Good day, everyone, and welcome to the Green Dot Corporation Fourth Quarter 2018 Earnings Conference Call. Please note that the contents of this call are being recorded. And I'd now like to turn the call over to Dara Dierks. Please go ahead with your presentation.

Thank you, and good afternoon, everyone. On today's call, we'll discuss Green Dot's fourth quarter 2018 performance and thoughts about 2019. Following those remarks, we'll open the call for questions. For those of you who haven't yet accessed our earnings release that accompanies this call and webcast that can be found at ir.greendot.com. As a reminder, our comments include forward-looking statements, 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 our most recent Form 10-K and 10-Q 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 our 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 will be on a non-GAAP basis. Information may be calculated differently than similar non-GAAP data presented by other companies. Quantitative reconciliations of our non-GAAP financial information to the directly comparable GAAP financial information appear in today's press release. The content of this call is the property of the Green Dot Corporation and is subject to copyright protection. Now, I'd like to turn the call over to Steve.

Thank you, Dara, and welcome, everyone, to Green Dot Corporation's Q4 2018 earnings call. Today, we'll start with a review of yet another outstanding quarter of performance, capping another amazing year of double-digit, top and bottom-line growth and the year that saw material advancement of our long-term strategy to become a large scale, highly-innovative and ever-evolving financial technology ecosystem that drives when the best and brightest in financial services and technology come together to invent, create and grow. In addition to providing an overview of our financial performance for the quarter and the year, I'll also reveal our new and exciting Six-Step Plan for 2019 detailing this year strategic and tactical road map for growth. Then, we'll finish up with Mark's commentary on the numbers, including a review of our 2019 financial outlook. So let's get to the numbers. Green Dot's products and platform model generated Q4 total consolidated operating revenue of $238 million, a 12% year-over-year increase. We note that this growth is 100% organic and quite robust, especially given that our revenue performance in Q4 of last year was itself a Q4 record. For the full year, total consolidated operating revenue came in at $1.042 billion, representing a year-over-year increase of 17%, approximately 2 points of this growth was attributed to around $20 million from UniRush in Q1, while the remainder was fully organic, helped in large part by the revenue contribution from our new and existing BaaS platform programs that grew at a faster pace than our previously established product lines, although they also grew collectively by double-digits. Adjusted EBITDA for the quarter was $44 million on a consolidated basis, representing a year-over-year growth rate of 37%. The leverage in our operating model continued to deliver very strong margin expansion of over 300 basis points on a…

Thank you, Steve. Our strong Q4 results capped a year of tremendous performance across practically every revenue and operating division in the Company. GAAP total operating revenue was $238 million, representing 12% year-over-year consolidated growth. This was the seventh consecutive quarter of double-digit year-over-year organic revenue growth and was accomplished despite the incredibly difficult compare of lapping last year's Q4 record breaking growth of 31%. Given that strong comp, we think that's quite a result on a full year basis, the Green Dot achieved total consolidated revenue of $1.042 billion, a growth rate of 17% year-over-year, of which practically all apps and two months of UniRush revenue in January and February was organic. Our full year revenue exceeded the midpoint of our initial guidance range by $52 million. Q4 adjusted EBITDA of $44 million represents year-over-year consolidated growth of 37% with the adjusted EBITDA margin in the quarter coming in at 18.4%, a Q4 record. This strong year-over-year margin expansion of over 300 basis points was the net result of improving margin flow through across the business. And in particular, from our base of direct deposit active accounts, we're improving purchase volume and higher retention, have a positive impact on profitability, not only do we derive strong margin from our long established programs, but we generated better-than-expected margins on accounts sourced from our BaaS partners as well. On a full-year basis, Green Dot achieved total adjusted EBITDA of $251 million, representing a growth rate of 22% over 2017 and reflecting year-over-year margin expansion of 100 basis points. Our full year EBITDA exceeded the midpoint of our initial guidance range by $12.5 million. Non-GAAP EPS came in at $0.56 per share for the quarter of 93% year-over-year. This is the 10th consecutive quarter of double digit or better non-GAAP EPS growth.…

[Operator Instructions] Thank you. And we will now begin the question-and-answer session. Today's first question will be Andrew Schmidt with Citi. Please go ahead.

Thanks for taking my questions here and thanks for the detailed power commentary, very helpful. In terms of just the expectations for Q1. Could you talk about what's already embedded in there in terms of just a shift in terms of tax filings in the first quarter to second quarter? Just curious in terms of the current guide what you're expecting?

Well, let we make sure I understand the question. You're saying what new programs in there or what are we expecting in terms of how we get to the 6% expected midpoint or?

It's more about your expectations with tax filings. Is there already an assumption built in for toward shift into Q2 or are you assuming some sort of a normalized pattern this year?

Well kind of both because there's always a lot of Q2 volume from taxes, but this year, it's maybe a bit more pronounced. We haven't even had -- if you think about, for those of you who follow taxes in other companies in the tax ecosystem, normally you have a big tax deposit is generally two of them throughout the quarter. And we have the first big one is normally mid February, used to be early February, but call it mid February would be a big disbursement day and then another one in late February or March. We haven't even had the first one yet. So the first one is expected at the very end of February either on the 27 or 28. Our tax division was no better, but I think it's the 27 and then one in March, so that's definitely later than what it's been when that happens, at least in terms of Green Dot for the card side of our business. That means the revenue in the spent from the deposits have hit those cards won't really be felt until Q2. But the RT revenue or the tax processing revenue we get is taken at the time of the process and so that would be in Q1. So I wouldn't think it's materially different. You never know and it could be that more spills into Q2 this time than traditionally, but I wouldn't think it's dramatically different. What do you think Mark?

That sounds about right. As Steve said, at this point in the year, we would have seen something. And at this point, we have it, it's just slower. So we're flying a little blind and trying to be prudent in how we forecast the quarter.

That makes sense. And then in terms of just the full taxes and gotten a lot of questions on how the tax law change effects for both filings, the amount of refunds. What's the expectation here for just the impact of new US tax -- revised US tax have on filing behavior and then correspondingly refund amount et cetera particularly for your core demographic.

Right, I was going to say, I mean you have a couple of answers you have. You how does it affect the tax ecosystem and how does it affect the part that we care about. The answer is that the

We can spend the next 2 hours.

No, for the Green Dot customer, which is the folks getting the prepaid cards and in some ways taking advantage of the tax processing, although that's a little bit more mainstream in that demographic? There's not a huge impact for us. Ironically, we've seen a lot of press reports about tax refunds being lower. That may be true for Middle America and upper class American to the extent their refunds. We don't think that's the case for lower-income Americans. We're expecting that the tax refunds will be similar or maybe even slightly larger depending on the way those turn out. So I don't think there's anything particularly unusual or dramatic except for that there's definitely a delay by at least two weeks that we know of and then we'll see how the rest of it turns out. In terms of tax filing numbers, the IRS publishes an actual filing guide that you can look up and I wish I had it in front of me. Otherwise, I would tell you what it was and we can get the address or the website later, the after hours. But you can actually go and they will tell you what the pacing is a filing relative to previous years and we are behind at this point in the season, but it always catches up. Listen, whenever it is, everybody files their taxes. So it's just a question of when it hits. But in terms of refunds in our part of the revenue, we think we have a good fix on what's going to happen and how, just going to be a few weeks later and then that means some of that spend revenue, interchange revenue and some of that will go into Q2 to a greater extent than what it has been in previous years.

Got it. That's helpful. And then a question on the product roadmap. Bank OS, thanks for the additional acronym by the way, that's for now. Bank OS, just trying to -- I guess, that full rollout in first half 2020. How is that juxtaposed with the existing banking-as-a-service strategy? Is it the right way to think about it? Banking-as-a-service more focused on enterprise customers and this bank OS would be more sort of for the mid-sized customers. I guess just a little more clarity on that would be helpful.

Yes, thanks for the question because it's actually one of the cooler ones we thought of and including the acronym I love the name and I'm glad you picked up on it, bank OS or bOS, because you're the bOS, and so first I want to be clear that while BaaS 4.0 is expected to be released in the production in mid 2020. On bOS, we just said 2020, because that may take a little while longer. But -- so here's how it works. If you think of the world of development and the sort of the biggest companies, the enterprise size companies need a lot of support because they're doing big projects at a very big scale and that's what we have today. So today, anyone on BaaS, banking-as-a-service, that platform is going to be like the companies we have, the Intuit and the Apples and the Uber's and the rest and the Walmart. These are very large partners with very large scale programs, large product teams, large technology teams, large compliance teams and so the engagement from Green Dot will be like-minded. We're going to have sales accounts teams and a lot of discussions and it's a fairly long sales cycle, and in fact too long, would love to figure out how to get it shorter, but enterprise sales is what it is, and if you've ever done it, what I'm talking about. With bOS, it's a whole different kind of a customer base. This is about the app store developer, or as I said in the prepared remarks, the social media influencer or the mid-sized retailer or the smallest store owner with three employees who wants to do some sort of payroll card, who wants to do some sort of rewards card for their own customer base, it could be the church who wants to do a fund raising card for their thousand Parishioner to make money off a part of the interchange, it could be anybody that's qualified to be on our network and to pass our strict vendor management rules and all the things that go along with being a regulated institution. But the concept of the everyday program or just like the app store being able to come in and create a product to their specifications, the plastic looks a certain way or the app looks a certain way, it has this reward. No, it doesn't have that reward, it has this fee, no it has that fee and to be able to have that individual or that program or that product manager develop it at their own pace and at their own speed is pretty cool. And we just think there are so many people out there, and to give you an example and I'll tell you where I got the inspiration for bOS. We're sitting at the Worldwide Developer Conference with Apple going back '02, I forgot when did the product announce -- get announced, it could have been three years already...

That was in 2017.

Whenever it was and I was --.

2017, 2019.

Yes, when I was there with our partners at Apple and I was watching the great show they had with the WWDC. And I was looking at the platform and the power of the app store. And in that conference, they saluted a nine-year-old boy or something like it, eight years old, who is the youngest app developer and Tim Cook introduced them and they applauded and then they introduce the oldest app store developer who is a woman in her 90s from China and everyone applauded and so forth. And I remember thinking wow, think about the app store and the millions of apps and the power that having a consistent API and development platform that anybody who is skilled enough to figure out how to do it could make an app, and as long as they complied with certain vendor management rules and as long as your technology passed certification, then you could have your app on the App Store. And just think about the ecosystem that's created, and in that literally as I was sitting there, I texted Kuan Archer, who I always text first with my weirder ideas, but -- so why can't we do this and the answer is, well, we can if we can build out all these things we have to do. We've done a lot already as part of why we are investing so much in BaaS. So this has been something we've been working on for a long time, but the thought that you could have APIs that are robust enough to work at scale, a platform that can handle it and then because we're a bank and because you're dealing with money, a tremendous amount of risk management tools and overlays that go onto that platform. But the fact is…

Our next questioner today will be Andrew Jeffrey with SunTrust. Please go ahead.

HI, good afternoon, guys. Appreciate you taking the question. And Mark, I'll always press you for a little more disclosure on BaaS but the growth rate contributions helpful, so thank you.

We do that for you.

Yes, I am flattered. Just too maybe dig in a little bit more on BaaS and the way the product and the platform is evolving. Steve, do you mean to signal or is it right for us to interpret some of the new investments such as bOS as perhaps a move away from enterprise type customers and the reason I ask is you put up out sized organic revenue growth last year and I think a lot of that had to do with BaaS, and I just wonder if this is more of a normalized outlook or if it works, if you're contemplating new BaaS signings that might currently be in the pipeline, recognizing how longer sales cycle is.

Right. So the answer is in no way we want to give up on our enterprise clients. We don't have nearly enough of them. We want more of them. We're ideally suited to big large, enterprise partnerships. We're very good at that and that always has the opportunity to drive the platform far faster than any individual. But I don't think it's a game of one or the other and so, bOS is a product of BaaS is just that is the product, that's a little bit more locked down. If you think about BaaS being fully customized, you have a partner like Apple, who comes in, says hey we want to do, A, B and C and this completely never been done before. And it's entirely bespoke every aspect of it is brand new or a product like Uber, the Uber account where they need rewards in instant pay functionality that only makes sense for Uber drivers. So it's very, very customized and for big clients like that where you can get hundreds of thousands of customers or many millions of customers, it certainly makes sense to do that and we invested time and energy into doing a custom offering because you'll make it back and those are great partners. And we always want to do more of that and there are a lot of the companies in America. So we don't want to give up that at all. In fact, we're investing in and more enterprise level sales people and trying to figure out how we shorten that launch timeline to make it a little bit more faster pace. I think the clip of new closings is too slow and so we're working on that. But that's always something we want to do. But in addition to that, if you can take those APIs and the features and say, look, we're not going to do a custom program like we did for Apple for everybody. That would be ridiculous. We can't do that. But people don't need that. So just think about any app that you're looking at or some of the examples I gave to illustrate the point. Somebody like that building their account as they need all those custom tools. So you're going to lock down risk management, you're going to lock down BSA and AML controls; you going to lock down the way we take deposits or CIP. Those will not be negotiable and how you do it. The bank is the bank and how we do it is how we do it, but what the plastic looks like and the fees you charge and the features that you put on it and on and on that you have great latitude on. And so we think it's an exciting opportunity, but it's not one or the other, we think both are important and bOS clearly is a couple of years down the road in 2020, the BaaS is right now.

Okay. And Mark, maybe for you again, and I hate to harp on this, but I'm just trying to understanding if I take your comments about 25% of the 2018 growth having come from BaaS, it implies and I recognize there's a couple of months of the -- the acquisition.

UniRush, yes, and I want to point out before you go further end of that. Yes, but Andrew just -- before you go faster I want to be sure that Mark was quoting the number in our new net revenue construct as 25%. It was close to about 40% or something like that. If you stood, if you did apples-to-apples on the way we were reported, right.

Okay, that's. So I think that goes to answer the question, but it still implies that the core business grew pretty robustly in 2018. So can you comment a little bit on kind of the trajectory of growth in the core Green Dot retail business whether that's decelerating or should stay about the same in 2019?

Well, Q4 was in the same capacity, isn't it similar I think for most of the year. In Q4, about half of our growth was driven by BaaS programs and half from our established product lines, meaning the typical Green Dot stuff, not just cards, but we have other programs besides cards. So it's been half and half and I think Mark been like that for most of the year.

Most of the year. That's exactly right. Look, it's, we're thrilled with how 2018 played out. It's having launched some programs in 2017 completed M&A in 2017 and then to grow over all of that in 2018 we thought was just remarkable. And no surprises to the upside and we're hopeful that we're on the right trajectory in the right path to continue to have that kind of opportunity in 2019.

And the next questioner today will be Brad Berning with Craig-Hallum. Please go ahead.

Good afternoon guys, congrats on the Intuit announcements and wanted to see if you guys could talk a little bit more about just thoughts on timing of when product rollouts could happen for that. If you have a lot of talk about that yet. And then kind of trying to size up the TAM little bit for QuickBooks domestic as far as number of employers, number of companies that use it or the number of payroll in kind of companies that use that are number play, just some kind of sense of magnitude of what does this mean.

Right. It's a fair question, but one, we can't answer. And I'll tell you why, is one of just the governance ring fences we have around our best partnerships is where the partner, the platform, the facilitator of it and to the extent better help is asked for or needed for design work or other parts of it we do that. But only the company itself can release numbers. So for example with Apple Pay cash that's why never give numbers that's up Apple to do that, or Intuit. So it's a fair question and maybe that what we can do just to help to some of the lay work as we can find out some of the public disclosures and help with that, or if you will cover Intuit or have people over there they may be willing to speak to it. But payroll, certainly a big business at Intuit. They do a great job with it and we're so excited to be part of that ecosystem and whatever we think is in there would be part of our guidance for this year because that's in a program that we announced and that's out there, but if we haven't announced a program yet, then it's not part of guidance.

0:56:47.5:

Well, I want to be thoughtful with my comments because I don't want to excite or disappoint. I think the answer is the pipeline is good. The parties or the kinds of opportunities in the pipeline are good, but that if I had a magic wand I would prefer that they were to close faster up, so which is no secret here in the building and Brett Narlinger, who's our Head of Revenue such a great guy and such a great partner makes me look mellow relative to his energy and aggressiveness in revenue. So I know he shares this thought with me, but we have to figure out and maybe how to make the offering a little simpler perhaps or do something where it isn't quite so customized. Because we want the deal to close a little bit more quickly. So I would say be opportunities are good. The pace is slower than what I like. And if we get them we got them, but the guidance doesn't rely on us getting them, but to your point would love to have more. I don't know if I have even answered that kind of even answered your question, but that's probably the best I can do.

And our next questioner today will be Robert Napoli with William Blair. Please go ahead.

Hi, thanks you. Good afternoon. Good to talk to you as well, Steve. The -- just looking at the active accounts are flat year-over-year, but the activity per account continues to go up at a healthy level. And I know, Mark, you said expect accounts to grow low single digit next year, what is driving. Can you just talk about the mix shift and how much left of mix shift there is to continue to get the higher purchase Volume transactions per account and is the average life of an account expanding?

Yes, in terms of mix shift. I'm not sure.

What he's saying is can we keep growing with how much more can we squeeze the.

Yes, the counter planned and transaction per counter up 10%.

Yes, and which -- as we've discussed for some time, that's really being driven by our direct deposit active growth, that was very healthy growth in the quarter. Our expectation is that we should be continuing to grow our direct deposit accounts, and as we do, you will see those metrics in terms of GDV per active purchase volume per active continue to increase.

Yes. I think, Bob, to the question and Mark is right, if we are at about half of our account base, give or take, as direct deposit and every year we're adding a couple of hundred thousand more for growing 10% or what do we go for the full year, guys, 13 something percent year-over-year is I think what the average in the normalized number was? If you took out UniRush, yes. So it's a lot of customers coming in to do that and we're only not even quite the halfway. So, the answer is, we have a lot of folks and a lot of room to grow and we continue to do that and we think we can do it certainly this next year, because we're seeing in the trend, but that doesn't mean we shouldn't want to grow active. So we want to have more actives, we want to have more people in there, because you ultimately have to have fresh customers coming in to keep growing. And so we have a long way to go with the customer base we have. We did add, oh my gosh, it was over 1 million accounts something year-over-year with the tax business, something else. We had a lot of accounts. Year-over-year and that's great. Q4 was not great and we thought it would be bigger than that, in fact I think Bob, you the one who asked the question, where I thought we were at about 5% and thought we had a lot of room, if you remember that we, you want to answer that? And where we, we made the mistake was to get a fresh number for the earnings call, is we looked at the most recent number which was weekly number, which was up at that point, about 7%. We ended up higher, but that's where it was and we missed this component that well, as we continue to get more and more direct depositors, you just don't have the churn without the churn, you don't have the unit counts and Q4 is not a big unit number any of anyway it's not one of our bigger acquisition quarters. And so that was the artifact of that that occurrence. But we always want to have more account holders. So I wouldn't say we are satisfied with being up 1%, that's not great. It's not relevant to our performance, and I'm glad that the people are having real customers who want to buy a real account to enroll the direct deposit. And that's all very good stuff. So the answer is can we continue to grow that way. Yes, certainly for some time to come. Do we want to have more new customers those real customers that are there to have a real account that they use as their bank account? Yes. Do we want to have more? Yes. There you go.

Thanks, and just my quick follow up would be, just on the BaaS program, are you seeing more, I mean it seems like there is more venture investment going into BaaS types of programs or companies, are you seeing more competition and what M&A, obviously you're investing and developing, I mean do you feel like, are you seeing more competition, do you feel like you're ahead of the competition today or are these investments that you need to, to move ahead keep up with the competition?

So on the platform side, we don't see a lot. Now having said that, is it maybe that we're not aware of the deals we don't get, you know, but in terms of the companies that were pitching. There are not a lot of companies that we are aware of that have, what we have, which is this integration of the regulated bank charter combined with really big iron technology. In other words, it isn't just a technology capability. It's a true technology company that would rival most Silicon Valley companies if only a tech company. And then on top of that, of course, you have this program management function, which we don't talk about a lot because I lovingly called the widget factory. But if you don't have that man, that's really hard to do, it's ugly nobody wants to do it. If you're not doing it somewhat of a thankless job because it's the whole belly of the beast of how these things run, but I'm not aware, Bob, and you may be of any competitor out there who has the bank that's able to do this and the capital base to do it. Remember? we have a big capital base and allows us to do a lot of these things, but the bank and the technology capability to build a platform that can serve the biggest and best in Silicon Valley and beyond and the program management function that's already at very high scale with call centers around the world and all the infrastructure you need to pull that off. I'm actually not aware of another company that has that but doesn't mean to say we don't have competitors. We always do and always will. But we think we feel pretty good with our offering. We just need to pick up pace.

Our next questioner today will be Joseph Vafi with Loop Capital. Please go ahead.

Hey guys, good afternoon. Just one more on BaaS' versus, let's call it the core business makes you really kind of two business is almost at this point that share pricing back and then maybe a little early, but do you have a feel the ROI on the BaaS business over time. Sure rival that of their kind of core, retail cards business could be higher, could be lower and obviously, I think there's probably more growth in BaaS, but I'd say the maturity of the platform is still far from mature. But if we look down the road in the few years which would you think, one of those two businesses inherently at maturity more attractive business model than the other?

Well, I think your observations are right and that is they're two separate businesses, if you will, that's why we call it products and platform, but Green Dot is our own consumer of our own platform. In other words, step one was about these two new Gen Z products being developed and Gen Z mode. And as we develop that we're building out our platform to make sure that our own developers are talking the platform set of our company saying, hey, make sure you build this and make sure build that so are our own consumers of our own platform. So you're right, it has a common processing back ended as you called it, it's probably a good description. So we think they are different business models, and we like them both. In terms of the scalability and over time, the margin and the growth opportunity, clearly the BaaS platform would have the bigger of the two because there's only somebody products you can sell and so many customer segments, you can sell them to no matter how prolific you are as a product company. But on BaaS over time, you could have a thousands of developers with all kinds of programs each one innovating, whatever it is, they are innovating, selling it to their customer base, very much like what the app stores, maybe not as broad-based, not everyone's going to want to have a bank account. But maybe everybody wants an app. But the concept is still there. So clearly the long-term growth opportunity is bigger for the platform than it is for the product side of our business, but they go hand in hand beautifully. Anything we invest in building out the platform and making them more robust directly impacts our success on the product side…

Okay, that's helpful and then I know you mentioned that perhaps the cadence of new wins you'd like it to be a little faster and perhaps part of that is due to a lot of productization going on pro BaaS customer now, and maybe over time, we get to a little bit more of a cookie cutter approach. Do you have a bead or radar lock yet on how that kind of cookie cutter process to speed things along could come about and what some of the key factors might be that at that done? Thanks.

Yes. It's a wonderful question but not when I can easily answer. Every account is different and the attraction of BaaS if you will the enterprise part of the platform is that it's custom that is truly bespoke. So it's hard to answer that but anyhow, we're really glad to be where we are after only three years you're looking at 300% CAGR, not even 3 years, 2.5 years and is already contributing half of our growth and it's a platform that today in a very short time is serving successfully, literally the largest technology companies in the world. So we feel pretty good about it, but a lot more runway to go for sure.

And our next questioner today will be Ramsey El Assal with Barclays. Please go ahead.

Thanks for taking my question guys. I wanted to ask about capital deployment balance sheet deployment and buyback specifically. Can you remind us again how it works with your regulators? How much lead time do you need for them to give you the nod that you can go ahead and return cash? And I guess have you have initiated that discussion and then also just bolted on there? Did you -- I might have missed is how much unencumbered cash there now on the balance sheet? And then I have a quick follow-up.

We have not initiated the conversation with our regulators for a share repurchase program. We have board authorization and once we do initiate dialog, I wouldn't hazard a guess on that the pace at which the regulators would entertain the conversation with the Q&A may be back and forth between us. They are great and responsive, but I can't predict how quickly they would respond to any request.

And then how much cash we have on the balance sheet?

$169 million on the balance sheet.

Okay, great. And then quick follow-up, can you talk about the sales organization and the sales process when it comes to BaaS? I mean the products themselves seem so diverse. Do you have a dedicated BaaS team? Are these inbound leads that you work? I mean how does the sales approach go to kind of targeting this kind of very diverse mix of offerings that are all related to this unified platform?

Right. Well, so a lot of it is inbound some is outbound but normally it's outbound with an inside job I guess. After all these years we know a lot of folks and lot of people know me or Mark or somebody on the team. So lot of it is, hey, Steve, I got a call from such and so call them back. That's not actually uncommon. And so a lot of leads will come in that way. And then we have a great sales team that's dedicated to BaaS into our bigger projects. And they would go out engage and I want to be clear because these guys worked so hard, it isn't that they're doing. We're not doing any wrong to make it not as fast as like, it's just that anything in life you are learning. This is a brand new concept it is not -- it is like this 10 banks out there doing this. So this is something that you have to say what is the client liking, what do they not react to, they said they wanted it, why do they need to wait another month before getting back in LOI. And we try to figure that out and improvement and that's so life works and we're running the company. So I think they're doing a great job. And I have every confidence that we'll figure out a faster path to getting those things close, but certainly not stopping us from hitting our goals and agendas, but, so we do have a dedicated sales team in fact that Brad's hiring a few more. And it's an area of key focus for the company because it's such a great opportunity to grow and use the same and reuse use and reuse the same APIs and infrastructure that we're going to build anyhow, and our building anyhow for our own stuff, so it's just a wonderfully synergistic business model.

And our next questioner will be Steven Kwok with KBW. Please go ahead.

Great. Thanks for squeezing me in. Just wanted to go back to the TAM, that you've talked about --of about 15% and increasing over 60% over the last past three years. Can you talk about the rate of progression that you've seen over the past three years? Has that rate increase accelerated to the same? And then also looking forward where do you expect the TAM to go to over the, let's say the next three years? Thanks.

Yes. You bet. So we went from -- in the analysis we did from 30 to 36 to 50, so it's picked up. But we have a lot of big clients on the platform. If we get some other big clients with the products that serve other kinds of markets. Then the TAM could get bigger. I think the more notable thing isn't so much the TAM because at this point when you have partners like Uber and Apple and Walmart, you're pretty much covering almost everybody, I think there's not too many people who don't use those products and some part or another. We're probably missing the Android side, I suppose, so we can still get bigger yet. But we have a big TAM, I think the story there is our penetration of the TAM and the ability to say, well, look how many of these folks can we sell products to and how many people is Green Dot serving every year and it's a big company when you look at all of our products and divisions together and all of them contributing revenue over the course of the year. And I really appreciate you asking the question because the -- look, when we launched the company to go public in 2010, we were a mono line Company at one product was a prepaid card we had them in two flavors. Walmart flavor and Green Dot flavor and Walmart was 70% or something like that of our revenue, probably a bigger part of our profit based on how the scale of those in those days. And there was one KPI active cards because people bought them as convenience products along with the Chiclets and the Wrigley's gum. So it's just such a different industry today in such a different…

Got it. And just a quick follow-up around large renewals like over the next two years and what's the progress around those it believe you have a large partner that we knew in mid of next year.

Large partner renewing, doesn't ring a bill. I don't know, Mark.

I have no idea.

Okay. Yes, so we do have as many of you know are the Walmart MoneyCard contract renewing and/ or having the opportunity to new in May of 2020. So we have about a 1.5 year to go. And there are two ways to do that. One is that there is a two-year stem on a contract, another way just flick a switch and under the same economic terms of contract extends out to 2020 to May of 2022 or Walmart can choose to renegotiate the contract or something else in between. We'd be happy with any of those renewals. We love working with Walmart. They are fabulous partner and one of my favorite partners. And we do anything for them. They're great people and a great company. And that contract comes up. So we work hard every day. There's no point in time especially after 12 years. There is no day that you're renewing the contract or no week that you have in a particular conversation. If we doing your job properly as a partner you hopefully showing your value every day, every quarter, every month and we work hard to do that. We're not perfect. And I'm sure there are things we can do better and we will. But we have high hopes that we can renew that sooner than later. To take that potential overhang off the stock to the extent investors are worried about it. So either way, we have a good year and a half to go and certainly would be our goal long before than they have an answer and or good news before that, but we don't know and we never take renewals for granted and it could go anyway. So we'll share that process plays out.

And the next questioner will be Ashish Sabadra with Deutsche Bank. Please go ahead.

Hi, thanks for taking my question. So a quick question on the interchange revenue over the last seven quarters through third quarter interchange revenues has grown faster than the overall company revenues. Fourth quarter was the first one and then growth was good, but slower than the overall company revenues. And that's despite direct deposit growing pretty fast. So I was just wondering what were the puts and takes and how should we think about that line item going forward?

Percentages, I leave for one of our accounting folks may, I am staring down just sort of smear in the after call maybe do that math.

I think it's really, it's coming from in 2017 you saw fee revenue going up as a consequence of our adding or modifying our MMS in 2016. But since then 2018 and beyond you've seen behavior driving our revenue, so interchange revenue is going to be a key driver of our growth as distinct from some of that fee revenue and it's coming from again our direct deposit volume is increasing, creating great GDV and offer that GDV you're seeing great purchase volume.

Well and to the extent I think your question was, Ashish, about interchange rate going up. Is that what you had asked and I apologize it's hard ask a little bit.

No, my question was, actually Mark's response was helpful. My question was just the growth. Yes, growth was slower than the overall company revenue growth. So my question was like why we aren't seeing better revenue growth with direct deposit growing so much faster.

Yes, what we --the reason is because as a percentage of consolidated revenue is that we have more revenue coming from places besides just cards. So in this for a few years ago, almost all the revenue from cards, but we have revenue now that increasingly is big from our Processing and Settlement Division, which has no interchange component to it and other products like that. So I think it's more a reflection or like tax processing, for example. So these are all things that have nothing to do with cards or interchange, and so as the company grows, and our other divisions grow interchange just like cards themselves become a smaller part of the overall mix. And that maybe what you're seeing without knowing the actual part of the income statement. It's hard to reconcile the math, but it may likely be that and where we help happy to help you with to the extent we can after the call.

Sure. That's helpful. And then maybe a quick question on the Turbo tax into it payroll card win. Is this a conversion where the existing customers on the payroll card will be converted over to the Green Dot platform as well or is it just for new cards which are issued on that payroll card?

I don't -- I can't imagine is any processor or conversion just hearing that phrase gives me nightmare. So I don't think there's any processing or conversion, but how Intuit chooses to mark at the new products to existing cardholders. I don't know. That's completely their opportunity and their side to do and will be here to support them, but it's a big business and we're certainly very excited and honored to be part of it, but how Intuit is planning the rollout in the marketing of that I can't speak to. Okay, we have Reggie, as your last analyst, okay, very good.

Yes, sir. Reggie Smith with JPMorgan. Please go ahead.

Yes, good evening, guys, how are you? Good. So I got dropped off earlier. So I'm not sure if this was covered, but obviously great growth over the last three years. Looking at the guidance this year, just curious how should we think about kind of the longer-term growth of the business, both kind of top line and EPS. Yes and a follow up.

Yes. Sure. Well, so it's our long stated public goal. We've had it for years, to do our best to grow 10% not 10% double-digits top and bottom line this year at the midpoint, it's 10% our guidance and that's always going to be our goal forever, unless something really changes radically because it should be our goal. We're a growth company. And as you get to the law of large numbers, and now over $1 billion of revenue and everything else, it clearly becomes harder every year, but that's where you have to have new initiatives like we talked about in our six Step Plan this year to meet that challenge. This year the guidance at 10% is over growing just an unbelievable year. I mean just think about I mean especially in Q1. We're growing fully organically in our guidance 6% at the midpoint over a quarter a year ago that saw the addition of Intuit huge account, TaxHawk, good account. The recent additions of Apple Pay cash and the Uber rewards account, which is growing very well. So that was all building in the quarter and then on top of that you got two months of the UniRush acquisition that had, say another $20 million plus there, all in one quarter that now we're over growing fully organically, a year later and then, so that's a big part of it. So the guidance we're giving a 10% at the midpoint all organic, we think it is pretty robust given the size of the company and the over grow of all that excitement that we had a year ago. Doesn't mean we don't want to do more. Doesn't mean that we can do more, but it's no cakewalk. We have work to do and that six step Plan is not only for investors to hear, but for our employees too. We have real work to do. But we feel very optimistic about it and obviously the business as you can tell, Reggie from just looking at the numbers in one of our other analyst earlier in the call, pointed out that not only the best grow but our established business lines continue to deliver and it's our goal for that to continue into 2019 .

Got you. Okay, perfect. I guess you talked about direct deposit growth being 10% pretty strong and it sounds like some of the kind of one downs are either not using the card or are they kind of moved over to kind of direct deposit, so it appears that the card is being used the way you want it to be used. I got to kind of looking at that money transfer line still you shown pretty good growth there. How do you reconcile? How should we reconcile the momentum you're seeing there with the growth in direct deposit? Is direct deposit included in that? Or like what's driving the strength there given how well you guys are converting people to direct deposit?

Right. Well, again, there is strength in numbers. The Green Dot Network, which is a very old part of the company, we debut that in 2004. My memory is correct, service a lot of companies. So we do, I have to give a wrong number, but it's got to be at this point over 300 or 500 different banks and programs, how many would know better, but it's something like that. And in all of those are doing reloading. So you're right that if you're on direct deposit at Green Dot you're not a heavy cash reloader. So a person who is not on direct deposit but who uses our card over and over. We'll do a lot more cash reload and we make good revenue on that and it's a good service, but all these other programs are also in cash reload that have nothing whatsoever to do with Green Dot and in fact we power a lot of our competitors, which we've done for years back when Amex was in the old days a big competitor. They were still using our network to load cash to their cards. So we have a co competition. You have a lot of upstarts that on one hand are doing their best to beat our brains out on the issuing side, but we service them on the reload side. And so anytime we can stick our foot in the ecosystem as opposed to a product we like that, and our network is good example of that. So the growth you're seeing in cash transfers is about our own customers, yes, it's about everyone else customers who are part of that. Yes. And it's also because our Money Processing division comes up with new products and cool ideas like e-cash and PayPal would be a part of that and credit card bill pay, and so you're always trying to come up with new things to drive that business , but it's a good ecosystem and still healthy after all these years.

Got you, okay, perfect, thank you. Great quarter, guys. End of Q&A

Thank you, Reggie, Appreciate it. Well, we are done. I know we went long but we appreciate all the great questions. Have a wonderful night on the East Coast in a day here in Los Angeles and the West Coast and we'll see you at a conference near you, Bye- Bye.

The conference has now concluded. Thank you all for attending today's presentation. And you may now disconnect your lines.