International Money Express, Inc. Q3 FY2024 earnings call

• Achieved strong Q3 results with GAAP EPS at a new high and adjusted EBITDA at an all-time high.
• Executing a strategy shift towards digital channels, with digital transactions growing significantly and outpacing the market.
• Retail business remains profitable and continues to gain share despite market softness.
• Streamlined operations, reduced costs, successfully refinanced credit line, and is in final phases of integrating La Nacional and i-Transfer.
• App is highly regarded with strong retention and recurrent usage, and unit economics of digital transactions now superior to retail.
• Initiating a process to assess strategic initiatives, including potential sale, with FTP Securities as financial advisor.

In Q3 2024, International Money Express (Intermex) reported total revenue of $171.9 million. Digital revenue grew over 66% year-over-year. Retail revenue is approximately $600 million annually. Adjusted EBITDA was $33.9 million, up 7% year-over-year. GAAP EPS was $0.53, a 29.3% increase year-over-year. Digital channels now have a superior gross margin per transaction than retail. Retail contributes about 90% of revenue, while digital is less than 10% on the send side but higher on the payout side with significant growth potential.

• Not providing 2024 guidance.
• Expect to continue growing retail business faster than the market and gain share at retail.
• Digital channels are a key growth area with significant potential, but need investment in customer acquisition.
• Anticipate realizing synergies from La Nacional and i-Transfer integrations in 2025.

• Slower market growth and economic shifts putting pressure on retail.
• Need to invest in digital channels to build the business, which may impact short-term bottomline.
• Market valuation not fully capturing the company's performance, positive cash flow, intrinsic value, or growth potential.

Q: Talk about competition in brick-and-mortar retail, digital share growth.

A: Retail growth is slower, digital is growing faster but still a smaller portion. Margin spread vs competition is smaller in tough market.

Q: Digital vs retail unit economics.

A: Retail Mexico wire has fees, FX, agent/payer costs; digital has higher revenue per transaction with lower agent fees but card processing, chargeback losses.

Q: Response to retail challenges, investment in digital.

A: Focus on efficient retail strategies, investing in digital customer acquisition; app is highly regarded, unit economics favorable.

Q: Impact of loyalty program change.

A: No expected impact on customer retention as loyalty program was restructured with low retention on points.