International Money Express(IMXI) - 2020 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Intermex generated record net income of $9.5 million, an increase of 135% compared to Q3 2019 [7] - Adjusted net income reached $12 million, up 28% year-over-year [28] - Revenues grew 12% to $95.6 million, driven by a 13% increase in transactions and an 11% increase in customers [7][26] - Adjusted EBITDA increased 16% to $19 million, with an adjusted EBITDA margin of 20%, a 69 basis point improvement year-over-year [26][27] Business Line Data and Key Metrics Changes - The company reported a 13% increase in remittance transactions, totaling 8.7 million compared to the same quarter last year [15] - The average Intermex retailer produced significantly more wires than competitors, contributing to overall transaction growth [11] Market Data and Key Metrics Changes - Intermex increased its market share in core markets (Mexico, Guatemala, Honduras, and El Salvador) to 19.2%, up 80 basis points from the same period in 2019 [16] - In October, the company achieved over 3.1 million transactions, representing a 19% year-over-year growth [17][34] Company Strategy and Development Direction - Intermex focuses on a localized approach to agent recruitment, emphasizing agent productivity and profitability over mere ubiquity [10] - The company is investing in digital offerings, including enhancements to its mobile app and hiring key personnel for its digital strategy [19][20] - The management believes that the brick-and-mortar business model will remain primary for years, while also expanding digital capabilities [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to maintain strong financial performance despite macroeconomic challenges [21] - The company anticipates fourth quarter revenue between $93 million and $95 million, reflecting a year-over-year growth of 12% to 14% [32] Other Important Information - The company converted 55% of adjusted EBITDA to free cash, resulting in $10.5 million in free cash generation, a 79% increase year-over-year [30] - The management team acknowledged the contributions of outgoing CFO Tony Lauro, marking his last quarterly earnings call [22][24] Q&A Session Summary Question: Competitive landscape among agents during the pandemic - Management noted no significant fallout among smaller competitors, but some have weakened positions, providing opportunities for Intermex [38][39] Question: Market penetration in emerging markets - Management indicated that emerging markets are growing faster than core markets, contributing significantly to overall business growth [40] Question: Investment spending and future guidance - Management confirmed plans for increased investment in digital initiatives, although specific numbers were not disclosed [42][46] Question: Consumer behavior changes - Management observed a steady recovery in consumer activity, with increased transaction volumes and new customer additions [58][63] Question: Online user profile and marketing strategies - Management highlighted that online users differ from brick-and-mortar customers, with ongoing efforts to enhance marketing strategies for online growth [49][50][72] Question: Updates on Africa and Canada - Management reported good growth in both Africa and Canada, aided by new payer relationships and business opportunities [55][56] Question: Card program updates - Management is enhancing the card program to better serve unbanked populations in both the U.S. and recipient countries [76]