Christopher Mammone - Steven W. Streit - Founder, Chairman, Chief Executive Officer and President Grace T. Wang - Chief Financial Officer Jess Unruh -.

Mark Palmer - BTIG, LLC, Research Division Ramsey El-Assal - Jefferies LLC, Research Division Tai DiMaio - Keefe, Bruyette, & Woods, Inc., Research Division Reginald L. Smith - JP Morgan Chase & Co, Research Division David M. Scharf - JMP Securities LLC, Research Division Michael J.

Grondahl - Piper Jaffray Companies, Research Division Matthew Lipton - Autonomous Research LLP Ashish Sabadra - Deutsche Bank AG, Research Division Tulu Yunus - Nomura Securities Co. Ltd., Research Division.

Good day, and welcome to the Green Dot Corporation Fourth Quarter 2014 Earnings Conference Call and Webcast. Please note, this event is being recorded. I would now like to turn the conference over to Mr. Chris Mammone, Vice President of Investor Relations for Green Dot. Mr. Mammone, you may begin..

Thank you, and good afternoon, everyone. On today's call, Steve Streit, our Chairman and Chief Executive Officer; and Grace Wang, our Chief Financial Officer, will discuss 2014 fourth quarter and full year performance and thoughts regarding our 2015 outlook. Following these remarks, we will open the call for questions.

For those of you that have not yet accessed the earnings press release and the slide presentation that accompanies this call and webcast, it can be found at ir.greendot.com. Additional operational data have been provided in a 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 Q3 Form 10-Q that we filed on November 7, 2014 for additional information concerning factors that could cause actual results to differ materially from the forward-looking statements.

During the call, we will make references to financial measures that do not conform to generally accepted accounting principles. This information may be calculated differently than similar non-GAAP data presented by other companies.

Quantitative reconciliations of our non-GAAP financial information to their most directly comparable GAAP financial information appears in today's press release and in the appendix of the presentation that accompanies this call. The contents of this call is property of Green Dot Corporation and subject to copyright protection.

With that, I'd like to turn the call over to Steve..

net interest income, which can grow when deposit balances increase or interest rates climb; increasing consolidated margin expansion as we integrate recent acquisitions into our bank and the opportunity to use Green Dot Bank's balance sheet, our leading consumer brand name, leading FinTech capabilities and proprietary consumer data to develop pro-consumer, modern credit offerings, which we think can have a great impact, positively for our company and most importantly, for consumers, and selling such products would be subject to regulatory approval.

So with that, that brings me to our guidance and our outlooks for 2015. And I'll give that over to Grace and then come back with some thoughts about our company since our IPO over the past 5 years.

Grace?.

Thank you, Steve. We already covered the highlights of Q4 during Steve's remarks, so let's dive straight into 2015 guidance, which you will find on the next page of the investor deck.

As we mentioned earlier, there's an unknown impact to our guidance range based on the discontinuation of our MoneyPak PIN product, which was largely pulled off the shelf over the past 30 days and will be fully disabled the next few days.

While it's not possible to forecast with precision, our best guess is that the negative to full year revenues could be anywhere from $10 million to as much as $40 million. And the associated impact to full year adjusted EBITDA could be just a few million dollars or as much as $10 million.

Given the difficulty in sizing the potential impact, we try to make our guidance ranges intentionally broad to cover the full range of possibilities. But we won't know for sure how things will play out until later in the year.

So with that said, Green Dot is forecasting full year non-GAAP total operating revenues to be between $720 million and $780 million, representing growth of 23% at the midpoint over 2014.

Adjusted EBITDA is forecast to be between $150 million and $170 million, representing growth of 21% at the midpoint over 2014 and an implied adjusted EBITDA margin of 21.3%.

When you add back the onetime year-over-year headwinds to the margin that we've listed on Page 14 of the investor deck, including the onetime $6 million benefit in Q1 of last year and the potential impact from a loss of MoneyPak PIN revenue, this margin expectation would translate to a normalized adjusted EBITDA margin improvement of about 200 basis points over 2014.

This is on top of the significant margin improvements we saw from 2013 to 2014, which demonstrates the strong underlying operating leverage inherent in our model.

2015 also represents our most diversified financial outlook ever as a public company, with no one program expected to represent more than 30% of our forecast for non-GAAP total operating revenues or more than 15% of our projected adjusted EBITDA.

So now that you know our business perhaps a little bit better and have our guidance for 2015, I'd like to hand back to Steve to finish the last section of our Today's Green Dot investor deck.

Steve?.

competition. The fear was that larger and better-funded players, especially the big banks, would take considerable market share and would cause price compression. There was a concern about the Walmart contract renewal and that they would cancel our contract or insist on unsustainable consumer pricing and rev shares.

There was concern over revenue concentration because 2/3 of our revenue and earnings came from the Walmart MoneyCard program.

And there was concerns over regulation that the Durbin Amendment in particular, at that time in 2010, would lower interchange rates and that other proposed state and federal rulemaking could negatively impact Green Dot's future prospects.

So how did we do 5 years later? Well, it turns out that many larger and better-funded players did come into the space and they tried hard to beat Green Dot, but Green Dot has emerged the champion. Back then, we have the Walmart contract renewal concerns and frankly, we still have those same concerns on the stock today.

We did renew with Walmart through the end of 2015, but we need to see what happens in 2016. Revenue concentration. Back then, 2/3 from the Walmart MoneyCard program. Today, this program is forecast to represent only around 30% of revenue and less than 15% of adjusted EBITDA. Back then, you have the concerns of regulation.

Five years later, Green Dot has emerged unscathed and well in alignment with all current and proposed new regulations and rule-making. On the next page as an overview, Green Dot then and now. Then, Green Dot was a 10-year monoline prepaid program manager that invented the prepaid industry.

Now Green Dot is a 15-year-old, diversified, FinTech-powered bank holding company with numerous products and services targeted to America's low- and moderate-income population. Today, we are a much larger, battle-tested, diversified branchless bank. Back then, we had revenue of $377 million. Now looking at the midpoint, revenue of $750 million.

And if you look at our CAGR since the IPO in revenue, 15% since 2010, 23% year-over-year forecast from 2014 to the midpoint of 2015. Back then at the IPO in 2010, we had adjusted EBITDA of $97 million. Going into 2015, adjusted EBITDA of $160 million at the midpoint.

If you look at our CAGR and adjusted EBITDA since the IPO, it's a 10% annual CAGR, plus 21% adjusted EBITDA year-over-year going into 2015. Back then, we were highly concentrated with revenue coming from Walmart of our -- the Walmart MoneyCard program being 2/3 of our company's revenue.

Today, no one program generating more than 30% of revenue and around 15% of adjusted EBITDA. So the summary here is that it's been really a very productive 5 years for the company. We're simply, in our view, a better company today.

And interestingly, one of the fastest-growing public companies over the past 5 years, if you look at our CAGR, and into 2015, in the entire FinTech and banking industry segments. So lastly, in summary. Today's Green Dot is much larger and much more highly diversified than at 2010. 80% of our revenue is recurring in nature.

We have numerous product and services, all targeted to the low- and moderate-income American segment. Green Dot is a proven survivor that has emerged as the undisputed champ of prepaid and a top consumer brand name for financial services. We are not just a prepaid program manager.

Today's Green Dot is high-tech, data-rich bank holding company with massive national distribution, making us well-positioned for the coming branchless era of banking. Many of the key investor concerns and overhangs have been resolved or substantially mitigated positively over the years.

And our historic double-digit CAGR since the IPO and the forecasted double-digit growth into 2015 ranks Green Dot as a top grower within its industry segments of FinTech and banking. And so we invite you to take a fresh look at Today's Green Dot and that's our new investor’s deck. And with that, we'll open the phones for Q&A.

Operator?.

[Operator Instructions] And our first question today comes from Mark Palmer of BTIG..

What is management's estimate of the impact on the company if Walmart indeed does not renew its contract at the end of 2015?.

Well, Mark, good question, I appreciate it. We always feel positive and energized by Walmart. And so we don't really discuss that much publicly, but it's a fair question. And if that were to happen in 2016 and the contract were not renewed, there's a slow predictable decay of revenue and earnings.

And the reason is, is that we have a portfolio of accounts and we're the issuing bank. So those accounts would stay on Green Dot Bank. We would not be acquiring new accounts after the cancellation. But the accounts that we have would stay and they would attrite over time.

And if you look at the cohort analysis, and we've done this in real life with our actual cohorts of cards, it would take about 5 years for that revenue to decay to 0.

And to give you a sense of the pace of that, after 2 years post-cancellation in a theoretical cancellation, about half of all the revenue would still remain 2 years out post-cancellation. And so we would have, in effect, 5 years in that event to rightsize the company and adjust costs and to find other replacement sources of revenue.

And so that's how that would play out. But again, it's not something that we think is likely, and I don't want to have that question be interpreted as differently.

But it's a fair question because I've been at some investor conferences or others where there's a belief that if Walmart or any retailer were to cancel say on a Monday, that by Tuesday morning, all the revenue evaporates. And it doesn't work that way. You have a large group of direct deposit customers who stay on for years.

You have other one-and-dones who would go away quickly. And that's how it would play out. So it would be something that we would be able to forecast and plan for and would be a 5-year, very predictable decay. But having said that, that doesn't mean it's something that we're planning for.

We have a high degree of confidence in the work and efforts we provide for Walmart, and so we're keeping our fingers crossed for 2016 and have reasons for optimism..

Our next question comes from Ramsey El-Assal of Jefferies..

Great news that the revenue concentration has really dapped down. Can you help us parse out the factors that have played the greatest part in this reduction? Obviously, TPG was very impactful and sales in alternate channels obviously have been higher than in the base of Walmart.

But I'm trying to figure out sort of the positive factors that are contributing the most? And also the degree to which any deceleration at Walmart might also be contributing to that very rapid and positive mix shift at the end of the day..

great organic growth on our branded products; a little bit softer revenue on the Walmart side of the house and acquisitions. And that together has generated that diversification..

Okay. The bottom line guidance came in a little lighter that we had modeled. And I think we may have overestimated the margin accretion from TPG.

Are there any incremental factors such as, I don't know, GoBank or the check cashing channel or any new business lines or new tuck-in acquisitions? Or are there any new incremental kind of margin pressure that has emerged over the last 12 months? Or did -- or are TPG's margins what you were anticipating? Maybe if you could just talk a little bit about how your assumptions going to your 2015 guidance..

the MoneyPak, the potential impact which maybe we'll do better; the $6 million nonrecurring one-over-one; and then the slightly smaller revenue of the MoneyCard program at the beginning of '15 that we had in '14..

Got it. One last super quick one for me. I heard you mentioned 600 new neighborhood Walmart locations as an incremental distribution opportunity. Just a quick comment on that..

Sure. Yes, those are wonderful stores. I don't know if -- you're probably in New York, I would guess. And I don't imagine they're up there in New York.

But if you see the prototype stores or live in the community where those stores are located, they look like gorgeously spotlessly clean grocery stores that have a selection of Walmart products that are designed to compete with Dollar stores and others. They are beautiful facilities.

And we were able to secure distribution in those stores as they build them and roll those out. So that's incremental to the traditional Walmart-large footprint store that you think up..

And our next question comes from Sanjay Sakhrani from KBW..

This is actually Tai DiMaio in for Sanjay. Just following up on the last question.

Do you have the year-over-year growth rate for Walmart by chance?.

We don't. And I don't know that we disclose it even if we do. I don't think we do segment reporting on that. So it's all blended into our overall business. So the answer is we don't. You can probably get to it. You know what TPG contributed because we talked about that in our disclosures.

And you know what our middle of the range EBITDA forecast is, so we could probably figure it out or you could too. But it's not a statistic I have handy..

Okay. And then just on the credit products you mentioned potentially rolling out. I remember the last time you spoke about it. You would have a plan submitted to regulators if this is a path that you were potentially going down.

Is this is something that you've already applied to do? And what sort of credit products were you looking at? Were they and be something like payday or installment loans?.

the secured credit card, that's one product that we have a lot of interest in; and then the unsecured line of credit. But to do those, we need to make sure that we're doing it thoughtfully and responsibly. And that's why it always requires regulatory approval and oversight..

And our next question will come from Tien-tsing Huang from JPMorgan..

It's actually Reggie filling in for Tien-tsing. I guess -- I'm not sure if you mentioned it or if I missed it or not.

But did you guys give Walmart revenue concentration this quarter?.

No. It'll be in the K and Q. Walmart for the quarter -- for the MoneyCard alone, it was 39% in the quarter..

Okay. You said the MoneyCard. Is that the way you guys have always reported it? Or is that....

No..

So historically, it's been the system revenue for Walmart?.

Right. It's been the system but -- Yes, Reggie, that's right. And that's a great question because it's an opportunity to expand that out a little bit. So we still have the metrics and always have, and we'll continue to talk about Walmart as one retailer. When we went public in 2010, you had one retailer, one product, one company.

It was a classic blue Walmart MoneyCard and that generated almost all of the revenue out of Walmart. If you now fast-forward 5 years later, we sell Green Dot products, branded products. We have a GoBank-branded product, we have gift cards, we have a reload network. I'm probably missing a few. TPG has contract.

So you have all these different contracts that have different expiration dates and that renew on their own scale, on their own agenda and their own timetables.

But in the market, Reggie, people think Walmart equals MoneyCard; MoneyCard equals Walmart, which is why when the Walmart MoneyCard program management contract comes up for approval or up for review, which is the one everyone talks about, everybody looks and then says, "Oh, MoneyCard equals concentration from Walmart," and that's not the case.

They're 2 different contracts, 2 different programs. So The Street, when they ask us about, "Hey, how's the Walmart renewal coming?" What they're referring to is the Walmart MoneyCard program management and issuing agreement, and that's the concentration that we're speaking of today.

The fact that we're adding or have added over the past year, Green Dot cards under different agreements or reload services or GoBank or the gift card agreement, which just renewed last year. These are all different contracts. And Wall Street generally and our analysts don't always -- in fact, rarely understand the difference.

So we're trying to help people understand the impact of the MoneyCard contract, which is the one that everybody writes about and talks about..

Got it. So just so that I'm clear. I guess when the K comes out, from here on out, you guys are going to talk about -- when you talk about revenue concentration, you're going to talk about Walmart MoneyCard. So this -- the 39% that you quoted today, that's what will be in the filing? Or are you guys going to move....

No. What we're going to do is we're going to disclose everything because we want investors to make sure they have the whole view of it. So you you'll have total Walmart of all products, all contracts, all everything. So that'll all be there. And you'll be -- you'll [ph] label it. We have gift, and we have this and that.

But then you'll have the Walmart MoneyCard. All I'm pointing out, Reggie, is that when people say, "Well, gosh. Walmart is 51," I think it was under. I don't know what it is actually this quarter. But....

52%..

So 52%. "So wow, Walmart's 52%." And you're going to lose that, right? The answer is no. That's a combination. Right now, one of the fastest-selling products in Walmart is the Green Dot Everyday Visa product.

So I want to be sure that investors understand that no one program, this Walmart MoneyCard contract, is very important and one that we are trying hard obviously to renew for many years.

But that one program is the metrics that I've been giving on the call and that investors should not confuse that contract and that program with all the many products and many contracts and many programs we have within Walmart.

Make sense?.

Yes, I understood. And I guess one follow up. So in the release, you talk about -- I forget the exact language -- I think it says something to the effect that the no one partner would be more than 30%. And I guess, what I'm trying to reconcile is if....

No one program?.

Yes, no one program.

So that would basically mean that the 30%, that you quote it today, for I guess the MoneyCard would be below 30% once you factor in TPG and everything else?.

That's right. Yes. Exactly correct. And if you look at the deck in the -- you may have missed part of the call, but that's exactly right. The Walmart MoneyCard is about 30% of revenue in 2015 forecasted to be and about 15% of EBITDA. That is exactly right..

Okay. And your TPG, I guess, when the deal was announced, you said it would be mid-teens accretive. Just making sure that's still on track as far as the accretion that you expect from TPG..

It is, yes. As you know, the accretion is a function of how the core business does throughout the year. So we won't have the exact numbers of what we hit with accretion until we know what the year turns out to be. But clearly, double-digits is for sure and high-teens would be the least of it.

In theory, what's ironic is that, in other words, if the money you kept that [ph] impact is worse, the TPG would look more accretive, right? So we won't know those accretion numbers, but highly accretive would be the right phrase..

Next question comes from David Scharf from JMP Securities..

Maybe 2 questions, one on reloads; one on Walmart. First of all, did you actually experience any hiccups on reload volumes from Q3 to Q4 with the phase-out of the MoneyPak? Because I know it was sequentially down. I'm wondering kind of what kind of data points you had..

So the numbers of reloads for our products, no. The number of total transactions under the cash transfer line, probably.

Were we down a little bit?.

Up slightly..

Bill Pay transactions, loads to a PayPal account, this kind of thing.

So Jess, how much were we up in cash transfers?.

We were in 2%..

So that's fine, about 2% up. So we weren't down at all. But having said that, that growth rate, I'm sure, must have been slower because we started pulling MoneyPak off in the middle of Q4 and continuing. So it wouldn't be surprising if PayPal loads and things that are not card-related would impact the numbers of cash transfers.

But luckily, the reloads to our cards and deposits, so in other words, the people using our products look very healthy..

Got it. Yes, because I'm just trying to get a sense first, and it's a big range obviously, a cautious range. But to get a sense for the methodology or how you ultimately gauge kind of a $10 million to $40 million....

It depends on which employee you ask. So we had -- we actually had teams of people doing their own analysis. They sort of have different brains, trying to attack it from every angle we could think of. And so here's sort of a rundown of it. You have certain transactions, which are not card-account based.

For example, putting money into PayPal or paying a DIRECTV bill or off-track betting or something of that nature. You have to have a MoneyPak for that. So we know that's going to go away. But that's the minority of it, right? But that's -- you know that's going to go away, and that's maybe $10 million or something like that.

We do have this really cool bar code solution that PayPal is going to be using and that we've rolled out so that you'll still be able to put money into a PayPal account using this bar code.

And that may work really well, who knows, right? But assuming that all goes away and nobody ever uses it for that ever again, then that would be your low end of the scale. Now the next question is the next $30 million of it is out of the category of who knows? And the reason is, is because you're dealing with behavior of consumers.

So for 15 years, and remember, we invented this whole ecosystem, right, because we sort of invented DOS, using the old Microsoft phrase. Consumers have either swiped their cards to reload. Or they bought a MoneyPak. While now when you go up to that Rite Aid stand or that Walgreens or that CVS, you don't see the old MoneyPak, you see a new MoneyPak.

And it's basically -- it looks like the same one, same artwork, same thing that consumer would think. But when you pick it up and turn it over, on the back, there's no PIN number. Instead, it says, "Hey, now even easier than ever to reload your card. Simply take your card to the cashier and swipe it." And that's it.

And already, we're up to 75%, 80% of swipe penetration. Walmart, we've been 100% swipe since April last year, and it went very, very smoothly. It's a very logical behavior for the consumer.

But who knows? Will some people be confused? Are Walmart cashiers better trained than cashiers at another retailer? Will some retailers not put up those other placards and therefore, the consumer can't find them? So you have every scenario from crisis and doomsday and that's your 40 to -- customers won't really care and it's easier to swipe and whatever.

And that's your lower end of the range. And so we don't know. So we made a really broad guesstimate. And my sense is it's fairly binary. And I would think by, certainly, our Q2 call, we'll know one way or the other. But we wanted to make sure the range was fat enough. We didn't want to do -- well, I suppose it could still happen.

What we didn't want to do is forecast only $10 million and then have it to be $20 million and then have a disconnect with the market. And so we thought by looking at everything from doomsday to nothing, we'd have a range and be more likely to hit it. I know that doesn't sound very scientific but that was the exercise..

Got it. No, that's helpful. I actually kind of experienced firsthand some confusion on the part of a Rite Aid check-out cashier. So there's no question that it's out there. Steve, on Walmart, I wanted to kind of maybe ask you kind of the concentration question but from a different angle.

When I look at -- when I do the math at the midpoint, based on the concentration figures you gave, 30% of revenue, 15% of EBITDA, I come up with an EBITDA margin for the MoneyCard program based on your guidance today of just 10.7%. And I come up with an EBITDA margin for the rest of the company, excluding MoneyCard, of 25.9%.

And that's even before commissions go up, theoretically, out of renewal. So the gulf would be even greater. And you can see where I'm heading, which ultimately is why do you want to renew this so badly? I mean it's 15% of earnings now. Presumably, if it were in melting ice cube mode, you would rightsize the company.

At end of the day, this program seems to be 1/3 to 1/4 the marginal profitability of the rest of your company. And it really probably only represents about 5% to 7% earnings hit once you rightsize things.

And I guess, if I were to ask you in terms of what acquisitions are you looking, I mean would you use deployable cash to go after a 10%, 11% EBITDA acquisition? So maybe you can give a little more color on just how meaningful this program is to the overall strategy..

Well, look, so the answer is nobody matches the scale and the sheer volume of folks, especially if your target is low- and moderate-income Americans than Walmart. So we would always fight tooth and nail and do anything ever that we could to please Walmart and to ensure to them that we were their best partner and their best selection.

Because it's a lot of revenue, it's still a very big program and it's part of our scale. So in fact -- in effect, to think about it, that scale is what helps buy the efficiency of the overall platform.

Plus, as an entrepreneur, frankly, and as a company that invents products that wants to delight consumers, what a fabulous and wonderful partner to have in Walmart. They touch a tremendous number of Americans every year, all of whom are in the demographic of folks we serve.

So whether it was at a 10% margin, a 20% margin or a 1% margin, we would always seek to renew that business and earn that business and do everything we can to please Walmart every day. So I want to be clear about that.

At the same time, the broader point is well taken, and that is that nobody, I would not imagine, looks at Walmart as a high-margin account, whether you're a Green Dot or Procter & Gamble or Johnson & Johnson or whoever the private equity company that makes Little Debbie's now, whatever that company is, they're wholesome [ph].

Nobody I think it's going to look at Walmart as high-margin business. But it's a high-scale business, and they're a wonderful partner. But to your point, we needed then figure out, which is what we're doing, how do we grow more on the organic side, like we've been doing on the Green Dot brand.

How do we diversify and buy more companies? How do we make sure we can develop more products using our amazing technology, which I'm very proud of, and our unparalleled reach and credible brand name with so many consumers, to launch new products that have different margin characteristics that can help us grow? So you never win a football game by putting fewer points on the board no matter what anyone says.

But to your point, we need to put on more points, and we need to continue to focus on margin with those new points..

Our next question is from Mike Grondahl of Piper Jaffray..

In the September quarter, you said that the Green Dot brand incurred, I think, grew 37% year-over-year.

What was that number in the December quarter?.

It was definitely high double-digits. But because it lapped the Dollar stores, probably not quite as high as 37%. The answer is I don't know. We can get it for you maybe in a follow-up call. But big. The Green Dot brand continues to be big double-digit growers..

Okay.

And then could you talk a little bit about -- had there been a marketing strategy around GoBank and Walmart?.

So thus far, other than putting it on the shelf and having the shelf talkers, which are the signage, if you will, that goes on the displays, we've not done any marketing in Walmart that's outpaced that. Now in Q1, we will, and we start the digital machine ramping up in Q1 as we end the tax season.

And we'll have some displays in the money centers and doing some other cool things to promote GoBank. But right now, we just wanted a naked au naturel acquisition rate to say, "Hey. Somebody sees 14, 15 products on the shelf. This is one of them.

Did they buy it? Did they know what it means? Does it have any differentiated behavior from a customer who buys prepaid card?" The answer is yes to all those things. And now we know better how to refine our messaging in the marketing.

So Q1 coming up will be, starting of tax season on February 1 in particular, will be the first marketing we do other than just putting the package on a j hook..

The next question is from Matt Lipton, Autonomous Research..

I guess, first, so there's been a few questions today on the margin guidance and just being able to let [ph] people model it. I guess one of the factors that I've been thinking about is when we did the call for tax fraud's group. It was talked about being a 500 to 600 basis point that added its contribution to Green Dot's margin at that time.

And you have some nice disclosure here on the PDF about core margins x those 2 items that you called out earlier, Steve, from the MoneyPak and from the onetime item being 200 basis points. So to me, it seems like there's a 300 to 400 basis point delta there between what the margin can be with the accretion from TPG and what you're guiding to.

So are there other investments that we should be aware of? Or is this just conservatism on your part?.

Well, it also depends on what part the of EBITDA range you look at. So the margins would look better, the more EBITDA you assume dropping to the bottom line. And I think we're assuming the midpoint is our max that we're using for our analytics in these decks. We didn't use the $150 million nor the $170 million.

I want to say it was all based on the $160 million. So part of that is that -- and it's just variable. If the MoneyPak issue had not been an issue, you'd feel more confident in looking at that revenue dropping to the bottom line. With that product being disabled, you don't know. And so it's safe to use the better part of valor.

But we always have optimism of controlling expenses. Any growth we have in the core business falls to EBITDA and expand margin. And so we're not saying that's the best we're going to do. But in these forecasts, we try to give a number that we don't violate. Sometimes it happens. And if it happens, things happen in running a business.

We try to give a number that you can rely on and then if we do better, people don't get upset. So we would say we feel really confident of 21.3%, but that doesn't mean it can't get better.

The comment about an improvement [ph] is again, that $10 million for MoneyPak, the $6 million onetime benefit that we lost from last year, we're not going to get it twice in other words. That's money that would have fallen right to margin, right? There's nothing against it. There's no additional infrastructure. There's no variable cost.

So when you wipe that at $60 million in potential negative margin, it does have that impact of 21.3%. But that's a lot of EBITDA on our base to get rid of, right? 10% of EBITDA just wiped out of the assumption. And so that otherwise would've been a fitted margin..

All right. And when I adjust for MoneyPak on the top line, it seems like you're forecasting -- just make sure I'm right on this double-digit organic growth, which is something that I know we talked about at the Analyst Day 1.5 years ago.

So does that to -- when more come into -- from the piece of that guidance, does that assume that Walmart, which definitely declined last year, low double-digits, does that kind of turn the quarter and start to improve? Are there other things that you're assuming kind of to the numbers in 2015 that helps you get to that double-digit organic growth x the MoneyPak issues?.

It assumes in the -- in the black box in the model, it assumes that Walmart stays flat and doesn't get better or worse, it just kind of stays where it is. And it assumes that the Green Dot brand continues to do reasonably well. Not as high as we did in the past because flopped a lot of those retailers.

But it assumes that we still stay double-digit on Green Dot. So those are the 2 assumptions. To your point is the question of MoneyPak and how that affects -- because you could call that cash transfer revenue as heritage or organic revenue, so that's a bit of an unknown.

But on cards, it assumes that everything stays the way it is at Walmart, at the level they are today. And assumes Green Dot pretty much does what it's doing in real life. So it's not really an aggressive assumption nor have we baked in declines because we don't have a reason to bake in declines. But that's where that is..

That's great.

And then, Grace, can you just give us the unencumbered cash number? And then also when you look at the banks of how much you could actually bring up to the holding company?.

We're sitting at around $136 million in unencumbered cash at the 12/31 mark. And I think from a cash-at-the-bank perspective....

How do you mean how much would come back? You mean, would the bank give up excess capital and put it back to the holding company, you mean?.

I think it was the number that you gave last quarter as well. I think it around $125 million of money at the cash to the bank that could, for regulatory purposes, become part of the Holdco and then dipping it up..

I don't -- well, yes, I don't think we would have said that. I think -- I always look at -- I'm sure there are ways that banks can give dividends.

I can tell you that in my conservative mind in banking, it's a -- what is that fish that has the -- the one with a sword that once the sword goes in, it never comes out? You know what I mean? When we put capital into the bank, we put it there to keep it there, to fund our other initiatives, the deposit growth programs like the kinds of things were talking about.

So I wouldn't bank on, no pun intended, any of the money at the bank becoming unencumbered at the holding company, I wouldn't think. Unless I'm misunderstand the question..

I don't think we talked about it that way. I think somebody asked a different question..

No. But I wouldn't count on any of that. The money at the bank is there to support the bank's activities and growth at the bank, which has been tremendous. If you look at our overall balance sheet, we're at 8 -- I don't know $868 million -- somebody help me out. I forgot the number, in total balance sheet this year versus....

$845 million at the end of....

Yes, $845 million. So it's up like 30%, 40% over a year ago. So we continue to grow the bank pretty quickly, and that capital is there as a safety net to do that..

Next question comes from Ashish Sabadra of Deutsche Bank..

A quick question on the Walmart extension. I was just wondering if you could provide some color on why did Walmart decide to extend versus the renewal.

And if there are other players involved in the negotiation process that you're aware of?.

Well, I can't give you a lot of color because I think it would be somewhat inappropriate for a public call. I think the way to express it is that it's a complex process. Of course, we're not the only player and the only bidder in that process. And they requested more time to complete their process and we're happy to oblige.

I don't think there's more to it than that, really..

Okay. Quickly at Walmart. You'd mentioned some stocking issues in the past. I was wondering if those have been resolved.

And so your expectation is the Walmart growth will still be flat, but I just wanted to make sure that if issues -- the stocking issue have been resolved? And are there any other things that we should keep in mind that Walmart going into '15?.

Well, I think we've done a great job with Walmart, and they have some wonderfully talented executives and operational personnel that focuses on this issue in our category and others. And I think we've made improvements.

We have the launch of that financial destination center, which is this large refrigerator-size cube that sits in the middle of Action Alley. And I do believe that's been more consistently stocked and better stocked.

And we're hoping that once consumers can find that and know they can depend on it, that, that will fix some of those merchandising issues. But to be fair to Walmart and every retailer, it's just retail. It is so hard when you have so many front-end employees and so many people and so much traffic to keep those stores perfectly stocked at all times.

So I want to say we're doing a good job. I want to say Walmart's doing a great job, and I think the destination center will be helpful in that..

Okay, that's helpful. Quickly on your other large retailers other than Walmart, which have been with the company for a long time.

Have you -- I was wondering if you can just comment on the Green Dot growth at those retailers, like the discounts?.

Yes. At our legacy retailers for Green Dot, think about the Walgreens and Rite Aids and CVSs and the 7-Elevens to the world. The growth is often variable quarter-by-quarter and year-by-year. But generally, as you can tell from the Green Dot brand, they've continued to grow quite nicely.

I'm always impressed with some of these retailers where we've been with for 10 years plus. Rite Aid has been, oh my gosh, it has been 14 years now. CVS, a decade. And it's just amazing to me -- more than a decade. 2012, it's been 12 years with CVS. How we continue to grow there year-over-year.

And it's a testament to the appeal of the product and the mainstreaming of the product. So growth is good. But every retailer has different growth margin rates. Somebody will try a new merchandising routine. Somebody has an issue, where they get lower, the other guy gets higher. So we sort of look at it as a portfolio of retailers.

And together, as the portfolio, they've done quite well..

Okay. I have one final question for me was around active card growth. So when you look at the active card growth, that's been around 5% year-on-year over the last 2 quarters in total in the fourth quarter. How should we think about it going forward? So you have some of the growth from the new retail channels going down. Walmart will be flat.

So how should we think about the active card growth? Should we -- is there an expectation of an improvement in the overall active card growth?.

Well, so again, it's a portfolio business. So we'll have some portfolios growing. We'll have other portfolios flat or shrinking. That's the way it works. And so in general, on average, our active cards has typically tracked our growth in card revenue. So we would expect to be up. Whether it'll be much more than 5%, I don't know. I haven't looked at it.

But I'm going to say 5% to 10%. I don't have the particular metric. But if I guess, 5% to 10% for next year, I don't think I'm going to be that wrong..

And our next question comes from Tulu Yunus from Nomura Securities..

Just a revenue guidance question first and sort of piggybacking off of Matt's question. If I look at -- assuming sort of TPG, I think you'd indicated about $90 million back in September as sort of the revenue run rate.

Back -- adjusting for the acquisition and then the lost MoneyPak revenues, you do -- I do get to sort of a double-digit revenue run rate, up from the 4Q exit of 6%, so question surrounding what is causing that acceleration. And it seems like the Walmart stability that you talked about is a big part of it.

Now question is how much of that -- just to clarify, are you speaking about Walmart as it stands -- Walmart in the aggregate of system-wide, which would include GoBank? Or are you talking about MoneyPak stability there? In other words, long drawn-out way to ask, what are sort of -- what are you kind of assuming in your guidance for GoBank?.

For GoBank?.

Right..

For GoBank, we talked about that we're at a run rate of about 6 -- well into 6 figures and this is -- which is fabulous for a brand-new checking account like that. But for it to have a real impact, remember, these are portfolio businesses. So even if you sold, let's pretend, 1 million accounts on day 1, you don't get all the money from that.

It takes time for those portfolios to build then age and generate the revenue. So -- but for GoBank this year, I don't know what we're forecasting. We're not breaking it down line item by line item. But I wouldn't say it's overly material even though I think we'll acquire a lot of accounts. It's just that it takes time for those portfolios to build.

Just like it took years for prepaid to build. It's the way it works. So GoBank -- and GoBank is also not only in Walmart, but it's also in the app stores and online, so it's all that together. So on GoBank, that's that. But then the other question....

Yes. No, that -- I mean, that's what I was trying to get at is I guess, when you say Walmart will be -- will stabilize in '15....

us, American Express, Incomm, NetSpend. Everybody is in that retailer, not just Green Dot. So while we're the predominant seller, and we've done a fabulous job maintaining a huge lead over the competition, it does all add up. So the fact that there's a loss to Green Dot year-over-year doesn't mean there's a loss to Walmart.

And I don't know if that makes sense or if I'm explaining that well.

But does that kind of logically hold it here?.

Yes, yes. No, I think I definitely get it. The other question just on the target for 7-digit accounts.

I'm sure you know in the Amex's disclosures back in 2013 when they first launched Bluebird, I think 9 months in, they talked about 1 million plus accounts that they had acquired, and now obviously we know there was a lot big marketing machine that went behind it. So I guess you're sort of looking at a similar type of ramp.

Question is, given that there's already another -- an Amex -- that there are, let's say, other prepaid products -- more prepaid products today at Walmart than there were back then, how confident are you that you can get to that 1 million plus by the end of '15?.

Yes. Well, so GoBank is both Walmart, but it's also app stores and online. And frankly, we do a lot of applications to the app stores and online that some days are equal to or greater than what we have in Walmart and likely the same is true for Bluebird. So I don't know this for a fact. You need to ask American Express.

But when they quoted that number, my guess is that was to all application sources, not specifically just in the retail environment. But GoBank attracts a different kind of a customer. It's a millennial, it's a technology customer, it's also a low and moderate-income customer who looks at it too as a really a good-quality, inexpensive checking account.

I just got another wonderful review from Consumer Reports that I think will help drive online acquisitions and app store acquisition. It's a really cool account. So it isn't a question of how much can we sell on a rack in a Walmart versus prepaid. It's how many folks can we attract to try this product in all of the country.

Walmart being a big part of that, but also all kinds of media. And so that number I gave you -- I didn't mean to say that Walmart itself, as a retailer, within its 4 walls, would sell a run rate of 1 million account by the end of the year. It refers to the product called GoBank through all the acquisition channels combined..

Okay, fair enough. And then last question is just on -- just a clarifier on the margin headwind for MoneyPak. So you referred to the $10 million, Steve. That -- you said it all falls to the bottom line.

I'm just trying to reconcile that with the disclosure on Page 11, where you talk about $10 million to $40 million of revenue impact, but $2 million to $10 million of EBITDA impact.

If it was 100% margin, wouldn't those 2 numbers be the same?.

No, don't know that. If -- and if in these questions, I said all, I don't mean all would be equal 100% and I'm not speaking socially here in terms of reconciliation tables.

But what I'm saying is incremental -- in any company, incremental revenue on a fixed base of expenses has a disproportionately larger impact on margin than a fresh dollar made on fresh infrastructure, right? So what I'm saying is when you have a fixed infrastructure of an ecosystem and you suck out $10 million from it, it's going to have a disproportionately larger impact to EBITDA than another product that was brand-new because you haven't changed your operating expense, you just got rid of $10 million of revenue.

So it does have a disproportionately higher impact on EBITDA. In the case of that forecast for MoneyPak, a lot's going into that, not just margin from the sale of the MoneyPak. But in the case of the elimination of that MoneyPak PIN product, that's where 100% of the fraud lives.

If you think of -- and you're not on our side of the desk, but the angst that, that product has created in terms of write-offs and fraud reviews and of employees and risk operations and dealing with customers and settling issues and all the stuff that surrounds the victim-assisted fraud, which is the reason why we got rid of the product.

All of that will go away as part of this MoneyPak coming out. So the revenue, yes, disproportionately affects your margin at a higher rate than other revenue. That's just the law of how business works.

But at the same time, we also believing we're going to get rid of a lot of the nonsense that they have to pay for and deal with that, that product has created. This is a case where the fraudsters got the best of us, and my decision was, and I'm glad I made it, that whilst having a onetime reset of financial impact, I'm glad it's gone. We did our best.

We had every fraud control we could imagine on the product. We worked with consumer groups and advocates and everyone else, and at the end of the day, I just didn't feel like I was going to be successful or the company would be successful at getting rid of the victim-assisted fraud and so I got rid of the product.

So in that range of EBITDA, I wish I could tell you if that black and white to say, "Okay, well, MoneyPak #3 is sold for x," and that means it is in.

You're sort of trading in the incremental EBITDA margin from those -- that money generated, minus what you're going to save in fraud expense and printing costs of all the MoneyPak PINs and all the things that going in all the call centers and all the customer service and the millions of calls. So it balances out, and it's really hard to the precise.

Anyhow, I hope that's a better explanation. But for sure, I don't have the transcript, but if I implied that 100% of MoneyPak revenue goes to margin, that would have been an incorrect statement. I don't think I said that. But I want to make sure I did. Listen, with that, we're done with the call.

I think there was no more questions either so thank you, everybody, for your time, and we look forward to seeing you at upcoming conferences..

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