Euronet Worldwide, Inc. Q2 FY2025 earnings call

• Acquired CoreCard, a leading-edge credit card processing platform, extending into digital payments processing space. - Signed significant Ren deal with one of the 3 largest U.S. banks for thousands of ATMs. - Second quarter delivered constant currency operating income growth of 13%. - EFT segment expanded digital capabilities via acquisitions and Ren traction. - epay evolved to provide broad digital payment solutions with notable signings. - Money Transfer segment had exceptional results with 33% operating income growth, limited exposure to remittance tax, and strong digital performance.

EFT segment revenue grew 6%. Operating income and adjusted EBITDA were in line with prior year results. epay grew revenue 5%, operating income 17% and EBITDA 15% when compared to the prior year. Money Transfer segment operating income grew 33% year-over-year, fueled by a disciplined cost management and strong performance across a wide range of channels and geographies. Revenue growth was primarily driven by volume via higher principal amount sent per transaction and growth in cross-border transactions, offset by a decrease in intra-U.S. transaction. Direct-to-consumer digital transactions grew by 29%, and digital payout product was up 20% year-over-year, composing 55% of total volume.

• Reaffirmed 12% to 16% earnings growth expectation for 2025. - Anticipates continuation of expanded margins in the second half of the year.

• Potential negative impact of 1% remittance tax on 27% of Money Transfer segment or 12% of consolidated revenues, but research indicates limited significant impact. - Dependence on market conditions for convertible transactions affecting interest expense.

Q: On the CoreCard acquisition, color on math if Apple partnership goes away and visibility on other deals?

A: Assumed Apple would go away eventually, but has marquee customer to reference sell into new people, and opportunity to sell back to those who need to upgrade.

Q: On EFT segment growth deceleration, color on driver and incremental margins?

A: Last year's strong Q2 was a tough comp, Q3 expected to get back on track, margins to increase with more transactions and DAF transactions.

Q: When to see revenue from top 3 bank deal?

A: Already has revenue, most to come in fourth quarter and beyond, and reference customer helps build Ren reputation.

Q: On CoreCard margin opportunity and unit economics of U.S. deal?

A: Margins should increase with volume and cost synergies, U.S. deal is high margin but doesn't dramatically change P&L immediately.

Q: On Money Transfer July trends and FX impact?

A: July saw big uptick, no troughing, FX fluctuation gyrations helped improve margins.

Q: On epay promotions and Money Transfer FX impact?

A: epay has promotions scheduled, nothing dramatic changing period comparisons; Money Transfer saw benefit from FX fluctuation gyrations.

Q: On CoreCard sustainable growth and revolving credit moat?

A: CoreCard's product has moat due to domain knowledge in handling complex scenarios like chargebacks and old transactions, and can be supercharged with Euronet's distribution; revolving credit has few players due to complexity of handling various edge cases.