Put plainly, the results are carrying the stock today. For Q2, GDOT reported non-GAAP earnings of $0.55 per share on revenues which rose about 28.2% compared to last year to about $222.5 million.
Not only that, GDOT’s purchase volume were strong as well. Q2 purchase volumes came in at $5.22 billion, up from $3.86 billion a year ago. GDOT also registered 9.55 million cash transfers in the quarter, up from 9.35 million last year. Tax refunds processed also grew in Q2 to 2.41 million from 2.18 million a year ago. At the end of the quarter, GDOT still boasted 5.15 million active cards up from 4.28 million in the same period last year.
Now turning to the guidance, GDOT’s non-GAAP outlook excludes $9.4 million of incremental processing expenses incurred in the first half of 2017 related to the need to pay expenses for processing services in excess of its normalized rate. Starting in Q3, the company no longer expects to incur such incremental processing expenses.
For Q3, the company sees worse than expected non-GAAP EPS of $0.25 on better than expected revenues between $187-189 million. Further, GDOT raised its full year outlook and now expects EPS of $1.99-2.03 up from $1.89-1.94 on revenues in the range of $855-865 million up from $830-845 million.
Given the strong Q2 performance and the raised outlook, investors may be inclined to believe in the GDOT story at the present time. The stocks currently trades at about 23x 2017 earnings, and a high that dates back to April of 2011.