Euronet Worldwide, Inc. (“Euronet” or the “Company”) (NASDAQ:
EEFT), a leading global financial technology solutions and payments
provider, reports first quarter 2024 financial
results.
Euronet reports the following
consolidated results for the first quarter 2024 compared with the
same period of 2023:
- Revenues of $857.0 million, a 9% increase from $787.2 million
(9% increase on a constant currency1 basis).
- Operating income of $64.0 million, a 40% increase from $45.6
million (45% increase on a constant currency basis).
- Adjusted Operating income2 of $63.6 million, a 39% increase
from $45.6 million (44% increase on a constant currency
basis).
- Adjusted EBITDA3 of $108.8 million, a 17% increase from $92.8
million (19% increase on a constant currency basis).
- Net income attributable to Euronet of $26.2 million, or $0.55
diluted earnings per share, compared with $20.1 million, or $0.39
diluted earnings per share.
- Adjusted earnings per share4 of $1.28, a 47% increase from
$0.87.
- Euronet's cash and cash equivalents were $1,236.2 million and
ATM cash was $599.7 million, totaling $1,835.9 million as of March
31, 2024, and availability under its revolving credit facilities
was approximately $579.0 million.
See the reconciliation of non-GAAP items in the
attached financial schedules.
“I am pleased that we achieved a record-breaking
first quarter adjusted EPS of $1.28, a 47% increase over the prior
year's $0.87,” stated Michael J. Brown, Euronet’s Chairman and
Chief Executive Officer. “We were able to deliver this strong
growth due to our continued focus on expanding our business in new
and existing markets, adding more products to our portfolio and
continued investment in our industry-leading technology in all
three segments.”
“Moreover, I am pleased that we were able to
deliver results which exceeded analyst consensus expectations for
both revenue and adjusted EPS in the first quarter following our
change from quarterly to annual adjusted EPS guidance. The
$1.28 adjusted EPS includes a benefit of approximately $4.5
million, or approximately ten cents per share from the resolution
of uncertain tax matters and approximately $3.0 million, or
approximately five cents per share from the recovery of a duty fee
paid in a prior year. Adjusting for these benefits, pro
forma adjusted EPS of $1.13 nicely exceeded consensus
estimates. This robust start to the year increases our
confidence in the 10% to 15% annual adjusted EPS growth guidance
range we provided for 2024."
First quarter adjusted operating income,
adjusted EBITDA, and adjusted EPS include a non-cash purchase
accounting expense adjustment of $0.4 million.
Taking into consideration recent trends in the
business and the global economy, and historical seasonal patterns,
the Company anticipates its 2024 adjusted EPS will grow 10-15%
year-over-year, consistent with its 10 and 20 year compounded
annualized growth rates. This outlook does not include any changes
that may develop in foreign exchange rates, interest rates
or other unforeseen factors.
Segment and Other Results
The EFT Processing Segment
reports the following results for the first quarter 2024 compared
with the same period or date in 2023:
- Revenues of $217.2 million, a 13% increase from $192.2 million
(12% increase on a constant currency basis).
- Operating income of $21.5 million, a 212% increase from $6.9
million (226% increase on a constant currency basis).
- Adjusted Operating income of $21.1 million, a 206% increase
from $6.9 million (220% increase on a constant currency
basis).
- Adjusted EBITDA of $44.7 million, a 51% increase from $29.6
million (54% increase on a constant currency basis).
- Transactions of 2,502 million, a 36% increase from 1,838
million.
- Total of 53,029 installed ATMs as of March 31, 2024, a 3%
increase from 51,510. We operated 49,290 active ATMs as of March
31, 2024, a 4% increase from 47,430 as of March 31, 2023.
Constant currency revenue, adjusted operating
income, and adjusted EBITDA growth in the first quarter
2024 was driven by continued growth in our merchant services
business and growth from new market expansion. Operating margins
benefited from actions taken by management to remove loss making
ATMs in last year's fourth quarter and this year's first
quarter. Furthermore, adjusted operating income and adjusted EBITDA
growth in the first quarter 2024 was benefited by the approximate
$3.0 million recovery of a duty fee paid in the prior year.
Transaction growth outpaced revenue growth due
to continued growth in high-volume low-value transactions in
India.
The EFT Segment's total installed
ATM's grew 3% from the addition
of 272 Euronet-owned ATMs, 1,116 new outsourcing
ATMs and the addition of 131 low-margin ATMs in
India. The difference between installed and active
ATMs relates to ATMs that have been seasonally
deactivated.
The epay Segment reports
the following results for the first
quarter 2024 compared with the same period or date
in 2023:
- Revenues of $257.1 million, an 8% increase from $237.4 million
(8% increase on a constant currency basis).
- Operating income of $26.6 million, a 3% decrease from $27.5
million (3% decrease on a constant currency basis).
- Adjusted EBITDA of $28.3 million, a 3% decrease from $29.1
million (2% decrease on a constant currency basis).
- Transactions of 953 million, a 2% decrease from 973
million.
- POS terminals of approximately 808,000 as of March 31, 2024, a
1% increase from approximately 799,000.
- Retailer locations of approximately 348,000 as of March 31,
2024, a 1% increase from approximately 344,000.
Constant currency revenue growth was driven by
continued digital media and mobile growth at consistent or better
revenue and margins per transaction. The decrease in operating
income and adjusted EBITDA was the result of increased costs driven
by inflationary pressures impacting operating expenses, together
with investments made in the business to drive product and
geographical market expansion.
The Money Transfer Segment
reports the following results for the first quarter 2024 compared
with the same period or date in 2023:
- Revenues of $384.6 million, a 7% increase from $359.4 million
(7% increase a constant currency basis).
- Operating income of $37.2 million, a 14% increase from $32.6
million (17% increase on a constant currency basis).
- Adjusted EBITDA of $44.5 million, an 8% increase from $41.1
million (10% increase on a constant currency basis).
- Total transactions of 40.6 million, an 8% increase from 37.6
million.
- Network locations of approximately 583,000 as of March 31,
2024, a 10% increase from approximately 528,000.
The 7% growth in constant currency revenue was
primarily driven by near double-digit growth in cross-border
transactions, offset by a decrease in intra-US transactions.
Direct-to-consumer digital transactions increased by 23%,
reflecting strong consumer demand for digital product. Money
Transfer’s revenue and gross profit per transaction were very
stable and consistent with the prior year. In addition to the
scale benefit of revenue growth, Money Transfer further improved
its operating margins over last year through effective cost
management.
Corporate and Other reports
$21.3 million of expense for the first
quarter 2024 compared with $21.4 million for
the first quarter 2023.
Balance Sheet and Financial
PositionUnrestricted cash and cash equivalents on hand was
$1,236.2 million as of March 31, 2024, compared to $1,254.2
million as of December 31, 2023. The net decrease in
unrestricted cash and cash equivalents is the net result of the
generation of cash from operations, cash placed
in ATMs reactivated in anticipation of the travel season
and the use of cash for the
Asian-based Infinitium acquisition completed during the
quarter.
Total indebtedness was
$1,938.1 million as of March 31, 2024, compared to
$1,869.6 million as of December 31, 2023. Availability under
the Company's revolving credit facilities was approximately $579.0
million as of March 31, 2024. The increase in debt was largely due
to cash placed in ATMs.
Non-GAAP MeasuresIn addition to
the results presented in accordance with U.S. GAAP, the Company
presents non-GAAP financial measures, such as constant currency
financial measures, adjusted EBITDA, and adjusted earnings per
share. These measures should be used in addition to, and not a
substitute for, revenues, net income and earnings per share
computed in accordance with U.S. GAAP. We believe that these
non-GAAP measures provide useful information to investors regarding
the Company's performance and overall results of operations. These
non-GAAP measures are also an integral part of the Company's
internal reporting and performance assessment for executives and
senior management. The non-GAAP measures used by the Company may
not be comparable to similarly titled non-GAAP measures used by
other companies. The attached schedules provide a full
reconciliation of these non-GAAP financial measures to their most
directly comparable U.S. GAAP financial measure.
The Company does not provide a reconciliation of
its forward-looking non-GAAP measures to GAAP due to the inherent
difficulty in forecasting and quantifying certain amounts that are
necessary for GAAP and the related GAAP and non-GAAP
reconciliation, including adjustments that would be necessary for
foreign currency exchange rate fluctuations and other charges
reflected in the Company's reconciliation of historic numbers,
the amount of which, based on historical experience, could be
significant.
(1) Constant currency financial measures are
computed as if foreign currency exchange rates did not change from
the prior period. This information is provided to illustrate the
impact of changes in foreign currency exchange rates on the
Company's results when compared to the prior period.
(2) Adjusted operating income is defined as
operating income excluding non-cash purchase accounting
adjustments. Adjusted operating income represents a
performance measure and is not intended to represent a liquidity
measure.
(3) Adjusted EBITDA is defined as net income
excluding, to the extent incurred in the period, interest expense,
income tax expense, depreciation, amortization, share-based
compensation, a non-cash purchase accounting adjustment and
other non-operating or non-recurring items that are considered
expenses or income under U.S. GAAP. Adjusted EBITDA represents a
performance measure and is not intended to represent a liquidity
measure.
(4) Adjusted earnings per share is defined as
diluted U.S. GAAP earnings per share excluding, to the extent
incurred in the period, the tax-effected impacts of: a) foreign
currency exchange gains or losses, b) share-based compensation, c)
acquired intangible asset amortization, d) non-cash income tax
expense, e) non-cash purchase accounting adjustments f) other
non-operating or non-recurring items and g) dilutive shares relate
to the Company's convertible bonds. Adjusted earnings per share
represents a performance measure and is not intended to represent a
liquidity measure.
Conference Call and Slide
PresentationEuronet Worldwide will host an analyst
conference call on May 1, 2024, at 9:00 a.m. Eastern Time to
discuss these results. The call may also include discussion of
Company developments on the Company's operations, forward-looking
information, and other material information about business and
financial matters. To listen to the call via telephone please
register at Euronet Worldwide First Quarter 2024 Earnings Call. The
conference call will also be available via webcast at
http://ir.euronetworldwide.com. Participants should register
at least five minutes prior to the scheduled start time of the
event. A slideshow will be included in the webcast.
A webcast replay will be available beginning
approximately one hour after the event at
http://ir.euronetworldwide.com and will remain available for one
year.
About Euronet Worldwide,
Inc.Starting in Central Europe in 1994 and growing to a
global real-time digital and cash payments network with millions of
touchpoints today, Euronet now moves money in all the ways
consumers and businesses depend upon. This includes money
transfers, credit/debit card processing, ATMs, POS services,
branded payments, foreign currency exchange and more. With products
and services in more than 200 countries and territories provided
through its own brand and branded business segments,
Euronet and its financial technologies and networks make
participation in the global economy easier, faster and more secure
for everyone.
A leading global financial technology solutions
and payments provider, Euronet has developed an extensive global
payments network that includes 53,029 installed ATMs, approximately
713,000 EFT POS terminals and a growing portfolio of outsourced
debit and credit card services which are under management in 67
countries; card software solutions; a prepaid processing network of
approximately 808,000 POS terminals at approximately 348,000
retailer locations in 63 countries; and a global money transfer
network of approximately 583,000 locations serving 198 countries
and territories. Euronet serves clients from its corporate
headquarters in Leawood, Kansas, USA, and 67 worldwide offices. For
more information, please visit the Company's website at
www.euronetworldwide.com.
Statements contained in this news release that
concern Euronet's or its management's intentions, expectations, or
predictions of future performance, are forward-looking statements.
Euronet's actual results may vary materially from those anticipated
in such forward-looking statements as a result of a number of
factors, including: conditions in world financial markets and
general economic conditions, including impacts from the
COVID-19 or other pandemics; inflation; the war in the Ukraine
and the related economic sanctions; military conflicts in the
Middle East; our ability to successfully integrate any acquired
operations; economic conditions in specific countries and regions;
technological developments affecting the market for our products
and services; our ability to successfully introduce new products
and services; foreign currency exchange rate fluctuations; the
effects of any breach of our computer systems or those of our
customers or vendors, including our financial processing networks
or those of other third parties; interruptions in any of our
systems or those of our vendors or other third parties; our ability
to renew existing contracts at profitable rates; changes in fees
payable for transactions performed for cards bearing international
logos or over switching networks such as card transactions on ATMs;
our ability to comply with increasingly stringent regulatory
requirements, including anti-money laundering, anti-terrorism,
anti-bribery, consumer and data protection and privacy; changes in
laws and regulations affecting our business, including tax and
immigration laws and any laws regulating payments, including
dynamic currency conversion transactions; changes in our
relationships with, or in fees charged by, our business partners;
competition; the outcome of claims and other loss contingencies
affecting Euronet; the cost of borrowing (including fluctuations in
interest rates), availability of credit and terms of and compliance
with debt covenants; and renewal of sources of funding as they
expire and the availability of replacement funding. These risks and
other risks are described in the Company's filings with the
Securities and Exchange Commission, including our Annual Report on
Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on
Form 8-K. Copies of these filings may be obtained via the SEC's
Edgar website or by contacting the Company. Any forward-looking
statements made in this release speak only as of the date of this
release. Except as may be required by law, Euronet does
not intend to update these forward-looking statements and
undertakes no duty to any person to provide any such update under
any circumstances. The Company regularly posts important
information to the investor relations section of its
website.
EURONET WORLDWIDE, INC. |
Condensed Consolidated Balance Sheets |
(in millions) |
|
|
|
|
|
As of |
|
|
|
March 31, |
|
As of |
|
2024 |
|
December 31, |
|
(unaudited) |
|
2023 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
1,236.2 |
|
$ |
1,254.2 |
ATM cash |
599.7 |
|
525.2 |
Restricted cash |
15.8 |
|
15.2 |
Settlement assets |
1,413.5 |
|
1,681.5 |
Trade accounts receivable, net |
407.6 |
|
370.6 |
Prepaid expenses and other current assets |
254.9 |
|
316.0 |
Total current assets |
3,927.7 |
|
4,162.7 |
|
|
|
|
Property and equipment, net |
324.5 |
|
332.1 |
Right of use lease asset, net |
143.9 |
|
142.6 |
Goodwill and acquired intangible assets, net |
1,057.7 |
|
1,015.1 |
Other assets, net |
239.8 |
|
241.9 |
Total assets |
$ |
5,693.6 |
|
$ |
5,894.4 |
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
Current liabilities: |
|
|
|
Settlement obligations |
$ |
1,413.5 |
|
$ |
1,681.5 |
Accounts payable and other current liabilities |
816.4 |
|
816.9 |
Current portion of operating lease liabilities |
50.3 |
|
50.3 |
Short-term debt obligations |
676.8 |
|
151.9 |
Total current liabilities |
2,957.0 |
|
2,700.6 |
|
|
|
|
Debt obligations, net of current portion |
1,258.8 |
|
1,715.4 |
Operating lease liabilities, net of current portion |
97.7 |
|
95.8 |
Capital lease obligations, net of current portion |
2.5 |
|
2.3 |
Deferred income taxes |
50.7 |
|
47.0 |
Other long-term liabilities |
83.3 |
|
83.6 |
Total liabilities |
4,450.0 |
|
4,644.7 |
Equity |
1,243.6 |
|
1,249.7 |
Total liabilities and equity |
$ |
5,693.6 |
|
$ |
5,894.4 |
EURONET WORLDWIDE, INC. |
Consolidated Statements of Operations |
(unaudited - in millions, except share and per share
data) |
|
|
|
|
|
Three Months Ended |
|
March 31, |
|
2024 |
|
2023 |
|
|
|
|
Revenues |
$ |
857.0 |
|
|
$ |
787.2 |
|
|
|
|
|
Operating expenses: |
|
|
|
Direct operating costs |
533.7 |
|
|
491.6 |
|
Salaries and benefits |
154.7 |
|
|
141.9 |
|
Selling, general and administrative |
71.9 |
|
|
75.2 |
|
Depreciation and amortization |
32.7 |
|
|
32.9 |
|
Total operating expenses |
793.0 |
|
|
741.6 |
|
Operating income |
64.0 |
|
|
45.6 |
|
|
|
|
|
Other income (expense): |
|
|
|
Interest income |
5.7 |
|
|
2.6 |
|
Interest expense |
(14.9 |
) |
|
(10.1 |
) |
Foreign currency exchange loss |
(12.5 |
) |
|
(1.1 |
) |
Other expense |
(0.1 |
) |
|
— |
|
Total other expense, net |
(21.8 |
) |
|
(8.6 |
) |
Income before income taxes |
42.2 |
|
|
37.0 |
|
|
|
|
|
Income tax expense |
(16.0 |
) |
|
(17.2 |
) |
|
|
|
|
Net income |
26.2 |
|
|
19.8 |
|
Net loss attributable to noncontrolling interests |
— |
|
|
0.3 |
|
Net income attributable to Euronet Worldwide, Inc. |
$ |
26.2 |
|
|
$ |
20.1 |
|
Add: Interest expense from assumed conversion of convertible notes,
net of tax |
|
0.9 |
|
|
|
0.8 |
|
Net income for diluted earnings per share calculation |
$ |
27.1 |
|
|
$ |
20.9 |
|
Earnings per share
attributable to Euronet |
|
|
|
Worldwide, Inc. stockholders - diluted |
$ |
0.55 |
|
|
$ |
0.39 |
|
|
|
|
|
Diluted weighted average shares outstanding |
48,962,583 |
|
|
52,974,800 |
|
|
|
|
|
EURONET WORLDWIDE, INC. |
Reconciliation of Net Income to (Adjusted) Operating Income
(Expense) and Adjusted EBITDA |
(unaudited - in millions) |
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
EFT Processing |
|
epay |
|
Money Transfer |
|
Corporate Services |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
|
|
|
|
$ |
26.2 |
|
|
|
|
|
|
|
|
|
|
|
Add: Income tax expense |
|
|
|
|
|
|
|
|
16.0 |
|
Add: Total other expense,
net |
|
|
|
|
|
|
|
|
21.8 |
|
|
|
|
|
|
|
|
|
|
|
Operating income (expense) |
$ |
21.5 |
|
|
$ |
26.6 |
|
|
$ |
37.2 |
|
|
$ |
(21.3 |
) |
|
|
$ |
64.0 |
|
Less: Non-cash purchase
accounting adjustment |
|
(0.4 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
(0.4 |
) |
Adjusted operating
income(1) |
21.1 |
|
|
26.6 |
|
|
37.2 |
|
|
(21.3 |
) |
|
|
63.6 |
|
Add: Depreciation and
amortization |
23.6 |
|
|
1.7 |
|
|
7.3 |
|
|
0.1 |
|
|
|
32.7 |
|
Add: Share-based
compensation |
— |
|
|
— |
|
|
— |
|
|
12.5 |
|
|
|
12.5 |
|
Earnings before interest,
taxes, depreciation, amortization, share-based compensation,
non-cash purchase accounting adjustment (Adjusted EBITDA)(1) |
$ |
44.7 |
|
|
$ |
28.3 |
|
|
$ |
44.5 |
|
|
$ |
(8.7 |
) |
|
|
$ |
108.8 |
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
EFT Processing |
|
epay |
|
Money Transfer |
|
Corporate Services |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
|
|
|
|
$ |
19.8 |
|
|
|
|
|
|
|
|
|
|
|
Add: Income tax expense |
|
|
|
|
|
|
|
|
17.2 |
|
Add: Total other expense,
net |
|
|
|
|
|
|
|
|
8.6 |
|
|
|
|
|
|
|
|
|
|
|
Operating income
(expense) |
$ |
6.9 |
|
|
$ |
27.5 |
|
|
$ |
32.6 |
|
|
$ |
(21.4 |
) |
|
|
$ |
45.6 |
|
Add: Depreciation and
amortization |
22.7 |
|
|
1.6 |
|
|
8.5 |
|
|
0.1 |
|
|
|
32.9 |
|
Add: Share-based
compensation |
— |
|
|
— |
|
|
— |
|
|
14.3 |
|
|
|
14.3 |
|
Earnings before interest,
taxes, depreciation, amortization and share-based compensation
(Adjusted EBITDA)(1) |
$ |
29.6 |
|
|
$ |
29.1 |
|
|
$ |
41.1 |
|
|
$ |
(7.0 |
) |
|
|
$ |
92.8 |
|
(1) Adjusted operating income and Adjusted
EBITDA are non-GAAP measures that should be considered in addition
to, and not a substitute for, net income computed in accordance
with U.S. GAAP.
EURONET WORLDWIDE, INC. |
Reconciliation of Adjusted Earnings per Share |
(unaudited - in millions, except share and per share
data) |
|
|
|
|
|
Three Months Ended |
|
March 31, |
|
2024 |
|
2023 |
|
|
|
|
Net income attributable to Euronet Worldwide, Inc. |
$ |
26.2 |
|
|
$ |
20.1 |
|
|
|
|
|
Foreign currency exchange
loss |
12.5 |
|
|
1.1 |
|
Intangible asset
amortization(1) |
5.5 |
|
|
6.9 |
|
Non-cash purchase accounting
adjustment(2) |
(0.4 |
) |
|
— |
|
Share-based
compensation(3) |
12.5 |
|
|
14.3 |
|
Income tax effect of above
adjustments(4) |
0.6 |
|
|
(1.0 |
) |
Non-cash GAAP tax
expense(5) |
2.5 |
|
|
2.4 |
|
|
|
|
|
Adjusted earnings(6) |
$ |
59.4 |
|
|
$ |
43.8 |
|
|
|
|
|
Adjusted earnings per share -
diluted(6) |
$ |
1.28 |
|
|
$ |
0.87 |
|
|
|
|
|
Diluted weighted average
shares outstanding (GAAP) |
|
48,962,583 |
|
|
52,974,800 |
|
Effect of adjusted EPS
dilution of convertible notes |
|
(2,781,818 |
) |
|
|
(2,781,818 |
) |
Effect of unrecognized
share-based compensation on diluted shares outstanding |
|
355,219 |
|
|
227,575 |
|
Adjusted diluted weighted
average shares outstanding |
|
46,535,984 |
|
|
50,420,557 |
|
(1) Intangible asset amortization of $5.5
million and $6.9 million are included in
depreciation and amortization expense of $32.7
million and $32.9 million for both the three months
ended March 31, 2024 and March 31, 2023, in the consolidated
statements of operations.
(2) Non-cash purchase accounting expense
adjustment of $(0.4) million is included in operating income
for the three months ended March 31, 2024, in the consolidated
statement of operations.
(3) Share-based compensation of $12.5 million
and $14.3 million are included in salaries and benefits expense of
$154.7 million and $141.9 million for the three months ended March
31, 2024 and March 31, 2023, respectively, in the consolidated
statements of operations.
(4) Adjustment is the aggregate U.S. GAAP
income tax effect on the preceding adjustments determined by
applying the applicable statutory U.S. federal, state and/or
foreign income tax rates.
(5) Adjustment is the non-cash GAAP tax impact
recognized on certain items such as the utilization of certain
material net deferred tax assets and amortization of
indefinite-lived intangible assets.
(6) Adjusted earnings and adjusted earnings per
share are non-GAAP measures that should be considered in addition
to, and not as a substitute for, net income and earnings per share
computed in accordance with U.S. GAAP.
Contact:
Euronet Worldwide, Inc.
Genese Hill
+1-913-327-4200
Euronet Worldwide (NASDAQ:EEFT)
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