Q4 2023 Euronet Worldwide Inc Earnings Call

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Operator: Greetings and welcome to the Euronet Worldwide fourth quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode.

Speaker Change: Greetings and welcome to the your net worldwide fourth quarter 2023 earnings conference call. At this time all participants are in a 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 one on your telephone.

Operator: 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 11 on your telephone. You'll then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. It is now my pleasure to introduce your host, Mr. Scott Clausen, General Counsel for Euronet Worldwide. Thank you. Mr. Clausen, you may begin.

Speaker Change: You didn't hear the unimagined message advising your hand is race to withdraw your question. Please press star. One again, please be advised that today's conference is being recorded it is now my pleasure to introduce your host Mr. Scott Clauson General counsel for Internet worldwide.

Scott Clauson: So closing you may begin.

Scott Clausen: Good morning, everyone, and welcome to Euronet's fourth quarter and full year 2023 Earnings Conference call. On the call, 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, where... Statements made on this call that concern Euronet's management intentions, expectations, or predictions of future performance are forward-looking. Euronet's actual results may vary materially from those anticipated in these forward-looking statements as the result of a number of factors that are listed on the second slide of our presentation. Except as later in the talk, I love how Euronet does not intend to update these forward-looking stations and undertakes no duty to any person to provide them to avoid placing undue reliance on these forward-looking statements. In addition, the PowerPoint presentation includes the reconciliation of the non-GAAP financial measures we'll be using during the call to their most comparable GAAP. Now I'll turn the call over to our CFO, Rick Weller. Thank you, Scott. Good morning, and I would like to thank everyone for joining us today.

Scott Clauson: Thank you good morning, everyone and welcome to <unk> fourth quarter and full year 2023 earnings conference call on the call, we have Mike Brown, our chairman and CEO.

Scott Clauson: Okay.

Scott Clauson: Miller, 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're making today.

Scott Clauson: Statements made on this call that concern you or naphtha or its management's intentions expectations or predictions of future performance are forward looking statements.

Scott Clauson: Joining us 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 slide of our presentation.

Scott Clauson: Except as may be required to have on your.

Scott Clauson: <unk> does not intend to update these.

Scott Clauson: Looking statements and undertakes no duty to any person to provide an update.

Scott Clauson: You used to avoid playing placing undue reliance on these forward looking statements.

Scott Clauson: 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.

Scott Clauson: Now I will turn the call over to our CFO Rick Weller.

Rick L. Weller: Thank you Scott.

Rick L. Weller: And I would like to thank everyone for joining us today I will begin my comments on slide five.

Rick L. Weller: I will begin my comments on slide five. For the fourth quarter, we produced revenue of $957 million, operating income of $97 million, adjusted operating income of $100 million, and adjusted EBITDA of $147 million. These results were made possible by contributions from all three segments.

For the fourth quarter, we produced revenue of $957 million operating income of 97 million.

Rick L. Weller: <unk> operating income of $100 million and adjusted EBITDA of $147 million.

Rick L. Weller: These results were made possible by contributions from all three segments. Adjusted EPS was $1 88 per share compared to $1 39 in the fourth quarter of 2022.

Rick L. Weller: Adjusted EPS was $1.88 per share compared to $1.39 in the fourth quarter of 2022 and ahead of the $1.75 guidance we provided for the quarter. We exceeded our guidance by better-than-expected performance across the business, good expense management, lower-than-expected tax rates, and improved FX rates against the U.S. dollar. I would also like to call out that Adjusted Operating Income, Adjusted EBITDA, and Next slide, please.

Rick L. Weller: And ahead of the $1 75 guidance.

Rick L. Weller: We provided for the quarter.

Rick L. Weller: We exceeded our guidance by better than expected performance across the business.

Rick L. Weller: Good expense management.

Rick L. Weller: Laura than expected tax rates and improved FX rates against the U S dollar.

Rick L. Weller: I would also like to call out that adjusted operating income adjusted EBITDA and adjusted EPS excluded a $2 5 million noncash.

Rick L. Weller: Noncash purchase accounting charge.

Rick L. Weller: Next slide please.

Rick L. Weller: Slide 6 shows our results on an as-reported basis. On a year-over-year basis, we saw our most significant currencies increase at mid-single to low-double-digit rates, with a few exceptions, like the Egyptian Pound, which declined 26 percent, and the Pakistani Rupee, which declined 21 percent. To normalize the impacts of these currency changes, we have presented our results adjusted for currency on the next slide. Here, on slide seven, we show our results adjusted for currency fluctuations. Before I jump into each segment, I want to reflect on the strength of our three segments, which produced another record consolidated revenue quarter and strong earnings growth across all three segments. EFT revenue grew 9%. While Adjusted Operating Income grew 53%, and Adjusted EBITDA grew 21%.

Rick L. Weller: Slide six shows our results on an as reported basis.

Rick L. Weller: On a year over year basis, we saw our most significant concern currency's increase at mid single to low double digit rates with a few exceptions like the Egyptian pound, which declined 26% and the Pakistan rupee, which declined 21%.

Rick L. Weller: To normalize the impacts of these currency changes we have presented our results adjusted for currency on the next slide.

Rick L. Weller: Here on slide seven we show our results adjusted for currency fluctuations.

Rick L. Weller: Before I jump into each segment.

Rick L. Weller: I want to reflect on the strength of our three segments, which produced another record consolidated revenue quarter and strong earnings growth across all three segments.

Rick L. Weller: <unk> revenue grew 9%.

Rick L. Weller: While adjusted operating income grew 53% and adjusted EBITDA grew 21%.

Rick L. Weller: This strong growth was the result of an increase in international withdrawal transactions combined with the continued strong performance from our merchant acquiring business, where profits have doubled over the past two years. EFT margins improved year-over-year due to an increase in high-value cross-border transactions, ePay revenue grew 7%, and Adjusted Operating Income and Adjusted EBITDA each grew 3% year-over-year.

Rick L. Weller: This strong growth was the result of an increase in international withdrawal transactions combined with the continued strong performance from our merchant acquiring business, where profits have doubled over the past two years.

Rick L. Weller: Ft margins improved year over year due to an increase in high value cross border transactions.

Rick L. Weller: <unk> revenue grew 7%.

Rick L. Weller: While adjusted operating income and adjusted EBITDA, each grew 3% year over year.

Rick L. Weller: This increase is primarily from continued growth in the core ePay business, including strong growth in digital channels, partially offset by fewer promotional campaigns from our retail partners in the fourth quarter compared with the prior year, excluding promotional activity, our ePay business, revenue for the fourth quarter, grew 8%. And the operating income and adjusted EBITDA each grew 12% compared to the fourth quarter of 22, highlighting the continued strength of our core ePay business, ePay margins came in a bit due a bit due to the mix of higher value promotional transactions in the fourth quarter of last year. Money transfer, fourth quarter revenue, adjusted operating income, and adjusted EBITDA grew 7%, 27%, and 20% respectively. This growth was the result of 8% growth in U.S. outbound transactions, 10% growth, Ahem. 10% growth in international originated money transfers, which includes 7% growth from Americas outside the U.S., 8% growth in transfers initiated largely in Europe, 20% growth in transfers initiated in the Middle East and Asia, and 17% growth in XE transactions, partially offset by a 13% decline in intra-U.S. business. These transaction growth rates include 20% growth in direct-to-consumer digital transactions. Transactions.

Rick L. Weller: This increase is primarily from continued growth in the core <unk> business, including strong growth in digital channels.

Rick L. Weller: Partially offset by fewer promotional campaigns from our retail partners in the fourth quarter compared with the prior year.

Rick L. Weller: Excluding promotional activity our EP business.

Rick L. Weller: Revenue for the fourth quarter.

Rick L. Weller: Grew 8%.

Rick L. Weller: And the operating income and adjusted EBITDA, each grew 12% compared to the fourth quarter of 'twenty two highlighting the continued strength of our core <unk> business.

Rick L. Weller: Margins came in a bit do a bit due to the mix of higher value promotional transactions in the fourth quarter of last year.

Rick L. Weller: Money transfer fourth quarter revenue adjusted operating income and adjusted EBITDA grew 7%, 27% and 20% respectively.

Rick L. Weller: This growth was the result of 8% growth in U S outbound transactions, 10% growth.

Rick L. Weller: 10% growth in international originated money transfers, which include 7% growth from Americas outside the U S 8% growth in transfers initiated largely in Europe, 20% growth in transfers initiated in the middle East.

Rick L. Weller: East and Asia, and 17% growth in Z transactions, partially offset by a 13% decline in intra U S business.

Rick L. Weller: These transaction growth rates include 20% growth in direct to consumer digital transactions.

Rick L. Weller: Transaction adjusted operating income and adjusted EBITDA growth also included effective expense management, producing the best operating margin in the past three years.

Rick L. Weller: Adjusted operating income and adjusted EBITDA growth also included effective expense management, producing the best operating margin in the past three years. Money transfer margins continued their improvement trends, driven by revenue growth and attentive expense management. In conclusion, we are pleased to see growth across all segments together with generally improving profit margins. Our fourth quarter growth trajectory and margin results position us nicely for a robust launch in 2024. With that, let's go to slide eight to make a few comments about the balance. On slide 8, we present our year-end balance sheet compared to the prior quarter. As you can see, we ended the fourth quarter with more than $1.2 billion in unrestricted cash and debt of approximately $1.9 billion.

Rick L. Weller: Any transfer margins continued their improvement trends as driven by revenue growth and attentive expense management.

Rick L. Weller: In conclusion, we are pleased to see growth across all segments together with a generally improving profit margins, our fourth quarter growth trajectory and margin results position us nicely for a robust launch of 'twenty 'twenty four.

Rick L. Weller: With that let's go to slide eight to make a few comments about the balance sheet.

Rick L. Weller: Here on slide eight we present, our year end balance sheet compared to the prior quarter as.

Rick L. Weller: As you can see we ended the fourth quarter with more than one $2 billion in unrestricted cash and debt of approximately $1 9 billion.

Rick L. Weller: The increase in unrestricted cash and cash equivalents is mainly due to cash generated from operations of $98 million, the return of $75 million in cash from our ATMs following the peak travel season, and working capital fluctuations partially offset by $54 million in share repurchases and the issuance of a $60 million convertible note receivable. The increase in debt was largely due to borrowing on the revolving credit facility to facilitate payments across several currencies over the year end.

Rick L. Weller: The increase in unrestricted cash and cash equivalents is mainly due to cash generated from operations of $98 million. The return of $75 million in cash from our Atms following the peak travel season, and working capital fluctuations partially off.

Rick L. Weller: Set by $54 million in share repurchases and the issuance of a $60 million convertible note receivable.

Rick L. Weller: The increase in debt was largely due to borrowing on the revolving credit facility to facilitate payments across several currencies. However, the year end.

Rick L. Weller: These borrowings were largely repaid immediately following year end, ahem. Now, let's go to slide 10 for a few comments on the full year. For the full year 2023, we delivered record annual consolidated revenue of $3.7 billion, adjusted operating income of $432 million, and adjusted EBITDA of $619 million. Adjusted EPS for the full year was $7.46, a 15% increase compared to $6.51 for 20

Rick L. Weller: These borrowings were largely repaid immediately following year end.

Rick L. Weller: Now, let's go to slide 10 for a few comments on the full year.

Rick L. Weller: For the full year 2023, we delivered record annual consolidated revenue of $3 7 billion.

Rick L. Weller: Adjusted operating income of $432 million and adjusted EBITDA of $619 million.

Rick L. Weller: Adjusted EPS for the full year was $7 46.

Rick L. Weller: A 15% increase compared to the $6 51.

Rick L. Weller: For 2022.

Rick L. Weller: The full-year results are largely in line with the fourth quarter, so I won't go through all the details again. However, I think it bears repeating that we are extremely pleased with the full-year record revenue and adjusted earnings per share, driven by contributions from all three segments. As we reflect on 23, we are pleased with the resilience of all three segments. In EFT, we saw transactions improve in the fourth quarter and even exceed travel trends. And our merchant acquiring business, acquired in 2022, continued to exceed expectations. For ePay, we produced continued growth in our core business, especially in digital channels, with more focus on the expansion of our own product. In money transfer, we closed the year with another quarter of double-digit operating margin and continued to expand both our physical and digital networks.

For full year results are largely in line with the fourth quarter. So I won't go through all the details again.

Rick L. Weller: However, I think it bears repeating that we are extremely pleased with the full year record revenue and adjusted earnings per share driven by contributions from all three segments.

Rick L. Weller: As we reflect on 2003, we are pleased with the resilience of all three segments in <unk>, we saw transactions improve in the fourth quarter, and then and even exceed travel trends and our merchant acquiring business acquired in 2022 continued to.

Rick L. Weller: Seed expectations for ebay, we produced continued growth in our core business, especially in digital channels with more focus on expansion of our own products.

Rick L. Weller: In money transfer we closed the year with another quarter of double digit operating margin and continued to expand both our physical and digital networks.

Rick L. Weller: We are also continuing to build momentum in our digital initiatives as we sign more Wren and Dandelion deals. As we explained in the third quarter, we expect our 2024 adjusted EPS growth to be in the 10 to 15 percent range. And while we feel confident with that range, you can rest assured that we are working hard to deliver earnings above that range. It has been another great year for Euronet. And with that, I'll turn it over to Mike. Slide 15, please.

Rick L. Weller: We are also continuing to build momentum in our digital initiatives as we sign more ran and Dandy line deals.

Rick L. Weller: As we explained in the third quarter, we expect our 2024 adjusted EPS growth to be in the fifth 10% to 15% range.

Rick L. Weller: And while we feel confident with that range you can rest assured that we are working hard to deliver earnings above the range.

Rick L. Weller: It has been another great year for year and half.

Rick L. Weller: And with that I'll turn it over to Mike.

Michael J. Brown: <unk> please.

Michael J. Brown: Thanks Rick, and thank you everybody for joining us today. I'll begin my comments on slide 15, as Rick said. Well, let me just start out and say, Wow, what a quarter. We delivered fourth-quarter earnings ahead of our expectations, which you may recall were nicely ahead of the consensus expectations back in October. These results were driven by better than expected improvement in international cash withdrawals, solid growth in our core ePay business, and diligent expense management in both EFT and money transfer. The record fourth quarter results are a true testament to the product and geographic diversity of our business, together with the attention of our management around the world. As we shared with you in the third quarter, nearly two-thirds of our earnings are generated from non-ATM related businesses.

Michael J. Brown: Thanks, Rick and thank you everybody for joining us today I'll begin my comments on slide 15, as Rick said.

Well, let me just start out and say Wow, what a quarter, we delivered fourth quarter earnings ahead of our expectations, which you may recall was nicely ahead of the consensus expectations back in October. These results were driven by better than expected improvement in international cash withdraws solid growth.

Michael J. Brown: And our core <unk> business, and diligent expense management, and both ft and money transfer.

Michael J. Brown: The record fourth quarter results are a true testament to the product and geographic diversity of our business together with the attention of our management around the world.

Michael J. Brown: As we shared with you in the third quarter nearly two thirds of our earnings are generated from non ATM related businesses.

Michael J. Brown: Throughout our nearly 30-year history, we have focused on developing a network of access points, products, and solutions that are secure, easy to use, and enable customers to send and receive payments and access their money using their preferred methods. This unique combination of our network, our product portfolio, technical solutions, and geographic footprint differentiates us from our competition and allows us to weather even the most challenging economic shifts. As I reflect on 2023 and look forward to 2024, I do so with great optimism.

Michael J. Brown: Throughout our nearly 30 year history, we have focused on developing a network of access points.

Michael J. Brown: And solutions that are secure easy to use and enable customers to send and receive payments and access their money using their preferred method. This unique combination of our network our product portfolio technical solutions and geographic footprint differentiate us from our competition.

Michael J. Brown: And allows us to weather, even the most challenging economic shifts.

Michael J. Brown: As I reflect on 2023 and look forward to 2024, I do so with great optimism.

Michael J. Brown: Back last summer, the market was ready to write the obituary for cash, and, in turn, the entire EFT segment of our business. However, we believe the recovery of international card usage on our ATMs in the latter part of the third quarter and its continuation into the fourth quarter, together with the third-party published data, has put that subject to rest. And I can look forward to growth across all three segments in 2024 because of the momentum we gained in the fourth quarter along with several strong drivers that are in place, which include inflationary pressures easing while wages are growing as we look forward to the 2024 travel season. We see opportunities for pricing increases, particularly in the EFT segment. We have plans for expansion into new markets in all three segments, and we will introduce new products and technology solutions to further diversify the business this year. You will see examples of each of these as we go through the fourth quarter highlights.

Michael J. Brown: Last summer the market was ready to write a bit you Arie on cash and then turn the entire ft segment of our business.

Michael J. Brown: We believe the recovery of international card usage on our Atms in the latter part of the third quarter and its continuation into the fourth quarter together with a third party published data has put that subject to rest.

Michael J. Brown: And I can look forward to growth across all three segments in 2024 because of the momentum we gained in the fourth quarter along with several strong drivers that are in place which include inflationary pressures are easing while wages are growing as we look forward to the 2020 for travel season.

Michael J. Brown: We see opportunities for pricing increases, particularly in the EFT segment, we have plans for expansion into new markets in all three segments, and we will introduce new products and technology solutions to further diversify the business and this year.

Michael J. Brown: You will see examples of each of these as we go through the fourth quarter highlights, let's go to slide number 16, and I will update you on our international card trends.

Michael J. Brown: Let's go to slide number 16, and I will update you on our international card trends in EFT. In the graph on the left, you can see that we have updated the slide we presented during our third quarter earnings call with the number of international cards used on our ATMs versus Euro control data through the end of the year. At the end of the second quarter, the market's conclusion was clear that cash was dead, and therefore, so was our growth potential. More than a bit of an overreaction, wouldn't you agree?

Michael J. Brown: Keith.

Keith: And the graph on the left you can see that we have updated the slide we presented during our third quarter earnings call with the update of international card used on our Atms versus Euro control data through the end of the year.

Keith: At the end of the second quarter. The market's conclusion was clear the cashless debt and therefore, so is our growth potential more than a bit of an overreaction. When you agree at this time, we believe that our data together with the research data coming out of Europe showed that they shift was related to economic <unk>.

Michael J. Brown: At this time, we believe that our data, together with the research data coming out of Europe, shows that the shift was related to economic pressure on consumer spending in Europe rather than an abrupt shift from cash to cards. I'd like to remind you that over 80% of our international transactions are from Europeans traveling within Europe. So, economic pressure on European customers is very, very relevant.

Keith: Sure on consumer spending in Europe, rather than a brush abrupt shift from cash to card.

Keith: To remind you that over 80% of our international transactions are from Europeans traveling within Europe.

Keith: So economic pressure on European customers is very very relevant.

Michael J. Brown: During the third quarter, we saw the realignment between Euro control travel data and international card usage on our machines, which continued to improve as we moved through the fourth quarter. In fact, our adjusted operating income grew 53% in the fourth quarter over the prior year, and the main reason was international transaction growth. We know that the most popular question that we will be asked today is, what do we expect for 2024's travel spend? And while it is difficult to predict the future exactly, we have some research to try to get a feel for what to expect based on the economic data which is available. In the graph on the right, you can see that in late 2022 or early 2023, inflation peaked in Europe, largely in line with higher fuel prices driven by the war in Ukraine, while salary per employee significantly lagged that inflation. This resulted in less discretionary income when traveling.

Keith: During the third quarter, we saw the realignment between Europe controlled travel data and the international card usage on our machines, which continued to improve as we move through the fourth quarter. In fact, our adjusted operating income grew 53% in the fourth quarter over the prior year and the main reef.

Keith: International transaction growth.

Speaker Change: We know that the most popular question that we will we will be asked today is why do we expect for 2024 as travel spend and while it is difficult to predict the future exactly we have some research to try to get a feel for what to expect on a on the economic data which is available.

Speaker Change: And the graph on the right you can see that in late 2022 or early 2023 inflation baked in Europe largely in line with higher fuel prices driven by the war and Ukraine, while salary per employees significantly lagged that inflation. This <unk>.

Speaker Change: <unk> and less discretionary income when traveling.

Michael J. Brown: The graph also shows that in 2024, it is expected that wages will catch up to and pass inflation, which will ease the pressure on consumer spending. Additionally, in their most recent overview, Eurocontrol expects that flights will reach 98% of pre-COVID levels in 2024, another positive indicator of improving transport. Finally, and perhaps most importantly, in an update to the consumer behavior survey that we showed you in the second quarter of last year, 71% of Europeans surveyed today say that they will increase or maintain their travel budget going into 2024. This further supports our optimism for the upcoming travel season, since this is the opposite of the same survey done in June of last year, where two-thirds of the respondents said they were going to decrease their travel spend during 2023. At the beginning of last year, we were facing inflation led by rising energy costs, increased living expenses, and travel costs were on the rise while wage increases lagged.

<unk> also shows that in 2024. It is expected that wages will catch up to and pass inflation, which will ease the pressure on consumer spending. Additionally.

Speaker Change: Additionally in their most recent overview eurocontrol expect that fly full reached 98% of pre COVID-19 levels in 2024.

Speaker Change: Another positive indicator of improving trend.

Speaker Change: Finally, and perhaps most importantly, and an update to the consumer behavior survey that we showed you in the second quarter of last year, 71% of European survey today say that they will increase or maintain their travel budgets going into 2020 for.

Speaker Change: This further supports our optimism for the upcoming travel season. Since this is the opposite of the same survey done in June of last year, where two thirds of the respondents said they were going to decrease their travel spend during 2023.

Speaker Change: At the beginning of last year, we were facing inflation led by rising energy costs increase living expenses and travel costs were on the rise while wage increases lagged all indicators now are pointing to easing inflation lower travel costs, and improving wage trends, which together with <unk>.

Michael J. Brown: All indicators are now pointing to easing inflation, lower travel costs, and improving wage trends, which together with our new market expansion and product diversification really drive our optimistic outlook for 2024. Now, let's go on to slide 17, and we'll talk more about the specific EFT highlights. Now that we've discussed the macro economic travel trends, let's talk about how we've continued to grow and expand our EFT business. Our EFT business rebounded from a third quarter where we saw a 15% year-over-year decline in operating income to an increase of 53% in the fourth quarter when compared to the prior year.

Speaker Change: Our new market expansion and product diversification really drive our optimistic outlook for 2024 now let's go on to slide 17, and we will talk more about the specific <unk>.

Speaker Change: The highlights.

Speaker Change: Now that we've discussed the macro economic travel trends, let's talk about how we've continued to grow and expand our ESP business.

Speaker Change: Our <unk> business.

Rebounded from a third quarter, where we saw 15% year over year decline in operating income to an increase of 53% in the fourth quarter when compared to the prior year that create the key drivers of the rebound work and increase in our most profitable international transactions compared to the prior year.

Michael J. Brown: The key drivers of the rebound were an increase in our most profitable international transactions compared to the prior year, an increase in merchant acquiring of 15% compared to Q4 2022, and continued expansion into new markets. The growth is made possible by our continued focus on diversifying our business by expanding our market presence and product portfolio. This quarter, we were able to achieve this by the launch of a new independent ATM network in Mexico, our first ATM network in Latin America. We also expanded into Belgium, our 32nd market in Europe. With these two additions, we now have Euronet ATM networks in 38 countries on three continents. Additionally, we signed an agreement with Gotime Bank to provide ATM managed services, one of the largest and fastest growing digital banks in the Philippines. Moreover, you may recall that during the second quarter, we signed a cardless cash withdrawal agreement with the Bank of the Philippine Islands that we have now launched.

Speaker Change: An increase in merchant acquiring or 15% compared to Q4, 2022 and continued expansion into new markets that.

Speaker Change: That growth is made possible by our continued focus on diversifying our business by expanding our market presence and product portfolio.

Speaker Change: This quarter, we were able to achieve this by the launch of a new independent ATM network in Mexico, Our first ATM network in Latin America, We also expanded into Belgium, or 32nd market in Europe with these two additions we now have urine at ATM networks in 38 countries on three.

Speaker Change: Additionally, we signed an agreement with <unk> bank to provide ATM managed services, one of the largest and fastest growing digital banks in the Philippines. Moreover, you may recall that during the second quarter, we signed a card less cash withdrawal agreement with the bank of the Philippine Islands that we have now launched.

Michael J. Brown: This provides more convenient and secure access to cash for our customers in the Philippines. Finally, building upon our successful ATM deposit network in Poland, which processed $7 billion in deposits last year, we signed a network participation agreement with Raiffeisen Bank in Romania. This network provides additional flexibility for both merchants and consumers to convert physical cash to digital money. We enter 2024 with the momentum of the last half of 2023, along with new opportunities, recent improvements in the domestic surcharge or interchange in Poland, Romania, Denmark, and the Netherlands, growth into recently entered new markets, outsourcing opportunities that we see all over the place, and improving travel trends. Hopefully, you will recognize the momentum that produced these record fourth-quarter results and, more importantly, can feel, as I do, the continuation of this momentum going into 2024 and the optimism that brings us. And let's not forget, as we have said many times before, all of this is made possible by utilizing the power of our WREN platform. Next slide, please.

Speaker Change: This provides a more convenient and secure access to cash for our customers and the Philippines.

Speaker Change: Finally building upon our successful ATM deposit network in Poland, which last year process 7 billion dollar than deposit we signed a network participation agreement with <unk> Bank in Romania. This network provides additional flexibility for both merchants and consumers.

Speaker Change: To convert physical cash to digital money.

Speaker Change: We enter 2024 with the momentum.

Speaker Change: And.

Speaker Change: The last half of 2023, along with new opportunities recent improvements in the domestic surcharge, our interchange in Poland, and Romania, Denmark, and the Netherlands growth.

Speaker Change: <unk> recently entered new markets outsourcing opportunities that we see all over the place and improving travel trends hopefully you will recognize the momentum that produce these record fourth quarter results and more importantly can feel as I do that the continuation of this momentum going into 2012.

Speaker Change: For and the optimism that brings to us.

Speaker Change: And let's not forget as we have said many times before all of this is made possible by utilizing the power of our <unk> platform.

Michael J. Brown: Now let's discuss. Our ATM is state. As we discussed in the third quarter with travel at over 90% of 2019 levels, we took a hard look at the profitability of each of our ATMs. This resulted in the removal of approximately 1,300 ATMs in the fourth quarter.

Speaker Change: Next slide please.

Speaker Change: Now, let's discuss <unk>.

Speaker Change: Our ATM estate as we discussed on the third quarter with travel at over 90% of 2019 levels. We took a hard look at the profitability of each of our Atms. This resulted in the removal of approximately 1300 Atms in the fourth quarter throughout 2024, we.

Michael J. Brown: Throughout 2024, we expect to see increased profitability and cost savings as we remove and relocate unprofitable ATM locations. We expect to see a temporary net reduction in our installed ATMs, which will result in slightly less revenue but an increase in profits and margins. As we move into 2024, we will continue to remove unprofitable ATMs, many of which will be redeployed into new profitable locations. As we build on the momentum of the fourth quarter, our plan is to deploy between 3,000 and 3,500 new ATMs in 2024. So to make it simple, we expect the net impact of this ATM optimization will be improved profit margins for EFD in 2024. Now, let's discuss EPIC.

Speaker Change: To see increased profitability and cost savings as we remove and reallocate unprofitable or relocate.

Speaker Change: Unprofitable ATM locations, we expect to see a temporary net reduction in our installed Atms, which will result in slightly less revenue, but an increase in profits and margins as we move into 2024, we will continue to remove unprofitable Atms many of which we.

Speaker Change: Will be redeployed into new profitable locations as well.

Speaker Change: We build on the momentum of the fourth quarter. Our plan is to deploy between 3000 and.

Speaker Change: 3500, new Atms for 2024.

Speaker Change: So to make it simple we expect the net impact of this ATM optimization will be improved profit margins for <unk> in 2024, now lets discuss apex.

Speaker Change: Yes.

Michael J. Brown: In the market, ePay is well known as a leading distributor of mobile top-up and prepaid branded content. However, for those of you that have been following ePay for a while, you've heard us discuss the significant investment we're making to expand our business offering. By leveraging our world-class technology, we've become a leading solutions provider to our existing retail and content partners around the world. More specifically, our solutions enable customers to purchase the branded services they enjoy in the manner that's most convenient for them. For example, this quarter, we launched Google Workspace at Curry's, a large UK electronics retailer. Google is leveraging ePay's issuing platform called Conductor, which provides an end-to-end service ranging from balance management, transaction processing, lifecycle management, and distribution.

Speaker Change: Yes.

Apex: And the market <unk> is well known as a leading distributor of mobile top up and prepaid branded content.

Apex: However for those of you that have been following <unk> for a while you've heard us discuss the significant investments, we're making to expand our business offering.

Apex: By leveraging our world class technology, we become a leading solutions provider to our existing retail and content partners around the world more specifically our solutions enable customers to purchase the branded services. They enjoy in the manner that is most convenient to them.

Apex: For example, this quarter, we launched Google workspace at Currys, a large UK electronics retailer.

Apex: <unk> is leveraging <unk> issuing platform called conductor, which provides an end to end service ranging from balance management transaction processing lifecycle management and distribution the sales pipeline for our issuing services growing and we're excited about its potential.

Michael J. Brown: The sales pipeline for our issuing service is growing, and we're excited about its potential. Additionally, in Brazil, we launched an online gift card marketplace for Nubank, the largest fintech bank in Latin America. We also introduced a similar offering for the popular Google Pay Wallet in India.

Apex: Additionally, in Brazil, we launched an online gift card marketplace for new bank, the largest Fintech bank in Latin America.

Apex: We also introduced a similar offering for the popular Google pay a wallet and India. These are demanding partners and these launches highlight the global scalability and versatility of our technology.

Michael J. Brown: These are demanding partners, and these launches highlight the global scalability and versatility of our technology. We also continue to expand our core distribution business into new markets, which I would like to reiterate grew at a healthy double-digit rate. During the quarter, we signed an agreement with Google Play to launch prepaid credits in Vietnam, a new high-potential market with 65% penetration of Android-based phones. With a population of nearly 100 million people, Vietnam is positioned as one of the top three South Asian gaming markets in terms of revenue and ranked second in terms of gamer population size.

Apex: We also continued to expand our core distribution business into new markets.

Apex: I would like to reiterate grew at a healthy double digit rate.

Apex: During the quarter, we signed an agreement with Google play to large prepaid credits into Vietnam, and new high potential market was 65% penetration of Android based phones.

Apex: With a population of nearly 100 million people Vietnam is positioned as one of the top three South Asian gaming markets in terms of revenue and ranked second in terms of Gamer population side.

Michael J. Brown: I am extremely proud of the technology and product advancements our ePay team has created. They continue to stay ahead of the market in order to provide our brand and retail partners competitive advantages in the ever-changing payment landscape, and I am excited to take this momentum into 2024. With that, let's go to money transfer. Slide number 20.

Apex: I am extremely proud of the technology and product advancements. Our team has created they continue to stay ahead of the market in order to provide our brand and retail partners competitive advantages in the ever changing payment landscape.

Apex: And I am excited to take this momentum into 2024 with that let's go to money transfer slide number 20.

Michael J. Brown: As I mentioned earlier, we had contributions from all three segments. Money transfers included back-to-back quarters of operating income and adjusted EBITDA growth of 20% or better. We accomplished this strong growth in profit while we continue to invest in our network, which now has expanded to an impressive 4.1 billion bank accounts and over 2 billion wallet accounts with 580,000 physical locations across 198 countries and territories. For 2023, we launched 97 correspondent banks and payment partners, 43% more than we activated in the previous year. In the fourth quarter alone, we launched 29 new correspondents in 25 countries, which was our best quarter of the year, and which now represents, which gives us strong momentum as we enter 2024.

Apex: As I mentioned earlier, we had contributions from all three segments money transfer as contribution included back to back quarters of operating income and adjusted EBITDA growth of 20% or better we accomplished this strong growth and profit while we continue to invest in our network, which.

Now has expanded to an impressive $4 1 billion bank accounts and over $2 billion wallet accounts with 580000 physical locations across 198 countries and territories for 2023, we launched 97 correspondent banks and <unk>.

Apex: Payment partners, 43% more than we activated in the previous year.

Apex: In the fourth quarter alone, we launched 29, new correspondents in 25 countries, which was our best quarter of the year, which now represents which gives us strong momentum as we enter 2024.

Michael J. Brown: The bottom line is that our network is the most strategic, real-time payments network in the world in terms of its geographic reach and how it encourages financial participation by enabling people to pay how they want to pay using cash or digital options and allows their beneficiaries to receive money how they want to, either cash or digital. Our ability to expand the network over the years has led to our growth, and it continues to unlock growth opportunities not only for our traditional money transfer business but also for our dandelion customers. For example, while account deposit growth rates have surpassed cash pickup for many years, principal transfer to digital accounts represented only 20% of our total volume by the end of 2019, compared to 39% in the last quarter. That's basically doubling. And the growth rates for account deposits accelerated sharply in 2023 at a 34% rate versus 17% in 2022, another double.

Apex: The bottom line is that our network is the most strategic real time payments network in the world in terms of its geographic reach and how it encourages financial participation by enabling people to pay how they want to pay using cash or digital options and allows their benefit.

Apex: Beneficiary to receive money, how they want to either cash or digital our ability to expand the network over the years has led to our growth and it continues to unlock growth opportunities not only for our traditional model.

Apex: The transfer business, but also for our dandelions are customers for example, while account deposit growth rates have surpassed cash pickup for many years.

Apex: Principal transfer to digital accounts represented only 20% of our total volume.

Apex: By the end of 2019 compared to 39% in the last quarter at basically doubling and the growth rates per account deposit accelerated sharply in 2023 at a 34% rate versus 17% in 2022 another doubling.

Michael J. Brown: While our bank deposit reach extends to countries comprising nearly 95% of the world's GDP, we've spent the last four years expanding the product offerings of our network by extending our real-time account deposit reach to more than 60% of the world's GDP and adding consumer and business payment capabilities to over 92% of the world's GDP. As I mentioned last quarter, we spent some effort and money revising our marketing strategy to position ourselves for substantial customer acquisition and a more efficient deployment of marketing dollars. These efforts have led to an acceleration in our digital growth. While it's still relatively early in this journey, I can report that we've seen three months of record digital customer acquisitions through January, each month surpassing the previous month. We've also seen improvements in customer satisfaction and retention.

Apex: While our bank deposit reach extends to countries comprising nearly 95% of the world's GDP. We spent the last four years expanding the product offerings of our network by expanding our real time account deposit reached to more than 60% of the world's GDP and <unk>.

Apex: Adding consumer and business payment capabilities to over 92% of the world's GDP.

Apex: As I mentioned last quarter, we spent some effort and money revising our marketing strategy to position ourselves for substantial customer acquisition and more efficient deployment of marketing dollars. These.

Apex: These efforts have led to an acceleration in our digital growth while it's still relatively early in this journey I can report that we have seen three months of record digital customer acquisition through January each month, surpassing the previous months, we've also seen improvements in customer satisfaction.

Michael J. Brown: And perhaps most importantly, our digital channel is profitable, and with expanding bottom-line margins, gives us room to pivot into investment opportunities as they arise. When I think about the opportunities ahead for RIA and XE, perhaps none is greater than geographic expansion. RIA and XE have licenses to send money in markets that represent approximately 63% of the global market.

Apex: And retention and perhaps most importantly, our digital channel is profitable and is and with expanding bottomline margins gives us room to pivot into investment opportunities as they arrive.

Apex: When I think about the opportunities ahead for Ria and Z, perhaps the non it's greater than geographic expansion Ria.

Apex: Maria NFC have licenses to send money in markets that represent approximately 63% of the global market.

Michael J. Brown: Geographic Expansion is something our teams evaluate constantly, considering both organic and M&A, and other avenues. We have eyes on additional markets that, over time, would expand our addressable market by 38% to 86% of the global SEND market. While many of these markets are not imminent, expansion into several of these markets is underway with actionable plans that are in flight. As we enter 2024, I'm excited about our money transfer growth prospects, and we expect to continue to outpace market growth. We have steadily taken market share from the competition over the years.

Apex: Geographic expansion is something our teams evaluate constantly considering both organic and M&A and other avenues, we have eyes on additional markets that over time would expand our addressable market by 38% to 86% of the global <unk> market.

Apex: Excuse me while many of these markets are not imminent expansion into several of these markets is underway by actionable plans that are in flight as we entered 2024 I'm excited about our money transfer growth prospects and we expect to continue to outpace <unk>.

Apex: Market growth, we have steadily taken market share from the competition over the years.

Michael J. Brown: And given the momentum built coming out of 2023, I'm optimistic as ever that our money transfer segment will continue to elevate itself to the top of the list. And now, let's turn to the next slide to discuss another money transfer business, our Dandelion Network. Slide 21.

Apex: And given the momentum built coming out of 2023, I'm optimistic as ever that our money transfer segment will continue to elevate itself to the top of the list.

Apex: And now let's turn to the next slide to discuss another money transfer business our day underlying network.

Michael J. Brown: Throughout the quarter, our dandelion customers continue to harness the power of our money transfer network. The strong growth is attributed to our network's ongoing enhancement, particularly in terms of mobile wallet coverage, which now spans, as I told you before, 2 billion wallet accounts. As you can see on this slide, number 21.

Apex: Slide 21 throughout the quarter, our data line customers continue to harness the power of our money transfer network.

Apex: The strong growth is attributed to our networks ongoing enhancement, particularly in terms of mobile wallet coverage, which now spans as I told you before 2 billion wallet accounts.

Apex: As you can see on this slide number 21.

Michael J. Brown: This fourth quarter was our most successful quarter to date in signing new customers. These signings were made possible because of the strength of our network. As I remind everyone, Dandelion is a network as a service. We signed several key agreements this quarter, including an exciting agreement with Commonwealth Bank in Australia. Commonwealth is the largest bank in Australia with $831 billion in assets and 17 million customers.

Apex: This fourth quarter was our most successful quarter to date, signing new customers. These signings were made possible because of the strength of our network as I remind everyone Dandelion is a network as a service.

Apex: We signed several key agreements this quarter included an exciting agreement with Commonwealth Bank in Australia Commonwealth as the largest bank in Australia was $831 billion in assets of 17 million customers.

Michael J. Brown: Commonwealth was attracted to Dandelion's value proposition due to a desire to compete more effectively for the outbound payments flow from Australia. Another impressive agreement signed during the quarter is for Ping Pong, one of the first and the largest China-based cross-border digital payment providers with a transaction volume of $18 billion. Ping Pong has partnered with more than a hundred major e-commerce platforms, website operators, and cross-border ecosystem service providers, which include Amazon, eBay, Walmart, Wish, Shopee, Shopify, and Roku.

Apex: Commonwealth was attracted to dandelions value proposition due to a desire to compete more effectively for the outbound payments below from Australia.

Apex: Another impressive agreement signed during the quarter as her pain pump one of the first and the largest China based cross border digital payment providers with transaction volume of $18 billion.

Apex: <unk> has partnered with 100, plus major e-commerce platforms website operators in cross border E <unk>.

Apex: Ecosystem service providers, which include Amazon, ebay, Walmart, which sharpie shopify and Rakuten.

Michael J. Brown: With these agreements, Stand Align continues to bolster our global presence and real-time digital payment capabilities. Let's go to the next slide, and I'll briefly give you an update on our rental development. Slide 22.

Apex: With these agreements and align continues to bolster our global presence and real time digital payment capabilities.

Apex: Let's go to the next slide and I'll briefly give you an update on our ramp development.

Apex: Slide 22, as you all know ran as the technology backbone that powers.

Michael J. Brown: As you all know, Wren is the technology backbone that powers Diverse Businesses at Euronet. It is proven to support different use cases, whether it is routing cash and withdrawal transactions to the card scheme, issuing prepaid cards for global brands or routing, or routing remittance transactions through the real-time payment rails of a country into a consumer's bank account. We believe RAN is well-positioned to allow banks, fintechs, and governments to keep pace with the ever-changing environment across the world of card-based and now account-based payments. We started our go-to-market strategy in the emerging markets of Asia and Africa, where we secured marquee wins with players like Standard Charter Bank and Grab Bank of the Philippine Islands, and we are now expanding our presence in these accounts by supporting new use cases and new market expansions of these clients.

Apex: Diverse businesses at <unk>. It has proven to support different use cases, whether it is routing cash withdrawal transactions to the card scheme issuing prepaid cards for global brand of routing our routing remittance transactions through the real time payment rails of our country into a consumer's bank account.

We believe <unk> is well positioned to allow banks fintech and governments to keep pace with the ever changing environment across the world of card based and now account based payments.

Apex: We started our go to market strategy in the emerging markets of Asia, and Africa, where we secured marquee wins with players like standard chartered Bank grabbed bank of the Philippine Islands, and we are now expanding our presence into these accounts by supporting new use cases and new market.

Apex: <unk> of these clients as an example, we added additional functionality to the bank of the Philippine Islands real time payments implementation by launching person to merchant services on the bank's wallet and mobile banking App. Additionally, in Malaysia, We launched grabs digital bank there.

Michael J. Brown: As an example, we added additional functionality to the Bank of the Philippine Islands' real-time payments implementation by launching person-to-merchant services on the bank's wallet and mobile banking app. Additionally, in Malaysia, we launched Grab's Digital Bank, their second digital banking market after Singapore. Grab, as you may know, is Asia's leading super app, providing everyday services like mobility, deliveries, and financial services.

Apex: Second digital bank banking market after Singapore graph as you May know is Asia's leading super App, providing everyday services like mobility deliveries and financial services as part of their financial services vertical that they launched digital banks in these two countries there are double digit.

Michael J. Brown: As part of their financial services vertical, they launched digital banks in these two countries. Their goal is to convert their super app users to banking clients by accepting deposits and making loans. Grab selected RAD as their SaaS-based issuer processing platform for both markets.

Apex: Bert they're super App users to banking clients by accepting deposits and making loans.

Apex: Grab selected ran as their SaaS based issuer processing platform for both markets. Additionally, following a very successful first phase of the project was CMO in Mozambique, we are expanding our relationship with them by building a national QR code system to power daily micro payments.

Michael J. Brown: Additionally, following a very successful first phase of the project with CIMO and Mozambique, we are expanding our relationship with them by building a national QR code system to power daily micropayments. As part of the geographic expansion of REN into new markets, we have entered the Americas region and continue to see strong interest in our REN technology from banks and processors in South America, as evidenced by the deals that we announced and signed in the previous quarter. Initial interactions with prospects in the United States are also very positive. We are excited about the modern cloud-native technology that we are offering to banks and financial institutions in the U.S. to help them modernize and keep pace with the rapidly changing payments landscape. Now, let's go on to slide 23 to wrap up the report. As I conclude my remarks, I am proud of Euronet's results for the fourth quarter and the full year. What a quarter!

Apex: As part of the geographic expansion of ran into new markets. We have entered into the Americas region and continue to see strong interest in our ran technology from banks and processors in South America as evidenced by the deals that we have announced them signed in the previous quarter.

Apex: Initial interactions with prospects in the United States are also very positive. We are excited about the modern cloud native technology that we are offering to banks and financial institutions in the U S to help them modernize and keep pace with the rapidly changing payments landscape.

Apex: Now, let's go on to slide 23 to wrap up in Florida.

Apex: As I conclude my remarks, I am proud of <unk> results for the fourth quarter and the full year, what a quarter adjusted EPS of $1, 88% to 35% over the prior year fourth quarter.

Michael J. Brown: Adjusted EPS of $1.88, a 35% increase over the prior year fourth quarter. And here's why I'm optimistic about 2024. First, delivering momentum driving record fourth-quarter results across all financial metrics. Second, the inflationary pressures which impacted EFT in 2022 and 2023 appear to be easing, which, together with improving wages, will increase discretionary travel spend.

Apex: And here's why I'm optimistic about 2024.

Apex: Delivering our momentum driving record fourth quarter result across all financial metrics.

Apex: Second the inflationary pressures, which impacted FTE in 2022, and 2023 appear to be easing, which together with improving wages will increase discretionary travel spend third we continued to diversify our business as about two thirds of our adjusted EBITDA comes from outside ATM.

Michael J. Brown: Third, we continue to diversify our business, as about two-thirds of our adjusted EBITDA comes from outside ATM transactions. Fourth, ePay is becoming a solutions provider delivering double-digit operating income and adjusted EBITDA growth in its core business. Next, money transfer enters 2024, finishing 2023 with back-to-back quarters of operating income and adjusted EBITDA growth at or above 20%. Finally, all segments of our business are driving growth, both revenue and profit. These are tangible reasons for optimism as we launch 2024. So how does this influence our expectations for 2024? As we mentioned in the third quarter, we will provide full-year earnings guidance rather than quarterly guidance for 2024.

Apex: M transactions fourth EPA is becoming a solutions provider delivering double digit operating income and adjusted EBITDA growth in its core business.

Apex: Neck money transfer enters 2024, finishing 2023 with back to back quarters of operating income and adjusted EBITDA growth at or above 20%.

Apex: Finally, all segments of our business are driving growth both revenue and in profit.

Apex: These are tangible reasons for optimism as we launched 2024. So how does this influence our expectations for 2024 as we mentioned in the third quarter, we will provide full year earnings guidance.

Apex: Other than quarterly guidance for 2024, we expected, we expect adjusted EPS and earnings growth.

Operator: We expect adjusted EPS and earnings growth in the 10 to 15 percent range. But, as Rick said, we are driving the business to produce even better results than that. With that, we'd be happy to take questions. Operator, will you please assist?

Apex: In the 10% to 15% range, but as Rick said, we are driving the business to produce even better results than that with that wed be happy to take questions. Operator will you. Please.

Operator: And at this time, we'll conduct a question and answer session. As a reminder, to ask us a question, you need to press star 1 1 on your telephone and wait for a name to be announced. To withdraw your question, please press star 1 1 again.

Thank you and at this time, we will conduct a question and answer session. As a reminder to ask this question you May Press Star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please standby what could cause the Q&A roster.

Operator: Stand by, we're gonna start the Q&A roster. One moment for our first question. Our first question comes from the line of Pete Heckman from D.A. Davidson. Your line is open. Hello, Pete.

Apex: One moment for our first question.

Apex: Our first question comes from the line of Pete Heckmann from D. A Davidson your line is open.

Peter J. Heckmann: Hey, good morning, everyone. Hey, hello. Thanks for taking the questions. In terms of your ATM footprint review, you talked about 3,000 to 3,500 deployments in 2024 being your target. I guess, what are you thinking as a net number in terms of what additional units do you, I guess, does that include units that are removed and then redeployed? Or I'm trying to think about how many...

Peter J. Heckmann: Hello, Hey, good morning, everyone, Hey, Hello, Thanks for taking the questions in terms of your ATM footprint review.

Peter J. Heckmann: You talked about 3000 to 3500 deployments in 2000 and straightforward your target.

Peter J. Heckmann: What are you thinking as a net number.

Peter J. Heckmann: What additional units I guess does that include.

Peter J. Heckmann: Our units that are removed and redeployed or I'm trying to think about kind of how we look at it as we see 3000 to 3500, new opportunities for new sites for ATM and then we will also continue to call. Our network remember, we didnt until just recently get back.

Michael J. Brown: So, kind of how we look at it is we see 3,000 to 3,500 new opportunities for new sites, you know, for ATMs. And then we will also continue to expand our network. Remember, we didn't until just recently get back to, you might say, the travel volume that we had in 2019. So, we were a little bit hesitant to just take out tons of ATMs before we knew how many travelers would really be there and if the sites were still good based on travel changes and so forth. So, we took out those ATMs, a bit over 1,000 ATMs in the fourth quarter. We'll probably take out another 1,000, maybe even 2,000, you know, somewhere between 1,000 and 2,000 this year.

Peter J. Heckmann: Back to you might say the travel volume that we had in 2019. So we are a little bit hesitant to just take out tons of Atms and before we knew how many travelers would really be there and emphasize theres still good based upon travel changes and so forth. So we took out those Atms better where 1000 Atms in the fourth quarter will probably take out another.

Peter J. Heckmann: And maybe even to somewhere between 1002 this year, but.

Michael J. Brown: Outside of that, we will place 3,000 to 3,500 new customers. And then I just wanted to ask, I don't, I wouldn't assume this is a super significant exposure, but I'm sure you've seen what's going on with Paytm in India, and I guess, what did you read on that? What would be your exposure to Paytm, and is it your impression that, to the extent the regulators shut that down, consumers would just move to one of the other mobile wallets? That's exactly what would happen if it happened, but I do kind of find it hard to believe they're so friggin' large that they would be shut down.

Peter J. Heckmann: Outside of that we will place three to 3500 new ones.

Speaker Change: Okay. Okay.

Speaker Change: Then just wanted to ask.

Speaker Change: As soon as a super significant exposure, but I'm sure you've seen what's going on with ppm in India.

Speaker Change: And.

Speaker Change: I guess what is your read on that what would be your exposure to APM and is it your impression that if to the extent the regulators shut that down that consumers are just moved to one of the other mobile wallets.

Speaker Change: That's exactly what would happen if it happened, but I do kind of find it hard to believe theyre. So frigate large that they would be shut down.

Speaker Change: No.

Speaker Change: But but the deal is we have every we have every single wallet and <unk>.

Michael J. Brown: But the deal is, we have every single wallet in India, and so you just see the volumes move across. Make sense. All right. Thank you. And, a little aside from the people that I talked to, a whole lot of people in India have more than one wallet already on their phone. So it wouldn't even be that big of a challenge.

Speaker Change: India and so you just see the volumes move across.

Speaker Change: Makes sense alright, thank you.

Speaker Change: A little aside from the people that I talk to.

Speaker Change: Lot of people in India have more than one wallet already on their phone so.

Speaker Change: It can be that bigger.

Operator: That makes sense. Thanks. One moment for our next question, and our next question will come from the line of Darren Peller from Wolf Research. Your line is open.

Speaker Change: Challenge shift.

Speaker Change: That makes sense. Thanks.

Speaker Change: Okay.

Speaker Change: One moment our next question.

Speaker Change: And our next question comes from the line of Darrin Peller from Wolfe Research. Your line is open.

Darren Peller: Hey guys, you know, travel seems to be driving still about a third of the... look at the numbers. And Mike, when looking at a few years, this is a little bit of a bigger picture question, but considering the growth drivers, many of which you went through are a little less cyclical or less tied to travel, perhaps, if you could just give us a sense of what you would expect the mix to look like when you think of, you know, EFT also growing still or resuming growth at a rate that's pretty healthy What kind of contribution do you think the business is going to see from travel in a couple of years? To the best of your knowledge, I mean, EFT is also going to grow well, I would imagine, so maybe if you factor that in.

Speaker Change: Okay.

Darrin Peller: Hey, guys.

Darrin Peller: Travel seems to be driving still about a third of EBITDA. When we look at the numbers and Mike when looking at a few years, but still a little bit of a bigger picture question, but just considering the growth drivers many of which you went through or a little less cyclical or less tied to travel perhaps if you could just give us a sense of what you would expect the mix to look like when you think of.

Darrin Peller: <unk> also growing still are resuming growth at a rate that's pretty healthy.

Darrin Peller: What kind of contribution do you think the business is going to see from travel related in a couple of years.

Michael J. Brown: So the best of your knowledge I mean, <unk> also going to grow well I would imagine so maybe if you factor that into.

Michael J. Brown: Well, it's hard to know, which one of our segments will grow the fab fastest and cut once you get to steady state.

Darren Peller: Well, it's hard to know which one of our segments will grow the fastest once you get to steady state. But what is real is that, you know, this year, we're going to finally get to the point where we kind of have our full legs underneath us with respect to travel and spend. And so once that's there, I mean, you just look at the opportunities we have in EFT. It'll be a fast grower. And so, you know, the three divisions and the other opportunities with rent and dandelion are all fighting to try to keep up. I mean, it's going to be a healthy race to see who grows the fastest, but we're really excited about every one of our endeavors. You know, Darren, I would add that if you look at our history, all of our businesses have consistent, very good, strong growth rates, either at or near double-digit growth rates. We don't have a bias against growth.

Michael J. Brown: What is real is that this year, we're going to finally get to the point, where we kind of got our full legs underneath us with respect to travel and spend and so once that's there I mean, you just look at the opportunities we have in ft.

Michael J. Brown: It'll be a fast grower and so you know the three divisions and the other opportunities with rent and Dandelion R. R.

Michael J. Brown: Are all fighting to try to keep up I mean, it's going to be a healthy race to see who grows the fastest but we're really excited about every one of our endeavors.

Michael J. Brown: Darren.

Darren: I'd add that if you look at our history.

Darren: All of our businesses have consistent very good strong growth rates, either at or near double digit growth rates.

Darren: We don't have a bias for.

Rick L. Weller: We have a culture of growth. And so, when we take a look at what the opportunities are around the world, we see continued expansion for all three of our sectors. So, while we might see, you know, some different rates of growth out of each of the segments as we execute our plans, we've got a very consistent history of double-digit or near double-digit growth from all three segments, and we see that the opportunities to continue that around the world remain as attractive, if not more attractive, as we go forward. Okay. I'm just trying to figure out the cyclicality of the business. Can we pull it a bit? Well, you know, so cyclicality, we really, when you look at seasonal cyclicality, we're always going to have that because travelers mostly travel in Q2 and Q3.

Darren: For growth we have.

Darren: Culture for growth and so when we take a look at what the opportunities are around the world. We see continued expansion for all three of our segments. So while we might see some different rates of growth out of each of the segments as we execute our plans.

Darren: We've got a very consistent history of double digit or near double digit growth from all three segments and we see that the opportunities to continue that around the world remain as attractive if not more attractive as we go forward.

Speaker Change: Okay, I'm, just trying to figure out the cyclicality of the business going forward.

Speaker Change: Yes.

Speaker Change: Yeah go ahead, yeah, so cyclicality relevant when you when you look at seasonal cyclicality, we're always going to have that because travelers, mostly traveling Q2, and Q3, but with respect to kind of the macro changes now that we're getting travel bag.

Michael J. Brown: But with respect to kind of the macro changes, now that we're getting traveled back, I don't think we're going to see cyclicality after that. I mean, if you just look at it, as Rick said, all three segments have histories of very strong growth, and that's why we're kind of looking forward. Now that we, like I said, got the travel stuff straightened out, we're really excited about where we are Remember in 2019, 58% of our EBITDA was in the EFT segment; it was all ATMs, okay? And now it's all, we've got diversity as our key, and now that's just a third of our business, while the other businesses have grown markedly over the last several years. So that's what gives us the opportunity. Mike, what percentage of your new ATM deployments are going to be outside of Europe? And I mean, I know we saw the Belgium and Mexico additions also, if you can help us size impacts or deployment timeline timelines there. Yeah, probably half or so.

Speaker Change: I would think we're going to see.

Speaker Change: Cyclicality after that.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: When you look at it.

Speaker Change: As Rick said all three.

Speaker Change: <unk>.

Speaker Change: <unk> history of very strong growth and that's why we're kind of looking forward now that we like I said, we've got the travel stuff straightened out we're really excited that.

Speaker Change: Where we are remember in 2019, 58% of our EBITDA was in the <unk> segment was all Atms, Okay and now it's all.

Speaker Change: We've got diversity is our key and now that's just a third of our business while the other businesses have grown markedly over the last several years. So so that's what gives us the optimism.

Speaker Change: Like what percentage of your new ATM deployments are going to be outside of Europe.

Speaker Change: We saw the Belgium in Mexico additions also if you can help us size impacts or deployment timeline timelines there.

Speaker Change: Yes, probably half or so.

Michael J. Brown: Okay, good. So it truly is, I mean, getting a lot more diverse. And a lot of that is Asia also, the APAC areas you had started. Well, Asia, North Africa, and now south of our border.

Speaker Change: Okay. Good so it truly is getting a lot more diverse with a lot of that is these are also the exact areas you had Asia and North Africa.

Speaker Change: Africa, and now south of our border.

Michael J. Brown: And I'd like to remind you, those ATMs that we're putting outside of Europe are probably twice as profitable as the ones in Europe. And the reason is that there's card access or acceptance all over Europe for most of your spend. You just need a little bit of cash to get by in Europe; you don't need a lot. But in these other markets, they're primarily cash-based markets. So, good luck having lunch with a card.

Speaker Change: And I'd like to remind you that.

Speaker Change: Those Atms that were putting outside of Europe are probably twice as profitable as the ones in Europe and the reason is it's because there's card access or acceptance all over to Europe, where most all of your spend.

Speaker Change: Just need a little bit of cash to get buy in Europe, you don't need a lot but in these other markets primarily cash based market. So good luck, having lunch with a card.

Michael J. Brown: You know, you've got to go, you've got to use cash. And so that's why those ATMs are so much busier. All right, that's all. Bad guy.

Speaker Change: <unk> got to go you've got to use cash and so thats why those Atms are so much busier.

Alright Thats helpful.

Speaker Change: Thanks, guys.

Operator: Thank you. One moment for our next question, and our next question will come from the line of Andrew Jeffrey from Tourist Securities. Your line is open.

Speaker Change: Thank you.

Speaker Change: Our next question.

Speaker Change: And our next question comes from the line of Andrew Jeffrey from tourists Securities. Your line is open.

Andrew Jeffrey: Hi, good morning, guys. Appreciate you taking the question. Mike, I wanted to ask you about money transfer. That's pretty impressive agent growth.

Andrew Jeffrey: Hi, Good morning, guys. Appreciate you taking the question.

Andrew Jeffrey: Mike I wanted to ask you about money transfer.

Andrew Jeffrey: Pretty impressive agent growth.

Michael J. Brown: So I guess I'm just starting out. Is RIA, Euronet, now the largest agent network in the world? Just want to kind of level it. We believe so, yes. Okay. And when you look at, well, I don't know if you call it agent growth, we'll just say point growth, because we have agents on the send side, and then we have others, and then we have payout correspondents on the other side. And in addition to those, in addition to the correspondents, which were typically banks or big retailers in some of these markets, we now have bank accounts directly, where people don't have to walk in; it But the new distribution channel is wallets, because in the developing world, everybody's got a wallet now, and so we can drop money directly into 2 billion wallets. And that is an advantage that we have that nobody else has.

Andrew Jeffrey: Yes.

Speaker Change: Just starting out.

Speaker Change: Is it now the largest agent network in the world just want to kind of level set.

Michael J. Brown: We believe so yes.

Michael J. Brown: Okay and then when you when you look at well I don't know if you caught agent growth, we'll just say point growth because we have the agents on the send side and then we have others in and then we have payout correspondence on the other side and including and including with Us.

Michael J. Brown: In addition to the correspondent which were typically like banks are big retailers and some of these markets.

Michael J. Brown: We now have bank accounts directly where people don't have to walk in that just drops out of their bank account direct labor, we've got $4 billion of those but the new distribution channel our wallets because in the developing world.

Michael J. Brown: He has got a wallet now and so we can drop money directly into 2 billion wallets and that is an advantage that we have that nobody has.

Michael J. Brown: Yeah, and that sort of sort of dovetails with my next question, which is your digital growth strategy and the success you seem to be having. Is the 20% digital transaction growth a baseline from which you'd expect to grow such that you're going to see, or we should expect segment revenue growth to accelerate over time? Or do you feel pretty good about Generally, we are around 10% high. I think we're going to get growth out of both of them.

Speaker Change: Yes, and that sort of dovetails into my next question, which is your your digital growth strategy and the success you seem to be having.

Speaker Change: Is the 20% digital transaction growth a baseline from which you would expect to grow such that youre going to see or we should expect segment revenue growth to accelerate over time or do you feel pretty good about sort of.

Speaker Change: I don't know, where you are around 10% high single digits.

Speaker Change: I think we're going to get growth out of both of them I don't know, which one is going to grow the flooding well right now the digital is growing faster and will probably continue to do so.

Michael J. Brown: I don't know which one's going to grow in funding. Well, right now, the digital is growing faster, and it'll probably continue to do so. And you know, I think one of the reasons that we're having really good success with our digital growth strategy is because of our digital payouts. We told you those numbers of how well we're paying out into, you know, bank accounts and wallets. Okay, and one last one, if I might sneak it in just with regard to rent, is Is sort of the what appears to be an accelerating shift to open banking and RTP globally going to reach a tipping point such that you think that REN growth accelerates, or is it going to be sort of a more steady or linear? No, no, no.

Speaker Change: And I think one of the reasons that we're having really good success with our digital growth strategy is because of our digital payout. We told you those numbers of how well, we're paying out into bank accounts and wallets.

Speaker Change: Okay, and one last one if I might sneak it in just with regard to rent.

Speaker Change: It is.

Speaker Change: Is it sort of the.

Speaker Change: What appears to be an accelerating shift to open banking and RTP globally going to reach a tipping point such that you think that that rent growth accelerates or is it going to be sort of.

Speaker Change: A more steady or linear compounding no no no.

Michael J. Brown: We've already got the beginnings of a hyperbolic curve. Because when you think about it, we had a new technology that was released three years ago, and nobody on the planet had it.

Speaker Change: <unk> already got the beginnings of a hyperbolic curve because when you think about it we've got a note we had a new technology that we're really three years ago nobody on the planet had it and so we had to get those early adopters in there and we got the early adopters who are all in Asia, because the Asian banks were more progressive and they were also threatened.

Michael J. Brown: And so we had to get those early adopters in there. And we got the early adopters who were all in Asia, because Asian banks were more progressive, and they were also threatened by wallets at the time. Okay? They wanted to stay relevant to their customers. So they were the early adopters.

Speaker Change: The wallet set the top okay. They wanted to stay relevant to their customers. So they were the early adopters.

Michael J. Brown: Once you get a couple of those, then the next ones come, and the next ones come. And the fact of the matter is, their legacy platforms can't support the kind of solutions that customers are demanding. In other words, their legacy platforms don't talk wallet, you know? And so once we established ourselves in Asia, then we took that same product, and we went to South America, and we've been going to North America as well.

Speaker Change: And then became once you get a couple of those and then the next one is calm in the Netherlands come and and the fact of the matter matter is their legacy platforms can't support the kind of solutions that customers are acting in other words their legacy platforms don't talk wallet.

Speaker Change: And so once we establish ourself in Asia than we took those that same product and we went to South America, and we've and we've been going now to North America as well.

Michael J. Brown: And finally, you know, things are happening. I mean, just last July, as you know, FedNow was launched. It was an RTP network in the United States.

Speaker Change: And finally things are happening I mean, you've just last July as you know that now was launched it was in RTP network in the United States.

Michael J. Brown: You know, it's running roughly 10 years behind India, but finally, we're getting our act together. So more and more people are going to be wanting to do account-based real-time payments, and this idea of just card-based payments is going to be very outdated in 10 years from now.

Speaker Change: It's running roughly 10 years behind.

Speaker Change: India Finally, we're getting our act together, so more and more people are going to be wanting to do account based real time payments and this idea of just card based payments is going to be very passe in 10 years from now.

Operator: We appreciate it. Thank you. One moment for our next question. Our next question comes from Charles Nabhan from Stevens. Your line is open. Good morning, and thank you for taking my question. I wanted to double click on the non-ATM piece of EFT.

Speaker Change: I appreciate it thank you.

Speaker Change: Uh huh.

Speaker Change: Thank you one moment our next question.

Speaker Change: Okay.

Speaker Change: Our next question comes from the line of Charles <unk> from Stephens. Your line is open.

Charles: Good morning, and thank you for taking my question I wanted to double click on the non ATM piece of ESP.

Charles Nabhan: If I look at one of your disclosures, it looks like 13% of EBITDA is driven by that non-ATM piece. And, if I recall correctly, roughly 20 to 25% of revenue within that segment is generated through those sources. So I guess first, my question is, if you could speak to any trends you're seeing within Piraeus. I know you talked about some expansion last quarter. And then, secondly, if my math is correct, I'm coming up with a margin somewhere north of 30.

Charles: If I look at one of your disclosures it looks like 13% of EBITDA is driven by that non ATM piece and if I recall.

Charles: Roughly 20% to 25% of revenue within that segment has generated through those sources. So I guess first my question is if you could speak to any trends youre seeing within Piraeus I know you talked about some expansion last quarter and then secondly, if my math is correct I am coming up with a margin some.

Charles: We're north of 30.

Michael J. Brown: And I wanted to confirm, you know, my map is at least somewhat in the ballpark because if I'm thinking about it correctly, that could be a nice tailwind to margins with any FT going forward. Okay, so we've got several things that are happening. So within EFT, the components are, of course, ATMs.

Charles: I wanted to confirm my map is at least somewhat in the ballpark is if I'm thinking about it correctly that could be.

Charles: A nice tailwind to margins with any FTE going forward.

Speaker Change: Okay. So we've got several things that are happening so with any FTE. So the components are.

Speaker Change: Of course, Atms and that would be mostly our independent ATM deployment second would be the outsourcing deals that we have and that's all in that ATM fees and then the other part of <unk> is going to be ran and acquiring <unk>.

Michael J. Brown: And that would be mostly our independent ATM deployment. Second would be the outsourcing deals that we have. And that's all in that ATM piece. And then the other part of EFT is going to be RAN and acquiring. Acquiring has got roughly 25% margins. When we install RAN, that's probably got 60 to 80% margins, depending on when and how that works.

Speaker Change: <unk> got roughly 25% margins.

Speaker Change: When we install ran that's probably got.

Speaker Change: 60% to 80% margins dependent on when and how that works and then the.

Michael J. Brown: And then the ATMs themselves are probably, you know, they've been as high as a 30% margin, a 33% margin. They're a little bit lower now because we don't have quite the productivity that we had in 2019 before the travel crisis, but that's coming back. So when you blend it all together, I think we could approach 30, but depending on how fast our business grows in acquisition, you know, at 25%, it might hold it down a little bit. Rick just looked at all his numbers, so he'll give you three significant digits on that answer.

Speaker Change: The Atms themselves are probably they have been as high as a 30% margin of 33% margin there a little bit lower now because we don't have quite the productivity that we had in 2019 before the <unk>.

Speaker Change: For the travel crisis, but that's coming back so when you blend it all together I.

I think we could approach 30, but depending on how fast.

Speaker Change: Our business grows and acquiring at 25%.

Speaker Change: It might hold it down a little bit Rick just looked at all of these numbers. So he'll give you.

Speaker Change: He'll give you three significant digits on that answer.

Speaker Change: Okay.

Rick L. Weller: And yes, your number is roughly right on; it is approaching 30% for the year. You know, our best, you know, margin years were back in 2019, so I think as we see the travel recovery continue into 2024. And as Mike said in his comments, we've seen some pricing opportunities on the interchange and possible surcharge fronts. We've seen some actual results, some announcements in 23. We anticipate maybe some more in 24 months, so all of that will just, you know, further support continued margin expansion in that business. I got it. If I could sneak in a quick follow-up,

Speaker Change: Yes, and yes. Your your number is roughly right there it is approaching 30% for the year.

Speaker Change: Yeah.

Speaker Change: Our best.

Speaker Change: Margin years, where back in 2019 so.

Speaker Change: As we see the travel recovery.

Speaker Change: Continue into <unk>.

Speaker Change: Into 'twenty, four and as Mike said in his comments.

Speaker Change: We've seen some pricing opportunities on the interchange and possible surcharge front, we've seen some actual some some results from some announcements in 'twenty three we anticipate maybe some more in 2004, so all of that will just.

Speaker Change: Further support continued margin expansion in that business.

Speaker Change: Got it if I could sneak in a quick follow up right.

Charles Nabhan: It's nice to see the margin expansion within money transfer, especially considering the way you're expanding the network. I wanted to drill into that a little bit and just get a better understanding of what specifically is driving that expansion. Is it a mix shift within the business, or is it just simply a scale-up on your existing network? Any commentary around that would be helpful. So remember, as we grow, we have about a 35% incremental EBITDA margin on that next transaction. So obviously, as you have more volume, it's going to average you out.

Speaker Change: Nice to see the margin expansion within money transfer, especially considering your the way you're expanding the network I wanted to drill into that a little bit and just get a better understanding of what specifically is driving that expansion is it a mix shift within the business or is it just simply scale on your existing.

Speaker Change: <unk> on your existing network any commentary around that would be helpful.

Speaker Change: Well remember is as we grow we have about a 35% incremental EBITDA margin on that next transaction.

Speaker Change: So obviously as you're as as you have more volume, it's going to it's going to average you up.

Michael J. Brown: And, and we're just doing, as we mentioned, too, on the digital side, we're being, we've got a kind of new approach to our digital marketing that's making it more effective. So, kind of everything added together, I would say. Got it. Appreciate the call, guys. Thank you. Please take a moment for our next question. Our next question comes from Mike Grondahl from Northern Cap Securities. Hey guys, Morning, Mike. Hey, good morning. Hey, first thing, the 1300 ATMs, you know, redeploy 4Q and then 1,500 roughly at your midpoint in 2024. Could you give us a little bit of color?

Speaker Change: And we're just doing as well.

Speaker Change: We mentioned two on the digital side more bandwidth.

Speaker Change: We've got it.

Speaker Change: Kind of a new approach to our digital marketing, that's making it more effective so kind of everything added together I would say.

Speaker Change: Got it appreciate the color guys. Thank you.

Speaker Change: Hi.

Speaker Change: One moment our next question.

Speaker Change: And our next question comes from the line of Mike Grondahl from Northland Securities. Your line is open.

Mike Grondahl: Hey, guys good morning, Mike.

Mike Grondahl: Hey, good morning.

Mike Grondahl: First thing the 1300 Atms.

Mike Grondahl: Redeployed in four Q, and then 1500 roughly at your midpoint in 2024.

Mike Grondahl: Could you give us a little bit of color like.

Mike Grondahl: Like, are they all unprofitable? Or is this like, what you just call it, the bottom 5%? Just looking for a little color, kind of what the cutoff is there. And then second, maybe, for Rick.

Speaker Change: Are they all unprofitable or is this like what.

Speaker Change: You just call it the bottom 5% just looking for a little color kind of what the cutoff is there.

Speaker Change: And then second maybe for Rick.

Rick L. Weller: What was the benefit from FX? tax rate, kind of compared to your $1.75 guy. Thanks. Well, let's see. For the ATMs, essentially, what we're seeing is these are ATMs that are not meeting our return expectations, okay? And, you know, they range from nearly breaking even to losing money. So at the end of the day, if we've got an ATM that's already on site and it's producing an incremental profit, we're not going to be motivated to want to take it out. But if it's not producing profit, then it makes sense for us to remove it. And as Mike said, you know, over the period that we've been looking to see the recovery of travel from COVID, we were a little less aggressive in taking out machines because we didn't really have good visibility as to what that exact traffic would look like. So we think that we're approaching that, and it just makes good management sense. But net-net, these are non-performing machines as opposed to, you know, let's call them light-performing machines.

Speaker Change: What was the benefit from FX and tax rate kind of compared to your $1 75 guidance in the quarter.

Speaker Change: Thank you Paul.

Speaker Change: Yes.

Well, let's see for the Atms.

Speaker Change: Yeah.

Paul: Essentially what we're seeing is these are Atms that are not meeting our return expectations.

Paul: And.

Paul: There they range from nearly.

Paul: Breakeven to losing money so at.

Paul: At the end of the day, if we got an ATM that already.

Paul: On site and it's producing an incremental profit, we're not going to be motivated to want to take it out but if its not producing profit then it makes sense for us to remove it and as Mike said.

Paul: Over the period that we kind of been.

Paul: Looking to see the recovery of travel from Covid, we were a little less aggressive on taking out a machine because we didn't really have a good visibility as to what that exact traffic would look like so we think that we're approaching that.

Paul: It just makes good management sense, but net net these are nonperforming machines as opposed to let's call them White performing machines.

Rick L. Weller: And then with respect to the benefit from tax or FX, we exceeded our earnings guidance by about, what, 13 cents a share. I would tell you roughly half of that was from tax, and then the other half was kind of split evenly between FX and operations. Thank you. Thank you. One moment for our next question, and our next question will come from Ken Suchowski from Economist Research. Your line is open. Hey, good morning.

Paul: And and then with respect to the.

Paul: Benefit from <unk>.

Paul: Tax or FX.

Paul: We exceeded our earnings guidance by about <unk> 13, a share I would tell you roughly half of that was from tax and then the other half was kind of split evenly between.

Paul: FX and operations.

Got it thank you.

Paul: Okay.

Speaker Change: Thank you one moment our next question.

Speaker Change: And our next question comes from the line of Ken So Chomsky from Autonomous Research. Your line is open.

Ken Suchowski: Thanks for taking the question. I just want to ask about the incremental EBIT margins in the EFT segment. I mean, how should we think about those?

Speaker Change: Hey, good morning, Thanks for taking the question I just wanted to ask about the the incremental EBIT margins.

In the <unk> segment, I mean, how should we think about those just given the mix of business and how thats changing 2023, I think had a kind of a mid teens incremental EBIT margin versus something much higher historically.

Rick L. Weller: We've given the mix of business and how that's changing, you know, 2023, I think it had a kind of a mid-teens incremental EVIT margin versus something much higher historically. You have the non-ATM bucket scaling in EFT, so some moving parts there. So any way to think about sort of the incremental margins in that segment moving forward would be very helpful. Yeah, I mentioned earlier, though, we anticipate that they will continue to improve. As we said last quarter, we're going to, you know, hold off and give a whole series of exact details.

Speaker Change: You have the non ATM bucket scaling in the ft. So some moving parts there.

Speaker Change: So any way to think about sort of the incremental margins in that segment moving forward would be very helpful. Thanks.

Speaker Change: Yes.

Speaker Change: As I mentioned earlier, though we anticipate that they will continue to improve.

Speaker Change: As we said last quarter, we're going to hold off and giving.

Speaker Change: A whole series of exact details.

Rick L. Weller: I think, hopefully, you can appreciate that, you know, producing earnings growth in the quarter that was a 30 plus percent year over year number and our full year number of 15% is that we're going to have ebb and flows throughout the segment, but we consistently produce these very strong double digit growth numbers. But, but, you know, more specifically in that EFT segment, we will continue to see those margins expand again, as I said earlier, because of travel recovery, which is going to bring those more high-margin transactions. As Mike said earlier, as we go outside of the European market, where we've seen very good response, very good returns on these ATMs, that should be very helpful.

Speaker Change: I think hopefully you can appreciate that producing earnings growth in the quarter that was <unk>.

30, plus percent year over year number and our full year number of 15% is that we're going to have ebb and flows throughout the <unk>.

Speaker Change: Segments, but we consistently produce these very strong double digit growth numbers, but but more specifically in that in that segment. We will continue to see those margins expand again as I said earlier because of travel recovery, which is going to bring those more.

Speaker Change: High margin transactions as Mike said earlier as we go outside of the European markets, where we've seen very good response very good returns on these.

Speaker Change: Atms that should be very helpful. And then again, we're seeing some some rate increases on the interchange and.

Rick L. Weller: And then again, we're seeing some rate increases on the interchange and surcharge front. So, and all that together with just good expense management. So, we'll improve the profits because of ATM profit management, pairing out the lesser performer one, some rate increases, some geographical expansion, some travel recovery, all signs of a point to improving margins. We will refrain from telling you what that number is.

Speaker Change: Surcharge front so.

Speaker Change: And all of that together with just good expense management. So so we'll improve the profits because of ATM.

Speaker Change: Profit management Paring Alpha the lesser performer, one some rate increases some geographical expansion some travel recovery all signs point.

Speaker Change: Two improving margins, we will refrain on telling you what that number is again, we want to focus on the earnings of the consolidation as opposed to any one particular part.

Rick L. Weller: Again, we want to focus on the earnings of the consolidation as opposed to any one particular part. Yeah, okay. That's helpful, Rick.

Speaker Change: Okay. That's helpful. Rick.

Ken Suchowski: And for my follow-up, I just want to ask about money transfer. You know, you mentioned an increase in marketing efforts in certain geographies. I was just wondering if you could talk about what you're seeing from a competitive standpoint because some of your competitors are being aggressive with promotional activity in the market. And I was hoping you could talk about how retention rates and customer acquisition costs are trending. I think you mentioned some strong digital customer acquisition in recent months. So, any thoughts on customer acquisition cost trends for new customers would be helpful. Thank you.

Rick L. Weller: For my follow up I, just wanted to ask you about money transfer you mentioned an increase in marketing efforts in certain geographies. I was just wondering if you could talk about what youre seeing from a competitive standpoint, because some of your competitors are being aggressive with promotional activity in the market.

Rick L. Weller: And I was hoping you could talk about how retention rates and customer acquisition costs are trending.

Rick L. Weller: You mentioned some strong digital digital customer acquisition in recent months, so any thoughts on customer acquisition cost trends for new customers, who would be helpful. Thank you.

Michael J. Brown: Okay. So, with respect to money transfer, I mean, you've got to understand that there are probably 10,000 money transfer companies in the world. Okay. And you know the names of a handful.

Rick L. Weller: Okay. So with respect to money transfer I mean, you've got to understand there are probably 10000 money transfer companies in the world. Okay, and you know the names of our handful okay. So.

Michael J. Brown: Okay, so, as an industry, this is a bare-knuckle street fight every single day, maybe a knife fight, okay? So, competition really hasn't changed. There are some of our competitors saying they're going to be more aggressive here or there, but we've seen little instances of that in one market or another for shorter periods of time. We don't see, in general, it being much more competitive than it ever was

Rick L. Weller: As a as an industry. This is a bare knuckle Street fight every single day, maybe a knife fight. Okay. So competition really hasnt changed there some of our competitors are saying, they're going to be more aggressive here. There we've seen little instances of that in one market or another for shorter periods of time.

Rick L. Weller: We don't see in general is much more competitive than it ever was we do see as I mentioned in previous.

Michael J. Brown: We do see, as I mentioned in previous calls, that just the inflationary pressures that we've seen in the United States and abroad have actually brought down the average amount sent per transaction. And remember, we make an FX spread on this. And so, if maybe our average FX spread is 0.6%, and instead of, and on average, our send amount is down, let's call it 20 bucks, you know, that costs us 12 cents a transaction, which is pure margin.

Rick L. Weller: In previous calls that just the inflationary pressures that we've seen in the United States and we see abroad have actually brought down the average amount sent per transaction and remember we make on FX spread on this and so maybe our average FX spread is 6%.

Rick L. Weller: Instead of <unk>.

Rick L. Weller: On average our R. R spend amount is down call. It 20 Bucks.

Rick L. Weller: That cost us <unk> <unk> of transaction, which is pure margin. So that's where we've seen.

Michael J. Brown: So, that's where we've seen the pressure, not necessarily because of competitiveness, but just because the reality is these immigrants who have got, you know, mostly blue-collar jobs, working hard, gas on their truck costs more than it did a year ago, groceries cost more, they just send a little bit less back to their mom, but they still send it every month. So, that's kind of what we've seen. Great. Thanks, Mike. Thank you. One moment.

Rick L. Weller: The pressure not necessarily because of.

Rick L. Weller: <unk> NIST, but just because the reality is these immigrants who are mostly blue collar jobs working hard gas in there to drive costs more than it did a year ago groceries cost more they just send a little bit less.

Rick L. Weller: Back to their mom, but they still Senate every month, so that's kind of what we see.

Great. Thanks, Mike.

Rick L. Weller: Okay.

Speaker Change: Thank you.

Operator: Okay, we've got one more question, operator, and then we're gonna be at the top of the hour. We're already there. Thank you. And now our next question comes from Andrew Schmidt from City Globe. Hey, good morning. Thanks for squeezing me in. This is David Wielizinski on behalf of Andrew Schmidt.

Speaker Change: We've got one more one more question operator, and then we're going to be at that at the top of the R. R.

Are there but.

Speaker Change: Thank you and our next question comes from the line of Andrew Schmidt from Citigroup.

Andrew Schmidt: Your line is open.

Andrew Schmidt: Hey, good morning, Thanks for squeezing me in good morning, Andrew and Steve.

Speaker Change: This is David Wilson Camper, Andrew Schmidt.

Andrew Schmidt: What drove the re-accelerating money transfer transaction trends quarter-to-quarter in APEC and Middle East-originated transactions? I think it's just the general economics there, which is probably most of it. And we had some, you may recall in the third quarter, we talked about some FX movements in Pakistan that were irregular, that drove the transactions from above the table to below the table in the black market. We saw that kind of right size itself, so that helped a little bit.

Andrew Schmidt: What drove the re accelerating money transfer transaction trends quarterly quarter in APAC and middle Eastern region any transfers.

Andrew Schmidt: Okay.

Speaker Change: I think it's just the general economics, there and.

Speaker Change: Which is probably most of it and we had some you.

Speaker Change: You may recall in the third quarter, we talked about some some FX.

Speaker Change: Movements in Pakistan that we're in.

Speaker Change: Irregular that drove the transactions from above the table to below the table in the black market. We saw that kind of rightsize itself. So that helped a little bit, but then as Mike says.

Michael J. Brown: But then, as Mike says, it's just kind of standard marketing activity out there. But that Pakistan was the only real call out there. If I could just squeeze in a follow-up here, regarding the EFT segment price increases, I'm wondering if you could provide more color on the opportunity there. Well, it's just what we said before. Last year, there were four countries that either approved interchange or allowed surcharges that were not allowed in the prior year. There are a number of countries discussing both of these issues right now. So if any of them cuts, we never know when they're going to come to the head. But when they do, you get this automatic step function in profit when they do.

Speaker Change: Just kind of standard.

Speaker Change: Marketing activity there, but.

Speaker Change: Pakistan was only the only real callout in there.

Speaker Change: If I could just squeeze in a follow up here regarding the <unk> segment price increases I'm wondering if you could provide more color on the opportunity there.

Speaker Change: Well, it's just what we said before over last year, there were four countries that either improved interchange or allowed.

Speaker Change: Surcharge step we're not allowed in the prior year.

Speaker Change: There are a number of countries discussing both of these issues right now.

Speaker Change: If any of them, we never know when they're going to come.

Speaker Change: But when they do you get the automatic step function in profit when they do so that's what we're looking at and let's take a look at the dynamics of this structure and payments world out there interchange as a fixed rate kind of a thing as our surcharges in many respects, but look whats happened to it.

Michael J. Brown: So that's what we're looking at. And, you know, let's take a look at the dynamics of this structure in the payments world out there. Interchange is a fixed rate kind of a thing, as are surcharges in many respects. But look what's happened with inflationary costs over the last few years. Rent is up, cash delivery is up, maintenance is up, and labor costs are up. The numbers on the cost side are up across the board, yet we can't just go out and raise the interchange rate.

Speaker Change: The inflationary cost over the last few years rents up cash delivery is up maintenance is up labor costs are up.

Speaker Change: If the.

Speaker Change: The numbers on the cost side are up across the board, yes, we can't just go out and raise the interchange rate.

Michael J. Brown: So it's not just us, but banks around the world are feeling this, you know, very significantly. And there are a lot of discussions underway on how banks are going to improve that revenue stream to be able to cover the cost. And so as those discussions take place, we've seen that kind of creep into the picture more and more over the last few years. And those discussions are ongoing, and well. We expect that they will continue. So there has to be some rate improvement just to cover the increased cost over the last few years. The point is, it isn't just us who wishes these numbers to go up. We're actually in conjunction with the banks as far as our thought process goes.

Speaker Change: So it's not just us but banks around the world are feeling this very significantly and there is a lot of discussions underway on how the banks are going to improve that revenue stream to be able to cover the cost and so as those discussions take place we've seen that kind of creep into the pick.

Speaker Change: More and more over the last few years and and those discussions are alive and well we expect that they will they will continue. So so there has to be some rate improvement just to cover the increased costs over the last few years.

Speaker Change: Point is it isn't just the wishes these numbers to go up.

Speaker Change: We're actually in conjunction with the banks as far as our thought process.

Michael J. Brown: But with that, I think we're going to end our call today. I want to thank everybody for their time on the call, and I look forward to talking to you next quarter. Thank you. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a good day. Thanks for watching!

Speaker Change: But with that I think we're going to end our.

Speaker Change: Our call today I want to thank everybody for your time on the call and I look forward to talking to you next.

Speaker Change: Next quarter. Thank you.

Thank you for your participation in today's conference. This does conclude the program you may now disconnect everyone have a great day.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.