International Money Express(IMXI) - 2021 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenues grew 26.3% year-over-year to $120.7 million, with total dollar cents increasing by 36% [4][16] - Net income rose 21.2% to $11.5 million, while adjusted net income increased 28.3% to $15.7 million [4][17] - Adjusted EBITDA increased 19.8% to $22.9 million, with an adjusted EBITDA margin of 19% [4][18] Business Line Data and Key Metrics Changes - The company achieved a record number of remittances, exceeding 10.5 million transactions, a 23% increase from the previous year [10] - Total remittance principal increased by 36% to $4.7 billion, marking the highest amount sent in a single quarter [10][16] - The agent base grew by 13% year-over-year, contributing to a 19% increase in unique customers [9][16] Market Data and Key Metrics Changes - Market share in core markets (Mexico, Guatemala, El Salvador, and Honduras) reached 21.8%, growing at a rate 40% faster than the overall market [5][11] - Emerging markets, including the Dominican Republic, Ecuador, and Nicaragua, experienced a 23% growth in transactions compared to the previous year [11] - Digital transactions increased by 71% year-over-year, with 23% of total transactions processed digitally [12][13] Company Strategy and Development Direction - The company employs an omnichannel strategy to meet consumer needs, focusing on security and timeliness [6][8] - There is a significant opportunity for organic growth in underserved ZIP codes, particularly in California and Western states [8][9] - The company is enhancing its card product offerings, including payroll and prepaid cards, to drive future revenue growth [14][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining growth despite potential macroeconomic headwinds, emphasizing execution and superior technology [22][24] - The company is increasing its full-year 2021 guidance for revenues and adjusted EBITDA, anticipating a strong finish to the year [19] - Management noted that while growth rates may not be sustainable indefinitely, the current trajectory remains strong [24] Other Important Information - The company recorded a $1 million impairment related to capitalized software and a $2 million reserve due to a banking institution's liquidation [17] - The company is actively exploring M&A opportunities while maintaining financial discipline [30][31] Q&A Session Summary Question: Commentary on macroeconomic factors affecting growth - Management clarified that competitors may have faced downturns in internal Latin America, but the company is focused on its execution and technology [22][23] Question: Update on Card Direct and prepaid products - Management confirmed ongoing rollout with employers and plans for a retail card product launch in early 2022 [25][27] Question: Capital allocation priorities and cash deployment - Management is actively exploring M&A opportunities and has initiated a share buyback program [30][32] Question: Pricing environment and competition - Management noted that while price pressure exists, it is not hindering profitability or EBITDA margins [34][35] Question: Digital transaction definitions and marketing approach - Management provided context on digital transactions and emphasized a distinct marketing strategy for online customers [39][41] Question: IT infrastructure upgrades and benefits - Management detailed ongoing upgrades to core products and a new online app, highlighting significant investment in technology [49][51] Question: Sales force expansion and principal growth outlook - Management discussed recent sales leadership upgrades and the addition of sales personnel to target unserved ZIP codes [56][57]