International Money Express(IMXI) - 2021 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for Q4 2021 was $127 million, a 28% increase compared to Q4 2020; full year revenue reached $459 million, up 29% year-over-year [8][31] - Net income for Q4 2021 was $13 million, a 37% increase; full year net income was $47 million, a 39% increase [8][31] - Adjusted net income for Q4 2021 was $16 million, up 36%; for the full year, adjusted net income was $57 million, a 36% increase [8][31] - Adjusted EBITDA for Q4 2021 was $24 million, a 27% increase; for the full year, adjusted EBITDA was $87 million, also a 27% increase [8][31] Business Line Data and Key Metrics Changes - Digital transactions initiated increased by 96% year-over-year, with 24% of transactions processed digitally [19][27] - Transactions deposited directly into bank accounts increased by 44% compared to the prior year [20] - The card product category, including Card Direct and Payroll MasterCard, is expected to contribute significantly to future revenue and profitability [20][36] Market Data and Key Metrics Changes - Market share in core markets (Mexico, Guatemala, El Salvador, and Honduras) increased to 21% [17] - Emerging markets such as the Dominican Republic, Ecuador, and Nicaragua saw a 32% increase in transactions compared to Q4 2020 [18] Company Strategy and Development Direction - The company focuses on a high-quality omnichannel customer strategy, utilizing proprietary software to enhance service delivery [10][22] - Investments in IT enhancements and the launch of the new Intermex Direct agency software are aimed at improving agent productivity and customer service [12][36] - The company plans to continue expanding its agent base, particularly in underrepresented markets, to drive growth [28][70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow market share and revenue in 2022, expecting double-digit increases in key financial metrics [22][36] - The company anticipates that the growth in remittance sizes may not be as strong as in previous years, but any increase would serve as a tailwind [41] - Management highlighted the importance of maintaining a strong compliance culture and investing in technology to support growth [12][36] Other Important Information - The company generated $47.6 million in net free cash in 2021, a 26% increase from 2020, converting 55% of adjusted EBITDA to net free cash [33] - Intermex repurchased approximately 271,000 shares for $4.4 million in Q4 2021, totaling 342,000 shares for $5.6 million for the year [34][35] Q&A Session Summary Question: Trends in average remittance size and guidance for 2022 - Management expects minimal growth in remittance sizes for 2022, having tapered back expectations from the previous year [41] Question: Update on Card Direct initiative and sales efforts - A team of eight salespeople is actively working with employers, with around 35 employers currently engaged [42] Question: Competitive dynamics in the remittance space - Management noted that larger companies have vacated the retail market, allowing Intermex to gain market share through value-added services [46][48] Question: M&A opportunities and cash position - Management is optimistic about potential M&A activity in 2022, seeing more opportunities as market conditions change [54] Question: Customer growth expectations for 2022 - Management anticipates a conservative approach to customer growth, expecting it to be lower than the previous year due to high growth rates in 2021 [61] Question: Update on agent growth and backlog - Management clarified that they do not have a backlog of agent requests but are actively seeking out agents in specific markets [68] Question: Insights on Mexico and Guatemala markets - Management sees continued strong performance in these markets, with opportunities for growth particularly in Western states [70] Question: Growth algorithm for 2022 - The growth will primarily come from retail, with new agent locations and maturing existing locations contributing significantly [74][76]