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Green Dot (GDOT) Stock Down 16.2% Despite Q2 Earnings Beat

Green Dot Corporation GDOT delivered mixed second-quarter 2022 results, wherein earnings beat estimates but revenues missed the same. GDOT did not raise its revenue guidance despite strong demand for financial transaction services. This might have displeased investors as the stock has plunged 16.2% since the earnings release on Aug 4.

Quarterly earnings (excluding 47 cents from non-recurring items) of 74 cents per share beat the consensus estimate by 42.3% and increased 8.8%% on a year-over-year basis. Non-GAAP operating revenues of $355.1 million missed the consensus mark by 1% but decreased 3.9% year over year.

Segmental Revenues

The Consumer Services segment’s revenues came in at $151 million, down 17% from the year-ago quarter’s level.

The B2B Services segment’s revenues of $143.5 million increased 27.4% year over year.

Green Dot Corporation Price, Consensus and EPS Surprise

Green Dot Corporation price-consensus-eps-surprise-chart | Green Dot Corporation Quote

Money Movement Services segment’s revenues were down 18% year over year to $54 million.

Key Metrics

Gross dollar volume decreased marginally year over year to $17.4 billion. Purchase volume fell 23.6% from the prior-year quarter’s level to $6.8 billion. GDOT ended the quarter with 4.61 million active accounts, down 23.5% year over year.

Operating Results

Adjusted EBITDA of $67.5 million rose 7.3% on a year-over-year basis. Adjusted EBITDA margin of 19% was up from the year-ago quarter’s level of 17.6%.

Balance Sheet

Green Dot exited the second quarter with unrestricted cash and cash equivalents balance of $776.3 million compared to $1.32 billion reported at the end of the prior quarter. GDOT had no long-term debt. GDOT generated $71.8 million cash from operating activities, while capex was $17.5 million.

Currently, Green Dot sports a Zacks Rank #1 (Strong Buy). You can see _1link">the complete list of today’s Zacks #1 Rank stocks here.

2022 Guidance

Green Dot expects full-year non-GAAP earnings per share (EPS) between $2.35 and $2.49 (prior view: $2.32 and $2.46). The midpoint of the guidance ($2.42) is below the current Zacks Consensus Estimate of $2.48.

Full-year non-GAAP total operating revenues are expected between $1.394 billion and $1.43 billion. The midpoint ($1.412) of the guided range is above the Zacks Consensus Estimate of $1.41 billion.

Adjusted EBITDA is expected in the band of $230-$240 million (prior view: $225-$235 million).

Recent Performances of Some Other Business Services Companies

Equifax EFX reported mixed second-quarter 2022 results, wherein earnings beat estimates but revenues missed the same.

EFX’s adjusted earnings of $2.09 per share beat the Zacks Consensus Estimate by 3% and improved 5.6% on a year-over-year basis. Revenues of $1.32 billion missed the consensus estimate marginally but improved 6.6% year over year.

IQVIA Holdings IQV reported solid second-quarter 2022 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.

IQV’s adjusted earnings per share of $2.44 beat the consensus mark by 2.1% and improved 15% on a year-over-year basis. Total revenues of $3.54 billion outpaced the consensus estimate by 1.2% and increased 3% year over year.

Omnicom Group OMC reported impressive second-quarter 2022 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.

OMC’s earnings of $1.68 per share beat the consensus mark by 7.7% and increased 15.1% year over year, driven by a strong margin performance. Total revenues of $3.6 billion surpassed the consensus estimate by 4.4% but declined slightly year over year.

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