EURONET WORLDWIDE, INC. Q4 FY2024 earnings call

• Delivered record fourth quarter with revenue of $1 billion, operating income of $123 million, and adjusted EBITDA of $166 million. - Adjusted EPS was up 10% compared to prior year fourth quarter and exceeded consensus estimates. - Continued strong free cash flows, producing nearly $65 million in the quarter and repurchased about 0.5 million shares. - On a full year basis, 2024 had consolidated revenue of $4 billion, adjusted operating income of $500 million, and adjusted EBITDA of almost $700 million. - Invested in digital initiatives like REN (most versatile real-time POS and ATM switching system), Dandelion (largest real-time cross-border payments network), and Skylight (proprietary compliance solution). - Strong balance sheet with $1.9 billion credit facility, investment-grade credit rating, and global network of assets including over 50,000 ATMs, access to 4.1 billion bank accounts, etc.

Euronet Worldwide delivered a record fourth quarter in 2024. EFT had double-digit constant currency growth across all financial metrics. Money Transfer achieved constant currency fourth quarter revenue growth of 9%, adjusted operating income growth of 12%, and adjusted EBITDA growth of 9% compared to the prior year fourth quarter. EPay had double-digit constant currency growth of 10% to 12% across all financial metrics. In terms of revenue contribution, Euronet-owned ATM revenue, which was 25% of total revenue in 2019, decreased to 19% in 2024 but still grew by 19%.

• 2025 adjusted EPS growth is forecasted in the 12% to 16% range. - First quarter 2025 is expected to have a tax charge of approximately $0.20 to $0.25 per share attributable to state income tax expense related to non-recurring first quarter repurchase of convertible bonds. - Full year effective tax rate is expected to be in the upper twenties excluding this one-time non-recurring tax item. - Continued strong double-digit growth expected into the future based on diversified business model and global market presence.

• Currency fluctuations: Modest currency headwind impact in the fourth quarter with major currencies in low single digits. - Market competition: High barriers to entry but new competition could pose risks. - Regulatory changes: Impact on operations and revenue if regulations change. - Macroeconomic factors: Cash to digital payment conversion plateauing could affect business dynamics.

Q: Reina Kumar asked about what gave confidence in raising initial EPS outlook for 2025 and drivers by segment.

A: Michael Brown mentioned strong momentum in all three segments, including digital segment growth, EFT's merchant services growth and ATM as a service, ePay's partnerships with big brands, and money transfer's digital transaction growth. Rick Weller added about business consistency and diversity.

Q: Gus Gala asked about money transfer geos, margins, and intra-quarter foot traffic.

A: Michael Brown said entering new geos can have fatter margins as they may be monopolies or oligopolies. Rick Weller mentioned leveraging consistent infrastructure.

Q: Cris Kennedy asked about newer initiatives like REN, Dandelion, and Skylight.

A: Michael Brown said REN has transaction-based licenses with hyperbolic growth potential, Dandelion is a large cross-border network, and Skylight is just starting but growing.

Q: Pete Heckmann asked about first quarter tax provision and Dandelion partners.

A: Rick Weller confirmed tax provision ballpark, and Michael Brown talked about large Dandelion partners like HSBC and CBA with growing volumes.

Q: Andrew Schmidt asked about EPS growth including tax impact and underlying trajectory.

A: Rick Weller confirmed EPS growth includes tax impact and said business has continuity with consistent performance across durable assets.

Q: Mike Grondahl asked about surcharge and interchange increases.

A: Michael Brown and Rick Weller discussed that interchange and access fee increases in countries contributed to operating income, with more such increases expected in 2025 due to focus on cash access and regulatory support for banks.