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Green Dot announced Thursday that its revenue and net income rose in the third quarter as the firm found ways to earn more money from its base of 4.6 million active prepaid cards.
October 30 -
Wal-Mart Stores Inc.'s deal to distribute Green Dot Corp.'s mobile checking account, GoBank, signals a fundamental change in how both companies approach their audience.
September 24 -
The purchase of Santa Barbara Tax Products Group is the latest move by the prepaid card pioneer designed to lessen its dependence on retail giant Wal-Mart.
September 18
Green Dot Corp. announced Monday that it will continue to sell its prepaid cards in Wal-Mart stores, which are easily its largest distribution channel, through the end of 2015.
Wal-Mart accounted for 52% of Pasadena, Calif.-based Green Dot's revenue in the third quarter. That outsized reliance on a single retailer made the status of the Wal-Mart contract renewal a major question mark for Green Dot.
Larry Berlin, an analyst at First Analysis, said Monday that the one-year contract extension suggests that the two companies are still negotiating over a multiyear deal.
"It's great to see that they're negotiating. And I think this is a sign that they will eventually reach a full contract. But because they didn't, some uncertainty over the stock remains," Berlin said.
Earlier this fall, Green Dot announced plans to distribute its mobile checking account, GoBank, at Wal-Mart, in a move that deepened the ties between the two companies.
Still, Green Dot, which used to have an exclusive deal with Wal-Mart, currently faces competition in the aisles in the Bentonville, Ark.-based retailer. Also selling prepaid cards at Wal-Mart are American Express and NetSpend, which is a division of Total System Services.
Analysts who cover Green Dot have generally assumed that Green Dot and Wal-Mart will eventually agree to extend their prepaid card relationship, though they have raised questions about whether the economic terms of such a deal will be favorable to Green Dot.
Besides the one-year extension, "all other terms and conditions" of the contract "remain in full force and effect," Green Dot stated Monday in a securities filing.
During quarterly conference calls with analysts, Green Dot Chief Executive Officer Steve Streit routinely fields questions from analysts about the Wal-Mart negotiations.
"We have a tremendous number of employees who work on the Wal-Mart account," Streit told analysts in September. "So we certainly hope that our chances are good for winning a renewal. We never count our chickens."
