Good afternoon, and welcome to the Green Dot Corporation Second Quarter 2016 Earnings Conference Call. All participants will be in a listen-only mode today. After today's presentation, there will be an opportunity to ask questions . Please note this event is been recorded. I would now like to turn the conference over to Dara Dierks. Please go ahead.

Thank you, and good afternoon, everyone. On today's call, we will discuss 2016 second quarter performance and thoughts about the remainder of the year. Following these remarks, we will open the call for questions. For those of you who've not yet accessed the earnings press release that accompanies this call and webcast it can be found at ir.greendot.com. Additional operational data has been provided in the supplemental table within our press release. As a reminder, our comments include forward-looking statements about, among other things, our expectations regarding future results and performance. Please refer to the cautionary language in the earnings release and in Green Dot's filings with the Securities and Exchange Commission, including the most recent Form 10-K that we filed on February 29, 2016, for additional information concerning factors that could cause actual results to differ materially from the forward-looking statements. During the call, we will make reference to financial measures that do not conform to Generally Accepted Accounting Principles. For the sake of clarity, unless otherwise noted, all numbers we talk about today, including the revenue per active card will be on a non-GAAP basis. The information may be calculated differently than similar non-GAAP data presented by other companies. Quantitative reconciliations of our non-GAAP financial information to the most directly comparable GAAP financial information appears in today's press release. The content of this call is property of the Green Dot Corporation, and is subject to copyright protection. Now, I'd like to turn the call over to Steve. Steven W. Streit - Chairman, President & Chief Executive Officer: Thank you, Dara, and welcome, everyone, to our second quarter earnings call. I'm pleased to report that Q2 was another strong quarter for Green Dot, delivering results ahead of our expectations on both the top- and bottom-line. Total GAAP operating revenue…

Thanks, Steve. I'd like to start by providing some insight into our strong performance in the quarter on the top- and bottom-line, followed by commentary on our two business segments and how they each contributed to our results. Based on another quarter where we exceeded our expectations, I'm pleased to be able to announce another modest top-line guidance raise for the full year and will provide those details along with our soft guidance for Q3 later in my prepared remarks. First, I'm pleased to report that we delivered $173.5 million in total operating revenue, representing a year-over-year increase of approximately 2%. Recall that due to MoneyPak discontinuation in early 2015 and the negative impact it had to active cards and associated revenue over the course of the year, we started this year with an approximate $35 million headwind that we would need to grow past just to break even in 2016 on a year-over-year basis. So the fact that we grew in absolute terms in the quarter shows our growth plans are working as expected and actually a little bit better than expected. Revenue growth came from all of our product lines including prepaid cards, GoBank accounts, cash transfers, and our tax refund processing business TPG. In our Account Services segment, we saw a year-over-year increase in revenue per actives of 13% driven by strong performance on our legacy portfolio plus better unit economics on our new products. In addition, in our Processing and Settlement segment, revenue per cash transfer increased 4%. Revenue per reload continues to grow for two reasons. First, we no longer offer free reloads on our new suite of products. And second, the new MoneyPak sells for $1 more than the old MoneyPak had, as the concentration of our portfolio receiving free reloads declines. And as…

Thank you. Our first question comes from Ramsey El-Assal of Jefferies. Please go ahead.

Hi, guys. This is Christen Chen for Ramsey. Thanks for taking my question. Steven W. Streit - Chairman, President & Chief Executive Officer: Sure. Hi, Christen.

Hi. Can you provide some more color on the Q3 and Q4 guidance – cadence especially on the bottom-line, it seems like that Q3 EPS guide was somewhat shy of our model, but the full year is still the same. Is there just some puts and takes there that we should be thinking about? Thanks.

Yeah. Look, you're absolutely right, on a full year basis, we're coming out to where we were going to come out before but we've accelerated some of that beat into Q2 and then we didn't raise on the bottom-line for the rest of year. So what you have is pretty much the same full year result that we previously had. Steven W. Streit - Chairman, President & Chief Executive Officer: Maybe we don't, Christen, understand specifically the question.

I guess – so the guide implies fee for acceleration into Q4. I know you had called out in the prepared remarks that there was a delay of initiative, a launch initiative from Q3 to Q4, but is there anything else we should be thinking about? I mean, we initially thought maybe this was related to the MasterCard processing migration, if there's going to be incremental expenses, but it seems like MasterCard has already gotten that taken care of and will be reimbursed. So, I guess, we're just wondering if there's something kind of the Q4 or Q3 migration that we should... Steven W. Streit - Chairman, President & Chief Executive Officer: No, we don't think so, but maybe what we can do, Christen, is we're looking at the face of Chief Accounting Officer, notice in the room, who is sort of a little bit puzzled. And maybe when we do the one-on-ones, after we can better understand the nature of the disconnect and try to answer it mathematically, but there's nothing unusual coming up in the room, so I am not sure we know how to answer it.

Okay, okay, sure. Thank you, fair enough. Steven W. Streit - Chairman, President & Chief Executive Officer: Sorry about that.

No problem. Steven W. Streit - Chairman, President & Chief Executive Officer: Okay.

Our next question comes from Sanjay Sakhrani from KBW. Please go ahead. Tai DiMaio - Keefe, Bruyette & Woods, Inc.: Hi, this is actually Tai DiMaio in for Sanjay. Thanks for talking my question. Steven W. Streit - Chairman, President & Chief Executive Officer: No worries. Tai DiMaio - Keefe, Bruyette & Woods, Inc.: I guess my question is a little bit more strategic, I mean, given where we are in the competitive cycle, you've seen a lot of the large individuals exit. I mean how do you think about your pricing on legacy accounts, given that you're getting much higher per unit economics on the new accounts. Do you have the ability to price them up – would you – I mean how do you think about that? Steven W. Streit - Chairman, President & Chief Executive Officer: Yeah, well, so we did in some cases. For the Green Dot portfolio, we did a modest, what's called, the Change in Terms, where we raised the monthly maintenance fee to match the new monthly maintenance fee on our new products that are sold. So we were at $5.95 and we went to $7.95 and we did that fairly recently. Was that at the end of 2015? We forget the dates. Remember we talked about it at that time. And so, it doesn't generate a tremendous amount of money because the cards don't have very long lives as you know. But it does help somewhat and it helps normalize the difference between a new card and an old card in that respect. So we did do that – we did not to do it on our other portfolios for various reasons. But, I also want to be clear that it isn't just that we're getting better economics on the new cards,…

Our next question comes from Vasu Govil of Morgan Stanley. Please go ahead. Vasu Govil - Morgan Stanley & Co. LLC: Hi, thanks for taking my question. I quickly wanted to ask about the active cards which were down 11% year-on-year and I think even on a q-on-q basis, the decline seemed higher than in last years from 1Q to 2Q. I'm guessing we've mostly – we are mostly done recycling the impact of the discontinued MoneyPak products, but can you sort of elaborate on what was going on and what we should expect in the back half for active cards? Steven W. Streit - Chairman, President & Chief Executive Officer: Sure. Well – so the first question is the decline is – in our view, the results of the MoneyPak removal back in 2015, you could just see if you remember that painful period of time, we removed the product at the end of January, some stragglers where there till the middle of February, but essential it was gone in January. And then starting at about March or April, you just saw the decline in new card sales come down which predicates a decline in active cards. And then you have fewer people who were buying the card – for MoneyCard, buying cards, which also generates a decline in active cards. So the 0.5 million of decline year-over-year is – the MoneyPak decline I believe is more than, but you have offsetting impacts. You have the MoneyPak users going away, but then you also have other people who are retaining longer, right, which helps to build your active card. So you have some portions of your portfolio increasing in actives. You have the lower revenue generating guys, thankfully decreasing in activity and active cards and the net is 500,000…

Our next question comes from George Mihalos of Cowen. Please go ahead. George Mihalos - Cowen & Co. LLC: Great. Thanks, guys. Just wanted to delve a little bit more into the guidance – maybe you can breakdown the reasons for keeping the EBITDA guidance where it is, given the outperformance in 2Q and then the revenue outperformance that we're seeing. It doesn't really sound like it has that much to do with the card migrations. So maybe you can help us there a little bit.

Sure, George. Look, our beat in the quarter was $6 million, but we believe we're going to have revenue headwinds in the second half associated with the new initiatives and we believe they will now deliver about $3 million less than we had planned. So we think that $6 million is really just a net beat of $3 million and that's why we took up our guidance to that extent on revenue. On adjusted EBITDA, we beat by $4 million and we think there is about a $2 million bottom-line headwind from the slow start that we have on Green Dot Money and the delay in the new program launch. And so, we think there is around $2 million also of potential headwinds from the processor conversion event. So, as a consequence, when you put that all together, we raised revenue $3 million and we're holding EBITDA and EPS flat. Steven W. Streit - Chairman, President & Chief Executive Officer: To us, it's just a mathematical equation. In other words, when we do the buildup, we're looking at who are the good guys and we take the good guys and then we see are there are any bad guys lurking in the dark shadows in the second half, and we subtract out the bad guys. And so that's the number you come up with. Could we be more aggressive based on our trends in our active card portfolio? Probably. Should we be more aggressive in our trends? Probably not. And that's what I meant earlier by aging. We only have 1.5 cohorts of 90-day cohorts, that's a pretty limited data set to play with guidance. And so we want to be thoughtful and conservative and we do know, as Mark said, we have anywhere from a $2 million to $4 million headwind on adjusted EBITDA because of the processor thing and the slower start to those initiatives. So, mathematically, it makes sense to hold steady. And, look, in the old days, would we have been more exuberant? Maybe. I think it's fair to say that we're increasingly more thoughtful and conservative as we try to view our guidance which doesn't mean we can't miss it. So who knows? But we always try to guide where we believe we can meet it at the very least. George Mihalos - Cowen & Co. LLC: Okay. Appreciate that. And if you guys can provide the percentage of revenue coming from your largest customer, Walmart, this quarter? Steven W. Streit - Chairman, President & Chief Executive Officer: Total revenue? Yes.

I think the concentration this quarter is 46%. Steven W. Streit - Chairman, President & Chief Executive Officer: Yeah. We want to remind you of something, though, because it's easy to get confused. So in the old days – in the olden days, we used to give the concentration just of the Walmart MoneyCard portfolio, just that one portfolio, remember we saw a lot of things at Walmart. That's just one part of it as the Walmart MoneyCard portfolio. And that one portfolio was 50%, 60%-some-odd of our revenue for the whole company. This new number of 46% is everything we sell at Walmart, the Walmart MoneyCard, gift cards, the Green Dot Everyday Visa product, GoBank, reloads, so it's a – so the number is still lower than what used to be at 46%, but it includes everything we sell whereas in the old days it was only the Walmart MoneyCard portfolio. George Mihalos - Cowen & Co. LLC: Thanks. Steven W. Streit - Chairman, President & Chief Executive Officer: Yep, you bet.

Our next question comes from Ashwin Shirvaikar of Citibank. Please go ahead. Steven W. Streit - Chairman, President & Chief Executive Officer: Hi, Ashwin, good to hear from you.

Hi, thank you for all the detail you guys are providing here. I wanted to delve a little bit deeper into the aging cohort comment that you had – you had basically now – as you said, maybe 1.5, 90-day periods. But you are beginning to see – possibly more attractive new consumer come in. And I wanted to get an idea of how long it might take to – not to complete the transition, but to reach something of a tipping point where you got sort of a sweet spot of enough good guys coming in that it offsets the downward pressure that might see on the other side. Steven W. Streit - Chairman, President & Chief Executive Officer: Yeah. If you think about portfolio, let me think of an imagery here. I was trying to think of a softball, let's use a softball. I'm trying to think an analogy we'd all think about. And you have sort of the soft outer and then it gets a little bit more firm inside and then at the center of the softball, you have a really hard core. And so, if I just said, hey, take your fingers and start peeling away at that softball, you get to the first layer, okay, the second layer would be a little bit harder but you'd really struggle to get rid of that hard core. That's the same thing in a card portfolio like ours. You have customers who are here today gone tomorrow, that's where the soft outer core and they will turn fairly quickly, although they are turning slower than they used to turn, that's still been a benefit. But they'll turn fairly quickly. But then as you get on the middle, those guys will be there forever, so when you think…

No, that makes sense. It gives a good framework to think about it. Sort of a follow-up question is, you do have the higher fee that you laid on higher per card fee and then the takeaway of the zero fee MoneyPak. Is there a situation sort of, let's call it, middle of next year where those things anniversary and then we should – as we'd start thinking of modeling out the next 12 months to 18 months that it creates sort of a comp issue. Steven W. Streit - Chairman, President & Chief Executive Officer: Well, this is the secret to understanding the cohorts. The usage has been so much better than we thought it would be on the new cards. In other words, you sort of anticipate what might happen and I think when we first guided the year, we said – and we disclosed our assumptions for the year, if you remember, and we said that one of our assumptions was that behavioral metrics on the new cards stay the same to the old cards. And we weren't sure if that was risky or not, they could have been much worse, let's say. But it turns out they're better. So as you see these portfolios come together over the next year, just like our current card, of active cards keeps getting better and better, that's been a trend over just, I don't know if you remember, we did the analysis last call, but it's many quarters in a row that our active cards have been getting better in terms of revenue per average active. And so, it could well be that we have that's still seasoning and coming together. As long as the portfolio seasoning, meaning your installed base keeps getting better because you're left at more…

Yeah, no, absolutely. My last question and this is kind of what I was trying to build up to is, not to speak concretely of guidance for next year. But the $1.75 for next year with everything that's going on, all these initiatives and where they stand and some are a little bit ahead, some are not where you want it to be. But overall, the $.75, is that still sort of a good ballpark to think about. Steven W. Streit - Chairman, President & Chief Executive Officer: Well, listen, we're still talking about it and that means we have confidence in it. It could be higher, yes, if everything lines up and things work out, yes, it could be lower, but we hope not – the only thing in 2017 that is a negative that or one of the things we see in 2017 that could be negative is, as we mentioned on the call, the process conversion, while we feel like the platform would be ready to go and we'll convert and, to the extent we not, we believe that MasterCard will continue to work with us and take care of us as they have. Well, then, that's okay. But it's hard to perfectly foretell the future on that. And so I feel better once the conversion is done and everything is working great. And we know that that's a thing of the past. That will give me some comfort because that was supposed to happen this year, right? And it's still might, but our guess is first half of 2017. And so I want to see that done and in the bag and lock down and that's good. And then I want to see our active card cohorts working the way we want them to work. Are they matching our expectations? Is behavior still the same or better than what it is today? And that's bit of an unknown, but absent those two metrics, if you will, things should work out on the upside, but we've always want to guide at a range that we believe we can hit.

Got it. Understood. Thank you. Steven W. Streit - Chairman, President & Chief Executive Officer: Yeah.

Our next question comes from Mike Grondahl of Northland Securities. Please go ahead.

Thank you, guys. First question, is there just anything else anecdotally you could share about the new cards with the higher economic, just that you've seen in these first 90 days in terms of usage or any patterns developing? Steven W. Streit - Chairman, President & Chief Executive Officer: Well, I think I'll give you the high level, I suppose, Mike. Look, we're thrilled with their performance and we talked about that in different ways, in different metrics. We haven't broken apart the metrics for the new card versus existing card because it's just too granular, and it'll drive people nuts with making their model. But we're currently obviously pleased with reloading behavior spend and all those other revenue generating activities that are driven by customer behavior, those are all looking very positive. Look, the reason why that's important is you can't fee yourself in the glory. Maybe for a month you can, but you can't fee yourself in the glory because if people don't like the product or they don't feel like it's a value, then you're going to crash the portfolio. So, in addition, to launching the products with different fees, you've got to see people engaging in the usability of the card. So the fees to us are the easiest part. Will people reload more money? What's your first 30-day reload rate? What's the average amount of GDV? What's your direct deposit enrollment? All those things to us are way more important than the fees because they predict what that hard core, to my previous analogy, will be in the out months and the out years. So all that behavior so far is looking positive. But I want to caution again. We have 1.5, 90-day cohorts. Fee revenue is clearly up, as you know, and as customers…

No, that's helpful. And then second question is the new MoneyPak, I think it's in 17,000 locations today, plus CVS later this year. How does that compare to the number of locations that the old MoneyPak was in? Steven W. Streit - Chairman, President & Chief Executive Officer: Well, the old MoneyPak would have been in – I'm going to say, all of our retailers or the vast majority, so let's call it 90,000 retailers in the heyday, call it the middle of 2014. And there was CVS, call it another 8,000 stores, that brings you up to 25,000 retailers, let's say. So we have a long way to go. Having said that, your biggest retailers are your biggest retailers, right, so the Walgreens, CVSs, Rite Aids, all those. The big winner is if down the line, you can get it back into a Walmart, which we moved MoneyPak long time ago, long before we moved it everywhere else. Could you get it into there? Could you get into – so we still have a lot of real estate left to go and we have a lot to prove to our partners. We would never want to sell a product that made our retailers feel like there was something wrong with the product. And I think, for the most part, the retailers we work with were proud of us for pulling the product, it was very Green Dot thing to do it, if you will. In terms of making sure we are protecting customers and protecting the reputation of those retailers. And then the new system is pretty slip. I doubt you'd use it necessarily to put money on your prepaid card. But the back end interface, if you got a MoneyPak.com, is a really cool website, and people are using it and it's working, and the fraud controls are working and it's very exciting to see that come to fruition. But, look it's a very small fraction of what the old MoneyPak would have been at its peak. And so we have a long way to go in terms of bringing it back with more distribution, and then we have to see how many more retailers can sell it, but given that it's only been in the market for a very short period of time, we feel good about the real estate we're getting back.

Got it. Thank you. Steven W. Streit - Chairman, President & Chief Executive Officer: Sure.

Our next question comes from Reggie Smith of JPMorgan. Please go ahead.

Hey, guys, congrats on the quarter. Just wanted to dig in on the comments you made earlier. I think you said that in regards to new sales that you guys continue to be the share leader as you retails with your new products. I guess my question is so you're still the leader, has share shifted at all with the rollout of these higher priced products? And I have a few follow-ups. Steven W. Streit - Chairman, President & Chief Executive Officer: Yeah, so the answer is, it has because we've lost – and this what I mentioned in the prepared remarks and it's a good question, I'll give you some color on it – we've lost on the repeat one-and-done customers and that was part of the design of the products. A significant part of our customer base use the products as a free throwaway product. And which is not their fault, it's our fault. That's how we design the product and they're taking advantage of it. But the card was cheaper than a gift card. So you could buy a Green Dot card or a Walmart card, you buy it, it's a couple of bucks to buy, but cheaper than a gift card than may be is $5 to buy, you buy it, you register it with the fake name like Rumpelstiltskin or something, we decline you, right, we're not going to approve you for the card, but you can spend down the card in the package and they do that and they pay their Verizon bill or they pay their Sprint bill or whatever it is, and whatever their DIRECTV bill, it was a very common one. And they throw it away, and they just do that every month. But every month we're doing a CIP and…

Understood. And I guess a follow-up to that. You talked about I guess the usage of the new cards and that has been, I guess, better than what you had modeled initially. Just curious have the sales also been better than what you modeled? So it sounds like you've got a better cardholder base than you thought. I guess my question is, is it a little bit larger than you thought as well or is it smaller or is it in line. And then lastly when thinking about the Uber relationship and I guess pre-funding and direct deposit, how should we think about the incremental expense associate with that or is there one, how – the mechanics of how that works and whether that's a potential drag? Thanks. Steven W. Streit - Chairman, President & Chief Executive Officer: Yeah, so the answer is, we don't really – we clearly have an expectation for new card sales but we model based on active cards. And for the active cards, we say would within a certain range, I forget what it is, a few points up or down. And, I think we're basically within our range of that. And ultimately it's a combination of active cards and the revenue per active, that's how we run the model. And we don't particularly guide on unit sales, although we have a forecast for each retailer. And the reason is because it's somewhat of a meaningless metric I can blow the door off of unit sales by saying, buy a Green Dot card for free and we'll put $10 at acquisition, right, but you'd see the company not do very well. So that's how we model it and that's within line. The next question is – I mean in the active cards and the revenue – the next question was about direct deposit – I'm sorry, would you give me that last one again? The cost of...?

Yes. So correct me if I don't understand this correctly, but I thought with Uber deal that you guys were prefunding the payroll and then it would settle with you guys maybe a day or two later, I'm just curious is there costs associated with that and how should we think about that? Steven W. Streit - Chairman, President & Chief Executive Officer: Yeah. The answer is it's an implied cost. We're using our bank's balance sheet, right. So every day you have settlements incoming. Every day you have settlements posting and outgoing, and that would be a settlement in transit and that's what that is, because you're getting the money every business day. It's no different by the way, in fact, it's identical to what we do with our retailers and we have for 15 years. When I reload a card – pick your favorite retailer, Reggie, Dollar General – when I reload a card at a Dollar General, the customers getting access to those funds the second they leave the store, right. But Green Dot doesn't get paid the second they leave the store, we're going to get pay the next business day or two days later or if it's a long holiday weekend, four days later. But the customer got to use the money right away. So there's always a fairly large outstanding receivables balance at the bank or settlement in transit. And so when we underwrite and do a risk analysis on our balance sheet at the bank, we're underwriting that retail or that organization for their ability to make sure they pay us pack in the time agreed to. And there would been an implied cost of money for that overnight or there would be an implied cost of money for the two-day, but as you can imagine, it wouldn't be significant and it's just part of the revenue and the EBITDA model for the product.

Got it. Understood. Thanks, guys. Steven W. Streit - Chairman, President & Chief Executive Officer: Sure.

Our last question comes from Bob Napoli of William Blair. Please go ahead. Bob P. Napoli - William Blair & Co. LLC: Thank you. Steven W. Streit - Chairman, President & Chief Executive Officer: Napoli, it's been a long time. Good to hear from you. Bob P. Napoli - William Blair & Co. LLC: Yeah, how are you doing buddy? Steven W. Streit - Chairman, President & Chief Executive Officer: Very good. Bob P. Napoli - William Blair & Co. LLC: Any thoughts on adopting the EMV cards for your prepaid cards? Steven W. Streit - Chairman, President & Chief Executive Officer: So the answer is we're going do EMV, but it's not going be until the later years. When I say later, I'm taking about end of 2017. And then go out from there and it will be on those customers – boy, the softball analogy is going to do me well, today. So back to that inner core. I was trying to think of like a mountain where you water brush and the clay falls of easy making hard clay, but I settled on the softball. So question was the EMV, so we will serve the EMV chips up on the cards that go to those hard core customers. It would be very, very wasteful to put an EMV chip on a card that hangs on the rack, that would be preposterous or to put an EMV chip on a one-and-done reloader, but clearly for high value customers, direct deposit customers, reloading customers, there is a number of ways we can segment our active base. And we've actually done the analysis and we do believe it will save us net some losses of person-to-person card transactions and you'll see those rolling out towards the end of 2017. And…

Absolutely. I'm turning the call back over to management for closing remarks. Steven W. Streit - Chairman, President & Chief Executive Officer: The only closing remark is thank you for listening. We appreciate you hearing our message today. And we look forward to talking to you next or seeing you at a conference near you. Have a great day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.