Euronet Worldwide(EEFT) - 2024 Q1 - Quarterly Results

Financial Performance Overview This section provides an overview of Euronet's first quarter 2024 consolidated financial results and the full-year 2024 financial outlook First Quarter 2024 Consolidated Results Euronet achieved a record-breaking first quarter with 47% adjusted EPS growth to $1.28, driven by strong segment performance and exceeding expectations Q1 2024 Consolidated Financial Metrics | Financial Metric | Q1 2024 | Q1 2023 | % Change | % Change (Constant Currency) | | :--- | :--- | :--- | :--- | :--- | | Revenues | $857.0M | $787.2M | +9% | +9% | | Operating Income | $64.0M | $45.6M | +40% | +45% | | Adjusted Operating Income | $63.6M | $45.6M | +39% | +44% | | Adjusted EBITDA | $108.8M | $92.8M | +17% | +19% | | Net Income | $26.2M | $20.1M | +30% | N/A | | Diluted EPS | $0.55 | $0.39 | +41% | N/A | | Adjusted EPS | $1.28 | $0.87 | +47% | N/A | - CEO Michael J. Brown highlighted the record-breaking first quarter adjusted EPS of $1.28, a 47% increase, attributing the strong growth to continued business expansion, new product additions, and technology investments across all segments[5] - The Q1 adjusted EPS of $1.28 included a benefit of approximately $0.10 per share from resolving uncertain tax matters and $0.05 per share from a duty fee recovery, with a pro forma adjusted EPS of $1.13 still exceeding consensus estimates[6] 2024 Financial Outlook The company reaffirms its full-year 2024 guidance, anticipating adjusted EPS growth of 10-15% year-over-year, consistent with its long-term historical growth rates - Euronet anticipates its 2024 adjusted EPS will grow 10-15% year-over-year, which is in line with its 10 and 20-year compounded annualized growth rates[7] - The outlook does not account for potential changes in foreign exchange rates, interest rates, or other unforeseen factors[7] Segment Performance This section details the first quarter 2024 financial performance and key operational metrics for Euronet's EFT Processing, epay, Money Transfer, and Corporate segments EFT Processing Segment EFT Processing segment revenue grew 13% to $217.2 million and operating income surged 212% to $21.5 million, driven by merchant services and new market expansion EFT Processing Segment Financial Metrics | Metric | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $217.2M | $192.2M | +13% | | Operating Income | $21.5M | $6.9M | +212% | | Adjusted EBITDA | $44.7M | $29.6M | +51% | | Transactions | 2,502M | 1,838M | +36% | | Installed ATMs | 53,029 | 51,510 | +3% | - Growth was driven by the merchant services business and new market expansion, with operating margins improving due to the removal of loss-making ATMs and a ~$3.0 million recovery of a prior-year duty fee[8] - The 36% growth in transactions outpaced revenue growth, primarily due to an increase in high-volume, low-value transactions in India[9] epay Segment epay segment revenue grew 8% to $257.1 million from digital media and mobile, but operating income and adjusted EBITDA decreased 3% due to inflation and investments epay Segment Financial Metrics | Metric | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $257.1M | $237.4M | +8% | | Operating Income | $26.6M | $27.5M | -3% | | Adjusted EBITDA | $28.3M | $29.1M | -3% | | Transactions | 953M | 973M | -2% | | POS Terminals | ~808,000 | ~799,000 | +1% | - Revenue growth was driven by digital media and mobile products, while the decrease in operating income resulted from increased costs due to inflation and investments for product and market expansion[12] Money Transfer Segment Money Transfer segment revenue increased 7% to $384.6 million, driven by cross-border and digital transactions, with operating income rising 14% from revenue scale and cost management Money Transfer Segment Financial Metrics | Metric | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $384.6M | $359.4M | +7% | | Operating Income | $37.2M | $32.6M | +14% | | Adjusted EBITDA | $44.5M | $41.1M | +8% | | Total Transactions | 40.6M | 37.6M | +8% | | Network Locations | ~583,000 | ~528,000 | +10% | - Revenue growth was driven by near double-digit growth in cross-border transactions, with direct-to-consumer digital transactions increasing by 23%, reflecting strong consumer demand[13] - Operating margins improved due to the scale benefits of revenue growth and effective cost management[13] Corporate and Other Corporate and Other expenses remained stable year-over-year, reporting $21.3 million for the first quarter of 2024 compared to $21.4 million in the prior year - Corporate and Other expenses were $21.3 million for Q1 2024, nearly flat compared to $21.4 million for Q1 2023[14] Financial Position This section outlines Euronet's balance sheet and overall financial position as of March 31, 2024, including cash, indebtedness, and credit facility availability Balance Sheet and Financial Position As of March 31, 2024, Euronet held $1.24 billion in cash, with total indebtedness increasing to $1.94 billion primarily to fund ATM cash for the travel season - Unrestricted cash and cash equivalents were $1,236.2 million as of March 31, 2024, a slight decrease from $1,254.2 million at the end of 2023, due to cash placed in reactivated ATMs and the Infinitium acquisition, offset by cash generated from operations[17] - Total indebtedness was $1,938.1 million as of March 31, 2024, up from $1,869.6 million at year-end 2023, largely due to cash placed in ATMs, with approximately $579.0 million in availability under revolving credit facilities[18] Financial Statements and Reconciliations This section provides definitions of non-GAAP measures, condensed consolidated financial statements, and detailed reconciliations of GAAP to non-GAAP financial metrics Non-GAAP Measures The company utilizes non-GAAP measures like constant currency, adjusted EBITDA, and adjusted EPS to provide additional insight into performance by adjusting for non-operational or non-recurring items Definitions of Non-GAAP Measures This subsection defines key non-GAAP financial measures used by the company to present a clearer view of its underlying operational results - Constant currency: Computed as if foreign currency exchange rates did not change from the prior period to illustrate the impact of FX rate changes[21] - Adjusted operating income: Defined as operating income excluding non-cash purchase accounting adjustments[21] - Adjusted EBITDA: Defined as net income excluding interest, taxes, depreciation, amortization, share-based compensation, non-cash purchase accounting adjustments, and other non-operating or non-recurring items[22] - Adjusted earnings per share: Defined as diluted U.S. GAAP EPS excluding the tax-effected impacts of items such as foreign currency exchange gains/losses, share-based compensation, and acquired intangible asset amortization[23] Condensed Consolidated Financial Statements This section presents the unaudited condensed consolidated balance sheets and statements of operations, detailing the company's financial position and performance for the specified periods - The Condensed Consolidated Balance Sheets provide a snapshot of the company's financial position at the end of Q1 2024 compared to the end of the prior fiscal year[29][30] - The Consolidated Statements of Operations detail the company's revenues, operating expenses, and net income for the first quarter, comparing the results to the same period in the previous year[31][32] Reconciliation of Non-GAAP Financials This section provides detailed reconciliations of GAAP to non-GAAP financial measures, including net income to adjusted operating income, adjusted EBITDA, and adjusted EPS - A detailed table reconciles Net Income to Adjusted Operating Income and Adjusted EBITDA for the consolidated company and each of its operating segments for Q1 2024 and Q1 2023[33] - A reconciliation table shows the adjustments made to Net Income to arrive at Adjusted Earnings, and the calculation from GAAP diluted EPS to Adjusted EPS for Q1 2024 and Q1 2023[34]