Green Dot Corporation · NYSE:GDOT
Green Dot — Investor Presentation (February 2012)
31 slides from Green Dot's investor presentation, Feb 14, 2012
Slide 1: Green Dot Corporation Investor Presentation First Quarter 2012
Green Dot Corporation Investor Presentation First Quarter 2012
Slide 2: Non-GAAP Financial Measures and Forward-Looking Statements
Non-GAAP Financial Measures During this presentation, references to financial measures of Green Dot Corporation will include references to non-GAAP financial measures. For an explanation to the most directly comparable GAAP financial measures, see the Appendix to these materials or the Supplemental
Slide 3: Green Dot Overview
reen Green Dot Overview
Slide 4: Green Dot at a glance
Green Dot at a glance Prepaid innovator identified need Leading reload network Proprietary technology Identified need for payment card products and financial services solutions for the underbanked First to develop nationwide sales program for general purpose reloadable (GPR) prepaid cards at retail
Slide 5: Green Dot's Mission
Green Dot's Mission Convenience Access Value Help people manage their money much better for much less Green Dot active cardholders pay <$7/month in total fees Banked households pay ~$18/month in overdraft fees alone, on average 1 Provide mass access to simple, inexpensive, low-hassle financial produ
Slide 6: Green Dot serves a large and growing base of customers
Know the Banking System Have Meaningful Income Have Been Verified Most have used a traditional bank in the past About half still hold a traditional bank savings or checking account Typically earn $15-75K annually Most are ages 25-45; Slightly more female 65% Caucasian, 20% African American, 10% Hisp
Slide 7: Investment highlights
Investment highlights Very large addressable market early in its adoption cycle Recognized leadership in the GPR prepaid market Disruptive technology and offering to traditional banking model Vertically integrated model with powerful network effects Barriers to entry around brand, compliance, distri
Slide 8: Large Addressable Market Opportunity
Large Addressable Market Opportunity Never Banked Previously Banked Under-Banked Banked Total Definition Approximate Size (M) Addressable Portion Addressable (%) Addressable (M) No one in household has or ever has had a checking or savings account No one in household has checking or savings account
Slide 9: Our Top Shelf GPR Product Suite
Our Top Shelf GPR Product Suite Reloadable Prepaid Cards Network-branded debit cards linked to an FDIC-insured transactional account MoneyPak Acts as a “deposit slip” enabling the loading of cash for a variety of uses, pre paid and beyond GDOT provides easy to use, low cost and integrated financial
Slide 10: Our Retail-Centric Distribution Model
Our Retail-Centric Distribution Model… Discount Convenience Grocery Drug Partners Emerging Online Payroll Gov’t Bank Affinity Green Dot sells basic financial products alongside other household necessities at retail locations
Slide 11: Superior to any Money Center Bank
… is Superior to any Money Center Bank 59,000 retail outlets 22,000 ATMs Green Dot’s retail distribution reaches 94% of Americans* * Based on a Scarborough research survey conducted between February 2009 and March 2010 Note: Bank of America and Chase retail outlets and ATMs are as of December 2010;
Slide 12: Walmart Relationship at a Glance
Walmart Relationship at a Glance Exclusive partner to Walmart since 2006 >2 million active WMT MoneyCards Under contract through May 2015 Third long-term contract executed together Highly customized and integrated private label program with a large cardholder base Helps Green Dot maintain its strong
Slide 13: Green Dot Network is Key Differentiator
Green Dot Network is Key Differentiator Load Funds onto Cards Transfer Funds Emerging Uses Use Cash at ~59,000 Retail Locations to… Green Dot cards Competitors’ cards Other networks PayPal First Data ADP Future applications Bill Pay Mobile Payments Green Dot is the leading proprietary reload network
Slide 14: Business Model Displays Powerful Network Effects
Business Model Displays Powerful Network Effects The more MoneyPaks we sell The more retailers we add The more card holders we acquire The more network partners we sign on As our network grows larger, we create an even deeper moat
Slide 15: How Does Green Dot... It's our proprietary technology
How Does Green Dot… Have ~59,000 “service locations”? Issue millions of accounts and take billions of deposits? Offer one of the largest nationwide surcharge-free ATM networks? Allow its customers to pay bills and send money without having to print or mail a single check? Offer low-priced banking se
Slide 16: Proprietary Green PlaNET Processing Platform
Proprietary Green PlaNET Processing Platform Distribution Retail locations Online Acquisition 3 rd Party Resellers Customer In Package Encoding Logistic and Distribution POS Integration Enrollment Process Financial Settlement Money In Direct Deposit Cash Deposit ACH Checks MoneyPak Gateway Connectiv
Slide 17: Green Dot's Vertical Integration
Green Dot’s Vertical Integration Allows it to… Card Issuing Card Processing Program Management Distribution Reload Network Innovate and launch new and upgraded products rapidly Integrate new network participants quickly Mitigate risk (vendor, regulatory and legislative) effectively Operate efficient
Slide 18: Green Dot is a Leader in...
Green Dot is a Leader in… Distribution Network Scale Brand Proprietary Technology Regulatory Compliance Green Dot Has ... 59,000 retail locations reaching 94% of Americans Leading proprietary reload network More than 4mm active accounts Most- highly recognized GPR card brand Green PlaNET platform Gr
Slide 19: Driving Robust Organic Growth
Driving Robust Organic Growth Strong Secular Trends More Distribution New Products More Usage Acquisitions Shift from cash to debit Credit is disfavored; “Pay Now” is in favor Dissatisfaction with banks Increase penetration New partnerships New channels(online, government, payroll) New bank-issued p
Slide 20: Financial Summary
reen Financial Summary
Slide 21: Financial Highlights
Financial Highlights High Growth Stable and Predictable Strong Operating Leverage Low Capital Intensity Strong secular growth dynamics (card +9%, cash/checks flat) 1 Leadership position with low penetration Network-effect business model Strong top-line visibility Long-term contracts w/ national dist
Slide 22: Share of Operating Metrics from Intuit
Share of Operating Metrics from Intuit Intuit had the greatest impact during Q1 GDV New Cards Activated Active Cards Cash Transfers Applied
Slide 23: Customer Acquisition
Customer Acquisition New Cards Activated Active Cards Strong growth in new card activations is important factor driving rapid growth of our active card portfolio Note: Numbers for calendar years ended December 31; CAGR data from 2006 to 2011 for New Cards Activated,; GAGR data from 2005 to 2011 for
Slide 24: Transactional Volume
Transactional Volume Gross Dollar Volume (GDV) Cash Transfers New and existing customers are using our cards and services more frequently Note: Numbers for calendar years ended December 31; CAGR data from 2006 to 2011
Slide 25: Strong Revenue Growth
Strong Revenue Growth Non-GAAP Total Operating Revenues Non-GAAP Total Operating Revenues Breakdown Robust top-line growth has been driven organically 1 Adds back stock-based retailer incentive compensation Note: Numbers for calendar years ended December 31; reconciliation for adjustments can be fou
Slide 26: Adjusted EBITDA and Margin
Adjusted EBITDA and Margin Inherent scalability readily apparent after lapping Walmart renewal 1 Adds back stock-based compensation expense and stock-based retailer incentive compensation 2 Represents adjusted EBITDA divided by non-GAAP total operating revenues 3 Margin lower in 2010 due to revised
Slide 27: Low Capital Intensity and Strong Cash Flow
Low Capital Intensity and Strong Cash Flow Capex / Total Operating Revenues Cash Flows From Operations Less Capex Green Dot’s business model is capital efficient and generates strong free cash flows
Slide 28: Investment Highlights
Investment Highlights Very large addressable market early in its adoption cycle Recognized leadership in the GPR prepaid market Disruptive technology and offering to traditional banking model Vertically integrated model with powerful network effects Barriers to entry around brand, compliance, distri
Slide 29: Appendix
reen Appendix
Slide 30: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures
Slide 31: Investor Relations Contact
Investor Relations Contact Chris Mammone 626.775.1742 cmammone@greendot.com