Euronet Worldwide(US:EEFT)2023-02-09 02:25Financial Data and Key Metrics Changes - For Q4 2022, the company reported revenue of $865 million, operating income of $79 million, adjusted EBITDA of $127 million, and adjusted EPS of $1.39, reflecting strong double-digit constant currency growth driven by all three segments [15][22][42] - The company ended the year with $1.1 billion in unrestricted cash and $1.6 billion in debt, with cash generated from operations partially offset by working capital changes [5][15] Business Line Data and Key Metrics Changes - The EFT segment saw strong improvements in revenue, operating income, and adjusted EBITDA due to increased domestic and international withdrawal transactions following the lifting of COVID travel restrictions [7][10] - Money Transfer revenue grew by 9%, adjusted operating income by 6%, and adjusted EBITDA by 5%, with direct-to-consumer digital transactions growing by 38% [8][9][10] - Epay revenue grew by 9%, operating income by 12%, and adjusted EBITDA by 11%, driven by the expansion of mobile and digital payments [18] Market Data and Key Metrics Changes - The company experienced a 13% growth in U.S. outbound transactions and a 13% growth in international originated money transfers, with transfers initiated in the Middle East and Asia growing by 14% [19] - The company noted that the average amount sent per transaction in Money Transfer declined by about 3% to 4%, impacting revenue per transaction growth rates [39][133] Company Strategy and Development Direction - The company plans to continue expanding its ATM network and digital initiatives, with expectations of strong growth rates in 2023 driven by travel recovery and new market entries [29][62] - The company is optimistic about the travel industry's recovery, with expectations of double-digit top-line growth in the coming years [23][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business despite ongoing economic uncertainties, highlighting the importance of cash transactions during such times [46][42] - The company expects adjusted EPS for Q1 2023 to be approximately $0.85 per share, representing a 23% growth over the previous year [22] Other Important Information - The company signed multiple agreements to expand its ATM network and digital payment solutions, including partnerships in the Philippines and Spain [47][49] - The transition of Croatia's currency to the euro is expected to impact EFT results, but management believes new rate-related opportunities will offset this [21][108] Q&A Session Summary Question: Clarification on EPS growth guidance - Management confirmed that the mid-to-upper teens EPS growth guidance for 2023 is based on the full number for 2022, with expectations of strong growth in all segments, particularly EFT due to increased travel [88] Question: Insights on Money Transfer growth rates - Management indicated that while inflationary impacts have been considered, the fundamental strength in customer addition and network expansion remains strong, with expectations for a slower first quarter [76][78] Question: Contribution of Chinese travelers to business - Management noted that while Chinese travelers could provide some benefit, historically, they have not significantly contributed to profitability due to restrictions on DCC [101] Question: Timing of Ren revenue recognition - Management stated that Ren revenue is tracking as expected, with significant growth anticipated as more agreements are signed and implemented [118] Question: Confidence in travel recovery - Management expressed confidence in achieving 92% to 93% of 2019 travel levels based on Eurocontrol data and observed trends in travel bookings [126]