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ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations
This report, including this Management’s Discussion and Analysis of Financial Condition and Results
of Operations, contains forward-looking statements regarding future events and our future results that are
subject to the safe harbors created under the Securities Act and the Exchange Act. All statements other
than statements of historical facts are statements that could be deemed to be forward-looking statements.
These statements are based on current expectations, estimates, forecasts and projections about the
industries in which we operate and the beliefs and assumptions of our management. Words such as
“expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,”
“continues,” “endeavors,” “strives,” “may” and “assumes,” variations of such words and similar expressions
are intended to identify forward-looking statements. In addition, any statements that refer to projections of
our future financial performance, our anticipated growth and trends in our businesses, and other char-
acterizations of future events or circumstances are forward-looking statements. Readers are cautioned
that these forward-looking statements are subject to risks, uncertainties, and assumptions that are difficult
to predict, including those identified below, under “Part I, Item 1A. Risk Factors,” and elsewhere herein.
Therefore, actual results may differ materially and adversely from those expressed in any forward-looking
statements. We undertake no obligation to revise or update any forward-looking statements for any
reason.
The following is a discussion and analysis of our financial condition and results of operations and
should be read together with our audited consolidated financial statements and related notes to consol-
idated financial statements included elsewhere in this report.
In September 2009, we changed our fiscal year-end from July 31 to December 31. Throughout this
report, references to “fiscal 2009” and “fiscal 2008” are to the fiscal years ended July 31, 2009 and 2008,
respectively.
Overview
Green Dot is a leading prepaid financial services company providing simple, low-cost and convenient
money management solutions to a broad base of U.S. consumers. We believe that we are the leading
provider of general purpose reloadable prepaid debit cards in the United States and that our Green Dot
Network is the leading reload network for prepaid cards in the United States. We sell our cards and offer
our reload services nationwide at approximately 55,000 retail store locations, which provide consumers
convenient access to our products and services.
We review a number of metrics to help us monitor the performance of, and identify trends affecting,
our business. We believe the following measures are the primary indicators of our quarterly and annual
performance.
Number of GPR Cards Activated — represents the total number of GPR cards sold through our retail
and online distribution channels that are activated (and, in the case of our online channel, also funded) by
cardholders in a specified period. We activated 6.26 million and 4.27 million GPR cards in the twelve
months ended December 31, 2010 and 2009, respectively, 2.12 million and 976,000 GPR cards in the five
months ended December 31, 2009 and 2008, respectively, and 3.14 million and 2.19 million GPR cards in
fiscal 2009 and 2008, respectively.
Number of Cash Transfers — represents the total number of MoneyPak and POS swipe reload
transactions that we sell through our retail distributors in a specified period. We sold 26.49 million and
17.28 million MoneyPak and POS swipe reload transactions for the twelve months ended December 31,
2010 and 2009, respectively, 8.19 and 5.00 million MoneyPak and POS swipe reload transactions for the
five months ended December 2009 and 2008, respectively, and 14.09 million and 9.15 million MoneyPak
and POS swipe reload transactions for fiscal 2009 and 2008, respectively.
Number of Active Cards — represents the total number of GPR cards in our portfolio that had a
purchase, reload or ATM withdrawal transaction during the previous 90-day period. We had 3.40 million,
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