Euronet Worldwide, Inc.

Good day, and thank you for standing by. Welcome to the Euronet Worldwide Third Quarter 2024 earnings call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, General Counsel Adam Godders. Please go ahead.

Thank you, and good morning, everyone, and welcome to Uranet's third quarter 2024 earnings conference call today. On today's call, we have Mike Brown, our chairman and CEO, as well as Rick Weller, our CFO. Before we begin, I would like to call your attention to the forward-looking statements disclaimer on the second slide of the PowerPoint presentation we will be making today. Statements made on this call that concern Euronet or management's intentions, expectations, or predictions of future performance are forward-looking statements. Euronet's actual results may vary materially from those anticipated in these forward-looking statements as a result of a number of factors, including those listed on the second slide of our presentation. In addition, the PowerPoint presentation includes a reconciliation of the non-GAAP financial measures we'll be using during the call to their most comparable GAAP measures. Now I'll turn the call over to our CFO, Rick Weller.

Thanks, Adam. I will begin my comments on slide five. We delivered a record third quarter on all key consolidated financial metrics. We delivered revenue of 1.1 billion, operating income of 182 million, adjusted EBITDA of 226 million, and adjusted EPS of $3.03. Important to note, we did not include in the 303 adjusted EPS an additional 28 cents per share related to an investment gain. Had we included the 28 cents, our adjusted EPS would have been $3.31. Leading the way for this quarter results was EFT with double digit constant currency operating income and adjusted EBITDA growth. Money transfer delivered constant dollar Third quarter revenue growth of 10%, operating income growth of 7%, and adjusted EBITDA growth of 4% compared to the prior year third quarter. ePay delivered double-digit revenue and transaction growth. Our adjusted EPS of 303 was up 11% compared to the prior year third quarter. When considering Our first three quarters adjusted EPS this year was 17% higher than last year. It is clear that we are on track to be at the top end of and quite possibly through the range of 10 to 15% for the full year. As I reflect on the average analyst estimate for the quarter, Some might say you're in at missed earnings expectations based on analyst consensus estimates of 311. While I understand that point, I will tell you that through the first three quarters of the year, we are 2% higher than the high end of our annual range we provided. I would also point out that due to the continued growth of the ePay and money transfer segments through the pandemic, We've seen somewhat of a gradual quarterly earnings mix shift out of the third quarter with a bit more balance in the first and fourth quarters. So, as we told you in the third quarter of 2023, rather than providing quarterly expectations, we are following a practice of a simple expectation of double-digit earnings growth of 10 to 15%. We recognize this approach may cause some differences to develop when comparing actual results to average analyst quarterly estimates. But we really want shareholders to embrace the competence of consistently producing double-digit earnings growth consistent with our past 20-year CAGR rates. And if a company can produce earnings at the high end If not through a 10% to 15% range and there be a 1% annual difference among analysts' quarterly estimates, I would say the company delivered impressive results. I hope shareholders focus on our commitment and delivery of double-digit earning results, possibly through an enviable double-digit growth range of 10% to 15%. I also hope shareholders appreciate the upper end of our earnings range is 60% greater than that which is expected for the S&P 500 for 2024. Moreover, for the third quarter, we continued our track record of producing strong free cash flows, producing nearly $100 million. In the quarter, we also took the opportunity to repurchase a million of our shares. Given the timing of the repurchases, there was only a marginal benefit to the third quarter adjusted EPS. But we know this return of capital to shareholders will improve earnings per share by 2% in all future periods. Slide six. presents a summary of our balance sheet compared to the prior quarter. As you can see, we ended the third quarter with $1.5 billion in unrestricted cash and debt of $2.3 billion. The net increase in unrestricted cash and cash equivalents is the net result of the generation of cash from operations, working capital fluctuations, and share repurchases. The indebtedness was $2.3 billion as of September 30th of 24, which was unchanged compared to June 30th of 24. Availability under the company's $1.25 billion revolving credit facility was approximately $670 million at quarter end. Slide 8 shows our results adjusted for currency fluctuations. EFT grew revenue 7%, operating income 12%, and EBITDA 10%. These growth rates were driven by improved travel, growth in the merchant services business, and growth within recent market expansions. Operating margins benefited from transactions driven by continued travel recovery and effective expense management. The ePay segment grew 10%, operating income 2%, and EBITDA 3%. Double-digit revenue and transaction growth was driven by continued digital media and mobile growth. Operating income and EBITDA growth rates were impacted by changes in product mix, investments in proprietary product offerings, and inflationary pressures. We expect to see a nice lift in fourth quarter EPA results versus prior year from promotional activity related to our B2B channel that was lighter in the prior year. As we have mentioned before, promotional activity in our Caduce incentives and rewards business is profitable and will benefit our quarterly results in the quarters where these campaigns occur, which may not always be consistent from year to year. With strong promotional activity benefiting the fourth quarter of this year, we expect full-year operating income in the upper single digits this year. Money transfer grew revenue 10%, operating income 7%, and EBITDA 4%. Revenue growth was primarily driven by double-digit growth in cross-border transactions, offset by a decrease in intra-US transactions. Direct-to-consumer digital transactions grew by 30%, reflecting strong consumer demand for digital products, which represents 19% of total transactions. The operating income growth of 7% was influenced by an additional $2 million in year-over-year incremental marketing spend during the quarter versus last year. Excluding the incremental digital customer marketing spend, operating income growth would have exceeded 10%, producing operating margins consistent with prior year. Money transfers, revenues, and gross profits per transaction were generally consistent with the prior year. Overall, we are very pleased that we have delivered third quarter results of delivered three quarters, nine months of growth in the upper teens. These growth rates give us even more confidence in our ability to deliver growth consistent with our proven history of double digit earnings growth. With that, we'll turn it over to Mike.