GDOT

Green Dot's FY2025 reveals a deeply troubled operating model masquerading as a growth story. Revenue grew 19.8% to $1.99B, but this top-line acceleration came at a brutal cost: net income collapsed from -$26.7M to -$98.9M, a 270% deterioration, and the company has now posted two consecutive years of losses after producing roughly $50-65M in net income from FY2021-2022. The MD&A makes the mechanics painfully clear — card revenues and other fees jumped 27% to $1.57B driven by BaaS partner growth, but processing expenses ballooned 39% (+$343M) to $1.23B, now consuming 59.1% of revenue vs. 51.5% the prior year. This is the classic 'banking-as-a-service' margin problem: GDOT is essentially a low-margin rails provider for its BaaS partners, where every dollar of incremental partner volume drags nearly as much processing cost with it.

The underlying business is also showing structural decay in its legacy Consumer Services segment — the MD&A explicitly cites a 'decline in the number of active accounts,' falling accountholder fees, lower breakage on a discontinued gift card program, an 8% drop in cash transfers, a 4% decrease in purchase volume, and a 13% decline in tax refunds processed. Interchange revenue fell 7%. So the headline growth is one-segment-deep (BaaS), while two of three legacy revenue lines are shrinking, and even the growing line is unprofitable at the margin. Restructuring charges of $22.1M and the closure of China operations confirm management is cutting, not investing for growth.