Dara Dierks - MD, ICR LLC Steve Streit - President and CEO Mark Shifke - CFO.

Ramsey El-Assal - Jefferies Steven Kwok - KBW Oscar Turner - SunTrust Ashwin Shirvaikar - Citi.

Good day, and welcome to the Green Dot Corporation's Fourth Quarter 2016 Earnings Conference Call. Please note, that the contents of this call are being recorded. Please note this event is being recorded. I would now like to turn the conference over to Dara Dierks. Please go ahead..

Thank you, and good afternoon, everyone. On today's call, we will discuss 2016 fourth quarter performance and thoughts about 2017. Following these remarks, we will open the call for questions. For those of you who have not yet accessed the earnings press release that accompanies this call and webcast, it can be found at ir.greendot.com.

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 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 our reference to financial measures that do not conform to Generally Accepted Accounting Principles. For the sake of clarity, unless otherwise noted, all numbers we talk about today, including revenue per active card will be on a non-GAAP basis.

The information may be calculated differently than similar non-GAAP data presented by other companies. Quantitative reconciliations of our non-GAAP financial information to the most directly comparable GAAP financial information appears in today's press release.

The content of this call is property of the Green Dot Corporation, and is subject to copyright protection. Now, I'd like to turn the call over to Steve..

Thank you, Dara and welcome everyone to our fourth quarter earnings call. Today, we will cover a review of the quarter and full year. We will talk about our two reporting segments and our increasingly diversified consolidated enterprise.

We will provide some more information on the recently announced pending acquisition of UniRush and we will provide our updated six step plan for 2017. Then, lastly, Mark will provide our financial guidance for 2017 both with and without the UniRush acquisition; you can easily see the guidance in parts and on a consolidated basis.

I'm pleased to report that Q4 was a strong quarter for Green Dot with both of our reporting segments and all of our revenue divisions performing within or better than our expectations. Total non-GAAP operating revenue came in at $163.2 million representing a 8% year-over-year growth rate.

Adjusted EBITDA for the quarter was $21.8 million representing year-over-year growth of 72% and margin expansion of around 500 basis points year-over-year. And non-GAAP EPS for the quarter was $0.19 which equates to the year-over-year growth of 217% or more than 3x the prior year period.

For the full year 2016 total non-GAAP operating revenue came in at $719.7 million representing a year-over-year growth rate of 3%.

Remember that we previously reported that we needed to grow by $35 million just to be flat on a year-over-year basis to this result means we generated around $55 million of good margin organic revenue from our new prepaid products and our new initiative.

Inclusive of approximately $11 million in usual expenses relating to the launch of our new prepaid products with higher unit economics, adjusted EBITDA for 2016 came in at $156.3 million growing 3% over the prior year with non-GAAP EPS at a $1.46 representing a 8% increase over 2015.

The results of the quarter and the year overall are in large part due to the discipline we've deployed around our roadmap for growth laid out in late 2015 and the corresponding 6 step plan to deliver at least a $1.75 in EPS in 2017. As background when Green Dot launched its IPO in 2010.

We were essentially a monoline prepaid card program manager for the majority of our revenue coming from just one product sold in one retailer, the Walmart Money Card. Since that time one of our most important long-term strategies has been to diversify and grow Green Dot's revenue base both organically and through acquisitions.

So that we could derisk our earnings then have multiple platforms of future growth. That plan has been very successful for us and that including the acquisition of UniRush with its PayCard business.

We now have two reporting segments under which resides six revenue divisions each with its own set of unique products for distribution channels yet all of them synergistic to the other and strategically on point with our mission to reinvent banking for the masses.

As one measure of that success, since our IPO year of 2010 on a pro forma basis in 2017 will have more than doubled our revenue and or EBITDA with no one product now representing greater than around 25% percent of our revenue. Each of our six revenue divisions has a dedicated leader and each has its own product roadmap and revenue plan.

Let me quickly discuss each, so you can have a better more updated view of today's increasingly diverse consolidated Green Dot. Let's start with our Account Services Reporting segment.

Within that segment consumer accounts is our largest revenue division and houses our prepaid card products, our GoBank checking account products and open-loop gift cards.

This is the division that investors and analysts tend to think of when they think of Green Dot Corporation because this division essentially represented the entire company's revenue at the time of our IPO in 2010. By comparison now in 2017, the consumer accounts division is expected to represent only about half of Green Dot's consolidated revenue.

2016 was a good year for consumer accounts with the launch of our new prepaid products with better unit economics and improving behavior across our customer base for these products.

As you know, the ongoing story in this business line is that we have lost a large number of active accounts since the discontinuation of the original MoneyPak in 2015, while the revenue generating behavior for the remaining customers of those legacy active accounts.

And the strong revenue generating behavior from the new customers of our new prepaid products has created materially higher revenue per active card.

So in 2016, the net result of double-digit revenue per active card growth offset by double-digit active card declines has led to single-digit overall revenue growth for this division but because the incremental higher revenue per active card has little cost associated with it, it has helped us significantly expand our consolidated margin contribution.

So this division is providing significant fuel to the consolidated margin expansion we see. But, we don't expect this division to deliver greater than single-digit top line growth until we begin to grow total actives, which isn't in forecast to happen until early 2018. Also in our account services segment is revenue division called Green Dot Direct.

Green Dot Direct is the amalgamation of several direct to consumer Web sites and direct to consumer direct mail programs that we've either developed organically or through acquisitions over the last few years.

Green Dot Direct includes greendot.com, walmartmoneycard.com, accountnow.com, achievecard.com, readydebit.com, gobank.com and soon rushcard.com.

By keeping the consumer facing brands as they are but consolidating and streamlining marketing onboarding and back office program management, we've been able to develop a powerful and profitable direct to consumer capability at a time when more and more consumers are going online and to their phones to find suitable bank accounts.

Given the macro of increasing online preference and the cost synergies, we expect to achieve from the acquisition of UniRush and RushCard, we believe our direct division has the opportunity to be a growth leader in the company for some years to come.

Next in the account services segment contingent upon the closing of the UniRush acquisition, we will have our newest revenue division called PayCard and Wage Disbursement Services. The brand of UniRush PayCard offering is called RapidPay.

With over 2000 corporate clients and around 275,000 monthly active employees receiving their pay through the RapidPay offering, we believe this division can become a significant contributor to the consolidated Green Dot.

The electronification of W2 payroll is a growing macro and given our bank, Green Dot's enhanced product selection that can help expand the number of products RapidPay offers its client base and the number of large corporate clients we work with we believe our new PayCard and Wage Disbursement Services division can be a very nice compliment to Green Dot's other business units.

Finally, in the account services segment is our wholly-owned bank subsidiary Green Dot Bank. Since it's founding, the bank has been an efficiency driver in an innovation enabler for Green Dot Corporation.

For example, GoBank mobile checking, the Uber disbursement program, the new prepaid products with check deposit, check writing and the embedded savings account offering, our secured Visa credit card, TPGs small business lending program and many of our new business opportunities have all been facilitated through our bank.

But it's also fair to say that Green Dot Bank has not historically had the regulatory flexibility to maximize its earnings potential as a standalone entity.

In fact, with the exception of the modest interest income the bank earns from balance sheet investment activities and the small amount of non-interest income it earns from its bank operations in Provo, Utah, the banks financial contribution is in the form of cost savings by serving as their issuing bank rather than earnings.

By going forward, pending regulatory approval, we believe Green Dot Bank can generate EPS for more material returns on investing core deposits and perhaps other business activities that can generate both interest and non-interest income.

In addition, in December 2016, we're successfully able to reduce our minimum Tier-1 capital ratio requirement from the former 15% minimum down to just below 10%.

As such, we now have a significant amount of extra capital in the bank subject to receiving regulatory approvals, we plan to dividend this surplus back to Green Dot parent, which we can then use for general corporate uses including funding share buybacks, making acquisitions or paying off debt.

We're early in the evolution of the bank as an independent money maker. But our plan is to make the bank more capital efficient and build out its capabilities as a future contributor in its own right. Now let's talk about our processing and settlement reporting segment. The first revenue division in this segment is money processing.

Its biggest product is our ubiquitous Swipe Reload Service available at around 100,000 retailers nationwide.

This division also owns our new MoneyPak product which is catching on with increasing retail distribution and higher sales and a product called eCash, which is a mobile barcode cash deposit solution that allows consumers' the ability to safely use our retail network to pay certain bills or to put cash into their PayPal account and other types of online wallets and account.

While this division saw the most paying during the 2015 discontinuation of original MoneyPak product, necessity is the mother of invention and we believe our money processing area now has perhaps the highest potential growth prospects of any division in the company.

New money processing products include our new simply pay corporate disbursement platform, that last corporate clients’ ability to replace checks with electronic deposits to recipients debit card. And the ability for large corporations to instantly send wages to far flung and dispersed groups of 1099 workers.

For example, simply paid as a platform we use to power Uber's instant pay to any debit card service for their drivers. We believe the potential growth opportunities are significant as the gig economy expands and as large corporations look to replace checks and 88 with more efficient and faster electronic payments.

Because many of these modern disbursement solutions almost always have faster payments, mobile banking and financial technology at their core, our money processing division also tends to be from where much of our fintech innovation brings forth.

Lastly in the processing and settlement reporting segment is our tax processing revenue division called TPG. TPG is purely a B2B processing technology play that serves as the back and refund processor for leading online of brick and mortar tax services including thousands of independent tax prep services and accounting firms nationwide.

Through TPG's integration and the leading tax industry software providers we're also increasing our cross-sell opportunities by offering GPR cards from our consumer accounts division and small business loans from Green Dot Bank to help expand our tax related services and generate incremental revenue beyond TPG's core processing services.

TPG's Financial performance on its core business is fairly static as it’s linked directly to the nation’s tax filing macro which has also been historically fairly static.

But, we believe that the recent success of our cross-selling efforts with cards, loans and other ancillary products has the potential to improve TPG's consolidated revenue and EPS contribution over time.

As you'll hear in more detail during Mark's section of today's call, our two reporting segments inclusive of these six revenue divisions are designed to operate as a strategically linked but highly diverse and robust group of businesses that on a consolidated basis after giving effect to the proposed acquisition of UniRush by the end of the quarter are expected to contribute between $815 million and $830 million of revenue in 2017.

Now that you have a better idea of Green Dot's diversified businesses, let's take a moment to look at 2016 and review how we did with our six step plan to achieve at least a $1.75 in EPS in 2017. We will also use this section to announce our new six step plan for the year.

Step one was to launch new more appealing products with materially better unit economics at all 100,000 Green Dot retailers, we did that. These new products are so far doing very well for us and seem to be attracting a more committed customer base for making the cards an increasingly integrated part of their personal financial management.

You can see evidence of this increasing customer quality in the usage metrics. For example, in Q4, GDV per active card is up 14%. Spent per active card is up 13% and direct deposit penetration as a percentage of active accounts is up again and Q4 growing 20% on a year-over-year basis.

In the quarter, 65% of all deposits to our accounts were made through direct deposit. Given the risk and uncertainty going into 2016 associated with launching a completely redesigned suite of products for brands as established as Green Dot and Walmart, we're thrilled to see customers adopt the products and use them the way we had intended.

And of course also thrilled to see the economics play out the way we modeled or even better. So given the success of these new products we can now set our sights on active card growth. There are only two ways to achieve active card growth. One way is to issue more new cards. The other way is to retain the cards you have.

We intend to issue more cards by refreshing our marketing with the new more mainstream message that's intended to make our products more relevant and compelling to a larger total available market.

We plan to expand card issuing activities in the new channels like tax, more aggressive online and direct mail strategies, and PayCard to our new UniRush RapidPay revenue division once that transaction closes. We also believe we have the opportunity to create new private label programs and expand our share of shelf in existing retail locations.

This is a proven strategy for us, we've already begun to execute on this plank at CVS and several other of our large retail partners. We intend to retain cards longer by using our own no cost Green Dot media touch points to educate customers on how to use their card as an everyday financial problem solver.

For example, Green Dot bank direct deposit customers can get their pay up to four days before their scheduled pay day. They are eligible to win a $5000 pay day bonus every Friday just for using their card in the prior week. They can write checks to pay their rent and deposit checks using their mobile phone camera.

They can save money in a free Green Dot Bank savings account and be eligible to win a cash price every month for doing so and of course with Green Dot, even if they accidentally spend beyond their available balance, they will never get ripped-off by paying overdraft fees or penalty fees.

These features aren't just appealing to low income customers, they are appealing to many other segments of customers as well.

As such, for 2017, step one of our new six step plan is to drive new acquisition strategies and new retention strategies to narrow the year-over-year loss in active cards each quarter and return to active card growth by the beginning of 2018.

Step two, was to relaunch MoneyPak with new risk controls, we did that and the new MoneyPak is now in over 30,000 Green Dot retailers with their goals to increase that number by the end of the year.

Sales volume continues to ramp and the customer experience has been well rated despite the new risk controls that create some additional customer requirements in order to use the product.

With the new MoneyPak now back in stores and sales growing, we believe we also have an opportunity to create new and compelling use cases for consumers to buy MoneyPak with the goal of expanding the MoneyPak products total available market beyond just the loading of prepaid cards.

As such for 2017, step two in our new six step plan will be to secure shelf space for the new MoneyPak add an additional 20,000 retailers by end of the year and to launch at least one new unique and compelling use case for the new MoneyPak product with the goal of materially increasing unit sales.

Step three was to make modest investments in high potential initiatives that align with our roadmap for growth. In 2016, we launched four new initiatives under this step.

There was a Green Dot money lending marketplace, the Green Dot Platinum Visa Secured Credit Card, the Uber Checking Account by GoBank and our simply paid 1099 disbursement platform for paying workers in the Gig Economy. So how did we do, first the Uber Checking Account from GoBank is a big success.

We acquired a sizable number of new accounts every month, drivers are happy with their GoBank account and use it as we had hoped and both Green Dot and Uber have succeeded in delivering real value for whole new set of customers. They simply paid 1099 disbursements platform is also working quite well.

Each month this cutting edge Green Dot payments platform sends millions of instant payment transactions right to the checking accounts of 10 of 1000s of 1099 workers. No checks in the mail, no ACS, deposits seven days later.

Next, the Green Dot Platinum Visa Secured Credit Card Program has done well relative to expectations and is showing real potential with 1000s of applications, many cards issued and customers properly using the card to help build their credit scores for the future.

While still too small to be a meaningful contributor to this year's financial performance, the secured credit card program is showing legitimate potential and as such we'll continue to invest in this one in 2017.

The Green Dot money lending marketplace has not been as impressive while we get a lot of applications and the side is well reviewed, the number of approvals granted by lenders in the marketplace has not been sufficient to make the program financially meaningful for us.

Having said that, the technology is very strong and usable for many other initiatives in the company and we're continuing to bring in lenders like LendUp, CCFI, Innova, OppLoans and Avant who have the opportunity to underwrite our applicants and make loans.

It doesn't cause us anything material to keep the business operational and we do earn a few $1000 in referral fees every month, so it remains worthwhile for us to give the lending marketplace more time, see it as an opportunity to generate meaningful results down the road.

So I'd say we're three out of four on new initiatives are still relatively small in 2016, we believe these and other new initiatives can create new areas of material organic growth for us and have the potential to become a meaningful portion of our consolidated revenue over time.

Creating entirely new products and new sales channels from scratch is a very difficult process that's fought with risk and uncertainty and I'm very pleased to say that we succeeded and officially launching several new initiatives that we believe make Green Dot a leading player and a very strong competitor in important new FinTech growth macros.

More importantly is that these new FinTech macros have the opportunity to drive growth rates within total available markets that are much larger than Green Dot's traditional markets and as such have the prospect of providing Green Dot with significant new organic growth opportunities over the years ahead.

So for 2017, our new step three will be to continue to make appropriate investments in growing these new successful initiatives in 2016 while making modest investments in a new crop of high potential initiatives that align with our roadmap for growth.

In particular, we believe we can use our retail distribution, money processing capabilities, mobile technology prowess and our bank charter to create new and compelling consumer products that can further establish Green Dot as among the most successful FinTech payments in banking franchises in the country.

Step four of our six step plan was to execute against a series of enterprise wide platform initiatives designed to drive multiyear cost reductions including as much as $20 million in savings by 2017 that would contribute to our stated goal of $1.75 in non-GAAP EPS.

Our team has done an amazing job on this front and I'm very pleased with how every department delivered as designed. While we had a fairly significant setback with the troubled way three processor migration last May.

We believe we have still succeeded in trimming a sufficient amount of expenses to several enterprise wide efficiency projects and through further consolidations of previous acquisitions to make up for the process of migration headwind and achieve our EPS goal for the year.

So for 2017, step four of our new six step plan will be to continue to drive incremental platform savings from a continued focus on rigid expense control across the enterprise and savings from integrating the UniRush acquisition over the course of this year.

Step five of our six step plan was about making accretive acquisitions of course we announced the UniRush deal and we continue to keep our eyes open for new acquisition opportunities that meet our requirements.

So for 2017, step five of our new six step plan will remain the same as we will continue to look for other acquisitions that are strategic, synergistic and easily accretive. Before going to step six, let me talk about the acquisition of Rush for a moment.

Last month, we announced an agreement to acquire UniRush, LLC and its operating businesses, RushCard, a leading online direct-to-consumer general purpose reloadable prepaid card provider and Rapid! PayCard a leading corporate payroll card provider.

The RushCard program has for many years been one of the most important and respected prepaid programs in America. They really like this deal as it materially expands our scale and the direct-to-consumer vertical while giving us an immediate foothold and the growing PayCard macro with UniRush RapidPay business.

The RushCard GPR program will be consolidated into the Green Dot direct revenue division that has other direct-to-consumer properties while RapidPay will operate as their sixth revenue division called PayCard Wage Disbursement Services inside of our Account Services Reporting segment.

With the acquisition, Green Dot will now rank among the nation's largest mobile online and direct mail providers of bank accounts, debit cards and related financial services with RapidPay helping us to become the largest providers of PayCards and Wage Disbursement Solutions in the country.

I'll let Mark get into the financial details of the UniRush acquisition during his section of the call little bit later on. Lastly, step six of our six step plan was about returning capital to shareholders in the form of share repurchases. In April of 2016, we repurchased $50 million in shares through an accelerated share repurchase program.

And for 2017, step six will carry over and remain as part of our new six step plan. We are committed to share buybacks and still have another $50 million remaining in the original buyback authorization which we expect to execute in 2017.

As we look back at 2016, not only was it a successful year for business initiatives, but we also made several important shareholder friendly governance changes.

In December, we announced that the Board of Directors has approved subject to stockholder approval amendments to the Company's certificate of incorporation that will declassify the Board of Directors. In September, the board amended our bylaws and adopted proxy access and majority voting.

We've also refreshed the board including five new directors in just the last year and separated the board chair and CEO roles with an appointment of an Independent Chairman.

All in all, it was successful in many ways transformative year for Green Dot and I greatly appreciate our investor support in allowing our team of talented executives across the enterprise to deliver these outstanding results against so many key initiatives.

I especially want to thank all of our Green Dot team members from the United States, China and the Philippines where approximately 900 direct employees and another approximately 1000 contract employees work every day to make Green Dot what it is to such a diverse set of stakeholders, regulators, legislators, business partners, vendor partners, fellow employees and of course investors and customers.

Green Dot is a mission based culture and everyday we strive to serve. I'm so deeply appreciative that despite such a difficult beginning for the year, our team was able to post strong results from top to bottom.

As we head into 2017, we believe that Green Dot is an increasingly important and powerful financial services franchise and stands at the forefront among the nation's leading and most successful FinTech banking platforms. I'm honored to be Green Dot's Founder and CEO and I'm eager to see what the year brings.

And with that, I'll now hand the call over to Mark Shifke for his CFO report.

Mark?.

Thanks, Steve. I'd like to start by providing some insight into our performance in the quarter, followed by commentary on our two business segments and how they each contributed to our results. Of course, I'll also provide our 2017 financial guidance and Q1 soft guidance as we look to the New Year.

First, I'm pleased to report that Q4 2016 was another strong quarter for Green Dot delivering $163 million in non-GAAP total operating revenue and almost $720 million for the year, equating to year-over-year non-GAAP revenue growth of 8% in the fourth quarter and 3% year-over-year growth for the full year 2016.

Revenue growth in the fourth quarter came from both our reporting segments. First, let's discuss our Account Services segment which includes our Consumer Accounts revenue division and our Green Dot Direct revenue division.

Non-GAAP Accounts Services segment revenue grew by 7% year-to-year driven by strong revenue per active account growth of 17% year-over-year.

The strong increase in revenue per active is result of the materially better unit economics of our new prepaid products combined with the customer base for those new products loading more money to the cards and spending more money off the cards.

You can also see the evidence of improving customer behavior and our long-term direct deposit enrollment trend, which posted another quarter of strong growth with 20% more active cards receiving direct deposit in Q4 2016 than the year ago period.

In the case of our Green Dot Direct revenue division, smarter and more efficient online marketing strategies and continued efficiency from ongoing integration of the AccountNow and AchieveCard acquisitions drove expanded margins. Now let's discuss the Processing and Settlement segment which had year-to-year non-GAAP revenue growth of 11%.

This segment includes our tax processing business line and our money processing business line.

Our tax processing business was largely dormant in Q4 due to seasonality, but it was an active quarter for our money processing division which saw revenue growth driven largely by the increasing transaction volume on our simply paid disbursements platform from our 1099 Instant Pay program.

The growing sales of the new MoneyPak product has achieved greater distribution and the increasing non-GAAP revenue per cash transfer which grew 9% year-to-year reflecting the continuing trend of fewer free reloads and more paid reloads as our new prepaid products become a larger portion of our active card base.

We also enjoyed solid performance on margins across the consolidated business.

Our non-GAAP operating revenue that was up 8% year-over-year and the quarter, adjusted EBITDA was up a robust 72% year-over-year and the quarter to $21.8 million reflecting a margin improvement of 500 basis points on a year-over-year basis, despite absorbing approximately $3 million in incremental expenses in the quarter relative to our expectations.

This dramatically higher operating margin combined with a lower tax rate and lower D&A in the quarter drove significantly higher non-GAAP EPS in the quarter of $0.19 per share, $0.03 better than we expected and over three times greater than the $0.06 per share we earned in Q4 2015.

For the full year, adjusted EBITDA was up 3% year-over-year to $156.3 million. Despite absorbing approximately $11 million in unusual supply chain expenses related to the stocking of our new prepaid products with higher unit economics at our network of 100,000 retail stores.

Absent the unusual launch expenses, this equates to an apples-to-apples margin expansion averaged across the full year of around 150 basis points.

This full year margin expansion and in particular Q4 strong margin performance is illustrative of the financial benefits we're realizing from our increasingly more efficient operating platform that supports our increasingly diverse lines of business across the consolidated enterprise.

Now let's discuss the UniRush transaction and then our thoughts on guidance for 2017. As we recently disclosed, we are acquiring UniRush for $147 million, plus a minimum $4 million annual earn out payment for five years post-closing. So effectively, $167 million gross.

The annual earn out payment could become greater as certain revenue growth hurdles in their GPR program are achieved in a given year, although any potential increase is not expected to be material to the overall price of the acquisition.

We do not expect to be responsible for any financial obligations in respect of regulatory findings such as a recently announced CFPB settlement. We also will be indemnified through a cash escrow reserve funded by seller in respect of UniRush's prior operations.

In addition, we expect to realize material tax benefits from the acquisition structure essentially the entire purchase price maybe amortized over 15 years for tax purposes, which on a net present value basis equates to approximately $44 million bringing the net cost of the acquisition including the minimum earn out payments to $123 million.

As we stated in the press release, we expect to benefit from material synergies as we integrate the Rush GPR business into our direct-to-consumer Green Dot Direct division.

So post full synergies which we expect to achieve around 18 months from closing, the EBITDA margin should be in the mid 20% range consistent with our other direct-to-consumer properties. Closing consideration will be paid using primarily a mixture of cash on hand and debt.

So now let me talk about guidance for full year 2017 and directional guidance for Q1. Assuming we close the UniRush acquisition by end of this quarter, we expect to add full year total non-GAAP operating revenue of $70 million to $80 million.

Full year adjusted EBITDA of approximately $7 million to $8 million, and non-GAAP EPS of approximately $0.04 to $0.05 a share.

So using the midpoints of the UniRush forecasted low end and high end results for the full year, we estimate Green Dot's 2017 full year total non-GAAP consolidated operating revenue to be between $815 million and $830 million representing year-over-year growth of 14% at the midpoint.

Consolidated adjusted EBITDA to be between $184 million and $191 million representing year-over-year growth of 20% at the midpoint and consolidated non-GAAP EPS to be between $1.85 and a $1.93 per share representing year-over-year growth of 29% at the midpoint.

As Steve mentioned, we anticipate completing another $50 million share repurchase this year. But because of the exact timing of the repurchase activity and the exact number of shares repurchased is unknown, we have not included any share repurchase benefit into our full year non-GAAP EPS guidance.

To calculate our full year non-GAAP EPS guidance, we are assuming approximately 52.7 million weighted average diluted shares outstanding, D&A of approximately $37 million and a tax rate of 35.6%.

Lastly, Green Dot's outlook reflect an expectation that Green Dot will be reimbursed for incremental processing expenses it expects to incur in the first half of 2017 related to paying two processors until we are able to successfully migrate our remaining consumer accounts from our former processor to our new processor.

This migration was originally scheduled to have been completed in the third quarter of 2016, but it is now scheduled to be completed in the second quarter of 2017. Now let's talk about our expectations for Q1.

We want to highlight that we've adjusted the expected timing of revenue derived from our tax processing division and in doing so have shifted our expectation of approximately $8 million of revenue from Q1 into Q2 in order to reflect the phase and timing of this year's tax season which has been somewhat unusual relative to past years.

Perhaps because of the new Pass Act, which delayed refunds for a large group of lower income tax filers or perhaps for other reasons that are still unclear, the IRS estimates as a total tax filing ecosystem inclusive of all filing segments is down by approximately 17% as of February 10 on a year-over-year basis.

We believe that low and moderate income Americans will still ultimately file their taxes by the deadline of April 18 and that these citizens who want to claim their sizable EITC, ACTC and other tax related payments.

But we're unsure how the timing of those filings could impact Q1, so we wanted to call this out as a bit of an unknown for us and a broader tax industry as we watch the quarter play out.

So assuming no contribution from the UniRush acquisition, an $8 million of tax related revenue moved out of Q1 and into Q2, we are estimating Q1 to deliver around $230 million in non-GAAP revenue for the quarter, which equates to a little more than 30% of our estimated full year guidance at the midpoint excluding UniRush.

On both the Q1 and full year basis, our consolidated guidance implies a low single digit revenue growth rate for the year on the core business, which is consistent with what we communicated at the JPMorgan Conference a few months ago.

But we understand and may feel a little bit out of step give the sequence of actual revenue growth we've experienced since launching our newsreader prepaid products in Q1 of last year.

As a refresher, in 2016, Q1 revenue was down 1% year-over-year, Q2 revenue was up 2% year-over-year, Q3 revenue was up 6% year-over-year and Q4 revenue, as you know, was up 8% year-over-year. So then why are we not forecasting higher revenue growth on the core business for 2017? There are two key reasons we'd like to share.

First, as Steve mentioned in his prepared remarks, the revenue growth in our consumer accounts division is derived by the net of double-digit higher revenue growth per active card offset by year-over-year declines in the number of active cards. We expect a number of active cards to stabilize over the course of 2017 and begin to grow in 2018.

And as you know, actual growth in revenue per active remains robust. But we want to be conservative with how we both model active card growth and revenue per active card growth over the course of the year.

The second related reason is a tax season can have a material impact on the number of active cards in the portfolio and revenue per active card derived from usage like interchange from spend, ATM fees and such.

The card model is driven by active card growth assumptions and revenue per active assumptions and even small adjustments to both inputs can yield a big improvement in the model.

So with the unusual trends in tax season we discussed earlier and given that even with a muted low single-digit revenue growth forecast on the core business, we are still able to amply deliver on our non-GAAP EPS growth and then some, we believe it's prudent to keep our expectations for both the number of active cards and the average revenue per active card on the conservative side so we don't accidentally get over our skies.

Of course if results play out better than expectations, we will certainly be pleased to let you know. Lastly, I just want to touch on what Steve said in his remarks about the company's performance.

We have accomplished so much in 2016 and let's say that Steve and I believe the business is in a very good place, both in terms of current operating performance and our prospects for future growth. As background, I started my involvement with Green Dot as an angel investor and board member in 2000.

More than a decade later in 2011, I got the entrepreneurial bug and left my job in the M&A group at JPMorgan's Investment Bank to join Steve in Green Dot in an operating capacity becoming the company's first M&A leader.

I remained in that role as an SVP of Corporate Finance based in New York until around two years ago when Steve and the Board asked me to also serve first as Interim and then full-time CFO. I agreed so long as the company didn't mind me staying based in New York which I still am today.

While I get great satisfaction out of being CFO and take immense pleasure in seeing all we have worked on come to fruition. I needed to be honest with Steve and the Board and myself that the constant weekly travel back and forth from JFK to LAX and the many consecutive days each month away from my family in Manhattan is taking its toll.

With the company now in a solid place and our many new initiatives taking root, I've indicated to Steve and the Board that while I'm happy and honored to remain CFO for as long as needed that we should attempt to locate a strong and experienced CFO who can be based full-time at Green Dot's headquarters in Pasadena.

Then, once we find that new CFO and he or she is established in the position, I would then return to my former Green Dot role as SVP Corporate Finance staying based in New York and traveling to Pasadena only if needed. To that end, Steve and I have begun a recruitment process to begin that transition.

These processes can take generally four to six months or longer and I'm absolutely committed to being the company's CFO for as long as needed. But you won't see any changes in my role for sometime to come, but Steve and I wanted to be transparent and give you the heads up now even though the transition likely won't happen for some months to come.

And as mentioned, once we have the new CFO in place, I will remain with the company in my former SVP Corporate Finance role based in New York. With that, I'd like to ask the operator to open the phone for questions.

Operator?.

We'll now begin the question-and-answer session. [Operator Instructions] Our first question comes from Ramsey El-Assal with Jefferies. Please go ahead..

Hi, Ramsey..

Hi, good evening, this is actually Christen Chen in for Ramsey..

Hi, Christen..

Thanks for taking my question..

Sure..

Hi, so just digging a little bit more on RushCard, on the synergy – I mean how much of that is cost versus revenue synergies in your plan and how much of those synergies are factored into guidance? I mean I know you said that without synergies it's $0.04 to $0.05 so it would imply that there is definitely a few sense of that in your guidance.

And then just quickly a clarifying question I may have missed it, but did you guys say that your guidance includes $50 million share buyback?.

Sure, let's – good question. The first one is our guidance does not include any potential benefit from the $50 million share buyback, so that's not put into EPS. So when and if we do that, that will be additional. And then the question on Rush, the synergies are mostly cost.

The Green Dot Direct division is the amalgamation of all these websites and one of the ways we save money is by combining all the marketing expenses and controlling our ecosystem with online clicks and search marketing and all the things we do to generate online sales.

So you can argue that there is some revenue efficiency, but when we think of that in integration, it's almost all cost efficiency certainly for the first year and a half. And the answer is you're right that none of that really is baked into 2017.

We're saying $0.04 to $0.05 which is essentially Rush's net income layered on top of Green Dot, so we're not really factoring any kind of synergy for this year..

Okay, perfect.

And just quickly, it's good to see that the direct deposit growth continues at that kind of plus 20% range, do you just have any visibility to what an up limit or how high this number could go in the future?.

Oh gosh, what a good question, kind of we look at all the programs that are out there, we bought a number of programs and we look at others and we see what those programs can do. RushCard for example would be on the highest end of the scale of the programs we see on direct deposit. GoBank and our company would be the all time winner.

GoBank has the highest direct deposit of any of our products and as a checking account you'd expect that.

So we think we have a lot of upside to go because the entire prepaid category just continues to emerge something more mainstream and less niche, and the more mainstream it is and the more the employment picture improves the more people use it for direct deposit, so we think we're certainly nowhere near the top, but it's hard to give you a precise number of what is the top..

Fair enough, thanks for taking my questions..

You bet, thank you..

Our next question comes from Eric Wasserstrom with Guggenheim. Please go ahead..

Hi, Eric. Eric, you there? Maybe you're on mute. Okay, well we can come back to Eric. You want to go, operator to the next name..

Eric? Okay, our next question….

You've had one of those conversations where you're iPhone's on mute and 10 minutes into it, you realized nobody's heard you..

Our next question is from Steven Kwok with KBW. Please go ahead..

Hi guys, good quarter, thanks for taking my questions..

Thank you..

So on the first one just going back to the UniRush acquisition, I believe their right now deposits are at MetaBank, are there any plans to move it over to a Green Dot Bank?.

Not on day one, so when we think of the efficiencies and the sequence of how we drive it, back office is the first thing you work on because that's where the biggest savings are, things like risk management or call center or supply chain that type of thing.

And then later on in the curve as you get towards the first year of integration, then you work on bank and processing because it's just more difficult and we save money, but it's not a massive amount of money. So we'll get there eventually.

Having said that MetaBank is a good partner, we know the folks well, we all sort of know each other in the industry and if they have a reason why they want to keep the deposits and it makes sense for us to do that.

We're not against that either, so ultimately in theory everything would be on the Green Dot stack, but not in the first year for the bank we'll probably keep that for a little later..

Got it. And then just when we look at the revenues per active card and then the revenues per cash transfer that's been continue to increase, at what point does that level out or how should we think about the trajectory and then for the new cards that are coming in, what's the incremental revenues on those cards..

This has been one of the delighting upsides for the model. We knew that the monthly maintenance fees were somewhat higher, but not by a lot, right, the Walmart MoneyCard it's a few dollars and not everybody pays it. So you're not looking at huge differences there.

The biggest increases have been in the usage metrics things like the direct deposit as Christian pointed out in the First Call or spend which generates interchange this kind of thing. And there has been this tremendous upside there more than we would have initially modeled which is why we sort of meet and beat throughout the course of the year.

And so we don't know what the limit is, we're forecasting conservatively because we don't know I guess is the honest answer. So we're tracking what we have or holding it steady in the model which is why we have that low single-digit growth.

But it's been coming in really strong and with some of the new features we have like the savings account, the prize-linked savings which you may have seen in the news is a ton of press coverage on it, NPR did a nice piece and others.

People are looking at these products as their bank, not just as something you buy for a few days to do something with it. Certainly we have a still lot of those customers as well. A lot more folks are using them for direct deposit and to pay their bills and for savings accounts and all those types of things.

The more our customers do that, the more not only what the revenue continue to grow but the bottom-line just expands exponentially because there is no cost really against that extra usage and that's where you're seeing this tremendous margin expansion.

That Q4 over Q4 comparison, while we grew by 500 basis points in margin, even though we still had extra cost that we haven't baked in is indicative of kind of what we're doing with the platform and it's a fairly clean comparison and this shows you the efficiency we're getting for more usage on a per card basis.

So we think we had more to go, we're not forecasting more to go, but we think we have more to go and it's been a really good upside for the business..

Got it.

And just as a quick follow-up you mentioned you are holding it and so you are holding at the fourth quarter levels or you're holding it at a year-over-year level?.

Neither in the gigantic black box that Terry Lee and his boss Paul have in the backroom, we sort of take a conservative swag of what we think is likely based on metrics we feel like we can hit or that are already existing or if they're not already existing ones that we think are obviously in the pipeline and we hold it there.

So I don't want to imply anything specific about the model except to say that on a dial if all the way up is super, aggressive and all the way down to super conservative we're somewhere in the low middle range of that, we just want to be cautious as we watch and play out..

Great, thanks for taking my questions..

You bet, Steven. Thank you..

Our next question is from Oscar Turner with SunTrust. Please go ahead..

Good afternoon, thanks for taking my question..

You bet, hi, Oscar..

Hi, another question on UniRush, it seems like the revenue per card for that portfolio is materially below that for rest of Green Dot, just wondering if there is an opportunity to boost that figure up to the corporate average overtime?.

Well, it's a good question. It maybe hard to determine from the press release because we mixed in pay card numbers which is entirely different usage patterns with their GPR products, and so I don't know that's exactly right, but it could be right.

And ultimately what you'll see is all of these things come up to a certain level because as we get them on the same bank or we put in the same features, we obviously want to take the best ideas from the best companies and move those to the most profitable products and we've done that, that's part of the reason why Green Dot Direct has been a growth leader for us.

And so we'll look for improvements in cost, we'll look for improvement in revenue, they do some really good things at direct deposit and we'll take those ideas and put it into the overall consolidated enterprise.

So anytime you do these acquisitions we want to take the best ideas and put them altogether to benefit the other divisions and I would imagine we'll do the same with RushCard..

Okay, thanks, that's helpful. And then just on the EBITDA margin, your guide implies almost 100 basis points of margin expansion next year after a pretty strong margin expansion this year especially in the fourth quarter.

Can you provide on what's driving that I guess margin expansion upside, how much of that is UniRush synergies versus the more efficient operating platform which seems to have driven margin upside this year..

Yes, great question, Oscar.

I would say the two drivers are unit economics and are platform efficiencies and in fact on a combined basis taking Rush into account for our consolidated guidance it has somewhat of a dampening effect at the moment on our consolidated margin, but as we indicated we expect that to pick up again as we drive efficiencies into 2018..

Okay, thank you..

You bet..

[Operator Instructions] Our next question comes from Ashwin Shirvaikar with Citi. Please go ahead..

Hi, Ashwin..

Hi, Steve. Hi, Mark. Thanks. So, you announced here a number of new initiatives on top of the initiatives that you already had that you made progress on during the course of 2016. And what I was hoping, you could walk through was -- some of these initiatives into your shelf space, rollout trying to increase the number of x cards into 2018.

What is the investment needed for some of these and when do you expect to get sort of a revenue boost from those? If you can ballpark late out that would be useful..

Yes. Well, the good news is, is that our expense space and CapEx space has been well controlled. CapEx you may have noticed, Mark, I'm sorry, I forgot if you have already said anything in prepared remarks, but that's been down..

Our D&A, we are projecting D&A for 2017 to be down from 2016. And I think to your point Steve, our cost structure is not increasing in order to drive these initiatives..

That's a good news. And what we do is, the number of initiatives are determined by the product roadmaps in each of those six revenue division. And those GNs are in the case of a few of our divisions, divisional CEOs.

Come in and they say, hey, here is our initiatives, and here is what we are going to put forth and here is why we think to go do drive revenue or expanded margins or whatever the initiative is and we go through it and once they are locked in, we have to deliver on them.

And so there is a lot of initiatives, it sounds like a lot as I read them throughout the entire consolidated company. But, if you are on a particular division, it's not a lot, there only be three or something in your group for the year. And then you focus on them and deliver.

And so, kind of hard to go through all of them, it depends on which division and happy to answer those questions now or in the after calls. But, the good news is, that they are all part of that cost basis because I think we have a lot of resources.

And even the phrase I use Green Dot Media and I known to be cheap and I don't get offended when people say that. People will speak in front of my car and that kind of thing. But, I do believe in being appropriate with expenses.

And so, when people want to spend money, the question is, why is that? And so Green Dot Media is a phrase you heard me use on the prepared remarks. We have millions and millions of people every month who come to our Web sites, our call centers or IVR machines.

These kind of thing -- why do we have to pay for marketing when we can get the same impressions if you will by just putting the message on the IVR and putting the banner on our own Web sites. So all the marketing we are doing for the secured credit card or -- it's just on our own media. And so always trying to boot strap and do things efficiently.

We do spend money obviously. We have a big expense space. But, what you see is, what you get. Anything new we are doing is within the cost space that we have forecasted..

Okay. Now, I just wanted to explicitly get that out there.

With regards to sort of stabilizing active cards, would that mean then that you're roughly going to be 34.1 million through the year or did you mean that some of these initiatives happen, you could be at a higher number by the end of the year?.

Also in the base or likely case, the middle case scenario what everyone call it were forecast to be down and actives, to stabilizing the actives as years goes by. And then, to be up and actives as we get to 2018 and we have actually been incredibly accurate with calculating those card declines and increases over time.

So, now, of course you are going to merge in Rush, rightful -- which will be a higher number of cards and that will reset the bar. But, we would expect the active cards to stay roughly where they are, they will come down a little bit in Q1, if our model is accurate.

They will stabilize in two; they will come up a little bit in three and four; and then they will start to rise overall in Q1 of 2018.

And if we do better, some of the issues that have kicked in, well then that curve will be accelerated if we do worse, the things go south and won't be as strong that we have been fairly accurate with those projections so far..

Okay. And then, last quick clarification question. Has the timing of your platform conversions got pushed out over the last 12 months or so? Has the perspective benefit from it also got spread out, pushed out, obviously, has been pushed out, but has it changed in totality because of the delay.

And what the assumptions specific dollars assumption that you are making of this year or for the benefit from a 2Q conversion?.

Yes. But, we haven't disclosed a specific benefit for the processes, but it's been a headwind except for the fact that our processing partners has been a good partner and has helped to make us hold for those issues.

But otherwise, it would have been a negative headwind, right? Because we are spending money to run two simultaneous processes each with their own minimums and own pricing and everything else. But, we will get those efficiencies as we successfully rollout Way4 and then will be done with that. And then, you will see that efficiency kick in.

But, it's all been helpful. I mean these are -- it's a large company, hence you have lots of different systems and lots of different platforms and every team is always working on what they do. So, we haven't given a specific number of processes but it is going to be part of those saves..

Got it. Okay. Thanks..

You bet, Ashwin. Operator believe it or not in less -- there is another screen I think, are we done with questions? That was very short..

We are done with questions..

Okay. Well, in that case want to thank everybody for listening today. We appreciate your support over the year. And we hope to do it again in 2017. Thank you everybody. Have a great day..

This concludes the conference. Thank you for attending today's presentation. You may now disconnect..