||||||||||
| Number of active accounts* | 1.93 | 1.89 | 1.81 | 1.78 | 1.79 | 1.68 | 1.65 | 1.58 | |||||||||||||||||||||
| Purchase volume | 2,035 | 2,006 | 2,000 | 1,986 | 2,070 | 1,983 | 1,976 | 1,935 | |||||||||||||||||||||
* Represents number of active accounts as of each period end.
Segment revenues within our B2B Services for the year ended December 31, 2025 increased $358.6 million, or 33%, over the prior year comparable period, while our segment expenses for the year ended December 31, 2025 increased $338.5 million, or 34%.
Our gross dollar volume, purchase volume, and the average number of active accounts during the year ended December 31, 2025 increased by 22%, 1%, and 11%, respectively, over the prior year comparable period. We have continued to experience organic growth from both new and existing users in certain BaaS programs that tend to yield higher gross dollar volume per active user but do not generate comparable levels of interchange fees. The growth in gross dollar volume from these BaaS programs resulted in a net increase in segment revenue due to higher program management service fees earned from these BaaS partners.
Segment expenses increased for the year ended December 31, 2025 over the comparable prior year period, principally due to higher processing expenses associated with the growth of certain BaaS account programs and higher third-party call center support costs as a result of an increase in gross dollar volume and the number of active accounts, partially offset by a decrease in transaction losses due to favorable reductions in our dispute loss rates on a full year basis. As a result of these factors, our segment profit for the year ended December 31, 2025 increased by approximately 22% from the prior year comparable period. This segment also experienced margin compression because certain BaaS partnerships are largely structured based on a fixed profit and therefore, our segment profit for certain arrangements will not scale with revenue growth.
Consumer Services
The results of operations and key metrics of our Consumer Services segment for the years ended December 31, 2025 and 2024 were as follows:
| Year Ended December 31, | |||||||||||||||||||||||
| 2025 | 2024 | Change | % | ||||||||||||||||||||
| (In thousands, except percentages) | |||||||||||||||||||||||
| Financial Results | |||||||||||||||||||||||
| Segment revenues | $ | 364,314 | $ | 402,462 | $ | (38,148) | (9.5) | % | |||||||||||||||
| Segment expenses | 233,643 | 240,562 | (6,919) | (2.9) | % | ||||||||||||||||||
| Segment profit | $ | 130,671 | $ | 161,900 | $ | (31,229) | (19.3) | % | |||||||||||||||
| Key Metrics | (In millions, except percentages) | ||||||||||||||||||||||
| Gross dollar volume | $ | 15,403 | $ | 16,557 | $ | (1,154) | (7.0) | % | |||||||||||||||
| Number of active accounts* | 1.49 | 1.88 | (0.39) | (20.7) | % | ||||||||||||||||||
| Direct deposit active accounts* | 0.39 | 0.43 | (0.04) | (9.3) | % | ||||||||||||||||||
| Purchase volume | $ | 11,518 | $ | 12,361 | $ | (843) | (6.8) | % | |||||||||||||||
* Represents number of active and direct deposit active accounts as of December 31, 2025 and 2024, respectively.
As additional supplemental information, our key metrics within our Consumer Services segment is presented on a quarterly basis as follows:
| 2025 | 2024 | ||||||||||||||||||||||||||||
| Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||||||||
| Key Metrics | |||||||||||||||||||||||||||||
| Gross dollar volume | 3,603 | 3,637 | 3,925 | 4,238 | 4,060 | 3,983 | 4,014 | 4,500 | |||||||||||||||||||||
| Number of active accounts* | 1.49 | 1.62 | 1.67 | 1.80 | 1.88 | 1.78 | 1.76 | 1.93 | |||||||||||||||||||||
| Direct deposit active accounts* | 0.39 | 0.40 | 0.41 | 0.41 | 0.43 | 0.44 | 0.45 | 0.46 | |||||||||||||||||||||
| Purchase volume | 2,670 | 2,730 | 2,991 | 3,127 | 3,082 | 2,904 | 3,036 | 3,339 | |||||||||||||||||||||
* Represents number of active and direct deposit active accounts as of each period end.
Segment revenues within Consumer Services for the year ended December 31, 2025 decreased $38.1 million, or 9%, from the prior year comparable period, while our segment expenses for the year ended December 31, 2025 decreased $6.9 million, or 3%.
Our gross dollar volume and purchase volume each decreased during the year ended December 31, 2025 by 7% from the comparable prior year period, and the average number of active accounts and average number of direct deposit active accounts across the year each decreased by 10%, primarily due to each of the factors discussed above in "Overview." These factors include macro-economic factors affecting consumer behavior and other competitive trends that have impacted acquisition at retail locations. As a result of these decreases in each of our key metrics, our monthly maintenance fee revenues, ATM fee revenues and interchange revenues decreased year-over-year. In addition, our interchange rate declined due to a mix-shift toward categories of consumer purchases with lower effective rates, as well as a decrease in breakage revenue on our gift card portfolio for the comparable periods, as the program has been discontinued.
Segment expenses for the year ended December 31, 2025 decreased from the comparable prior year period primarily due to a decrease in overall transaction losses attributable to lower customer dispute volume across our portfolios and favorable reductions in our dispute loss rates, and lower supply chain material expenses, which are comprised of card packages and personalized debit cards, due to fewer active accounts, partially offset by an increase in sales commissions from higher revenues on products subject to tiered revenue-sharing agreements.
Overall, segment profit for the year ended December 31, 2025 decreased by approximately 19% from the prior year comparable period.
Money Movement Services
The results of operations and key metrics of our Money Movement Services segment for the years ended December 31, 2025 and 2024 were as follows:
| Year Ended December 31, | |||||||||||||||||||||||
| 2025 | 2024 | Change | % | ||||||||||||||||||||
| (In thousands, except percentages) | |||||||||||||||||||||||
| Financial Results | |||||||||||||||||||||||
| Segment revenues | $ | 225,268 | $ | 217,657 | $ | 7,611 | 3.5 | % | |||||||||||||||
| Segment expenses | 96,736 | 95,075 | 1,661 | 1.7 | % | ||||||||||||||||||
| Segment profit | $ | 128,532 | $ | 122,582 | $ | 5,950 | 4.9 | % | |||||||||||||||
| Key Metrics | (In millions, except percentages) | ||||||||||||||||||||||
| Number of cash transfers | 29.85 | 32.28 | (2.43) | (7.5) | % | ||||||||||||||||||
| Number of tax refunds processed | 12.02 | 13.82 | (1.8) | (13.0) | % | ||||||||||||||||||
As additional supplemental information, our key metrics within our Money Movement Services segment is presented on a quarterly basis as follows:
| 2025 | 2024 | ||||||||||||||||||||||||||||
| Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||||||||
| Key Metrics | |||||||||||||||||||||||||||||
| Number of cash transfers | 7.39 | 7.43 | 7.52 | 7.51 | 8.14 | 8.22 | 8.15 | 7.77 | |||||||||||||||||||||
| Number of tax refunds processed | 0.11 | 0.20 | 3.73 | 7.98 | 0.15 | 0.19 | 4.20 | 9.28 | |||||||||||||||||||||
Segment revenues within our Money Movement services for the year ended December 31, 2025 increased $7.6 million, or 3%, from the comparable prior year period, and segment expenses for the year ended December 31, 2025 increased $1.7 million, or 2%.
The increase in segment revenues for the year ended December 31, 2025 was driven by higher tax processing revenues, which increased due to the expansion of our taxpayer advance program and a favorable mix-shift in the distribution channel in which tax refunds were generated, despite a 13% decline in the number of tax refunds processed. The decrease in the number of tax refunds processed during the year ended December 31, 2025 tax was principally attributable to the performance of our online tax preparation partners. These increases were partially offset by an 8% decline in the number of cash transfers processed during the year ended December 31, 2025 from the prior year comparable period. The decline in the number of cash transfers processed was due to a lower number of active accounts within our Consumer Services segment and to a lesser extent, a lower number of cash transfers processed for third-party programs.
Segment expenses increased for the year ended December 31, 2025 by 2% from the comparable prior year period primarily from an increase in third-party costs and related expenses due to growth across our tax processing services, partially offset by lower sales commissions from lower cash transfer revenues.
Overall, segment profit increased by approximately 5% from the prior year comparable period.
Corporate and Other
The results of operations and key metrics of our Corporate and Other segment for the years ended December 31, 2025 and 2024 were as follows:
| Year Ended December 31, | |||||||||||||||||||||||
| 2025 | 2024 | Change | % | ||||||||||||||||||||
| (In thousands, except percentages) | |||||||||||||||||||||||
| Financial Results | |||||||||||||||||||||||
| Unallocated revenue and inter-segment eliminations | $ | 38,679 | $ | 5,792 | $ | 32,887 | 567.8 | % | |||||||||||||||
| Unallocated corporate expenses and inter-segment eliminations | 236,841 | 217,262 | 19,579 | 9.0 | % | ||||||||||||||||||
| $ | (198,162) | $ | (211,470) | $ | 13,308 | (6.3) | % | ||||||||||||||||
Revenues within Corporate and Other are comprised of net interest income, certain other investment income earned by our bank, interest profit sharing arrangements with certain BaaS partners (a reduction of revenue) and eliminations of inter-segment revenues. Unallocated corporate expenses include eliminations of inter-segment expenses and our fixed expenses such as salaries, wages and related benefits for our employees and certain third-party contractors, professional services fees, software licenses, telephone and communication costs, rent, utilities and insurance. These costs are not considered when our CODM evaluates the performance of our three reportable segments since they are not directly attributable to any reporting segment. Non-cash expenses such as stock-based compensation, depreciation and amortization of long-lived assets, impairment charges and other non-recurring expenses that are not considered by our CODM when evaluating our overall consolidated financial results are excluded from our unallocated corporate expenses above. Refer to Note 25-Segment Informationto the Consolidated Financial Statements included herein for a summary reconciliation.
Revenues within our Corporate and Other segment were driven primarily by an increase in net interest income, which increased by 43% for the year ended December 31, 2025 from the prior year comparable period. The increase in net interest income was primarily the result of yields earned from an increase in cash from deposit programs with our partners, higher yielding investments from our bond repositioning strategy, and a decrease in interest shared with certain BaaS partners (a reduction of revenue).
Unallocated corporate expenses for the year ended December 31, 2025 increased by approximately 9% over the prior year comparable period. The increase was driven primarily by an increase in accrued bonus compensation expense due to our current financial performance relative to annual performance targets, higher professional services fees associated with our strategic review process, the proposed transactions with CommerceOne and Smith Ventures, and our AML regulatory compliance initiatives, an increase in software licenses and hosting costs due to investments in our platform and operations, and an increase in federal deposit insurance due to higher deposit balances and the rates we pay thereon.
Capital Requirements for Bank Holding Companies
Our subsidiary bank, Green Dot Bank, is a member bank of the Federal Reserve System and our primary regulators are the Federal Reserve Board and the Utah Department of Financial Institutions. We and Green Dot Bank are subject to various regulatory capital requirements administered by the banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory actions by regulators that, if undertaken, could have a direct material effect on our financial statements. Under capital adequacy guidelines, we and Green Dot Bank must meet specific capital guidelines that involve quantitative measures of the assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.
The Basel III rules, which were promulgated by the Federal Reserve and other U.S. banking regulators, provide for risk-based capital, leverage and liquidity standards. Under the Basel III rules, we must maintain a ratio of common equity Tier 1 capital to risk-weighted assets of at least 4.5%, a ratio of Tier 1 capital to risk-weighted assets of at least 6%, a ratio of total capital to risk-weighted assets of at least 8% and a minimum Tier 1 leverage ratio of 4.0%. Either or both of Green Dot Corporation and Green Dot Bank may qualify for and opt to use, from time to time, the community bank leverage ratio framework under the Federal Reserve's version of the U.S. Basel III Rules. Under the community bank leverage ratio framework, a qualifying community banking organization may generally satisfy its capital requirements (and capital conservation buffer) under the U.S. Basel III rules provided that it has a Tier 1 leverage ratio greater than 9% and satisfies other applicable conditions. Green Dot Corporation and Green Dot Bank qualify for and opt into use of the community bank leverage ratio framework. We expect that Green Dot Corporation will continue to qualify for and use the community bank leverage ratio framework, and that Green Dot Bank will calculate and disclose its risk-based capital ratios and Tier 1 leverage ratio under standardized approach of the U.S. Basel III Rules.
As of December 31, 2025 and 2024, we and Green Dot Bank were categorized as "well-capitalized" under applicable regulatory standards. To be categorized as "well-capitalized," we and Green Dot Bank must maintain specific total risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set forth in the table below. There were no conditions or events since December 31, 2025 which management believes would have changed our category as "well-capitalized."
The definitions associated with the amounts and ratios below are as follows:
| Ratio | Definition | |||||||
|
Tier 1 leverage ratio
|
Tier 1 capital divided by average total assets
|
|||||||
|
Common equity Tier 1 capital ratio
|
Common equity Tier 1 capital divided by risk-weighted assets
|
|||||||
|
Tier 1 capital ratio
|
Tier 1 capital divided by risk-weighted assets
|
|||||||
|
Total risk-based capital ratio
|
Total capital divided by risk-weighted assets
|
|||||||
| Terms | Definition | |||||||
|
Tier 1 capital and Common equity Tier 1 capital |
Includes common stock and retained earnings, adjusted for items primarily related to accumulated OCI, goodwill, deferred tax assets and intangibles.
|
|||||||
|
Total capital
|
Tier 1 capital plus supplemental capital items such as the allowance for credit losses, subject to certain limits
|
|||||||
|
Average total assets
|
Average total consolidated assets during the period less deductions and adjustments primarily related to goodwill, deferred tax assets and intangibles assets
|
|||||||
|
Risk-weighted assets
|
Represents the amount of assets or exposure multiplied by the standardized risk weight (%) associated with that type of asset or exposure. The standardized risk weights are prescribed in the bank capital rules and reflect regulatory judgment regarding the riskiness of a type of asset or exposure
|
|||||||
The actual amounts and ratios, and required "well-capitalized" minimum capital amounts and ratios at December 31, 2025 and 2024, were as follows:
| December 31, 2025 | |||||||||||||||||||||||
| Amount | Ratio | Regulatory Minimum | "Well-capitalized" Minimum | ||||||||||||||||||||
| (In thousands, except ratios) | |||||||||||||||||||||||
| Green Dot Corporation: | |||||||||||||||||||||||
| Tier 1 leverage | $ | 653,063 | 11.9 | % | 4.0 | % | n/a | ||||||||||||||||
| Common equity Tier 1 capital | $ | 653,063 | 32.9 | % | 4.5 | % | n/a | ||||||||||||||||
| Tier 1 capital | $ | 653,063 | 32.9 | % | 6.0 | % | 6.0 | % | |||||||||||||||
| Total risk-based capital | $ | 677,794 | 34.1 | % | 8.0 | % | 10.0 | % | |||||||||||||||
| Green Dot Bank: | |||||||||||||||||||||||
| Tier 1 leverage | $ | 449,328 | 8.4 | % | 4.0 | % | 5.0 | % | |||||||||||||||
| Common equity Tier 1 capital | $ | 449,328 | 29.7 | % | 4.5 | % | 6.5 | % | |||||||||||||||
| Tier 1 capital | $ | 449,328 | 29.7 | % | 6.0 | % | 8.0 | % | |||||||||||||||
| Total risk-based capital | $ | 456,957 | 30.3 | % | 8.0 | % | 10.0 | % | |||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
| Amount | Ratio | Regulatory Minimum | "Well-capitalized" Minimum | ||||||||||||||||||||
| (In thousands, except ratios) | |||||||||||||||||||||||
| Green Dot Corporation: | |||||||||||||||||||||||
| Tier 1 leverage | $ | 760,571 | 15.0 | % | 4.0 | % | n/a | ||||||||||||||||
| Common equity Tier 1 capital | $ | 760,571 | 42.6 | % | 4.5 | % | n/a | ||||||||||||||||
| Tier 1 capital | $ | 760,571 | 42.6 | % | 6.0 | % | 6.0 | % | |||||||||||||||
| Total risk-based capital | $ | 782,207 | 43.8 | % | 8.0 | % | 10.0 | % | |||||||||||||||
| Green Dot Bank: | |||||||||||||||||||||||
| Tier 1 leverage | $ | 362,697 | 7.3 | % | 4.0 | % | 5.0 | % | |||||||||||||||
| Common equity Tier 1 capital | $ | 362,697 | 28.2 | % | 4.5 | % | 6.5 | % | |||||||||||||||
| Tier 1 capital | $ | 362,697 | 28.2 | % | 6.0 | % | 8.0 | % | |||||||||||||||
| Total risk-based capital | $ | 370,207 | 28.8 | % | 8.0 | % | 10.0 | % | |||||||||||||||
Liquidity and Capital Resources
The following table summarizes our major sources and uses of cash for the periods presented:
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (In thousands) | |||||||||||
| Total cash provided by (used in) | |||||||||||
| Operating activities | $ | 138,557 | $ | 81,383 | |||||||
| Investing activities | (450,533) | 81,402 | |||||||||
| Financing activities | 141,275 | 743,148 | |||||||||
| (Decrease) increase in unrestricted cash, cash equivalents and restricted cash | $ | (170,701) | $ | 905,933 | |||||||
During the years ended December 31, 2025 and 2024, we financed our operations primarily through our cash flows provided by operating activities and customer funds held on deposit, borrowings from our senior unsecured notes and, from time to time, our short-term working capital activities through our borrowings under our credit facility. As of December 31, 2025, our primary source of liquidity was unrestricted cash and cash equivalents totaling $1.4 billion. We also consider our $2.5 billion of investment securities available-for-sale to be highly-liquid instruments.
We use trend and variance analysis as well as our detailed budgets and forecasts to project future cash needs, making adjustments to the projections when needed. We believe that our current unrestricted cash and cash equivalents, cash flows from operations, borrowing capacity under our revolving line of credit, and net proceeds
from the issuance and sale of our senior unsecured notes will be sufficient to meet our working capital, capital expenditures, and any other capital needs for at least the next 12 months. We are currently not aware of any trends or demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in our liquidity increasing or decreasing in any material way that will impact our capital needs during or beyond the next 12 months. We continue to monitor the impact of material trends on our business to ensure our liquidity and capital resources remain appropriate throughout this period of uncertainty.
Cash Flows from Operating Activities
Our $138.6 million of net cash provided by operating activities during the year ended December 31, 2025 principally resulted from $98.9 million of net losses, adjusted for certain non-cash operating expenses of $258.5 million, and a decrease in net working capital assets and liabilities of $21.1 million.
Our $81.4 million of net cash provided by operating activities during the year ended December 31, 2024 principally resulted from $26.7 million of net loss, adjusted for certain non-cash operating expenses of $170.3 million, and a decrease in net working capital assets and liabilities of $62.2 million, which includes the payment of $44 million for the civil money penalty included in the Consent Order.
Cash Flows from Investing Activities
Our $450.5 million of net cash used in investing activities during the year ended December 31, 2025 primarily reflects purchases of our available-for-sale investment securities, net of proceeds from sales and maturities of $332.5 million, payments for property, equipment and internal-use software of $72.5 million, and net changes in loans of $43.2 million.
Our $81.4 million of net cash provided by investing activities during the year ended December 31, 2024 primarily reflects net proceeds from sales and maturities of our available-for-sale investment securities of $221.1 million, partially offset by payments for property, equipment and internal-use software of $74.3 million, net changes in loans of $27.9 million, and capital contributions related to our investment in TailFin of $35.0 million. Our final payment under our commitment with TailFin was made in January 2024.
Cash Flows from Financing Activities
Our $141.3 million of net cash provided by financing activities for the year ended December 31, 2025 was principally the result of a net increase in customer deposits of $404.8 million and the issuance and sale of our notes payable of $14.9 million, partially offset by a net decrease in settlement assets and obligations to customers of $278.5 million.
Our $743.1 million of net cash provided by financing activities for the year ended December 31, 2024 was principally the result of a net increase in customer deposits of $718.0 million, and a net increase in settlement assets and obligations to customers of $35.6 million. Refer to additional discussion below for our borrowings and repayments of debt.
Other Sources of Liquidity
Senior Unsecured Notes
In 2024 and 2025, we issued and sold senior unsecured notes (the "Notes") in an aggregate principal amount of $65 million. The Notes have a five-year term, maturing September 15, 2029. The principal amounts bear interest at a fixed rate of 8.75% per annum, payable semi-annually in arrears. The net proceeds of the offering were used to repay outstanding indebtedness under our revolving credit facility discussed below, and for general corporate purposes.
2025 Revolving Facility
In February 2025, we entered into a new revolving line of credit agreement (the "2025 Revolving Facility") with a financial institution up to a maximum principal amount of $20 million, subject to borrowing base limitations defined under the terms of the agreement. The 2025 Revolving Facility matures in August 2026 and will bear interest at variable market rates, but subject to a minimum rate of 6.0% per annum. Interest payments are due monthly, and accrue based on the then-outstanding principal balance. We had no outstanding balance as of December 31, 2025.
2019 Revolving Facility
In October 2019, we entered into a secured credit agreement with Wells Fargo Bank, National Association, and other lenders party thereto. The credit facility provided for a $100.0 million five-year revolving line of credit (the "2019 Revolving Facility"), which matured in October 2024. The proceeds of any borrowings under the 2019 Revolving Facility were used for working capital and other general corporate purposes, subject to the terms and
conditions set forth in the credit agreement. As of September 30, 2024, the then-outstanding balance on the 2019 Revolving Facility was repaid in full, and the 2019 Revolving Facility terminated at its maturity date.
Material Cash Requirements
While the overall macro-economic environment, the effect of high inflation and interest rates, and other factors described in "Outlook and Other Trends Affecting Our Business" above have created economic uncertainty and impacted how we manage our liquidity and capital resources, we intend to continue to invest in growth and cost efficiency initiatives in the normal course of business, subject to the consummation of the proposed transactions with CommerceOne and Smith Ventures. The amount and timing of these investments and the related cash outflows in future periods is difficult to predict and is dependent on a number of factors including the rate of change of computer hardware and software used in our business and our business outlook as a result of macro-economic uncertainties. We intend to continue to invest in new products and programs, new features for our existing products and IT infrastructure in order to scale and operate effectively to meet our strategic objectives. However, we expect our capital expenditures in 2026 to be lower compared to our annual investments in 2025. We expect to fund these capital expenditures primarily through our cash flows provided by operating activities.
We have used cash to acquire businesses and technologies and we anticipate that we may continue to do so in the future. The nature of these transactions, however, makes it difficult to predict the amount and timing of such cash requirements. Additionally, we have made and may further make periodic cash contributions to our subsidiary bank, Green Dot Bank, to maintain its capital, leverage and other financial commitments at levels we have agreed to with our regulators. We may need to increase the size of our cash contributions to Green Dot Bank to maintain its capital, leverage and other financial commitments.
Contractual Obligations
On January 2, 2020, we effectuated our agreement with Walmart to jointly establish a new fintech accelerator under the name TailFin, with a mission to develop innovative products, services and technologies that sit at the intersection of retail shopping and consumer financial services. We hold a 20% ownership interest in the entity, in exchange for annual capital contributions of $35.0 million per year from January 2020 through January 2024. Our final payment under this commitment was paid in January 2024. See Note 7-Equity Method Investmentto the Consolidated Financial Statements included herein for additional information.
Our remaining leases have terms between approximately 1 and 7 years, subject to renewal options of varying terms, and as of December 31, 2025, we had a total lease liability of $1.9 million. See Note 20-Leasesto the Consolidated Financial Statements included herein for additional information regarding our lease liabilities as of December 31, 2025.
In the normal course of business, we enter into various agreements with our vendors and retail distributors that may subject us to minimum annual requirements. While our contractual commitments will have an impact on our future liquidity, we believe that we will be able to adequately fulfill these obligations through cash generated from operations and from our existing cash balances.
Statistical Disclosure by Bank Holding Companies
The following section presents supplemental information for Bank Holding Companies. The tables in this section include Green Dot Bank information only.
Distribution of Assets, Liabilities and Stockholders' Equity
The following table presents average balance data and interest income and expense data for our banking operations, as well as the related interest yields and rates for the years ended December 31, 2025, 2024 and 2023:
| Year ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||
|
Average balance |
Interest income/ interest expense |
Yield/ rate |
Average balance |
Interest income/ interest expense |
Yield/ rate |
Average balance |
Interest income/ interest expense |
Yield/ rate |
|||||||||||||||||||||||||||||||||||||||||||||
| (In thousands, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loans (1) | $ | 30,464 | $ | 5,564 | 18.3 | % | $ | 37,193 | $ | 3,637 | 9.8 | % | $ | 23,801 | $ | 2,315 | 9.7 | % | |||||||||||||||||||||||||||||||||||
| Taxable investment securities | 2,237,366 | 49,725 | 2.2 | 2,483,386 | 46,593 | 1.9 | 2,671,049 | 49,920 | 1.9 | ||||||||||||||||||||||||||||||||||||||||||||
| Non-taxable investment securities | 28,638 | 782 | 2.7 | 29,229 | 806 | 2.8 | 29,491 | 814 | 2.8 | ||||||||||||||||||||||||||||||||||||||||||||
| Federal reserve stock | 6,660 | 489 | 7.3 | 5,337 | 353 | 6.6 | 7,794 | 345 | 4.4 | ||||||||||||||||||||||||||||||||||||||||||||
| Fee advances | 22,554 | 4,116 | 18.2 | 15,954 | 2,991 | 18.7 | 13,068 | 3,276 | 25.1 | ||||||||||||||||||||||||||||||||||||||||||||
| Cash | 1,798,936 | 84,667 | 4.7 | 1,243,275 | 69,283 | 5.6 | 548,044 | 29,981 | 5.5 | ||||||||||||||||||||||||||||||||||||||||||||
| Total interest-bearing assets | 4,124,618 | 145,343 | 3.5 | % | 3,814,374 | 123,663 | 3.2 | % | 3,293,247 | 86,651 | 2.6 | % | |||||||||||||||||||||||||||||||||||||||||
| Non-interest bearing assets | 856,150 | 459,564 | 311,643 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 4,980,768 | $ | 4,273,938 | $ | 3,604,890 | |||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Checking accounts | $ | 119,516 | $ | 5,196 | 4.3 | % | $ | 66,106 | $ | 4,387 | 6.6 | % | $ | 1,461 | $ | 7 | 0.5 | % | |||||||||||||||||||||||||||||||||||
| Savings deposits | 19,328 | 11 | 0.1 | 21,726 | 12 | 0.1 | 23,945 | 15 | 0.1 | ||||||||||||||||||||||||||||||||||||||||||||
| Time deposits, denominations greater than or equal to $250 | 2,934 | 102 | 3.5 | 1,640 | 54 | 3.3 | 1,320 | 26 | 2.0 | ||||||||||||||||||||||||||||||||||||||||||||
| Time deposits, denominations less than $250 | 2,818 | 71 | 2.5 | 4,258 | 110 | 2.6 | 3,599 | 56 | 1.6 | ||||||||||||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 144,596 | 5,380 | 3.7 | % | 93,730 | 4,563 | 4.9 | % | 30,325 | 104 | 0.3 | % | |||||||||||||||||||||||||||||||||||||||||
| Non-interest bearing liabilities | 4,631,025 | 4,062,691 | 3,495,342 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities | 4,775,621 | 4,156,421 | 3,525,667 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total stockholders' equity | 205,147 | 117,517 | 79,223 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 4,980,768 | $ | 4,273,938 | $ | 3,604,890 | |||||||||||||||||||||||||||||||||||||||||||||||
| Net interest income/yield on earning assets | $ | 139,963 | (0.2) | % | $ | 119,100 | (1.7) | % | $ | 86,547 | 2.3 | % | |||||||||||||||||||||||||||||||||||||||||
___________
(1)Non-performing loans are included in the respective average loan balances. Income, if any, on such loans is recognized on a cash basis.
The following table presents the amount of changes in interest income and interest expense due to changes in both average volume and average rate for the years ended:
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||
| Total Change in Interest Income/ Expense | Change Due to Rate (1) | Change Due to Volume (1) | Total Change in Interest Income/ Expense | Change Due to Rate (1) | Change Due to Volume (1) | ||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||||||
| Interest-earning assets | |||||||||||||||||||||||||||||||||||
| Loans | $ | 1,927 | $ | 2,435 | $ | (508) | $ | 1,322 | $ | 12 | $ | 1,310 | |||||||||||||||||||||||
| Taxable investment securities | 3,132 | 6,761 | (3,629) | (3,327) | 195 | (3,522) | |||||||||||||||||||||||||||||
| Non-taxable investment securities | (24) | (8) | (16) | (8) | (1) | (7) | |||||||||||||||||||||||||||||
| Federal reserve stock | 136 | 42 | 94 | 8 | 22 | (14) | |||||||||||||||||||||||||||||
| Fee advances | 1,125 | (77) | 1,202 | (285) | (2,295) | 2,010 | |||||||||||||||||||||||||||||
| Cash | 15,384 | (8,202) | 23,586 | 39,302 | 570 | 38,732 | |||||||||||||||||||||||||||||
| Change in interest income | $ | 21,680 | $ | 951 | $ | 20,729 | $ | 37,012 | $ | (1,497) | $ | 38,509 | |||||||||||||||||||||||
| Interest-bearing liabilities | |||||||||||||||||||||||||||||||||||
| Checking accounts | $ | 809 | $ | (599) | $ | 1,408 | $ | 4,380 | $ | 68 | $ | 4,312 | |||||||||||||||||||||||
| Savings deposits | (1) | - | (1) | (3) | (2) | (1) | |||||||||||||||||||||||||||||
| Time deposits, denominations greater than or equal to $250 | 48 | 3 | 45 | 28 | 21 | 7 | |||||||||||||||||||||||||||||
| Time deposits, denominations less than $250 | (39) | (3) | (36) | 54 | 42 | 12 | |||||||||||||||||||||||||||||
| Change in interest expense | 817 | (599) | 1,416 | 4,459 | 129 | 4,330 | |||||||||||||||||||||||||||||
| Change in net interest income and expense | $ | 20,863 | $ | 1,550 | $ | 19,313 | $ | 32,553 | $ | (1,626) | $ | 34,179 | |||||||||||||||||||||||
___________
(1)The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns.
Maturities and Sensitivities to Changes in Interest Rates
The following table presents contractual maturities of loans by type. All of our loans due after one year are based upon fixed interest rates under the stated terms of the loan agreements:
| Due in one year or less | Due after one year through five years | Due after five years through fifteen years | Due after fifteen years | Total | |||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||
| Residential | $ | 157 | $ | 906 | $ | 6,670 | $ | - | $ | 7,733 | |||||||||||||||||||
| Commercial | 22,497 | 191 | - | - | 22,688 | ||||||||||||||||||||||||
| Installment | 315 | 1,833 | 3,668 | - | 5,816 | ||||||||||||||||||||||||
| Consumer | 29,901 | - | - | - | 29,901 | ||||||||||||||||||||||||
| Secured credit card | 10,615 | - | - | - | 10,615 | ||||||||||||||||||||||||
| Total fixed-income securities | $ | 63,485 | $ | 2,930 | $ | 10,338 | $ | - | $ | 76,753 | |||||||||||||||||||
Allocation of Reserve of Credit Losses
The following table shows the reserve for credit losses allocated to each loan category:
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||
| Amount | Percent of loans in each category to total loans | Amount | Percent of loans in each category to total loans | ||||||||||||||||||||
| (In thousands, except percentages) | |||||||||||||||||||||||
| Residential | $ | 89 | 0.4 | % | $ | 83 | 0.5 | % | |||||||||||||||
| Commercial | 29 | 0.1 | 38 | 0.2 | |||||||||||||||||||
| Installment | 63 | 0.3 | 59 | 0.3 | |||||||||||||||||||
| Consumer | 19,989 | 94.9 | 16,161 | 92.1 | |||||||||||||||||||
| Secured credit card | 883 | 4.3 | 1,201 | 6.9 | |||||||||||||||||||
| Total | $ | 21,053 | 100.0 | % | $ | 17,542 | 100.0 | % | |||||||||||||||
Deposits
The following table shows Green Dot Bank's average deposits and the annualized average rate paid on those deposits for the years ended December 31, 2025, 2024, and 2023:
| December 31, 2025 | December 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||||||||||
| Average Balance | Weighted-Average Rate | Average Balance | Weighted-Average Rate | Average Balance | Weighted-Average Rate | ||||||||||||||||||||||||||||||
| (In thousands, except percentages) | |||||||||||||||||||||||||||||||||||
| Interest-bearing deposit accounts | |||||||||||||||||||||||||||||||||||
| Checking accounts | $ | 119,516 | 4.3 | % | $ | 66,106 | 6.6 | % | $ | 1,461 | 0.5 | % | |||||||||||||||||||||||
| Savings deposits | 19,328 | 0.1 | 21,726 | 0.1 | 23,945 | 0.1 | |||||||||||||||||||||||||||||
| Time deposits, denominations greater than or equal to $250 | 2,934 | 3.5 | 1,640 | 3.3 | 1,320 | 2.0 | |||||||||||||||||||||||||||||
| Time deposits, denominations less than $250 | 2,818 | 2.5 | 4,258 | 2.6 | 3,599 | 1.6 | |||||||||||||||||||||||||||||
| Total interest-bearing deposit accounts | 144,596 | 3.7 | % | 93,730 | 4.9 | % | 30,325 | 0.3 | % | ||||||||||||||||||||||||||
| Non-interest bearing deposit accounts | 4,218,332 | 3,746,910 | 3,220,323 | ||||||||||||||||||||||||||||||||
| Total deposits | $ | 4,362,928 | $ | 3,840,640 | $ | 3,250,648 | |||||||||||||||||||||||||||||
Our aggregate deposits in denominations that met or exceeded FDIC limits were approximately $257 million, $116 million and $228 million as of December 31, 2025, 2024 and 2023, respectively. Our time deposits portfolio in excess of FDIC limits is not material at December 31, 2025.
Key Financial and Credit Ratios
The following tables show certain of Green Dot Bank's key financial and credit ratios for the years ended December 31, 2025, 2024, and 2023:
| December 31, 2025 | December 31, 2024 | December 31, 2023 | |||||||||||||||
| Net return on assets | 1.2 | % | 1.3 | % | 2.3 | % | |||||||||||
| Net return on equity | 29.7 | 48.7 | 104.2 | ||||||||||||||
| Equity to assets ratio | 4.1 | 2.7 | 2.2 | ||||||||||||||
| Allowance for credit losses to total loans outstanding | 27.4 | 35.4 | 27.2 | ||||||||||||||
| Nonaccrual loans to total loans outstanding | 2.4 | 5.1 | 6.1 | ||||||||||||||
| Allowance for credit losses to nonaccrual loans | 1,147.3 | 691.7 | 442.1 | ||||||||||||||
| December 31, 2025 | December 31, 2024 | December 31, 2023 | |||||||||||||||
| Net charge-offs during the period to average loans outstanding: | (In thousands) | ||||||||||||||||
| Consumer | |||||||||||||||||
| Net charge-off during the period | $ | 16,571 | $ | 17,222 | $ | 20,111 | |||||||||||
| Average amount outstanding | 9,585 | 9,718 | 10,036 | ||||||||||||||
| Secured credit card | |||||||||||||||||
| Net charge-off during the period | 3,368 | 4,181 | 3,895 | ||||||||||||||
| Average amount outstanding | 11,174 | 13,302 | 12,398 | ||||||||||||||
Green Dot Corporation published this content on March 16, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on March 16, 2026 at 21:20 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]