Topline
Green Dot’s boffo first quarter earnings report suggests embedded banking could increase the company’s stock price as European rivals grow rapidly
Key Facts
Green Dot’s first quarter results reveal faster-than-expected revenue growth, higher margins, and optimism for the future.
Green Dot’s stock has lost 72% of its value since its 2010 IPO.
Growth by its European rival, Paris-based embedded finance startup Swan, suggests embedded finance could boost Green Dot’s shares.
Yet Berlin-based Solaris’ recent woes suggest investors should also consider risks.
Since going public in 2010, Provo, Utah-based banking services provider Green Dot Corporation has suffered a 72% drop in its stock price.
But things could be looking up for the company’s investors because in the first quarter of 2025, Green Dot’s banking as a service platform — which provides branded banking services to enterprises — posted 49% growth.
Last month was the first time I had heard of BaaS — following my visit to Swan, the Paris-based embedded finance startup, which is valued at $205.5 million, Pitchbook reported. Since 2019, Swan has grown to 300 employees and 80,000 end users, according to my June 2 interview with co-founder and CEO Nicolas Benady.
Based on Green Dot’s recent results and the European growth of Swan, the embedded finance market — which is expected to grow at a compound annual growth rate of 36.41% from $146.2 billion in 2025 to $690.4 billion in 2030, according to Fintech Futures — could contribute to rapid growth and reward investors in Green Dot and other providers.
Yet the challenges faced by Berlin-based Solaris — prompting an urgent $145 million capital infusion in February, according to Pitchbook — highlight possible risks in the embedded finance industry.
“The securing of our Series G funding marks the successful completion of a two-year transformation journey, providing the foundation for our continued growth,” Solaris CEO Carsten Höltkemeyer said, according to TFN.
“This fresh capital will not only support our operations until we reach profitability but will also accelerate our ability to seize market opportunities and build a strong core capital base,” he added.
Green Dot’s Boffo First Quarter 2025 Report
Green Dot — which is both a registered bank holding company and a financial technology provider — offers financial services to consumers and businesses which are “under-served by traditional banking,” according to the company.
Green Dot has two primary revenue sources:
- B2B Services: BaaS is Green Dot’s primary driver of future growth. Revenue from Green Dot’s embedded finance service has grown faster than 40% for the last two quarters, according to company releases.
- Consumer Services: Green Dot also provides consumer financial products such as Go2Bank digital bank and prepaid debit cards through this segment. The company’s consumer services revenue fell 4% in the fourth quarter, noted the company.
In the first quarter of 2025, Green Dot beat investor expectations and raised guidance, noted AI Invest.
Here are the key numbers:
- First quarter 2025 revenue: $558.87 million — up 24% from the previous year and 10% above the consensus estimate, according to AI Invest.
- Q1 2025 adjusted earnings before interest, taxes, depreciation, and amortization: $90.56 million — a 53% increase, AI Invest noted.
- Q1 2025 net income: $25.77 million — up 443%, reported AI Invest.
- Q1 2025 gross dollar volume: $37.25 billion, a 21% increase, wrote AI Invest.
- 2025 non-generally accepted accounting principles revenue forecast: $2.05 billion — the midpoint of a range — 9% above the company’s previous forecast, AI Invest reported.
- 2025 Non-GAAP earnings per share: $1.21 — the midpoint of a range — 9% above the previous forecast, noted AI Invest.
“It was a very strong start to 2025 as we beat our projections, added significant new BaaS and money processing partners, and extended a major retail relationship,” Green Dot Interim Chief Executive Officer William Jacobs said in a release. “These results reinforce my confidence that we are positioned to win in the embedded finance market, which is seeing continued demand and expansion,” he added.
While Green Dot faces challenges — most notably its dependence on Walmart for much of the company’s BaaS revenue, the possible slowdown in growth due to macroeconomic headwinds, and new competitors entering the market, embedded finance offers a new growth vector.
More specifically, new deals with Samsung — which integrates Green Dot’s banking tools into devices — and Crypto.com (expanding crypto payments) are positioning Green Dot as an embedded finance leader. In addition, the company’s renewal of a “major retail partnership” — possibly with Walmart — higher profitability and more available cash are all reasons for optimism, noted AI Invest.
The entry of PayPal and Plaid into embedded finance could cost Green Dot market share unless the company can offer partners and customers the industry’s best value proposition. Moreover, economic contraction due to tariffs and higher interest rates could put the brakes on consumer and business spending, as I noted in a June Forbes post.
Swan’s Fast-Growing Embedded Finance Business
If Green Dot wanted to accelerate revenue growth, one option would be to acquire embedded finance startups in Europe.
One such company is Swan — although I doubt the firm’s CEO would want to sell the company. “I am an engineer who started my career as a developer and worked two years in the payment industry for Visa,” according to my June 2 interview with Swan CEO Nicolas Benady.
“I am an entrepreneur — Swan is my fourth one and the first as CEO. The other three were acquired. I don’t want Swan to be acquired. I want to build something real,” he added.
Swan’s growth springs in part from the company’s ability to solve a hard problem that matters to small-and-medium-sized businesses: making embedded finance easy. “The problem we are trying to solve is to enable retailers to set up their own banking utility — analogous to providing food, housing, water or the Internet — in five minutes,” Benady told me.
“Developers wanted to provide software that would enable retailers to do banking but there was complexity — including compliance and licensing. Our vision was this should be so easy it takes only five minutes,” he added.
The company grew because Benady applied his strengths in raising money and building a team. “Between 2019 and 2025, we grew to 300 people in five countries in Europe,” he told me.
“We have 80,000 end-clients and process 40,000 card transactions per day. We are white labeling with fifty partners. We begin with something really simple to use yet sophisticated for developers,” he added.
Competition in Europe does not seem worrisome to Swan. “We are not disrupting Visa or Mastercard,” Benady said. “We are more in competition with European banks. We provide banking services for European small and medium-sized businesses. Banks can’t compete with us. They are not going to offer their banking services as application programming interfaces.”
“Over the next 10 years we will tackle the European market. The regulation is light since we have already been approved in five countries. We do have a balance sheet but we can’t lend money. We have to safeguard deposits and put the money in a safe place.”
“The only disadvantage of being in Paris is that other European cities like Barcelona and Berlin have gotten the edge when it comes to attracting talent. In the last 10 years, Paris has enjoyed more startup success.”
Solaris Shifts From Unicorn To Survival Mode
Berlin also hosts an embedded finance startup — which has made a journey from unicorn to survival mode, according to TFN.
Andreas Bittner and Marko Wenthin founded Solaris in 2015 — and the company was once seen as Europe’s largest embedded finance provider. Like Swan, Solaris supplies white-label banking to fintech firms such as Trade Republic and Tomorrow Bank.
During the pandemic, low interest rates helped the company expand aggressively. However, when growth slowed, cost cutting began. In October 2022, a new CEO Carsten Höltkemeyer took over. He cut 240 employees from the company’s 700-employee workforce, TFN noted.
Despite these efforts, Solaris “reported €178 million in losses for 2023, raising concerns about its long-term viability,” according to TFN. SBI, a Japanese financial group, led a €140 million funding round which sent Solaris’ valuation down 94% from a peak of €1.6 billion to €90 million, reported The Munich Eye.
Solaris’ new majority shareholder is optimistic. “Becoming the majority shareholder in Solaris is a natural step in our ongoing investment journey with the company,” SBIHD Representative Director, Chairman, President & CEO, Yoshitaka Kitao told TFN.
“Solaris is well-positioned with cutting-edge technology and an exceptional team to pioneer the next phase of embedded finance in Europe. We are excited to support Solaris in realizing its vision,” he added.
Where Will Green Dot Stock Go Next?
Green Dot stock will need to keep exceeding expectations to reward investors. Based on five Wall Street analysts offering an average 12 month price target of $11.67, the company’s stock has 7.2% upside, according to TipRanks.
If Green Dot can navigate the opportunities for growth from embedded finance and sidestep the perils Solaris has encountered, perhaps the company’s stock will rise more.