Euronet Worldwide(US:EEFT)2025-05-07 10:31Revenue Segments - Euronet's EFT Processing Segment generated approximately 25% of total consolidated revenues for Q1 2025, driven by transaction fees and management fees from ATMs [108]. - The epay Segment accounted for about 29% of total consolidated revenues in Q1 2025, with digital media content now representing approximately 71% of its revenues [109]. - The Money Transfer Segment contributed around 46% of total consolidated revenues for Q1 2025, primarily from transaction fees and foreign currency exchange margins [110]. - Total revenues for the EFT Processing Segment were $232.5 million for the three months ended March 31, 2025, an increase of $15.3 million or 7% compared to the same period in 2024 [122]. - Total revenues for the epay Segment were $267.4 million for the three months ended March 31, 2025, an increase of $10.3 million or 4% compared to the same period in 2024 [133]. - Money Transfer Segment total revenues increased to $417.7 million for the three months ended March 31, 2025, up $33.1 million or 9% year-over-year [144]. Profitability and Income - Operating income for the EFT Processing Segment was $23.3 million for the three months ended March 31, 2025, an increase of $1.8 million or 8% compared to the same period in 2024 [130]. - Operating income for the Money Transfer Segment rose to $45.1 million, reflecting a $7.9 million or 21.2% increase compared to the same period in 2024 [150]. - Gross profit for the EFT Processing Segment was $96.0 million for the three months ended March 31, 2025, an increase of $9.9 million or 11% compared to the same period in 2024 [126]. - Gross profit for the epay Segment was $65.3 million for the three months ended March 31, 2025, an increase of $3.3 million or 5% compared to the same period in 2024 [136]. - Gross profit increased to $193.2 million, a rise of $18.0 million or 10% year-over-year, with gross margin improving to 46.3% [146]. - Net income attributable to Euronet was $38.4 million, an increase of $12.2 million or 47% compared to the same period in 2024 [161]. Operational Metrics - Euronet operates a network of 55,512 ATMs and approximately 1,214,000 POS terminals globally, enhancing its transaction processing capabilities [103]. - Active ATMs as of March 31, 2025, increased to 51,875, up by 2,585 or 5% compared to the previous year [121]. - Transactions processed in the EFT Processing Segment increased to 3,464 million for the three months ended March 31, 2025, a rise of 961 million or 38% compared to the same period in 2024 [121]. - Direct-to-consumer digital transactions grew by 31%, indicating strong consumer demand for digital products [144]. Expenses and Costs - Direct operating costs for the EFT Processing Segment were $136.5 million for the three months ended March 31, 2025, an increase of $5.4 million or 4% compared to the same period in 2024 [123]. - Selling, general and administrative expenses for the epay Segment were $12.8 million for the three months ended March 31, 2025, an increase of $3.2 million or 33% compared to the same period in 2024 [139]. - Salaries and benefits expenses were $87.9 million, an increase of $7.2 million or 9% compared to the same period in 2024 [147]. - Depreciation and amortization expenses for the Money Transfer Segment decreased to $6.1 million, down $1.2 million or 16% year-over-year [149]. Financial Position and Cash Flow - Working capital increased significantly to $1,565.3 million as of March 31, 2025, compared to $810.5 million as of December 31, 2024 [162]. - Interest expense rose to $19.4 million, an increase of $4.5 million or 30% year-over-year, driven by higher interest rates [155]. - Operating cash flows decreased to $1.7 million in Q1 2025 from $30.0 million in Q1 2024, primarily due to a decrease in deferred income taxes [165]. - Cash used in investing activities was $54.7 million in Q1 2025, down from $96.8 million in Q1 2024, mainly due to the acquisition of Infinitum in 2024 [166]. - Financing activities generated $162.6 million in Q1 2025, compared to $81.3 million in Q1 2024, with net borrowings on the Credit Facility increasing to $710.0 million from $82.6 million [167]. Foreign Currency Exposure - Approximately 74% of Euronet's revenues are denominated in currencies other than the U.S. dollar, making it sensitive to foreign currency exchange rate fluctuations [106]. - A 10% fluctuation in foreign currency exchange rates could impact reported net income and working capital by approximately $140 million to $150 million annually [183]. - Foreign currency exchange rate fluctuations positively impacted cash by $91.8 million in Q1 2025, compared to a negative impact of $47.2 million in Q1 2024 [168]. - The company held foreign currency derivative contracts with a total notional value of $0.9 billion, primarily in U.S. dollars, euros, British pounds, Australian dollars, and New Zealand dollars, with the majority maturing within the next twelve months [188]. - The company uses derivatives primarily as economic hedges and does not designate foreign currency derivatives as hedging instruments pursuant to accounting standards, recording gains and losses in earnings in the period of change [186]. Strategic Initiatives - The company aims to expand its market presence through both physical and digital assets, which may increase transaction volumes across its networks [112]. - The company is exploring additional acquisitions to support growth, which may require integration of new assets and management resources [116]. - The amended Credit Facility increased from $1.25 billion to $1.9 billion, with a maturity extended to December 17, 2029 [170]. - The company anticipates capital expenditures of approximately $85 million to $95 million for 2025, with $23.2 million spent in Q1 2025 [176]. - Total capital expenditures for Q1 2025 were primarily for ATMs, POS terminals, and IT equipment, indicating a focus on market expansion and technology [176].