Euronet Worldwide(US:EEFT)2022-10-21 16:37Financial Data and Key Metrics Changes - The company reported consolidated revenue of $931 million, operating income of $168 million, and adjusted EBITDA of $212 million, with adjusted EPS of $2.74, reflecting a 55% increase from $1.77 in the same quarter last year [6][11][12] - The strong performance was attributed to double-digit constant-currency growth across all three segments, driven by increased domestic and international cash withdrawal transactions in the EFT segment due to rising travel demand post-COVID restrictions [6][11] Business Line Data and Key Metrics Changes - The EFT segment saw significant growth, with increased domestic and international withdrawal transactions, contributing to overall revenue and gross profit expansion [9][11] - Epay revenue grew by 18%, operating income by 29%, and adjusted EBITDA by 24%, driven by mobile and digital branded payments and digital distribution channel growth [10] - Money transfer revenue, operating income, and adjusted EBITDA increased by 11%, 23%, and 29%, respectively, with notable growth in U.S. outbound transactions and international transfers [11][12] Market Data and Key Metrics Changes - The company experienced currency fluctuations, with many significant currencies declining by 10% to 20% against the U.S. dollar year-over-year, impacting cash positions [8][14] - Despite these fluctuations, the company maintained its full-year 2022 adjusted EPS guidance of $6.30 to $6.40, reflecting confidence in underlying business resilience [14][16] Company Strategy and Development Direction - The company plans to expand its ATM network into new markets and continue introducing new products in the epay segment, alongside expanding its Money Transfer network [27][28] - The company is focused on geographic and product diversity to navigate economic pressures and maintain growth through various economic cycles [22][61] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about travel recovery in 2023, with expectations of reaching 92% of 2019 travel levels, which would represent a 25% improvement from the previous year [26][27] - The company remains vigilant regarding inflation impacts but has not yet seen significant pressure on revenue or gross profit across segments [13][61] Other Important Information - The company added approximately 3,000 new merchants and expanded its ATM portfolio, with a total of over 1,800 ATMs installed this year [30][32] - The company is facing challenges in the ATM supply chain but is working with new manufacturers to continue expansion [33] Q&A Session Summary Question: Confirmation on 2023 outlook and key variables - Management confirmed mid to upper teens adjusted EPS growth for 2023, with key variables including travel recovery and FX rates [64][65] Question: High-value transaction trends - Management indicated that high-value transaction recovery is trending well, with significant impacts from reduced travel from the UK [67][70] Question: Sustaining growth amid electronic payment trends - Management acknowledged the shift towards electronic payments but emphasized the continued need for cash, especially in cash-based markets [73][78] Question: Impact of strengthening dollar on guidance - Management noted consistent growth across the business despite FX headwinds, maintaining the EPS guidance [84][86] Question: R&D investments and expense management - Management confirmed ongoing R&D investments without significant increases expected for 2023, focusing on maintaining operational efficiency [90][92] Question: 2023 travel recovery tracking and margin structure - Management expressed confidence in tracking travel recovery and indicated that margins would improve as transaction volumes increase [94][96]