Q2 2025 Euronet Worldwide Inc Earnings Call
Question. During this time simply press star followed by the number one on your telephone keypad if.
If you would like to withdraw your question again press Star one it is now my pleasure to introduce your host Mr. Adam gathers General counsel of your network by Thank you Mr. Others, you may begin.
Thank you and good morning, everyone and welcome to <unk> second quarter 2025 earnings conference call today on the call we have Mike Brown, our chairman and CEO as well as Rick Weller, our CFO before we begin I need to call your attention to the forward looking statements disclaimer on the second slide of the Powerpoint presentation, we'll be making today.
Statements made on this call that concern euronext or its management's intentions expectations or predictions of further performance are forward looking statements.
<unk> 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 that second slide of our presentation and.
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 at.
At this time I'll turn the call over to our CEO Mike Brown.
Thank you Adam and thank you everybody for joining us on our call today I'll begin my comments on slide number five.
Before I jump into the quarterly results I am sure you read our release last night.
Where we announced the acquisition of core card.
Leading edge proven scaled credit card processing platform.
This acquisition is exciting in so many ways first and foremost it extends our strategy into the digital payments processing space.
CT card perfectly complements our Ren platform with a modern revolving credit technology that is proven at scale. Moreover, I'll remind you that issuing and processing of cards is not new to us we already process tens of millions of cards across Europe and Asia.
The addition of this leading credit platform gives us yet more growth opportunities.
As it enables us to go after the $10 billion plus revenue Tam market with very attractive operating margins approaching 50% and elevated market rates of growth in large markets, where we have strong footholds, Europe and Asia and finally it is not.
The consumer credit.
It's not just consumer credit scorecard also serves us as a business lending sector. Let me continue my excitement as scorecard was not enough.
Just this week, we signed a significant brand deal with one of the three largest U S banks.
We've been in pursuit of this deal for a couple of years, which makes this announcement that much more exciting our Ren technology will be used to drive thousands of Atms across the country. Clearly this was a <unk>.
Very competitive process across all industry leaders and so to be selected for this deal it really underscores the capability and confidence that banking leaders have and our Ren platform.
These two deals further our digital strategy and while we are excited that these deals will contribute to growth in future quarters, I don't want to overlook the great operating performance of the business. This quarter. The second quarter, we delivered constant currency operating income.
<unk> growth year over year, or 13% I think this number underscores the strength of our business in these exciting digital announcements further position us to continue our 20 year track record of double digit earnings growth.
We're a growth business with even more exciting opportunities today than yesterday, now I will hand, it off to Rick to discuss our results in more detail.
Thank you Mike Good morning, and thank you to everyone for joining US today I will begin my comments on slide seven we.
We delivered a record second quarter on all key reported consolidated metrics. We delivered revenue of $1 1 billion operating income of $159 million and adjusted EBITDA of $206 million and finally, adjusted EPS of $2 56.
The money transfer segment led the way by producing constant currency operating income growth of 33%. Despite significant macro uncertainties that range from immigration reform to global conflict, a great quarter, our second quarter adjusted <unk>.
<unk> grew 14% year over year.
During the quarter, we repurchased $247 million of our shares given the timing of the repurchases. There was only a marginal benefit to the second quarter. Adjusted EPS I'll also point out that our consolidated operating margins expanded by more than 112 basis points over the prior year.
And we expect to see.
A continuation of.
Posting expanded margins as we go through the second half of the year.
Slide eight presents a summary of our balance sheet compared to the prior quarter.
As you can see we ended the second quarter with $1 3 billion in unrestricted cash and debt of $2 for the.
The decrease in cash is largely due to stock repurchases offset by cash generated from operations and working capital fluctuations.
Regarding our share repurchases, we anticipated that there was a reasonable likelihood of completing the core card acquisition and it was important to core card that the deal be a stock for stock transaction for tax purposes. Accordingly, we knew a couple of hundred million dollars for sure.
Repurchases made sense, whether we completed the acquisition or not.
In that we have now signed the purchase agreement and look forward to closing, we essentially have done a cash deal after issuing shares that we just repurchased.
Slide nine shows our results on a reported basis.
Year over year, the major currencies, we operate in strengthened compared to the dollar to normalize the impact of currency fluctuations. We have presented our results adjusted for currency on the next slide.
On slide 10 now.
<unk> segment revenue grew 6% operating income and adjusted EBITDA were in line with the prior year results, it's worth noting that the second quarter last year ft posted exceptionally strong operating income, making it a tough comparison.
While the second quarter is a difficult comp to the prior year, we expect to see the strength of the ft earnings.
Grow to restore itself in the third quarter.
<unk> grew revenue, 5% operating income, 17% and EBITDA, 15% when compared to the prior year. The main drivers of growth this quarter were attributable.
To the our payment business and continued growth of our digital channel sales in multiple markets predominantly relating to gaming content.
Money transfer revenue operating income and adjusted EBITDA grew $6 33, and 28% respectively.
The revenue growth was primarily driven by volume.
Higher principle amount per transaction and growth in cross border transactions offset by a decrease in trial U S transactions.
Direct to consumer digital transactions grew by 29%, reflecting continued consumer demand for digital products.
Operating income and adjusted EBITDA growth outpaced revenue growth significantly leveraging of margin to the bottom line due to gross margin expansion driven by opportunities developed from foreign currency fluctuations.
Leverage of scale and effective expense management.
Before I close on the quarter I'd like to point out that we saw roughly <unk> <unk> a share impact due to higher interest expense due to carrying the refinanced convertible at revolver rates.
As you know we have utilized convertible transactions in our capital structure and would expect to continue with acceptable market conditions and terms, we did not issue any such securities in Q2, but remain interested in doing so thereby improve.
Moving interest expense.
Further we had about five per share for higher income taxes about half of which related to a greater impacts.
From state taxes on the convertible retirement and the other half due to expense assignment to foreign operations looking forward for the balance of the year, we would expect the tax rate to tick up a percent or two.
In summary, we are pleased to reaffirm the 12% to 16% earnings growth expectation, we have for 2025.
With this I will turn it back over to Mike.
Okay. Thank you, Rick and everybody move on to slide 12.
Graphs on slide 12 illustrates over the past 10 years, the strength of our business lies in the diversity of our three segments as well as the diversity within those segments now, let's move to slide number 13.
We will discuss the results.
The segments, starting with the Ft Slide 13.
Our <unk> segment, which was founded as a cash ATM business expanded its digital capabilities through the acquisition of core card. The previously acquired Infinitum, a two factor authentication provider and continued traction of Ren in the marketplace ran a digital modern end to end payments platform that <unk>.
<unk>, Fintech and government and innovative solution to keep pace with the ever changing payments landscape ran provides.
Wiring issuing processing and access to real time payment networks, we are receiving accolades around the world for its digital innovation, including the rack.
<unk> from one of the top three banks in the United States.
This leading U S bank isn't alone.
During the quarter, we signed a deposit network participation agreement with Santander, the third largest bank in Poland and ATM outsourcing.
Tim outsourcing agreements with security bank in the Philippines Axis Bank, the third largest bank in India and May bank of the Philippines and all of these services will be powered by ramp further evidence that banks around the globe recognize that <unk> technology allows them to serve their customers in a more modern and real time.
<unk> way a.
A few years ago, we added merchant acquiring another digital business line, which continues to perform very well in fact this quarter. We saw the highest card transaction volume we have processes since we acquired the business.
To further the growth in the second quarter, we successfully completed the integration with Oracle, OPI, which significantly strengthens our position within the premium hospitality sector.
And we signed more than 9000, new more merchants, including one of Greece's top basketball team.
It's been an exciting few days in the ft business, when combined with our existing strategic growth opportunities, including expanding international and domestic access fees, increasing interchange rates and a recent market expansion the acquisition of core card and the agreement with this large.
<unk> Bank will continue to fuel <unk> growth in the second half of the year and beyond.
So now let's go on to slide 14, and I'll talk about ebay <unk>.
<unk> has evolved from a retail base mobile top up business to a global partner, who provides a broad offering of digital payment solutions for some of the largest consumer brands in the world, including Apple, Google, Sony Netflix and a number of local players.
I, commonly get asked what is ebay EPA allows the consumer to participate in the digital economy and the way they prefer whether it is for budgeting security or convenience today, 70% of our ipe transactions are 100% digital consumer experience across <unk>.
E Commerce merchants digital bank and prominent wallets around the world. Moreover, the majority of the remaining 30% of the transactions use a digital payment method to purchase those services.
Notable signings in this quarter.
Content distribution signing in Turkey, this quarter with riot games publisher of league of legends. Another signing this quarter was with Etsy gift cards, which had previously only been available for purchase from Etsy directly.
Excuse me and lastly, we signed an agreement to launch Amazon Prime subscription services in India.
Now, let's move on to slide 15, and talk about money transfer.
Okay.
This quarter, our money transfer segment delivered exceptional results underscoring the strength and breadth of our globally diversified business model operating income grew 33% year over year fueled by our disciplined cost management and strong performance across a wide.
Range of channels and geographies.
This performance is particularly impressive given the evolving immigration dynamics in North America, and the recent announcement of the new Remittance Tech.
To help you understand the impact the revenues subject to the new 1% remittance tax.
<unk> only 27% of money transfer segment or 12% of <unk> consolidated revenue limiting our overall exposure let.
Let me start with research from the center from global of Global development. They found that a 1% increase in fees resulted in a one 6% decline in remittance volume, which could either be fewer sand or lesser amounts of money.
This research suggests that while the potential negative impact of one 6%. It's only two tenths of a percent of our consolidated revenue.
While we would clearly rather not see this tax the research indicates it will not have a significant impact on our business. When it begins next January we all.
Also know that a significant number of our customers have bank accounts and while they may be more comfortable operating with cash they may prefer a debit card to avoid this tax further and which further reduces the impact on our revenues.
Even with the turbulence in the market our key performance indicators paint a compelling picture of our ability to continue to deliver growth our transaction volume increased 4%, but the principal transferred increased 10% digital transactions grew 29% and our digital payout.
Product a powerful engine of our ongoing growth.
It's up 20% year over year now composing 55% of total volume.
These results highlight the powerful momentum behind our digital transformation and underscore our position as a global leader in money transfer we leverage the worlds Premier real time cross border payments network.
Robust omnichannel capabilities, and our innovative wholesale strategy with dandelions.
We achieved an important expansion in the Asia Pac region last month.
Through our acquisition of a majority position in key remittance, a leading Japanese multichannel operator.
This strategic integration not only gives us access.
To a license and the country's evolving remittance landscape by Kodak produces a very rare type one funds transfer service provider license, which allows it to deliver high value inbound bank deposits, an important capability for our dandelion network.
Japan is a sizable 6 billion dollar outbound remittance market with an influx of foreign workers, we anticipate outbound growth will considerably outpace overall market trends.
Notable enhancements to money transfer as digital product were made through re is an <unk> partnership with Google and Nick Kal a European Neo bank. Other noteworthy accomplishments included the launch of 20, new partners across 19 countries, extending our global presence to net debt now.
<unk> 200 countries and territories and in Australia, we renewed our partnership with the Austrian post.
Excuse me.
Dan ally on wholesale continued to grow its client base, adding union bank in the Philippines, the 10th largest bank in the country Peru's leading wallet yafei used by 65% of the adult population chill as Vito wallet, and UK, BMS and blank and Banco Guayaquil Ecuador's.
Second largest bank and our rent customer a very interesting cross sell that we got going there dandelions comprehensive solutions bank grade compliance global reach real time deposits account validation and seamless integration through API, our swift be ICEE or increasingly recognized by <unk>.
Leading institutions worldwide with a 33% year over year growth in operating income.
Healthy pipeline market expansion, our money transfer segment is positioned to maintain its strong momentum and deliver continued value for our investors and customers.
Slide number 16.
As I mentioned earlier <unk> has entered into a definitive agreement yesterday to acquire core card Corporation, a leading U S based provider of credit card processing platforms. This acquisition marks a strategic milestone in our long term growth plan reinforcing our commitment to scalable high margin digital business.
Does that align with global payment trend.
As outlined in the press release. This is an all stock transaction valued at approximately $248 million, we expect the transaction to be.
Adjusted EPS accretive in the first full year post close courtyard has a proven track record of serving the strong global global brands like App, Apple Goldman Sachs American Express and Fintech innovators like card lists and Gemini.
And certain analysts reports covering core card there are concerns expressed over the new reports that Goldman Sachs may sell the Apple portfolio. We are obviously aware of such a possibility and we have factored that into our purchase decision decision. So there's no real surprise here the merits of core card go well.
Beyond any single program and this transaction has been undertaken without any dependency on a positive outcome related to the Goldman sales process on the technology front core cards platform.
<unk> debit prepaid and revolving credit solutions, not only for consumers, but businesses as well we are really excited about <unk> potential.
Beyond the U S. We plan to extend core cards reach into emerging markets, where <unk> has a strong presence and where demand for credit is growing this transaction will support the continued growth of our EFT segment, while expanding our addressable market within our stated strategic pillars next slide please.
You may recognize this slide which is slide number 17 from our year end and first quarter earnings announcement as highlighted issuing is a core strategic growth initiatives illustrating how core card fits perfectly into our long term digital evolution. This acquisition is not just the tactical when it is a.
Alignment with our long term growth thesis to grow year in that we are targeting large addressable markets like the one eight quadrillion in global payments and the 320 trillion in foreign exchange and cross border flows by providing credit card processing.
Scorecard enhances our ability to serve the payment and transaction processing pillar <unk> will now cover prepaid debit and credit card issuing along with our other proven abilities in acquiring real time payment switching and ATM management. Please move onto slide number 18.
A lot of people ask us where we're going if we transform our strategic vision into a simple illustration you can see how our business mix is evolving and why this acquisition is strategically important.
Over the past decade, we've executed a deliberate shift away from our legacy cash based business line like you are in that own Atms and towards digital offerings 2019 year net owned Atms represented 25% of our revenue mix by 2024 that number was reduced to 19%.
And we're targeting 7% by 2034 core card helped drive this dramatic transformation by offering a high growth high margin and highly differentiated digital offerings.
Let's talk more about core card in their offerings. So you can get a little bit familiar courtyard provides a modern revolving credit processing platform built for scale and design for banks brands and Fintech.
It currently supports millions of card accounts and processes billions of transactions annually. While the technology is certainly impressive their list of clients are equally impressive Goldman Sachs uses core card to process. The Applecart card lists uses core card to power its various card program.
And it has been in the news recently as the chosen partner for the soon to be released Coinbase credit card. This along with other marquee clients validates core cards ability to deliver at scale with precision and reliability.
Revolving credit remains one of the most profitable and strategically important offering for the for banks and Fintech in the U S and globally. This space is dominated by a handful of incumbents why because building and operating a revolving credit platform at scale is one of the most com.
Plex challenges facing solution providers.
This isn't just about writing code. This is about mastering the intricacies of revolving credit logic, where balances shift due to delayed payments disputes returns interest recalculations.
Domain, where business logic is king and we're even the most seasoned engineers can't just simply code their way through without deep domain knowledge, which core card has and here's this strategic kicker while many new competitors focus on debit and prepaid.
Segments with capped interchange and limited margin core card is built for where banks and Fintech see real value in summary core card. It's not just a product. It's a proven scalable platform trusted by some of the most innovative names in the financial services industry. It gives us a springboard ended the use.
As credit issuing market and beyond backed by our leadership team with deep roots in the space.
The platform supports.
Range of use cases from stable coins and global brands to lending early wage access.
Healthcare and commercial credit now, let's move onto the next slide and I'll show you our go to market strategy for the U S.
Our strategy to expand core card in the U S is phased deliberate and anchored in high opportunity segment. We will continue to participate in the embedded finance opportunity by partnering with Fintech digital banks and program managers across diverse use cases core cards flexible API driven architecture.
Sure and marquee client roster, including Apple card lists and Gemini gives us a strong foundation to scale our existing ebay relationships also offer a unique cross sell opportunity brand partners currently issuing prepaid credits may be interested in launching credit card programs.
Creating a natural adjacency for growth. Our next target here is unlocking the commercial credit opportunities with tier two and tier three banks commercial credit presents a more immediate opportunity than consumer credit to the <unk> digital initiatives, we are seeing more activity in this space.
As of late especially with tier two and tier three banks. These are the bags that range from $10 billion to 250 billion in asset side.
Core card has already signed one such bank bank of California, and while commercial credit is our immediate focus we also see a strategic path to consumer credit by initially supporting banks with adjunct solutions, we can gradually modernize their consumer credit platforms, helping them.
<unk> in a market dominated by Tim led ties offerings and slow turnaround time.
So while the U S offers an attractive market, here's where we get really excited we see even more opportunity in the rest of the world. Let's go onto the next slide and we'll talk.
Looking beyond the U S. Our global expansion strategy is anchored in our strong presence and trusted relationships across Asia and Latin America. These regions represent the next frontier for growth for modern credit issuance on the back of rising GDP per capita and an increase in consumption.
Expenditures.
In phase one we will focus on cross selling core cards revolving credit capabilities to our existing existing base of payment processing clients, such as grab which is the Uber of Asia standard Charter ICI Bank Axis Bank bank of Ginger and the bank of the Philippines Island.
<unk> just to name a few these relationships provide a natural entry point to introduce our credit solution in India. For example, the number of credit cards.
Credit card issuers has doubled in five years and more than half are already urinate processing clients for other payment domain then.
The number of credit cards is expected to double again by 2029, driven by rising GDP and a fierce appetite for more consumer consumption.
We also plan to leverage our broader ecosystem.
<unk> partners, particularly our ipe and dandelion divisions, which already serve banks and Fintech and high growth markets. These partnerships offer additional cross selling opportunities and reinforce our ability to deliver integrated end to end solutions across the payment value chain in phase II.
<unk> will target new financial institutions and existing relationships in markets, where we have strong brand equity. Many of these institutions are constrained by legacy platform provided by our regional and local players and are actively seeking modern scalable alternatives. Finally, we all.
So anticipate a structural shift in the regulatory landscape across emerging markets as credit markets deepen and regulations evolve we expect a broader wave of fintech to enter the credit card space transitioning from prepaid to credit issuance today. Many are held back by regulatory constraints and limited access.
To credit infrastructure.
As these barriers recede with our established relationships and proven capabilities, we are well positioned to lead with this transition.
Similar to how we grew Ria from a U S centric position, we see an opportunity to use our global footprint to accelerate the growth of core car emerging markets, our favorite hunting ground and as dermis as demonstrated by our success signing those re starting to sign those rent deal.
Slide number 22.
This acquisition represents an important step in <unk> long term strategy to scale, our digital payments business and deepen our presence into more resilient technology Durbin revenue streams at its core the rationale is anchored in the large and growing opportunity credit issuing particularly revolving credit.
Which remains one of the most lucrative revenue pools in payment scorecard as one of three platforms in the U S proven at scale for revolving credit and this is a rare opportunity to own such a platform, which is API first and has already earned the trust of marquee innovative clients like App.
It brings industrial grade stability and the flexibility to serve both fintech.
Innovators and traditional banks.
This acquisition provides a growth driver to support our digital diversification strategy core cards marquee clients and proven platform give us immediate momentum to scale across both <unk> and the banking segment segment in the U S and globally, the core card world fits seamlessly into our ecosystem.
Our strength in.
And payments processing brand partnerships and global distribution and enables us to deliver broader more differentiated value proposition. We are super excited about the opportunity. This brings this acquisition is a catalyst expanding our payments technology portfolio accelerating our shift to digital and.
<unk> as the preferred innovation partner for Fintech, and a leading modern card issuing platform for Fintech and banks in the U S and globally now I'll close out the quarter.
Before I close I'd like to address two emerging opportunities for <unk>.
Artificial intelligence continues to shape the narrative across industries and for good reason at our company, we view AI not just as a tool, but as a strategic enabler across our enterprise, we've harnessed AI to elevate the customer experience, making interactions more seamless personalized and responsive.
<unk> behind the scenes, it's driving operational efficiencies in areas such as contract generation regulatory compliant and multilingual communication. This is part of our broader commitment to building, a smart smarter faster and more agile organization.
The second area of growing interest as stable point and its potential implications for our business.
Our proprietary <unk> platform is already architected to support stable coins and has in fact process blockchain native transactions positioning us well to pursue further integration on the operational front, we've initiated discussions with several select partners regarding.
Stable coin.
Facilitation and our Treasury team is actively evaluating its utility as part of our capital management strategy. While we're still early in this exploration, we see promise and how digital assets May drive new use cases to deliver speed transparency and efficiency.
While we do not yet know how to quantify the future.
The impact of AI or stable coin, we will continue to pursue these opportunities that are beneficial to our business.
And hopefully.
Hopefully we have conveyed the strategic shift to the digital business. The plays in the one eight quadrillion global payments market with analysts.
Tangible for growth supporting our model, we have core assets. We have this newly announced acquisition of core card. We have a ran technology, we have our dandelion network, our global footprint of licensed and regulated entities. We have distribution partners in the form of banks retailers company owned stores.
<unk> Pos terminals and our people the best I could ask for with consistent track record of delivering growth year after year as I boil. It all down I hope Youll takeaway three important messages.
We are moving in a strong strategic digital direction as evidenced with the core card acquisition and the recently announced brand deals.
<unk> is not a cash business, it's now nearly all digital payment transaction and.
And we have consistent double digit operating results.
Reflecting the strength of our global asset diversity, we're looking forward to the remainder of 2025 and with a strong second quarter. We are pleased to reaffirm our earnings expectation of 12% to 16% growth for the year will be happy to take questions. Operator will you assess.
Okay.
We will now begin the question and answer session. If you have dialed in and we would like to ask a question. Please press star one on your telephone keypad to raise your hand and trying to queue.
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And our first question comes from the line of Vasily <unk> with <unk>. Your line is open.
Hi, Thank you for taking my question I guess, maybe the first one just on the core card acquisition like you gave us.
Quite a bit on sort of how you see the revenue synergies. They got over time, just on the Apple partnership that you called out in the risk of it potentially going to away given just the revenue concentration there.
Hoping you can give us some more color on how the math would work on making the deal accretive if that relation ship went away I mean, do you have more visibility and do other deals in the pipeline, that's giving you confidence there just any color there would be helpful. Thank you.
We do and we also have these potentials I mean, we were out there doing debit card issuing for a whole bunch of banks and fintech around the world, particularly in Asia, and a bit in South America and these.
Customers have been asking about credit and so.
To be able to give them the most sophisticated credit.
Platform in the world because Apple demanded that they give to their customers with their card. We've got a heck of an asset to cross sell so when we did our analysis, we assume that that.
Apple would go away at some point in the future, although it's going to take a few years to do that because it is such a sophisticated.
It has a such a sophisticated super set of features that no other credit card in the U S had so even if somebody buys it and they've got using somebody else or their own internal system, it's going to take quite a bit of modification and then theyre going to have to bring over the $20 billion portfolio without.
With that problem. So we figure we've got them for a couple of three years anyway, and that's the lowest sold today and then and during that time, we will have a great marquee customer to use as or is.
As an example, as a reference customer to sell into new people and in the meantime, however, they they sell it to if it if they don't have core card now maybe that offers us an opportunity to sell core card right back into them. So they can upgrade.
That's very helpful. And then maybe just a second question on the Es segment growth on a constant currency basis that actually decelerated this quarter, even though typically in second quarter and a stronger quarter for you. So any color on what drove that T cell and also how should we think about incremental margins for <unk>.
That business on a go forward basis, I know, you've said structurally in the business of higher relative to prevent that make and its just more inflation, but as high teens, there wouldn't be an incremental margin that we can be should be sort of for modeling going forward or do you see room for improvement there.
Our last year, good quarter kind of hard to you. This year, we had a just a killer Q2 last year and so when we compare it looks like a deceleration, but the reality is.
Where.
It was just a Q2 thing that's why we're really looking at Q3 as we will get back into the backend of the driver's seat with respect to acceleration. So we're not really worried about that deceleration.
We've got a lot of opportunity in Q2 and Q3 the whole tourist season has elongated.
So there is less than that actually less in the second and third quarters are a lesson we'll call. It May June July August and it gets spread into into more months on both and so we think that our margins will increase there as our transactions increase.
And we've just got new.
We've just got some new stuff.
Of that <unk>.
Things like our our DAP.
Transactions, which basically are doing the same number of transactions, but at a higher.
Higher revenue that'll help our.
Margins as well.
Thank you very much.
Thank you.
Our next question comes from the line of Peter Heckmann with D. A Davidson your line is open.
Good morning, everyone and thanks for taking the question and congratulations on the top three bank.
Mike When do you think we can start to see.
Revenue start there and when do you expect it to hit the full run rate.
To tell you the truth, we've already we already have revenue coming from them and it's only going to accelerate we kind of had pre full signature kind of revenue.
From them as we did.
Did some work with them to give them a super set of features they've never had before.
And this should start kind of immediately so I'd say.
Most of it is going to come.
Fourth quarter and beyond but.
It's a big deal with a top three bag and let me tell you every other bank.
The country has the same problem. This bank had I can't go into that detail right now, but we solved it and we're.
We're going to cross sell the same.
Same solution to other banks as well as a great reference customer.
Pete.
<unk> clearly.
We're going to make money on it and stuff like that I think the importance here is the significance of a bank. That's in the that's in the top three in the United States. We've sold run around the World We've had great.
Success with that and things like that at some point, we will put out a press release that actually named the bank in that but this is a bank recognizing that we have the leading industry technology out there.
And I think that that will be a very strong statement as we continue the momentum of rent sales. So.
It certainly will bring in revenue, but I would tell you having that as a reference customer will be very helpful. For four building on the Wren reputation and now you put behind that the core card with with a arguably arguably one of the most.
Respected cards in the world.
The Apple card.
And having that technology available.
We think that this is just a super combination in a super play.
That's great that's great and then so in terms of.
Looking at software.
With the acquisition of core card and acknowledging that certainly the Goldman Sachs relationship is going to be around 2345.
Potentially more years.
Where do you think the company should be able to hit that maybe $250 million software revenue target you think that can be.
Hit in 2028.
$250 million is a little steep for 2028.
Okay.
Yeah, that's a little steep our goal with random house to deliver.
$100 million in.
And pre tax in op income.
And.
So where.
We're a few years away from that but these big deals are really accelerants.
So we'll see we don't really put will try to actually handicap that for you were thinking even and maybe about having an investor day in the fall and when we do we'll kind of lay that out for you.
Okay, that'd be great I think the market would would work on that and welcome the opportunity to get deeper into the business.
Okay.
Thanks.
Thank you.
Our next question comes from the line of <unk> <unk> with <unk> question Heart. Your line is open.
Hey, Mike Hi, Rich good morning, Thanks for taking our questions.
Good morning ran I believe the dream to be sorry.
Sizable chunk, let's call it.
Eight digits right, let's call. It mid <unk>, 80% margins is there an opportunity to bring up to the core card margin number up.
I appreciate all the comments on the cross sell and grow market opportunity, but really digging down on this opportunity may be.
<unk> platform do a little cost removal.
The other part of it.
It's a combination.
Nation of.
We will be able to as we combined we'll be able to get some cost synergies between the two companies that one was public and we were public we've got other other ideas as well.
But volume is the easiest way you just put more.
More banks on the platform and you spread the overhead across more revenue. So it's.
For sure those margins should increase.
Got it and then on the U S fuel, which congrats.
What is how should we be thinking about the unit economics, a lot, but I mean, clearly gone the ramp timing, but is there anything we should be thinking of in terms of contribution margin EBIT margin.
I imagine it being a top three bank.
Some negotiating leverage all on their own.
Just just thinking about how you balance that out.
Well it's a.
Obviously, a high margin business, because it's a it's a software type of transaction.
But.
In terms of how that flows into the rest of the of the P&L.
I would characterize it as a.
It's an important win.
It doesn't it doesn't directionally change the whole P&L.
It's another it's another brick in building the building so it'll it'll it'll benefit but it doesn't change the.
It's not going to change next year next quarters numbers dramatically just because of that.
What will change it is more and more of those RIN sales, which will be which will be more and more possible because of the continued recognition of the quality and contribution of this product. So so.
I think I would view it as more of a of.
Of an indicator of where we can go as opposed to it.
Moving the XL.
Schedule next quarter.
But it is it's.
It's very it's software. So it is very very high margin. So we'll take it.
Yes, it's going to be wonderful.
Got it got it.
And if I can squeeze one more in on money transfer.
Anything on what you're seeing in July for digital and retail I mean are you seeing perhaps with cropping in either of those in retail specifically around well funny funny, you should ask that got us but.
I haven't heard anybody say Holy Smokes, you guys crushed it on the money transfer, which you should have sat right out of the blocks I mean here everybody is having all of these problems and we are just crush in our numbers because.
We intend to be number one in the world and we're getting closer and closer everyday but with respect to what I saw what we've seen so far in July a big uptake tick over June.
We do not see any dropping in fact, we see just the opposite.
We're excited about both the digital growth, which is probably 6% higher than we saw in June and we're also seeing retail growth so and the nice thing, let's not forget the U S only accounts for.
Call it 40% of Ria as numbers, and maybe even a little bit less right.
Third yeah, 33% so.
We're seeing strong growth around the world as well, where they don't quite have these.
Immigration.
Challenges like what we're seeing here in the United States. So money transfer is doing really well July is doing even better than what we saw last month.
Thank you for all the comments guys.
Okay.
Yes.
Next question comes from the line of Mike Grondahl with Northland Securities. Your line is open.
Hey, Thanks, guys, Hey, just.
Two quick questions one.
Any update on ebay promotions and how you think they'll fall during the back half of the year.
And then two in regards to the money transfer.
I don't know, sometimes you've called out the strength from FX just any color on how helpful. That was we saw a lot of incremental margin in that business.
With respect to the promotions, we've got a few scheduled for end of Q3 beginning of Q4.
So we will see when and how those.
Work out for us.
With respect.
But Pete.
Nothing right now on the drawing board that.
I'm sorry, Mike.
Skus me.
I don't know if thats a.
Complement or not but.
But.
Nothing nothing on the drawing board that would dramatically change the the comparisons on periods over periods, it's let's call it business as usual as opposed to anything Thats an expected one time huge.
Change.
Got it.
And then with respect to money transfer.
I think somewhere in my comment I mentioned that we did see some benefit because of the FX.
Fluctuation gyrations that were going on during the quarter. So we did get a little bit of benefit out of that.
As <unk> also pointed out we saw we saw a little higher average value per transaction come through which again, sometimes as what you see when you see a little bit of that volatility on the FX. So net net we did see a little bit of benefit on it.
And.
We'll see if any of that happens again as we go forward, but but certainly it helped to improve the margins a little which.
Obviously helps support like a 33%.
Year over year operating income growth.
Yeah on that 6% of revenue constant currency, so great. Okay.
Thank you.
Thank you Mike.
Next question comes from the line of Chris Kennedy with William Blair. Your line is open.
Good morning, Thanks for taking my question and appreciate all the detail.
Core card has talked about its business could grow like 30% to 40%. If you exclude the concentration with Goldman is there any way to think about kind of what youre thinking about the sustainable growth of core card.
Well I think they are probably their estimates are probably tighter than ours, but we hope to supercharge that by just opening because they are basically all in the U S.
And we're going to open up the rest of the world to them. So hopefully if they do what they say and we give these connections to different parts of the world, we can even accelerate that.
Also say look they built a wonderful product and they've got a team that's been very focused on the quality.
Scalability.
And delivering a product that.
Its been tested by Apple so they've put lot of effort into the quality of that product.
We really respect on the other hand, they haven't put much effort into sales and marketing.
And this is where we see kind of a hand in glove kind of fit we've got operations around the world, We've got relationships with hundreds of banks with brands like.
Like Apple and Google and and <unk> I mean, we could just keep going down the list, new which is a.
Online banking in Brazil.
We have the.
Tremendous list of relationships that that cut across the money transfer business. The <unk> business, the <unk> business, and so here's where we see bringing a great technical product with our distribution around the world and so yes, we expect to see.
<unk> that we will be able to essentially supercharge that sales process than now.
Now.
Bear in mind that that.
Credit transactions, especially if it has anything to do with a conversion process. Okay.
The sales cycle is not two weeks.
But but we'll be we'll be actively going after it right out of the gate here.
Understood. Thanks for taking the questions. Thank.
Thank you Chris.
Next question comes from the line of Charles <unk> with Stephens. Your line is open.
Hi, Good morning, Mike Hi, Good morning, Mike Rick. Thank you for taking my question, Mike you had referenced the complexities associated with revolving credit issuance and I was hoping you could double click on that I know theres only a handful of players in that market due to some of those complexities, but what is it specifically about that product.
That.
<unk> has created a moat.
Within that industry.
Apple has been I mean.
Apple came from nothing to a $20 billion portfolio in what four or five years, because they've got a super set of features and they've got a great brand.
And they do all kinds of things, whether it's cash bag, whether it's recalculating your interest all the way back multiple months.
Depending on if there were returns our charge backs or whatever year years, even yes.
They've just they've made their system they had to do this for Apple, but they've made a system that's extremely.
Flexible, which means the next guy might want that same Super center some of those Super set of features.
So so.
It's a bigger moat that.
If the if it was easy there'd be 20 people out there selling this stuff there's three three and it's these fringe cases, these kind of weird things that don't happen a combination of this this and this that throw all these interest calculations into that.
Into the trash for a lot of people.
That kind of domain knowledge that that.
That that R&D staff has created this excellent product.
Another thing to bear in mind on a product like this is.
You read a lot and hear a lot about things like stable coin okay.
How are they going to deal with things like charge backs like fraud like authentication.
And those are complexities that are arent even involved in the mathematics of calculating an interest on a charge back that might be three years old or a charge back and then a restore and I could give you.
Thousands of different peculiarities issues that happened within the processing business, but as we think about a platform like this also imagine what it might offer in terms of abilities to players that do have stable coin.
<unk> and want to have on ramps and off ramps.
Authentication approvals.
You could get to be.
You can see where there could be a lot of interesting future applications out there.
Got it that's super helpful.
And as a follow up I wanted to get your thoughts on travel trends within the EFT business as well as the impact of some of the interchange increases.
Highlighted over the last year or so I know you noted the elongation of the travel season, but just kind of curious what youre seeing on an absolute basis.
For travel trends within 25 relative to your relative to your job your expectations.
So just one little interesting note is the Americans traveling to Europe, we love them, they've all got their own currency on their card.
Yeah.
That's up 10% over last year.
So that's really exciting as you've as you've.
As you've probably read not many Europeans or go into the U S.
They don't feel like they have been treated very well by this administration. So what that means is theyre going to stay home or they're going to they're going on vacation more closer to home. So all the numbers look good we will see what the final numbers are for the year, but they are certainly up from last year.
And.
All of that is Greg.
So we've we've seen a strong like I said this Q2 with the ft kind of compare to last year looks kind of flattish, but thats just because last year's number was extraordinary and.
But we're looking at Q3.
Back to strong numbers so.
We don't we don't have any concerns with respect to travel.
Got it then that 10% is all the more interesting considering the weakening in the U S dollar so.
No.
But I think.
Part of it is human nature.
I'll ask baby Boomers are all go on boy I better get the year before I die before another pandemic closes it down.
[laughter].
Great.
Thanks again guys.
Alright, I think I think we're at the top of the hour.
Operator, so we'll end the questions now I want to thank everybody for joining in and spending the time with us and look forward to talking to you in about 90 days.
Ladies and gentlemen that concludes today's conference call. Thank you all for Shining and you may now disconnect.
Yeah.