International Money Express, Inc. Q4 FY2024 earnings call

• The company reported solid performance in a challenging market, focusing on an omnichannel strategy.
• Digital transactions saw a 71.7% YOY surge, and digital revenue was up 48.3% in Q4.
• Retail business remains highly profitable with over $600 million in annual revenue.
• New products/services like mobile phone top-ups and bill payment enhancements were mentioned.
• M&A activity: Acquisition of Amigo Paisano to accelerate digital growth, and integration of La Nacional has doubled its EBITDA.
• i-Transfer is progressing well with margin growth.
• The company has a strong brand trust, world-class technology, banking relationships, and customer service.

In Q4, total revenue was $164.8 million, with full year revenue reaching $658.6 million. Digital transactions surged 71.7% year-over-year, and digital revenue was up 48.3% in Q4, totaling $5.6 million for the quarter and $20.6 million for the full year. Adjusted EBITDA for Q4 was $30.9 million with a margin of 18.8%, and full year adjusted EBITDA was $121.3 million. The consumer base expanded to 5.7 million, up 1.8% year-over-year. Digital revenue contributed significantly, with digital revenue in Q4 at $5.6 million (48.3% YOY growth) and full year at $20.6 million.

• 2025 full year revenue projected to be $657.5 million to $677.5 million.
• Fully diluted GAAP EPS expected to be $1.76 to $1.91, adjusted diluted EPS $2.09 to $2.26, adjusted EBITDA $113.8 million to $117.3 million.
• Q1 2025 revenue projected $145.5 million to $149.9 million, fully diluted GAAP EPS $0.32 to $0.34, adjusted diluted EPS $0.40 to $0.43, adjusted EBITDA $23.3 million to $24 million.
• Increased digital marketing spend planned, and share repurchases to resume shortly after earnings.

• Macro challenges in the remittance market, including a slowdown in Mexico.
• Uncertainty in political and macro backdrop around key Latin America corridors.
• Impact of immigration policies on consumer behavior and the remittance market.

Q: How did the Amigo Paisano opportunity come about, and talk about MAU retention and marketing ROI?

A: Amigo Paisano was their first wireless as a service client; acquisition was driven by ability to own transactions, defensive reasons, and quality team. MAU retention is expected with co-branding. Marketing cost is stable with lower points, and learning from external agencies and acquired team expertise.

Q: Rank factors affecting 2025 guidance, macro vs competition vs company specific?

A: Macro environment in Mexico and other countries, digital growth potential vs retail contraction, and need to improve retail offerings.

Q: Impact of immigration policy, and share repurchase appetite?

A: Immigration policy impact is seen as bluster with no huge disaster, and planned share repurchases of about $40 million in 2025 with opportunistic potential.

Q: Digital customer acquisition economics and other income?

A: Digital acquisition cost is stable, retention and loyalty are high. Other income pickup due to adjustment in fees for uncollected money orders and wires.

Q: Retail headcount additions and attack?

A: Focus on adding retail agents in underpenetrated states, same store growth, new agent growth, and maximizing performance at existing agents.