Green Dot 2011 Annual Report Download - page 23

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Employees
As of December 31, 2011, we had 464 employees, including 393 in general and administrative, 54 in sales and
marketing and 17 in research and product development. None of our employees is represented by a labor union or is
covered by a collective bargaining agreement. We have never experienced any employment-related work stoppages
and consider relations with our employees to be good. As of December 31, 2011, we also had arrangements with third-
party call center providers in Guatemala and the Philippines that provided us with approximately 951 contractors for
customer service and similar functions.
ITEM 1A. Risk Factors
Risks Related to Our Business
Our growth rates may decline in the future.
In recent quarters, our total operating income, net income and the rate of growth of our operating revenues have
fluctuated. Sequential growth in our card revenues and other fees, cash transfer revenues and interchange revenues,
collectively, was negative in the second and third quarter of 2010 and 2011. Accordingly, there can be no assurance
that we will be able to continue our historical growth rates in future periods, and we would expect seasonal or other
influences, including potential fluctuations in stock-based retailer incentive compensation caused by variations in our
stock price, to cause sequential quarterly fluctuations and periodic declines in our operating revenues, operating income
and net income. In particular, our results for each of the first three quarters of 2011 were favorably affected by large
numbers of taxpayers electing to receive their refunds via direct deposit on our cards. We expect to experience similar
patterns in our results of operations in 2012, with total operating revenues being higher during the first half of the year,
as a result of a larger number of taxpayers electing to receive their refunds via direct deposit on our cards. In October
2011, our joint marketing and referral agreement with Intuit expired and was not renewed. Although Intuit has entered
a new agreement to continue as a network acceptance member, our revenues attributable to Intuit will decline
significantly in 2012 on a year-over-year basis and the impact of this change will be the greatest during the first half
of 2012. For the year ended December 31, 2011, Intuit accounted for approximately 5% of our operating revenues,
excluding stock-based retailer incentive compensation.
In the near term, our continued growth depends significantly on our ability, among other things, to attract new long-
term users of our products, to expand our reload network and to increase our card revenues and other fees, cash
transfer revenues and interchange revenues collectively per customer. Since the value we provide to our network
participants relates in large part to the number of long-term users of, businesses that accept reloads or payments
through, and applications enabled by, the Green Dot Network, our operating revenues could suffer if we were unable
to increase such users of our GPR cards and to expand and adapt our reload network to meet consumers’ evolving
needs. In addition, the negative impact on our operating revenues caused by any failure to increase the number of
long-term users of our products could be exacerbated by the loss of other users of our products as we focus our
marketing efforts on attracting new long-term users. We may fail to expand our reload network for a number of reasons,
including our inability to produce products and services that appeal to consumers and lead to increased new card
sales, our loss of one or more key retail distributors or our loss of key, or failure to add, network acceptance members.
We may not be able to increase card usage and cardholder retention, which have been two important contributors
to our growth. Currently, many of our cardholders use their cards infrequently or do not reload their cards. We may be
unable to generate increases in card usage or cardholder retention for a number of reasons, including our inability to
maintain our existing distribution channels, the failure of our cardholder retention and usage incentives to influence
cardholder behavior, our inability to predict accurately consumer preferences or industry changes and to modify our
products and services on a timely basis in response thereto, and our inability to produce new features and services
that appeal to cardholders.
As the prepaid financial services industry continues to develop, our competitors may be able to offer products and
services that are, or that are perceived to be, substantially similar to or better than ours. This may force us to compete
on the basis of price and to expend significant advertising, marketing and other resources in order to remain competitive.
Even if we are successful at increasing our card revenues and other fees, cash transfer revenues and interchange
revenues collectively through our various initiatives and strategies, we have experienced and will continue to experience
an inevitable decline in growth rates as such revenues collectively increase to higher levels and we may also experience
a decline in margins. If our operating revenue growth rates slow materially or decline, our business, operating results
and financial condition would be adversely affected.