Euronet Worldwide, Inc.

To the Euronet Worldwide's first quarter 2025 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. It is now my pleasure to introduce your host, Mr. Adam Godders, General Counsel for the Euronet Worldwide. Thank you, Mr. Godders. You may begin.

Thank you. Good morning, everyone, and welcome to Euronet's first quarter 2025 earnings conference call. On the call today, we have Mike Brown, our Chairman and CEO, and Rick Weller, our CFO. Before we begin, I need to call your attention to the forward-looking statements disclaimer on the second slide of the PowerPoint presentation we'll be making today. Statements made on this call that concern Euronet or its management's intentions, expectations, or predictions of further 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 that are listed on the second page 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 CEO, Mike Brown.

Thank you, Adam, and thank you everybody for joining us today on the call. I'll begin my comments on slide number five. Well, let's first just dive right into our results for the quarter and what a quarter it was. We achieved double-digit constant currency growth in operating income and adjusted EBITDA, highlighted by an 18% increase in operating income over the prior year. We didn't just tiptoe into double-digit growth territory. We kicked in the door. All segments contributed to these record earnings. As we exited the first quarter, ongoing commentary around immigration, tariffs, and the trade war have dominated the headlines. There are a wide range of opinions regarding the macroeconomic impact, but the simple truth is that it's too early to predict the impact of these policies as witnessed by the volatility in the stock market. However, we did not see significant adverse impacts on our business from these policy discussions on our first quarter results, and with three-fourths of our revenues generated from outside of the United States, we do not anticipate any significant direct impact to our business as a result. With these strong first quarter results, together with our diversified global business, we are reaffirming our expectation to produce between 12 and 16% earnings for the year. As you may recall from our fourth quarter discussion, our business model is built on two key revenue pillars that will continue to expand as payment functionality evolves and business becomes more and more global. The first pillar is payment and transaction processing, with which we facilitate high volume transactions for banks merchants, and brand partners, continually expanding our use cases to stay aligned with evolving demands. The second is cross-border and foreign exchange, with which we power FX-related use cases and distribute FX services through a mix of owned and third-party channels, spanning both physical and digital touchpoints to meet consumer and business payment needs. While the methods have and will likely continue to evolve, We believe it is fairly safe to say that people will always need to make payments. Urinet will continue leading the way with its innovative use cases. Now, I will hand it off to Rick to discuss the results in more detail.

Thank you, Mike. Good morning, and thank you to everyone for joining us today. I will begin my comments on slide seven. For the first quarter, we delivered revenue of $916 million. adjusted operating income of $75 million, and adjusted EBITDA of $119 million. A record first quarter across all three metrics. These results were made possible by contributions from each of the segments, but with a particularly strong earnings contribution from the money transfer segment due to double digit transaction growth led by digital transaction growth of 31% compared to the prior year first quarter and double-digit cross-border transaction growth. Adjusted EPS of $1.13 compared to the prior year of $1.28. However, it is important to look a little deeper. For this year's first quarter, the $1.13 included a one-time charge of 20 cents per share for the repurchase of the convertible bonds. With respect to the prior year's first quarter, the $1.28 included a benefit of approximately 15 cents per share due to the reduction of certain tax matters. So on a pro forma basis, adjusted EPS grew 18% year over year. we were able to deliver this strong earnings growth due to our continued focus on expanding the business in new and existing markets, adding more products, and continued investments in our industry-leading technology across all three segments. Needless to say, this strong start to the year strengthens our confidence in the 12 to 16% annual adjusted EPS range expectation we provided for 2025. Next slide, please. Slide eight presents a summary of our balance sheet compared to the prior year. As you can see, we ended the first quarter with some increase in cash and debt, which was the combined result of the generation of cash from operations and the use of $59 million of cash for repurchase of shares and working capital requirements in EFT and money transfer to meet holiday business needs. We repurchased approximately $492 million of convertible notes using a combination of cash and debt. However, overall, our net debt leverage remains relatively conservative at about one times EBITDA. While the share repurchases we made in the first quarter will benefit future periods by approximately 1%, the repurchases had less than one-fourth of a penny benefit for this first quarter result. Moreover, as we approach the seasonally strong part of the year, we will see more ATM cash, which will drive more interest expense, which you can see in our historical trends. Slide nine, please. Year over year, most of the major currencies we operate in declined at low to mid single digit rates. To normalize the impact of currency fluctuations, we have presented our results adjusted for currency on the next slide. On slide 10 now. Building on the momentum from last year, we are pleased to start 2025 with record results across all metrics. All segments played a role in the record quarterly results. Starting with our EFT segment, revenue grew 10 percent, adjusted operating income grew 15, and adjusted EBITDA grew 10 percent when compared to prior year. This notable growth was fueled by a rise in both domestic and international cash withdrawal transactions, further expansion into new markets, and the addition of access fees and interchange rate increases in certain markets. Operating margins expanded nicely due to revenue growth complemented by effective cost management. ePay grew revenue 8% and adjusted operating income and adjusted EBITDA grew 5%. The main drivers of growth this quarter were attributed to our payment business, the continued growth of our digital channel sales in multiple markets, predominantly related to gaming content and mobile activation increases in ePay USA. Adjusted operating income and adjusted EBITDA were impacted by the payment of $4.5 million during the quarter to resolve an operating tax matter covering multiple years. Excluding the one-time payment related to the operating tax matter, ePay grew adjusted operating income 22% and adjusted EBITDA 20%. Money Transfer revenue, operating income, and adjusted EBITDA grew 10%, 23%, and 17% respectively. The 10% growth in revenue was primarily driven by double-digit growth in cross-border transactions, offset by a decrease in intra-U.S. transactions. Direct-to-consumer digital transactions increased by 31%. reflecting strong consumer demand for digital products. On a constant currency basis, money transfers, gross profit per transactions, and amount sent improved compared to the prior year. Overall, gross profit per transaction remains stable or improved across all segments. Moreover, Consolidated operating margins expanded 80 basis points compared to the prior year, driven by volume growth, gross margin improvements, and scale across all segments. In summary, these meet and beat first quarter results further strengthen our confidence in the 12 to 16% earnings growth expectation we have for 2025. With this, I'll turn it back to Mike.

Thank you, Rick. I will continue my comments on slide number 12. Today I want to talk about our business and how our growth strategy continues to produce results. Earlier I mentioned our growth strategy by the continued global expansion of our leading global cross-border payments network, focused on high-value FX transactions. Moreover, the results Rick just reviewed are evidence that our strategy works, producing double-digit growth, or maybe we could say doing double-time. As we have discussed over the past few quarters, the strength of our business lies in the diversity of our three segments, as well as the diversity within those segments. This quarter was a great example of just that. As the graph on slide 12 illustrates, over the past 10 years, our first quarter revenue has continued to grow. The continued constant growth year after year is due to our team's execution of our strategy. Over the last 10 years, our first quarter revenues have more than doubled from $435 million to over $937 million. Whether led by ePay, EFT, or money transfer, Euronet continues to produce record revenues. As we discussed, our business was built on two key revenue pillars that will continue to expand and reach more and more customers. First is payment and transaction processing, and the second is cross-border and foreign exchange. Without our diverse revenue streams, we would not have had the ability to produce consistent growth year after year. While our pillars will continue to expand and grow, our global reach, we know that people will always need to make payments, and Euronet will continue to lead the way. Now let's move on to slide number 13, and I'll discuss what makes up our revenue. I'm on 13 now. So to quickly recap our business, Euronet started with one segment, EFT, by deploying our own APMs. Today, we operate three segments that each complement one another and represent a diversified global business with a collection of assets that have positioned Uranet as a global leader in the payments industry. As you can see on the slide, for the full year 2024, only 19% of our revenue was generated from Uranet-owned ATMs. Our first quarter growth and product mix are in line with the full year of 2024 last year. While our Uranet-owned ATM revenue is growing, our other revenue streams are growing at an even faster pace. We invested heavily in card acquiring, in REN, Dandelion, digital money transfer, ePay, and you can see those results. Said differently and simply, while I am proud of our heritage, we are not just an ATM business. Now let's briefly discuss the payments global market. Based on a 2024 report issued by McKinsey and Company entitled Global Payments in 2024, the global payment industry handled 3.4 trillion transactions in a revenue pool of 2.4 trillion, or just over 13 basis points per dollar process. McKinsey predicts the revenue pool to grow at a rate of 5% per year. And as we have shared with you, our focus on cross-border payments With seven times the opportunities, the more valuable transactions have enabled us to achieve revenue per transaction at more than 20 times the market average. In addition to getting the more valuable transactions, we are growing at twice the market ratio of growth. With less than 1% of the overall industry revenue pool and a focus on higher value payments, we have a lot of room to continue to grow. In the past three decades, we've built an unmatched set of assets, technology, expertise that have positioned us as a global leader in payment processing, cross-border payments, and foreign exchange. The payments industry is growing, and we are growing at double the market rate. There's that word again. We really like doubles. Now let's talk about EFT. Next slide, please. During the first quarter, EFT delivered double-digit growth across all metrics Our EFT growth this quarter was made possible by the expansion of core services to banks and fintechs, including expansion of international and domestic fees, growth in recently launched markets. These are the Philippines, Albania, Belgium, Mexico, Egypt, Morocco, and Malaysia. Continued growth of our POS acquiring business and good expense management there. Taking advantage of ATM as a service opportunities. Notable examples in the first quarter of the expansion of our merchant services business in Greece included we secured a five-year agreement with Avolta AG, a Swiss-based travel retailer. We entered into an agreement with NRG, a leading energy company specializing in power generation and retail electricity sales, to assume all the online payments for energy bills from consumers. We signed an agreement with Snappy, a local digital bank in Greece, to enable card-based top-ups for the digital wallet. And we introduced a new revenue stream with the launch of NowPay, a service that offers same-day settlement for our merchants for an additional fee. And finally, we signed an additional 7,000 new merchants this quarter. What about geographic expansions? During the quarter, EFT launched two new independent ATM networks in the Dominican Republic and Peru through our JV partnership with ProSegur. Let's discuss how our ATM network helps us grow our service offerings. We continue to add network participation agreements, signing 11 new merchants in Poland for ATM deposits. And what about rent during the quarter? We signed an agreement to implement POS and ATM DCC via REN for Bank of Ceylon and Sri Lanka. The Bank of Ceylon is a large commercial bank with 651 branches and 715 ATMs. We signed an agreement with the Bank of the Philippine Islands, that's the number two bank there, to support the rollout of QR code based merchant payments on 40,000 merchant POS terminals leveraging our REN payments platform. And we signed a strategic agreement with Yes Bank, one of India's leading private sector banks, to modernize and transform their retail payments infrastructure. Under this new agreement, the bank will transition to Uranet's RAN payments platform, hosted on our private cloud infrastructure in India. As you can see, our EFT business continues to grow across products, solutions, and geographies, which will benefit our results as we move through the remainder of the year. Now let's move on to slide number 15. As I begin my comments on ePay, I want to repeat for you what Rick discussed earlier. Excluding a one-time payment to resolve an operating tax matter for $4.5 million, our core ePay business grew revenue by 8%, operating income by 22%, and adjusted EBITDA by 20%. The growth was driven by expansion in our payments business, growth of our digital channel, sales in multiple markets predominantly related to gaming content and mobile activation increases in the, in ePay US. In addition, we saw broad growth across most of all of our ePay geographies. A notable signing this quarter was a contract with Sony in Turkey for distribution in both digital and physical channels. This is a strong market where ePay has established good digital and retailer penetration. During the quarter, ePay continued to grow its payment processing business with the signing of a payment processing contract with the Munich Airport. This contract will include over 300 POS terminals and provides alternative payment methods as well, like WeChat Pay, Alipay, et cetera, for vendors at the airport, including retail outlets, hospitality, and parking. We expect to launch this in the late second quarter or early third quarter of this year. Finally, as we look to the second quarter, we expect to see an improvement compared to the prior year from the promotional activity related to our B2B channel that was lighter in the prior year, last year. As we have mentioned before, promotional activity in our produced incentives and rewards business is very profitable and will benefit our quarterly results in quarters where these campaigns occur. Now let's move on to slide 16 and we'll talk about money transfer. Okay, as we turn our attention to money transfer, we achieved double-digit growth across all metrics in the first quarter, with adjusted operating income increasing by 23% compared to the prior same period last year. What a quarter for money transfer. Key metrics include transactions grew at double-digit rates, continuing to outpace the market by two and a half times. Digital transactions increased 31% compared to the prior year. digital payout grew by 29% year over year, accounting now for 55% of our total volume. Our exceptional performance in money transfer stemmed from our market-leading digital distribution channels. Strategic growth drivers include our global presence, omni-channel capabilities with established brick-and-mortar and digital experiences, the world's best digital payout network, a wholesale strategy with Dandelion, and our strong competitive stance for the total addressable market. This quarter, we signed 22 new agreements across 20 countries, expanding our network into Iraq and Sudan. We also launched 13 partners in 11 countries. A key highlight is our integration with Visa Direct, enabling customers to send funds within minutes to 4 billion Visa debit cards. This service also simplifies sending money to a bank account by providing the recipient's name and debit card number, further solidifying our leading position in digital payout, one of our biggest growth drivers. On the send side, we renewed our exclusive agreement with Belgian Post, underscoring the value of our service. Additionally, we expanded our digital offering into New Zealand with our REIA app, strengthening our digital presence in the APAC region. Shifting focus to our platform, Dandelion Wholesale continues to enhance cross-border capabilities for major players. This quarter, we signed new deals with MoneyTrans, a Brussels-based fintech in the remittance industry, and Skyee, a Hong Kong-based fintech specializing in cross-border payments for e-commerce businesses. Notably, Dandelion's Easy-to-integrate model enabled MoneyTrans to connect to our full network in under a week, allowing them to rapidly scale their international payment capabilities and accelerate their time to market. These new Dandelion deals, together with the ease of integration, are contributing to the 33% transaction growth of Dandelion that we saw this last quarter. The momentum is building. As you can see, we're hitting on all cylinders in money transfer, and we have a robust pipeline of diverse opportunities ahead, giving us confidence in our ability to continue our strong growth. Let's move ahead to the next slide, and we'll talk about how we can close this course. As I close out my comments on the first quarter, I want to reiterate that we are a diversified business. We have a leadership team with a proven track record of delivering growth year after year after year. and a revenue mix that continues to shift as we make investments, acquire companies, and launch new products. For the year ended 2024 and the first quarter of 2025, only 19% of our revenue is from our ATM-owned network. As we have explained, we have a robust business model that plays in a $2.4 trillion revenue global payments market with endless potential for growth. Supporting our model, We have our core assets, our REN technology, our dandelion network, our global footprint of licensed and regulated entities, distribution partners in the form of banks, retailers, company-owned stores, ATMs, and POS terminals. We have a very robust balance sheet that can support future growth initiatives and our people the best I could ask for with a consistent track record of delivering growth year over year. Our business stands on these foundational assets, and we have a go-to-market strategy for our revenue pillars through our three different segments and multiple use cases, enabling Euronet to reach the world of payments, transaction processing, cross-border payments, and foreign exchange through our network of networks. Our overall business is growing two times faster than the global payments market, of growth, and we expect that to continue. As I conclude my remarks, I want to repeat, we look forward to the remainder of 2025. With a strong first quarter and a strong start to the year, we are reaffirming our earnings expectation of 12 to 16% growth for the year. With that, I will be happy to take questions. Operator, please assist.

Thank you. At this time, we will now conduct a question and answer session. As a reminder to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from Pete Hackman from DA Davidson. The floor is yours.

Thank you. Good morning, everyone. I wanted to follow up a little bit on Dandelion, the integration with Visa. I guess, is it possible to get a little bit more visibility into kind of the quarterly trends there or perhaps the year-over-year growth rates in 2024 and what you're expecting for 2025? It sounds like there's a number of deals getting done, but it's kind of hard to see through the rest to see exactly what the trends are there.

Well, you saw that we had a 33% growth, and I would tell you that virtually 100% of that is without Visa Direct because we just flipped on the Visa Direct switch, I don't know, a couple of weeks ago or so. So we don't have any numbers in there for that. We're very excited. This is a great distribution channel for our money transfer business. And you know what it does is it makes it much, much easier for somebody to send money digitally. We like that because it costs us less than a physical cash payout. All you've got to do is give them the name and the card number of the recipient, so it's really easy. We're excited about this, but it's not in our numbers right now.

Okay, that's helpful. This is a follow-up on your partnership or joint venture in California. in a couple of countries with ProSegur. Do you anticipate that being an aggressive rollout or would you consider more of a pilot program? How should we think about that?

Okay, so as you may know, ProSegur is kind of the brinks of South America, you know, of Latin America and also Spain. And they've got an excellent, you know, an excellent reputation with all the banks there. So they give us entrees into these banks so that we can get licensed in these countries. We want to go into... I'm not saying every country south of our border, but most all the countries south of our border. So we're excited about that. Now, you know how it works is we get those, we light up those first few ATMs, we make sure we've got everything working really well, and then we start to blow it out like we have in these other markets. So yes, we're expecting aggressive rollouts in the ProSegur joint venture partner countries.

All right, great. Thank you.

Oh, and one last thing on that. Excuse me, operator. Pete, don't forget that every country south of our border has a different currency. So we're not just talking about tourists from the U.S. who might go to Ecuador or something, but it's just crossing the borders there for those countries. You know, they're going to need the local currency wherever they go whenever they cross the border. So lots of opportunity for us. Helpful.

Thanks. Go ahead. That's great. Thank you for the question. Our next question comes from Mike Grodal from Northland.

The floor is yours.

Hey, Mike and Rick. Congrats on a nice quarter. Curious what you're seeing over in Europe on the ATM side. Any early read on summer travel or consumer spending over there? How's it coming in according to plan?

It seems to be at least with three weeks or so into April, it's just tracking right according to plan. And I mean, I think that's the thing everybody's got to remember is that 80% of the customers who are ATMs where travel makes a difference are Europeans. And they're still going on vacations. You know, there have been some people who've hypothesized because of the U.S.' 's stance towards Europe and some Europeans afraid to come here. Maybe they'll vacation at home instead of in the U.S. or whatever. But I think that's all on the edges. What we've seen so far is everything seems to be lining up like we thought. Very similar to last summer, but there will be more travelers this summer.

Got it. And then... Your 12% to 16% adjusted EPS growth this year guidance, how are you factoring FX into that? There's been a pretty nice move up to the euro to the dollar to 114. How are you thinking about that for 25?

Yeah, Mike, we generally just expect that the FX rates will hold flat. So we've not, you know, we've not got increases built into our numbers. So, you know, if we see, you know, a measurable increase, you know, it could give us a little bit of tailwind. But we don't try to outguess it. You know, you also have to keep in mind is that, you know, we've got a mix of currencies around the world. So you can't just look at one currency. Okay. And then, as we said, we do have about 25% of our revenues generated in the U.S. So we've definitely seen a little benefit tailwind. But the assumption on a go-forward basis is always that we don't outthink it or put some projection on what will happen there.

Got it. Rick, maybe a better way to ask it. Were there any put and takes? to the 12 to 16% growth, you know, anything doing better, anything doing a little worse to call out? Maybe there's not.

Yeah, well, you know, I think if you'd really get behind all the math there, yeah, you would see, you know, we benefited a little bit more from some share repurchases, the, you know, year over year carryovers of that. On the other side of the coin, we had more interest expense because rates were increasing you know, as we went through much of last year, then we started seeing a little bit of a dip in it, you know, so rates, interest rates a little bit more. So that kind of offset some of that. You know, those were, you know, probably, you know, the biggest puts and takes to call out there. We didn't have any Like I mentioned there, we didn't have any really significant benefit from share repurchases this quarter because they were purchased towards the end of the quarter. So nothing really there. We had just a slight benefit on income taxes, not much. You know, probably the best thing on the headlines is you kind of sort through some of that math And you, again, focus on 18% growth in operating income. That's the heart of the business. That's the strength and the fuel to the business. If we can't grow our business at those kind of rates, we won't have the earnings. So at the end of the day, the quality of our earnings, our year-over-year numbers, if you try to, you know, let's say cut out a lot of the noise that happens, whether it's purchase, share purchases, interest or tax or whatever, and you go, you know, on a, on a kind of an apples to apples basis, we had about an 18, 19% year over year EPS growth, almost exactly what we had in operating income. And if I reflect back even to the full year of 2024, you would see the kind of same kind of math there. So I think the real showcase to our strength of the business is the strength of the earnings growth which I think is very much to do with the diversity that we have across our business geographically, product-wise, segment-wise, customer-wise, and we feel pretty good about the momentum that's going in our business.

Great, thank you. Thank you, great question. One moment, please.

Our next question comes from Chris Kennedy of William Blair. The floor is yours.

Good morning. Thanks for taking the questions. Can you just talk about consumers' willingness to pay ATM surcharge or access fees in Europe? It's kind of a new concept over there. Any observations in the data?

Well, I think that the data seems to say that they – first of all, you've got to understand, we're not the only people doing this. Much like the United States, if you go to any ATM that's not your own bank's ATM, you will pay, what, $3.50, $4 or whatever it is here, right? It's exactly the same in Europe. Once Visa and MasterCard have allowed it in a given market, we do it, but everybody else doesn't. uh, when you, when you think about it, that people really don't, if you want the cash, that's just kind of the common denominator. And so we don't really see, um, you know, we don't see like a change in the price elasticity curve, you might say.

You know, the other thing I would point out is, um, what is very common practice in Europe is that, uh, The banks put on their customers what they call a disloyalty charge. And all of these banks have two or three euros that they charge their customer anytime they use an ATM other than on their network. So for the most part, customers are quite accustomed to paying a fee if they're using an ATM that's other than their banks. And then the other thing that, aside from that, as Mike mentioned here earlier too in the comments, is that we sign participation agreements with banks across Europe. And that gives the bank the ability to extend its presence across the wider area, a broader number of ATMs. And, you know, and that's good for the customer and it's good for us. So, again, we see that the practices are pretty consistent where banks are charge customers off bank kind of fees. So, you know, customers are, let's say, accustomed to that type of a fee.

And it does two things. First of all, once you've got, and we call it a surcharge here on ATMs, it opens up for us more ATMs in that potential market because then we can go after the local transactions where we might not have gone after that ahead of time. And second, like Rick says, we sign network participation agreements with banks so that they use our network, our Uranet branded network, as an extension of their own, and they basically buy transactions from us at wholesale. If you might remember, the first country in continental Europe that did this was Spain, and we must have 30 different banks in Spain who have contracts with us so that their customers have access to our ATMs with a no fee agreement. So it actually lengthens our runway for numbers of ATMs in Europe as more and more surcharges come into the market.

Right. Very clear. Thank you for that. And then just a quick update on the merchant services business. It seems like you're expanding into new geographies. And Mike, I think you mentioned tight expense management on that business.

Well, yeah, our goal is to expand into Portugal, Spain, and Italy. They have a similar kind. They're hyper-competitive, first of all, and so we're kind of starting from scratch. But we understand how to have a value proposition that's good for the small merchants in these Mediterranean-touching countries. And so that's our goal is to take the tricks that we've learned in Greece and and export them to those three other countries. And we're just on the beginning of that right now. We've hired sales forces. We're going out selling to the merchants and trying to dislodge them from their current providers because we've got a good value prop.

Great. Thanks for taking the questions.

Thank you for your question. One moment, please. Our next question comes from Gus Gala from MCH. The floor is yours.

Hi, Mike. Hi, Rick. Thanks for taking our questions. Could you talk about the RIA digital shift? Two areas I want to dig in on. Can you talk about maybe efficiencies around digital marketing insofar as driving the strength in branded digital? And then any commentary around how your maybe gross profit dollar retention has been trending, anything that's qualified on that front would be helpful. And then on a similar front and money transfer, could you talk about how you've dealt with more entrance into the independent channel domestically in the past? Sounds like a larger peer is more actively pursuing that space here in the U.S. Thanks.

Well, I mean, you just look at our money transfer results and they speak for themselves. I mean, we are absolutely crushing it with our, you know, our REIA business up and down the value chain. You know, we start with REIA at bricks and mortars. We have reiamoneytransfer.com on the online side. You can see that our growth there is 30%. We continue to grow that kind of 30% quarter on quarter on quarter, and it keeps on happening. We do see some entrance, but we also see people dying off. I mean, this is a hyper-competitive market. Last year we saw two of the, I would say, major mid-sized players just evaporate, one in Europe, one in the U.S. So it is competitive. One of the things that we've got going for us is that we have an omni-channel strategy. And that's where you can have the same customer number and the same relationship with us, whether you use bricks and mortar or you go digital. And so what that's done is it's actually helped us continue to keep these customers as they may migrate from bricks and mortar to more digital areas.

Yeah, you also asked about gross profit. As I mentioned earlier, actually, we saw a little increase in our gross profit for transactions. So we feel pretty good about the stability of the market out there. And to further Mike's comments about the other guys in the business, look, we purchased this REIA business. It's been in our group now since 2007. And there's rarely an agent that we have that you walk in there that there aren't four or five other brands that are actively competing. And so this has been the way we've lived. It's the kind of day-to-day kind of hand combat battle that... Juan and his team do every single day. So, you know, we do see sometimes the names on the brands that we compete with change out there, but the competitive nature of the independent channel hasn't been much today different than it has been over the last 15 years.

I appreciate the comment.

Thank you for your question. Oh, go ahead if you have one more.

Yeah, sorry. And then one on EFT. Can we talk about the LATM opportunity a little bit? Maybe is there a way to quantify what the opportunity could be in terms of ATMs, transactions? And then a second layer, could you – in the past you've talked about the productivity – of these ATMs outside of Europe being much higher. Could you put a finer point on how this, you know, the Proseguro, how their ATMs kind of look versus those numbers? Yeah, anything of note there would be helpful.

Okay, so some of this is too early to give you actual numbers. I mean, we've used Proseguro as our JV partner just in two markets, and that's the two new ones, the DR and and Peru. So we're just starting. We don't have any data. However, we entered into Mexico on our own and they're extremely profitable for us. And the one thing you've got to remember is, you know, in Europe, the bulk of Europe uses Europe, right? And they, these are Euro to Euro transactions. And so they're not cross currency. So you can't make a currency spread on those transactions in Europe. However, virtually every transaction that we do, uh, you know, in a cross-border transaction that we do in South America or Latin America is all cross-currency. So much higher percentage of our transactions can be DCC transactions, which gives you the ability to make, you know, more than a couple bucks on a surcharge. So So there's a lot of opportunity there. It's the same kind of thing that we saw in North Africa with Morocco and in Egypt and the same thing we see in Malaysia and the Philippines. Lots of DCC opportunities there. Lots of travelers just traversing those geographic areas. So I can't tell you exactly how big it's going to be, but we know the opportunity is large.

Gotcha. I appreciate all the comments as usual.

Thank you for your questions. One moment, please. Our next question comes from Raina Kumar from Oppenheimer.

The floor is yours.

Good morning. Thanks for taking my question and good results here. I think earlier you had mentioned that 80% of tourists in Europe are Europeans themselves. Are you able to break that out a little bit further and talk about what percentage you see are U.S. tourists?

I think I know that 80% of our customers in Europe are Europeans. And of the 20% that's left, about half of that comes from Britain. And the other half comes from the U.S. and all the other countries. And I bet you, I don't know that number off the top of my head. Maybe Rick does, but I'd say the U.S. might be half-ish of the last 10%.

It's just slightly less than half, but we're in the right zip code.

Yes. Understood. Okay, that's really helpful. And then I just want to ask about money transfer. How much benefit do you guys think you got from just the FX volatility in the quarter versus, I guess, what your competitors are doing?

I don't think that we got much benefit in the first quarter. I didn't think that we started seeing the volatility move as much until kind of towards the end of the first quarter. We have seen more activity in the first part of April here. But I would say on balance, not much in the first quarter. But again, it looks like April is activities picked up. And I think that kind of coincides with a lot of the press. I mean, if you remember, April 2nd was a big announcement date on the the tariff position. So I think that's kind of when you really started seeing the volatility move.

Understood. Okay. And then just finally on the ATM business, it's good to see the Dominican Republic and Peru up on their ATMs. Can you just comment on how many ATMs in general you expect to add this year?

Well, as we said before, we would probably start moving away from that kind of a thing, you know, just so that it's just another statistic to have to measure. But, you know, together, and we also had announced that we had signed a transaction in Eastern Europe that will add quite a few ATMs from an outsourced basis. So I would tell you that we would expect our business to add ATMs consistent with the prior years. So we weren't wanting to put out a specific number on that, but you can expect that we will continue to put in about the same number of ATMs. And if we, you know, see a little bit more traction somewhere or if we sign some larger outsource deals, we could go through that. But our momentum would be consistent with what we've done in the prior years.

Great. Thank you.

Thank you for your question. Our next question comes from Darnan Peeler with Wolf Research. The floor is yours.

Hi, thanks. This is Daniel Krebs on for Darren Teller.

I wanted to follow up on the merchant services outside of Greece. I know it's early efforts now, but In your view, how long is the typical sales cycle and grant period until we can start to see some material contributions from these countries?

Thanks. Oh, I think we'll materially, one of the challenges we got is that Greece is just crushing it. So when you say material, material in comparison to Greece or just kind of, or adds up to a few millions, you know, I would say that that's probably not going to be till late this year, early next year. But we're working hard. We see the opportunity. Pardon me.

Well, you know, I think another demonstration of that And the credibility of what we have to offer. As we mentioned there earlier, we just signed the Munich airport. I mean, you know, this is a major player in Europe. The Germans have exacting standards of quality. And so... You know, it, I think, speaks to the quality of what we have to offer. So, you know, we start seeing the momentum grow there. And, you know, we're not just a household name out there in the merchant processing. We've got a lot more strength in Greece. But we'll continue to drive that. But that's just a good example of people recognizing what we have to offer. And it's also recognizing the quality of our technology because, you know, really, you know, these folks are wanting to be able to have payments processed from all people that come through that airport. And, you know, they're not people carrying just a traditional Visa or MasterCard type of a product. They've got QR code kind of products, things like that. This is non-traditional card processing type of payment. And so people are making recognition of the technology difference we make to help them serve their customers better.

Understood. Thanks. And just a quick follow-up maybe on the travel trends.

Do you potentially see a scenario where if there's slower inbound to U.S. and U.S. domestic activity, that some of that travel activity could end up shifting to Europe? I'm not sure if you've seen any of that in early Philippines data, perhaps.

Haven't seen anything show up in the numbers. You know, I think you raise a good question that we just haven't seen any kind of data on it. But you're right to the extent that someone from outside the United States that may have planned to come to the United States, feels like they don't want to make the trip here, well, you know, the next largest tourist location is Europe. And because we've deployed in some of the other Asia-Pac markets, the Northern African markets, you know, we've got a lot of those places covered. So, you know, if consumers do shift their preference or their behavior there, you know, we might get a little benefit from that.

Great. Thank you so much. Thank you for your question. Our last question comes from Zachary Gunn of FT Partners. The floor is yours.

Hey there. Thanks for taking the question. Apologies if I missed it. I just want to ask, were there any incremental geographies that launched direct access fees this quarter? I know there's a couple expected to come on in 2025 and just With that, is there any way to think about the contribution of incremental countries and what that's expected to contribute to that EPS guide for the full year?

I don't think we had any new ones come on in the first quarter. We had some that, and I can't remember which countries or which, I might have said in my Q4 call, we had a few come on in the fourth quarter so that we would get the benefit of them in the first quarter. But if they, but I can't remember anything past that.

Do you recall? Nothing in terms of a new addition in the first quarter. Like Mike said, we're getting some, you know, full year benefit here from some of those others. We've got some others that are on the radar screen that we would expect this year. But, you know, we're not the folks that make those announcements. And so we don't want to put the names out there until, It's really the card organizations that have to make those announcements and things like that. So we do expect some more this year, but nothing new came on board in the first quarter.

Got it. That's helpful. And then just quickly as a follow-up, I just want to ask on the regulatory environment. Obviously, money transfer came in strong this quarter, but we saw specifically FinCEN put out some geographic targeting orders on zip codes in the US, and it's probably a small proportion of overall volume. But what are you seeing in the regulatory environment today? Do you think that there's risk that these type of restrictions on filing CTRs and decreasing the amount required, that that expands further? Just any commentary on that would be helpful.

You know, look, I think it's always hard to outguess that, but maybe if we reflect a little bit on kind of the world that we operate in, and essentially we operate and have been on a basis that generally has been taking IDs on folks, and, you know, we've seen these kind of things before. We haven't seen any kind of, like we said earlier, any kind of significant difference show up out there. And so our general view at this time is that we don't anticipate any kind of adverse reactions from that. But, you know, it really all depends on what kind of action could be taken in the future. We operate on an ID basis pretty much around the world, if you will. So when people are sending money, they're generally accustomed to that. So again, as I said, we haven't seen anything now. And as of what we see in the market today, we don't expect anything significant in that regard.

And aside from that, or because of our very diligent view on compliance and regulation and all that, you know, we have an absolutely pristine compliance record. Our larger competitors cannot brag about that. We certainly can over all the years, over 30 years of doing this. We don't get into trouble because we play it by the book and we're very conservative. And I think with that, Zach, we're going to have to cut it off. But I thank everybody for their time today, and I look forward to seeing them in about 90 days. Thank you.

Thank you, everyone, for your participation in today's conference. This does conclude the program. You may now disconnect.