Q3 2021 International Money Express Inc Earnings Call
Greetings welcome to the International Money Express Inc. Third quarter of 2021 earnings Conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press stars zero on your telephone keypad. Please note. This conference is being recorded.
I will now turn the conference over to your host Mike gallon time, you may begin.
Good morning, everyone and welcome to our quarterly earnings call.
I would like to remind everyone that today's call includes forward looking statements, including our updated 2021 guidance and actual results may differ materially from expectations.
For additional information on the international money Express, which we refer to as inner mix or the company. Please refer to the company's SEC filings, including the risk factors described they are in.
I'll forward looking statements on this call are based on assumptions and beliefs as of today and you should not rely on are forward looking statements as predictions of future events.
Please refer to slide two of our presentation for a description of certain forward looking statements.
That the company undertakes no obligation to update such information, except as required by applicable law.
On this conference call, we discuss certain non-GAAP financial measures.
Information required under regulation G under the Securities and Exchange Act with respect to such non-GAAP financial measures is included in the presentation slides and our earnings press release, our quarterly Form 10-Q in our annual report Form 10-K include.
In reconciliation of certain non-GAAP financial measures to the appropriate GAAP measures.
These can be obtained in the investors section of our website at <unk> online Dot com.
Presenting on today's call will be our chairman and Chief Executive Officer, and President, Bob Lissie, Chief Financial Officer Andras Spendy.
Also on the call today is Joseph Aguilar, Chief operating Officer, and Randy Nelson Chief Revenue Officer, Let me now turn the call over to Bob.
Good morning, and thank you for joining US today, we are proud to announce another quarter of very strong growth across all of our operating and financial metrics.
Let me highlight some of these accomplishments and slide three compared to third quarter of 2020 revenues grew 26, 3% to $127 million total dollars sent grew 36% net income was $11.5 million an increase of 21, 2%.
<unk> adjusted net income of $15.7 million, an increase of 28, 3% and adjusted EBITDA increased 19.8% to $22.9 million.
As has been the theme since we have been a publicly traded company. We again generated a record number of remittances during the third quarter with more than 10 5 million transferring four $7 billion for our customers underlying this performance I want to commend the entire intermix team both in the us and abroad.
The Intermix brand continues to gain more traction each quarter, our market share increased to a record high in our core markets of Mexico, Guatemala, El Salvador, and Honduras, capturing the share of 21, 8% as we grew 40% more than what was already a very robust market.
The companies Omnichannel strategy continues to meet our customers needs, while delivering strong financial results for our shareholders. We have spoken about it before but particularly for those who may be new to our call. It is always worth highlighting intermix employs a growth strategy that focuses on the consumer and meeting their needs efficiently effectively with a.
And focus on security and timeliness.
We provide choices for our consumers for what we believe to be the best retail and online product and service in the marketplace, enabling consumers to choose whatever is the best method for them to send in for their beneficiaries to receive money.
On the same side, we partner with engaged carefully vetted top quality group, where freetail agents, located where our customers list and work.
Both our agents and intermix strive to provide the best quality of service in the industry.
Same time for those consumers, who preferred to initiate remittances through their laptop or their smartphone we continuously work to improve and expand our online digital business offering.
Additionally, intermix consumers can choose to send them a retail by using cash or debit card or online by using debit card credit card or a C. H on.
On the pay outside or received side, we have thoughtfully assembled a network that delivers wires more efficiently and effectively than ever before while providing consumers with more options than any other competitor.
Our customers and beneficiaries can receive money digitally into their bank accounts loaded on a mobile wallet paid out at ATM or they may pick up cash over the counter at one of our convenient payment locations importantly, all of these funds are available in minutes.
We believe our strategy is a major differentiator for inter Max, particularly when considering the widely differing demographics of those who send and receive money throughout the world. We believe that the cached option remains critically important in Latin American corridor, where the vast majority of wires are sent and received in cash.
One of the biggest opportunities that remains for the company is R. Retail digital business. There are hundreds of ZIP codes throughout the country that are either underserved or unserved by intermix. This means we do not have a retailer and the ZIP code or have fewer retailers and the ZIP code that would be optimal.
We feel confident that we are in the best position to exploit these opportunities through our best in class retail sales force.
A disproportionate share of the ZIP codes are found in California to Western States are expected to produce significant numbers of wires, we have a tremendous opportunity for organic growth in the western states along with plenty of organic opportunity remaining even in our most established dates for the quarter our agent base increased 13% over the prior year period with most agents added in.
California, and the west are.
Our agent growth helped deliver 19% increase in unique customers this quarter compared with the prior year period, we finished the quarter with 2.7 million unique customers who transferred with us.
Our relationship with the 4 million customers you Trust and value. Our service is a tremendous asset for the company will be able to market additional products like our card products that I will talk about later and of course, our digital service to these consumers and.
In the third quarter, our customers sent money more frequently and also sent larger amounts as I mentioned earlier, we delivered more than 10 5 million transactions, an increase of 23% over the third quarter of 2020.
This is also the largest number of remittances ever sold by the company in one quarter and as a result, our principal sent increased 36% to $4.7 billion in the quarter again, the most of the company has ever sent in a quarter with are expanding each network intermix continues to capture market share fueled by exceptional growth and transactions across our core markets.
Of Mexico, Guatemala, Honduras, El Salvador, as well as merchant markets you can see illustrated on the next slide.
We now have achieved a 21.8% market share in our combined core markets. We did this with a growth rate, 40% faster than the total market for this period.
Shown on slide six emerging markets, such as Dominican Republic, Ecuador in Nicaragua, among others also continued to experienced robust growth during the quarter.
The one year growth in these markets with similar to that in our core markets. The emerging markets had much more difficult conferences last year in total are emerging markets grew transactions by 23% compared to third quarter of 2020, However, looking past the impact of the pandemic in 2020 or two year growth rate for the third quarter is 66.
Percent per emerging markets and 39% for our four core markets. Both are very strong performances, considering the overall market.
While growing a very highly profitable base of retail agents and growing remittances at retail much faster to market. Intermix is also continuing to invest in our digital app and furthering our presence online.
And the next slide you will see the continued penetration of digital online initiative with transactions, increasing 71% compared to the prior year period.
Based on the definition of some of our industry competitors, who defined it digital transaction as a transaction where either side of the room. It's his cashless intermixed processes more than 23% of its transactions digitally. These remittances were either initiated cashless transactions on the same side Ah resettle cashless on the receive side.
During the quarter transactions that were deposited directly into a bank account increased 37% compared with the prior year period transactions process through the use of a debit card or retail although a small percentage overall, we're all wires grew at 78% year over year. These transactions will continue to increase as the number of retailers.
Except debit cards is expanded.
Lastly, another key pillar of our growth strategies are card product category car direct pre-paid Mastercard and payroll Mastercard, we've been enhancing our system's infrastructure to efficiently and effectively support these products, while adding field sales and support personnel to expand our presence in the market to drive meaningful.
Contribution to future revenue and profitability growth.
Before I turn the car over to Andros I'll conclude by saying Intermix continues to executed a very high level that execution has led to significant gains in market share strong growth in revenue adjusted EBITDA net income. This has all been accomplished why we have simultaneously invested in the future of our company through the development of our new products.
Third quarter represents another period in which intermix has met or exceeded market expectations for revenue adjusted EBITDA net income having now been a public company for 13 quarters, we have now met or exceeded our EBITDA net income expectation for 13 consecutive quarters, we're confident in our ability to continue to execute our multichannel <unk>.
<unk>, which provides an fuels consumer choice ultimately, resulting in the companies continued growth and strong performance and what we believe is a tremendous growth opportunity that lies ahead with that I will turn the call over to our CFO Andrew spending.
Thanks, Bob and good morning to everyone.
Moving to slide eight let's walk through the third quarter results from a bit more detail as Bob highlight it's been another quarter of strong execution in all areas of the business with plenty of new milestones achieved across our key measures in the quarter revenues were up significantly at 26% versus the prior year quarter, finishing of just under $121 million behind.
That strong growth were a few key factors, we had a 19% increase in customer count and a 13% increase in activations. So our payments ecosystem in network of clients continues to grow and grow. This has helped us drive remittance transactions up 23%, our customer sent more often than larger amounts pushing total agreement in principle up 36.
Percent versus last year, those larger amounts also producer revenue tailwind for us from the FX component, we earn on those transactions gap.
<unk> net income for the quarter was $11.5 million up over 21% versus the prior year period are strong topline was the key driver with lower depreciation amortization and interest expense also contributing to a solid bottom line results. These.
These improvements were partially offset by higher salaries in general spending related to new product initiatives like card investment in digital and enhancements and modernization of our technology.
It's worth mentioning that within net income we did have to work through two unusual headwinds this quarter. One in line with our technology and software upgrades, we recorded impairment of about $1 million in the quarter for capitalized software related to code, we will no longer utilize and to a small banking institution that we use was put into liquidation by.
Mexico Bank regulator, resulting into $2 million reserve for company deposits held there.
Good in the software right off on the Bank reserve along with other certain non-cash expenses adjusted net income increased 28% to just under $16 million, which you can see on the next page.
Are strong growth in revenues, partially offset by growth in operating expenses drove adjusted EBITDA up 20% to $23 million.
Adjusted EBITDA margin for the quarter was 19% or second quarter in a row of 19% plus margins a year ago margins, where higher although at that time, we were benefiting from an extraordinarily lean stretch will cost management as we're managing through what was still a great deal of uncertainty from Covid those savings last year accentuate this year's <unk>.
<unk> and digital card and the retail front, and all of which position as well for 2022.
Moving on to slide 10, given the strength of our third quarter results are execution trajectory in an incredibly valuable and growing payments ecosystem, where again, increasing our full year 2020 on guidance for revenues and adjusted EBITDA and narrowing on net income and adjusted net income ranges, we now expect to revenue to be between $450.
455 million GAAP net income between 44 and $45 million adjusted net income between 52 and $53 million and adjusted EBITDA between 84, and $85 million, we continue to balance revenue growth and profitability, while simultaneously investing for the future of our company, especially in technology.
Talent and marketing our expectation for a strong finished the second half is allowing us to accelerate many of these investments and position us for what we feel will be another standout year in 2022 with that let me turn the call back to the operator for questions.
Thank you at this time, we will be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad a confirmation tunnel indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue for participants using speaker equipment and may be necessary to pick up your handset before pressing this darkies.
One moment, please while we pull for questions.
Our first question is is from David Sharp with JMP Securities. Please proceed with your question.
Great. Good morning, everybody. Thanks for taking my questions.
Terrific results again, and Bob I guess first question just.
It's really more macro commentary or.
Or speculation on your part you know some of the larger.
Providers or western Union Moneygram, both kind of remarked.
Demand didn't come in quite a strong or the outlook.
As expected largely a function of the delta search and supply chain issues.
But they actually call. They did call out Latin America is sort of one of the few bright spots. So.
Definitely in the right place at the right time.
Is there anything in particular, we ought to be focusing on it.
Either in the headlines are just paying attention to add on your biggest core.
Markets.
You know just kind of curious, okay, whether or not this kind of growth can be sustained if there are any sort of macro.
Had windows on the horizon, we should be paying attention to in your biggest corridors.
So good morning. Thank you for the question I think that the first thing is I'd like to say it has to be careful when you look at you mentioned Western Union, So I'll follow suit with that.
When you are talking about the Latin American corridor, they're usually referring to that as inter Latin America, so they're not referring to U S.
Talk about U S headed to Latin America. They are talking are usually about U S. Outbound. So just that just one thing and and some of the I'm not an expert on anyone else's business, but in some of our competitors. They suffered such a downturn internal Latin America last year.
Being really in the throes of Covid that they're lapping very very easy numbers. So you might want to look at the two year trend on those.
But then upset about others businesses, we want to focus on ours, that's what we do.
We're not seeing.
Any real challenge that hasn't existed before it's all about our execution, it's about our superior technology retailer selected process for picking retail agents, it's about knowing where our customers are providing the very best service in the world for them picking up our customer service line and four seconds consumers continue.
Move towards our brand.
Some of the larger competitors you mentioned really are not necessarily even in contention where those consumers are because they do business through large box stores and they haven't really modified their model overtime. So all of those things have been working for US we don't see anything on the horizon that looks like a huge rivera.
Arsenal, obviously no one can look at the future and continued to project, 25% revenue increases and as you heard from our discussion we know we're talking about or keep in mind, we talk about our growth and transactions. When you look at the two year trend, it's even equally are even more spectacular because.
We had a good we had a good third quarter last year. So you look at two years, we've grown our core market almost 40%, 39% plus two years over 21 over 19 are emerging markets are up 66%. So we continue to have consumers choosing at retail and also choosing in line or online.
This is growing but.
And that's just a factor of all those conditions that I talked about so we're not seeing anything that would indicate this as a temporary situation at the same time, we're not about ready to.
To state the 25% revenue growth is going to be under <unk>. Obviously, that's a that's a tough one to continue entertain forever.
Got it got it I appreciate the clarification 811 follow up.
You had.
It had some brief comments on.
Card direct we've been hearing for a number of years kind.
Kind of.
Plans to roll out prepaid products, either at retail or or with employers can you can you give a little more granular update and kind of where you are on that front and maybe yeah, well we have been rolling it out with employers. We don't talk a lot about it is we don't most of our anything even or retail money transfer business in great detail, particularly.
A new.
Sort of vertical for us, but we've been rolling it out we building a sales force that rolls up underneath Randy Nielsen you know is our chief revenue officer.
We've got folks in the field now selling to employers.
The payroll card and as you know we feel like we've got us a little bit of a short cut to those employers since we process. Those checks were not check casher Moby process checks through our check reconciliation for our product. So we know who are the employers who create a lot of checks that end up at our retailers. So that's really underway and it's growing first nicely.
Where the second piece of that is a retail car product, which is more of a general purpose card that can be converted into a mastercard or.
Mastercard debit card in the long term with the individual.
Are you using it reloading it and.
And that will be rolled out.
Some time in in fourth the early first quarter, we haven't really picked there's just a lot goes on around the holidays and stuff like that so those are doing well and we think that there'll be there are important because they are a bridge product.
A lot of our consumers have we talked about for years.
Have not really been empowered with the ability to do transactions and a cashless way. So we believe that will also empower a lot of our consumers to be able to if they choose to go online and access our online product, but also to be access you sending transactions from retail through a card based.
Debit based transaction in retail.
Got it great. Thank you.
Our next question is from Mark Palmer with B T. I G. Please proceed with your question.
Yes. Thank you good morning, and thanks for taking my question.
Excellent quarter again.
If you could talk a bit about capital allocation priorities.
You've now got over $125 million cash on your balance sheet, you've got the full access to your credit line.
<unk>.
What are you seeing in the environment in terms of opportunities for potential acquisitions in and barring that what are you thinking with the garden deployment.
Some of that cash.
Yeah, I think it's so I'll answer your question first about what are we seeing in terms of opportunities we've been very active on the M&A front recognizing that.
Ah kind of underlying financial discipline, we're not going to put ourselves in a position, where we're going to either overpaid over the lever and there's a lot of that going on in the market. So we're having to be very selective, but I'd say, we're we're being very active.
We've been in connection with a lot of avenues that would work for the company.
And how long were you going to be able to share more soon but I think that we liked him the M&A front, we like.
Obviously, our core and what were excellent that we like opportunities to expand their into markets, where we're not as penetrated and we want to be.
Also where we have opportunity from an outbound perspective from the U S where markets, particularly west of the Mississippi, where we may be able to acquire into and have more of a presence those are kind of top of mind I think in addition to that.
There are a lot of adjacencies in our space, where we could where.
Where we have opportunity.
Synergies, where they could be either from a technology perspective, a customer perspective or product perspective, but not exactly what we do but there is enough overlap or we would see a lot of benefits I think from an M&A perspective.
That's first in line.
I think you would have noticed the share buyback that we announced this quarter and what.
What I would say about that is have the kind of take that in conjunction with what we announced earlier this year in terms of the refinancing so that was all around flexibility. So at a much larger credit line much better terms. That's what we did earlier this year and then this last quarter.
We took a look at creating the flexibility for us to return on capital or shareholders. When it made sense and so we have the buyback program there.
Of a size, that's meaningful and I would say that where we are and it will be opportunistic in terms of when and where we activate that buyback we've been talking about it buyback for.
The board for some time and I think after the last quarter. When we really had out of the park results and we didn't necessarily see the mark market react the way. We we expected we just realized as aboard an accompanying that there was a lot of value there and initiating a buyback makes sense.
Thank you and I have.
One more question.
Which just pertains to the pricing environment and Bob you had said that.
You're not really see some of the challenges you.
Your business that we've heard about from others in the space.
What are you seeing on the pricing print.
Okay.
Excuse me.
I think we're seeing relatively the same as we've always seen there's always going to be a pressure point and I'm gonna talk about retail primarily right now I assume that's where the questions directed towards.
We're always going to see the small guys that are desperate.
And certain regional areas.
Be aggressive related to both agent commissions and discounting in the form mostly of increased exchange increased peso's increase could cells per dollar but.
But I don't think it's heightened at all I think it kind of comes and ebbs and flows and it's hard for some of them to sustain because some of them have gotten to a place where.
Based on the scale and it's really difficult to discount. So we're seeing our margins now some of that has buoyed by the fact that we've had higher principle amounts, but we're seeing really good solid margins, particularly in our core, particularly in our markets, where there is an exchange component, which would be primarily Mexico and.
<unk> so price compression for us is something we deal with but not not in a way that is hindering us from from driving profitability or continuing to drive the EBITDA margins that we'd like Randy.
Randy's here as well and I dunno, if Randy if there's anything you want to add to that I would just add that to.
<unk> point, we see we feel it every day from the little smaller companies, but our sales team I think is very very good at selling through that and talking to our agents and consumers about all the other solutions and benefits were bringing.
So that we don't have to compete.
This or.
Take part in the price compression.
Thank you very much.
Yep.
As a reminder, if you'd like to ask a question. Please press star one on your telephone keypad.
Our next question is from Timothy <unk> with Credit Suisse. Please proceed with your question.
Thanks, a lot for taking the question. So I'd seven in the comments there I thought were very helpful and I. Thank you very accurately accurately called out that the definition of digital cents.
The different across platforms and sometimes it includes in store on one end of that are in person and cash the.
The next to each sharing of the 23% in Q3, four total digital as I send or receive are able to provide any context on the portion of those that are digital on both sides. And then is it brings follow up just any comments around the marketing approach online customers.
How that might differ how you plan to extend those efforts. Thanks a lot.
Yeah.
We won't disclose in great detail I would give you a little bit more around it that the bigger part of that the bigger share of that is.
Transactions deposited into bank accounts.
On the other side of the border, which would be considered digital because they are digital on one side cashless on one side, so that would be the bigger part of that.
Not really haven't really disclosed the different components of that but that's the bigger side of it.
What was the other part of the question.
The marketing approach for online transactions and how it how about clearly how it differs ear approaches to attracting touch.
I think the the the.
Online approach differs in many ways.
Our conduit to the consumer and retail is through the right retailer in the right neighborhood, where we know consumers are and we know competitors are so we know wires are there.
It's about us being in that same area with a very.
Superior product that differentiates itself, so it's really simple and the customer acquisition cost as much lower.
We talked about that before and I won't go into the numbers on that on the retail on the online side, it's very much a online social media marketing kind of product.
Today, we don't really market to our existing customer base, which.
We talked about quarterly how many people that is but on an annual basis, that's over 4 million customers and today because of the vibrancy of our retail business because it's been growing revenue of 25% thereabouts year over year, we're not going and trying to convert those consumers were bringing consumers to online.
Separate and apart from that.
There's a couple of things that were doing that we won't disclose and how will market to consumers who had been at retail, but again, we're not going to try to market to R. Retail customers that our customers have a retail agents and bring them to online we never really think that's a productive.
Assess we think that we offer as we speak about often the omnichannel approach. Our approach is not to try to force people into actions that may not be in their best interests or at least what they want to do today or in the best interests or what wants to happen from their receiver south of the border. That's why we offered.
Things like mobile wallets, an over the counter and bank deposits and credit cards debit cards accepted a retail so from our perspective, the way that will market to our online business is very much through social media and online marketing and there's a real process for that and it's been a lot of people doing that not just with remittances, but all kinds of online.
There's a great history of that and a lot of agencies out there to help us we picked a really good company to help us with that marketing and that's the way will bring people today at least initially if we start to see a degradation of retail.
And for those that have their concerns about the degradation of retail we're not seeing it now I mean, 25% growth in in revenue in the quarter, 39% growth two year growth in our transactions for.
For our core 66% growth in our emerging markets. If we start to see a degradation our approach would modify and our approach would be more aggressive towards the retail consumer but today. The retail consumer is more profitable than the online consumer by far just one of the reasons. When you look at some of the folks that have recently gone public that they're profitabilities.
Near what the people that are that are retail is so we not trying to convert people to online for not ready to be online incur that extra cost to incur the to bring them there and then drive that lower.
Margin per transaction today that would be part of that so the approach will be very much those that are there and shopping for online we want to be very much a strong competitor in that process and will continue to go after them in that traditional online marketing way going against the other online providers.
Excellent. Thank you for all that context, we appreciate it.
Thanks.
Our next question is from Alex Mark Mcgrath, which Keybanc. Please proceed with your question.
Hey, Thanks for taking my question can you talk about some of the progress with upgrades and enhancements surround your it infrastructure, just maybe perhaps in detail as to.
Exactly has been done to date and some of the benefits that you're seeing from this early benefits.
Ya.
We have a number of projects and I'm not sure what year focused on exactly and I'm not sure. What we May have told you can you give you a little bit more specific I mean, we're in we're in the process of updating our core product at retail.
Both software and hardware we're in the process final stages of our new application online that will be is in testing now and will be available to our consumers as a very big upgrade to our online app it'll be a native app, probably either late in fourth quarter. Early first so we have a number of things that are going.
On we've over the year over the last few years, we've probably tripled or spend on technology.
In house and with vendors on the outside so it's a huge focus for us we've always been if you take away for a minute and not think about.
The new frontier of online and I'll deal with that in a second but when you think about retail we've always been the cutting edge guys. The fastest most reliable technology the easiest to use and that differentiator. We are working hard to continue to keep with our new upgrade of all of our core business had re.
[noise] tail again, along with a big upgrade for all of our top agents with with new hardware I'd retail and then when it comes to the online business.
We're in the final stages really in the testing stages internally of our new native App and that will be rolled out either late this quarter early next quarter for our consumers and we think that will be a best in class. We think that that provides us the combination that's rare in the industry today are world class back.
And with a front end it competes very handily with anyone's, we've had time to be able to look and observe and look at what we think are the best factors relative to the online business and we've been building that into that App and we're in a combine that with the fact that when you actually dollar customer service and other things like that you get somebody before.
You get tired of waiting like in four or five seconds, which is not what you get with probably any other provider, but especially the online guys.
And Alex This is Andrew just add is it's it's less exciting but obviously.
We're investing in cyber security as well as some of its top of mind with us and investors. So we're putting appropriate money to work there too.
Great. Yeah. Thank you know that answers the question I appreciate the detail.
Our last question is from Mike Grondahl with Northland Securities. Please proceed with your question.
Hey, guys might congratulations to on on another strong quarter.
Bob any expansion are updates on the sales force anything to call out there.
Yeah, I'm Gonna ask Randy to answer that an ally of some color if needed, but Randy one guy sure.
Well good morning, like we've had several upgrades in terms of sales leadership positions that were thrilled about over the last few months.
We've we've as Bob mentioned in his opening comments, we've identified literally hundreds of Unserved zip codes around the country. We've.
We basically conjoined we've.
<unk>.
Took taken those zip codes and made them districts and higher now 13 additional sales folks to work those unserved districts. So we know there are hundreds of agents opportunities in those ZIP codes thousands hundreds of thousands of wires that we're not.
Not reaching today those consumers because we didn't have the agents in place so.
So with that additional sales team. We've we've added them in September of a couple of them in October and we're out of the gates really quickly here in terms of their contributions and.
What they're adding to our agent network.
That's great to hear.
Bob.
Thought for insights just on.
36% principal growth.
Think about going forward.
Well.
Part of that is fully by our transactional growth rate part of it is that some of the countries that grew faster are countries with higher principles. So there is some some movement right. Some some some shifts change there, but another piece of it is is that the economics of remittances have changed a bit the average remit.
<unk> has gone up particularly in our case, we've always been a company that is at the higher end of the average principal amounts. We think that's partly due to that when someone is sending a larger amount of money I am not talking about one's better.
Three flags, but five six $700 that those are the ones that we get because of the charity that it gets there on time and we got great customer service and all the rest of it but there is clearly a component that's there based on the economic conditions of based on the stimulus is that have been out there.
It's hard to pinpoint what percentage of our consumers are benefited directly but I believe they have all benefited directly or indirectly when a me by that they may be the recipients of a government stimulus, but if they weren't they worked for someone that was the beneficiary of the government stimulus somebody got a <unk>.
X number of dollars and decided to finally put the deck on the back of their house or do landscaping or whatever so the economic activity has been greatly increased we also have a bit of a of a thought process. It says that.
As our economy is seeded up at least in terms of activity and in terms of cash in the system.
Some of the recipient countries are still lagging and suffering a bit from COVID-19 or the second wave or delta or what have you and as a result, there's a greater need that exists south of the border and more cash north of the border. So that's booing that average send them out but behind that let's not lose fat site on the fact.
That there's tremendous transaction growth. That's also there that's driven that 36% amount of principal growth.
We don't necessarily rely on that and as you see a lot of the projections that we've had over time are kind of modified and but now we started to see that now for a succession of quarters and typically in the past we haven't seen that come back to its origins. What we've seen is a plant towing and that's what we probably expect.
Although we're not depending on that as we project our future numbers.
Got it got it great well, hey, congratulations again, thank you.
Thank you we have reached the end of the question and answer session and I will now turn the call over to Bob Lucy for closing remarks.
Thank you all again for joining us for the third quarter, we look forward to talking to you we will not too soon because it'll be fourthquarter. So will be next year, but thanks again for your time and attention will talk to you soon have a great day.
This.
<unk> today's conference and you may disconnect your lines at this time. Thank you for your participation.
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