International Money Express, Inc. Q2 FY2024 earnings call

Key Points

• Total revenue for Q2 was a record $171.5 million, adjusted EBITDA was $31.1 million (18.1% margin), EPS $0.42, adjusted EPS $0.55 (10% growth vs last year).
• Digital business outpaced market growth, expanding margins and profitability. Integration of La Nacional boosted EBITDA three-fold.
• Global strategies led to revenue records in nine countries. Retail operations are a cornerstone, delivering strong margins and free cash.
• Acquired a small remits company in England, reworked retail sales organization with new leadership. Total cost of sales and marketing at retail remains 7% of gross profit.

Total revenue for Q2 reached a record $171.5 million. Adjusted EBITDA was $31.1 million, with a margin of 18.1%. EPS was $0.42 and adjusted EPS was $0.55. Digital revenue was up almost 70% year-over-year with gross margin per transaction close to double. Retail operations contributed over $600 million in revenue. Digital business outpaced market growth, expanding margins and profitability. Integration of La Nacional led to a three-fold increase in EBITDA. Global strategies yielded revenue records in nine countries.

Andras Bende updated the outlook, recalibrating closer to the lower end of the previous guidance range of $657.6 million to $677.6 million.

Challenges

• Encountered economic and market-specific challenges, but nimble culture and adaptive model helped cope.
• Facing top line headwinds in the industry and retail broadly, which could impact performance.

Q: Gus Gala asked about growth assumptions, agent base pressure, new sales folks, and capital allocation.

A: Bob Lisy and Andras Bende discussed market softness, retail vs digital growth, new sales leadership, and M&A focus.

Q: Andrew Harte asked about macro trends, Europe digital opportunity.

A: Bob Lisy talked about June peso-related trends, digital vs retail mix, and Europe's digital potential.

Q: Mike Grondahl asked about digital investment details and retail challenges.

A: Bob Lisy explained digital investment in marketing and product management, retail challenges due to macro conditions.

Q: Bill Dezellem asked about Europe migrant community and competitor failures.

A: Bob Lisy discussed Europe's bank account accessibility, migrant community, and competitor failings due to lack of focus and technology issues.