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International Money Express(IMXI) - 2023 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue increased by 27% year-over-year, reaching $145.4 million during the quarter [56] - Net income rose just under 1% to $11.8 million, while GAAP EPS growth was about 3% [57] - Adjusted EBITDA increased more than 16% to $24.1 million, benefiting from strong revenue growth [83] - Cash balance at the end of the quarter was $85.5 million, with a strong net free cash generated of almost $14 million, up more than 37% from the previous year [58][84] Business Line Data and Key Metrics Changes - Digitally originated transactions grew by 68%, with 30% of transactions sent or received digitally, up almost 5% from a year ago [44] - The average remittance amount decreased by 5% year-over-year to $415 per transaction, primarily due to lower average transaction amounts to the Dominican Republic [81] - Unique active customers increased by 37% to 3.6 million, generating a record 12.9 million remittance transactions, which is 29% more than a year ago [54] Market Data and Key Metrics Changes - The company estimates its 2022 market share in the top five Latin American receiving countries was just over 20%, up 150 basis points from the first quarter of last year [45] - Total principal transfer grew by 22% to $5.3 billion, driven by the strength of the core business and the addition of La Nacional [81] Company Strategy and Development Direction - The company is focused on expanding its footprint in key ZIP codes with a differentiated value proposition for consumers and agent partners [52] - Investments in Europe are being made to capture growth opportunities, with a focus on Spain, Italy, and potential expansion into France and the U.K. [63] - The integration of La Nacional's U.S. business is underway, with a focus on rightsizing the retail network and maximizing efficiencies and margins [76] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential in the Western states, where there is significant unfilled market opportunity [42] - The company is cautious about competition but emphasizes execution, market analysis, and return on investment as key focus areas [13] - Management expects to achieve an EBITDA margin of 9% to 11% by late 2023 or early 2024 [52] Other Important Information - The company has authorized an additional $100 million for share repurchases, with over 3.1 million shares repurchased for about $66.9 million [58] - The company plans to communicate guidance in three metrics: revenue, EPS, and adjusted EBITDA starting with the Q2 earnings release [61] Q&A Session Summary Question: What triggered the hiring of 12 regional directors? - Management indicated that the hiring was to drive agent growth and respond to market opportunities, particularly in the West [25][28] Question: Can you provide an update on the value-added services and their contribution to revenue? - Management clarified that value-added services are considered standalone products, with expectations for significant revenue contributions in the future [34] Question: How should investors think about market share and growth opportunities? - Management emphasized a bottom-up approach to assessing market share, focusing on underserved ZIP codes and recognizing the potential for growth in various Latin American countries [106][107]