Euronet Worldwide(EEFT) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported revenue of $916 million, adjusted operating income of $75 million, and adjusted EBITDA of $119 million for Q1 2025, marking record results across all three metrics [13][19][20] - Adjusted EPS was $1.13, down from $1.28 in the prior year, but on a pro forma basis, adjusted EPS grew 18% year-over-year [13][14][15] - The company achieved an 18% increase in operating income compared to the prior year [7][15] Business Line Data and Key Metrics Changes - The EFT segment saw revenue growth of 10%, adjusted operating income growth of 15%, and adjusted EBITDA growth of 10% [20] - Epay revenue grew by 8%, with adjusted operating income and adjusted EBITDA growing by 22% and 20% respectively, excluding a one-time tax payment [21][42] - Money Transfer revenue, operating income, and adjusted EBITDA grew by 10%, 23%, and 17% respectively, driven by a 31% increase in digital transactions [22][45] Market Data and Key Metrics Changes - The company noted that most major currencies operated in low to mid single-digit declines year-over-year [18] - The company generated three-fourths of its revenues from outside the United States, mitigating potential impacts from U.S. macroeconomic policies [8][9] Company Strategy and Development Direction - The company focuses on two key revenue pillars: payment and transaction processing, and cross-border and foreign exchange [10][26] - The growth strategy includes global expansion of the cross-border payments network and enhancing digital transaction capabilities [25][26] - The company aims to continue leading in innovative payment solutions while expanding its global reach [29][54] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 12% to 16% earnings growth for the year, reaffirming this guidance based on strong Q1 results [9][55] - The management acknowledged ongoing macroeconomic discussions but did not foresee significant adverse impacts on business performance [8][9] Other Important Information - The company repurchased approximately $492 million of convertible notes, maintaining a conservative net debt leverage of about one times EBITDA [17] - The company continues to invest in technology and expand its product offerings across all segments [15][52] Q&A Session Summary Question: Follow-up on Dandelion and Visa integration - Management noted a 33% growth in Dandelion, with the Visa Direct integration expected to enhance digital money transfer capabilities [58][59] Question: ATM side in Europe and summer travel - Management indicated that European travel is tracking according to plan, with expectations for increased travelers this summer [68][69] Question: FX impact on adjusted EPS growth guidance - Management stated that FX rates are generally expected to hold flat, with no significant increases built into the numbers [71][72] Question: Consumer willingness to pay ATM fees in Europe - Management indicated that consumers are accustomed to paying fees for ATM usage outside their bank networks, similar to practices in the U.S. [83][85] Question: Update on merchant services expansion - Management is expanding into Portugal, Spain, and Italy, leveraging successful strategies from Greece [90][91] Question: Ria digital shift and gross profit retention - Management reported strong growth in the Ria business, with a 30% increase in digital transactions [96][99] Question: LATM opportunity and Prosegur partnership - Management highlighted significant opportunities in Latin America, particularly in cross-currency transactions [107][108] Question: Regulatory environment and compliance - Management expressed confidence in their compliance record and did not anticipate significant adverse effects from recent regulatory changes [143][145]