All right. Thank you. Good morning, everyone, and welcome to Euronet's third quarter 2023 earnings conference call. On this call, we have Mike Brown, our Chairman and CEO; and 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're making today. Statements made on this call that concern Euronet or its management's intentions, expectations or predictions of future performance are forward-looking statements. Euronet's actual results may vary from those anticipated in these forward-looking statements as a result of a number of factors that are listed on the second slide of our presentation. Listeners should avoid placing undue reliance on these forward-looking statements. Except as may be required by law, Euronet does not intend to update any forward-looking statement and undertakes no duty to any person to provide an update. 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. Now I'll turn the call over to our CFO, Rick Weller.

Yes. Thank you, Scott, and good morning, and thank you to everyone who is joining us today. I will begin my comments on Slide #5. For the third quarter, we produced revenues of $1 billion, the first $1 billion quarter in Euronet's history. We achieved operating income of $167 million and adjusted EBITDA of $212 million. Adjusted EPS was $2.72 compared to $2.74 for the third quarter of 2022. Excluding the effects of share repurchases and FX headwinds during the quarter, the business performed in line with our expectations. Slide 6 presents the summary of our balance sheet compared to the prior year. As you can see, we ended the quarter with more than $1 billion in unrestricted cash and $1.7 billion in debt. The decrease in cash is essentially the share repurchases and working capital changes, partially offset by cash generated from operations and cash returned from the ATM. Slide 7 shows our results on an as-reported basis. Let's go to Slide 8 and talk about our results on a constant currency basis. On Slide 8 now. As we discussed in the second quarter of 2023, we saw a divergence in our international transactions compared to the international travel recovery. Mike will provide further comments on this subject a bit later. But we are pleased to have regained some footing at the end of the quarter. To that end, EFT revenue grew 2%. Operating income and adjusted EBITDA decreased by 15% and 12%, respectively. The decreases in adjusted EBITDA and operating income were the result of decreases in our most profitable international cross-border transactions primarily driven by the decline in Croatia due to its switch from the kuna to the euro at the beginning of this year, together with the impact of inflation, which reduced European travel budgets leading to fewer ATM transactions. Transaction growth outpaced revenue growth due to continued growth in high-volume, low-value transactions in India. For epay, revenue grew 1%, while operating income and adjusted EBITDA decreased by 6% and 5%, respectively. These results were driven by continued digital media and mobile growth which was offset by declines in promotional campaigns delivered on behalf of our retail partners when compared to the same period last year. As we have discussed in prior quarters, the epay segment experiences fluctuations from these promotional campaigns. We will continue to welcome the opportunity to grow our promotional B2B business, but we have to understand that these promotional campaigns will create some uneven comparisons from time to time. Excluding our promotional activity for comparison purposes, our core epay business revenue grew 11%. Operating income and adjusted EBITDA grew 17% compared to 2022, highlighting the strength of our core epay business. Finally, epay revenue and gross profit per transaction were consistent year-over-year. Money Transfer. Third quarter constant currency revenue, operating income and adjusted EBITDA growth was the result of 7% growth in U.S. outbound transactions, 10% growth in international originated money transfers, which included 12% growth from Americas outside the U.S., 8% growth in transfers initiated largely in Europe and 7% growth in transfers initiated in the Middle East and Asia and 18% growth in xe transactions. These transaction growth rates included 20% growth in direct-to-consumer digital transactions. These growth rates were somewhat tempered by a dislocation of FX rates in the informal market channel, specifically Bangladesh and Pakistan. Money Transfer revenue per transaction was relatively constant while gross profit per transaction improved year-over-year. Moreover, average amount sent by customers remained nearly the same this quarter versus last quarter's third quarter. And finally, as we close, as was the case in the second quarter, the Money Transfer team posted another quarter of improved operating margins, not only improved but the second-best quarter operating margins other than the third quarter of 2020. So for all of those that have often asked whether Money Transfer could regain its operating margins, I know we consistently express the confidence that our Money Transfer team was committed to margin improvements. So net-net, commitment made, commitment delivered. As I conclude my discussion on the financial results, I cannot help but to reflect on the strength of our three segments. First, a record consolidated revenue quarter, the first quarter to exceed $1 billion in revenue; second, double-digit growth from the core epay business across all metrics; third, margin expansion and double-digit growth exceeding 20% in adjusted EBITDA and operating income in the Money Transfer segment. Finally, we saw EFT return to a solid footing with respect to international transactions largely back in correlation with Eurocontrol travel data in September of '23. With that, I'll turn it over to Mike.

Thank you, everyone, for joining us today. I'll begin my comments on Slide 10. It's been challenging to observe the decline in our share price since our July conversation. While I understand the market's reaction, it's hard for me to reconcile it with our ongoing earnings growth history. I'd like to reflect on the diversity of our earnings. When I started this business, all our revenue came from ATM cash withdrawals. Today, these withdrawals represent about 35% of our consolidated adjusted EBITDA. However, it appears that the market is fixated on this 35% and not recognizing the value of Euronet's entire business. This year, 65% of our adjusted EBITDA will come from other revenue streams including POS acquiring, epay digital distribution, Dandelion digital money transfer, Ren, and card processing. This diversity enables us to achieve record revenue and earnings and another year of double-digit growth, despite economic challenges in Europe. During a recent investor discussion, one of our long-term investors said, "We are with you, Mike, but you're going to have to prove it." I hope to demonstrate that cash usage will continue and highlight the value of our consolidated business. On Slide 11, we noticed a sudden disconnect between our international transactions and Eurocontrol flight recovery data. From May to June, we observed an intuitive belief that a gradual cash-to-card transition is underway, a transition that has been ongoing since the company was founded in 1994. The data indicates that the change we saw in June was mainly due to European travelers facing economic difficulties, leading to fewer ATM withdrawals. We don't believe that this signifies an abrupt shift in cardholder behavior from cash to card but rather that travelers had less money to spend on vacations. The orange line on the slide shows the number of international cards used at our ATMs compared to Eurocontrol's data, illustrated by the blue line. For the first five months of this year, our international card usage was ahead of Eurocontrol's recovery levels. However, starting in late May, the trend changed drastically. As of September, international card usage on our ATMs had returned above Eurocontrol's recovery levels. This suggests that customers haven't shifted from cards to cash in September, just as they didn't switch from cash to cards in June. Moving to Slide 12, some have asked what other factors might have changed. The two significant factors observed are opt-in rates and average withdrawal amounts per transaction. The data shows that opt-in rates for our DCC transactions have stayed consistent, possibly even becoming more stable recently. The graph on the right indicates that average withdrawal amounts have remained steady, with a slight upward trend that spiked in the second quarter of 2022 due to the Ukrainian war. This information illustrates that those using our ATMs are completing transactions as they have in the past. On Slide 13, we can see card usage trends month by month for international cards used at our ATMs. The beginning of 2023 showed more international cards issued in our machines than in 2022, and slightly more than in 2019. You can observe the change beginning in May, widening in July and August. Yet, as of September, the number of cards used aligned with previous years, prompting questions about the decrease in transactions over the summer. Jumping to Slide 14, this chart isolates card usage by travelers from outside Europe. We see that non-European cards were used at higher levels at our ATMs each month this year compared to 2022, and in April, we even surpassed 2019 levels. The trend for non-European travelers reflects stable usage compared to pre-COVID times, showing that the data does not indicate more customers are shifting from cash to cards. Now we’ll move on to European traveler data on Slide 15. This data reflects similar trends seen in previous slides. Again, 2023 began on par or better with previous years but saw a drop in May. By the end of the third quarter, European-issued cards came back into near alignment with 2019 and 2022, illustrating an economically driven contraction in ATM withdrawals rather than a rapid change in consumer behavior. Slide 16 showcases European economic data affecting consumer behavior. A consumer survey co-funded by the EU revealed that high energy costs and inflation left Europeans with less disposable income for vacations. Instead of skipping vacations, they aimed for affordable destinations and reduced spending while traveling. 70% to 75% of Europeans can easily adjust their travel plans based on finances, with two-thirds indicating they will spend less on vacations this year. The significant increase in costs, including mortgage interest rates and food prices, align with the observed transactional decline in June, July, and August, confirming that inflation has impacted European vacation spending. On Slide 17, I reiterate that our data indicates there hasn't been an accelerated move from cash to card. Instead, changes in the European economy have driven consumers to spend less on vacations. While this is positive for our long-term prospects, we anticipate that higher interest rates and continued inflation will limit European spending recovery in the near term. We remain optimistic about the ATM business's long-term potential. There is still room for growth in our existing markets and new ones. We’ve seen significant consolidation in the banking sector in Europe, leading to fewer ATMs and increased market share for our existing network. The rise in interchange rates in several European markets presents more revenue opportunities, and there are indications of easing inflationary pressures in September. We will carefully analyze the profitability of our ATM fleet in the coming quarters. Moving forward, we hope to address the challenges of our EFT segment on Slide 18. Our POS acquiring business grew by 25% in adjusted EBITDA compared to the third quarter of 2022 and has doubled in the past 18 months. We've expanded into Spain and Portugal, adding over 3,000 new merchants. In France, we signed an agreement with Super U to deploy Euronet ATMs at 150 locations, which could significantly enhance our network. We’re also collaborating with Eurobank in Serbia to provide ATM acquiring services. On Slide 19, during the quarter, we added over 500 Euronet-owned ATMs and new outsourcing machines as we prepared for the seasonal shifts. We now have nearly 51,500 active ATMs and plan to establish 3,000 to 3,500 new machines by year-end, while monitoring the profitability of our current sites. Transitioning to Slide 20, our epay team continues to grow, expanding our product portfolio and distribution networks. We are excited about our digital code server platform for Sony, now reaching Europe and Asia. Moreover, our Prezzy cards have launched in India and New Zealand, enhancing digital purchasing capabilities for consumers. On Slide 21, our Money Transfer network now provides services to 540,000 locations and billions of bank and wallet accounts across numerous countries. We have launched a similar number of correspondent agreements this year as last year and have signed new agreements in various regions. Our account deposit network has allowed us to achieve strong growth in principal transfers, illustrating our success in meeting customer needs for various money transfer options. Continuing with our payment platforms, Dandelion is expanding rapidly into the cross-border payments market. We secured significant partnerships this quarter, including agreements with major banks and emerging fintech companies, aimed at enhancing our market presence. On Slide 24, we recognize the need to simplify our guidance communications moving forward. Despite a history of double-digit earnings growth, the market hasn't reflected this growth in our share price, which has raised concerns about our complexity. Effective 2024, we will present our guidance as an annual adjusted EPS growth rate of 10% to 15%, eliminating quarterly targets for segment revenues and margins. I would like to conclude by reaffirming that our data shows no abrupt shift in consumer behavior from cash to card but rather reflects economic pressures affecting European travelers. We are a diversified company with growth possibilities spanning multiple segments. Reflecting on our recent quarter, we achieved record revenue by surpassing $1 billion, our core epay business grew significantly, and Money Transfer displayed strong growth trends as well. With these achievements in mind, we're optimistic for the remainder of 2023 and into 2024. Thank you, and I welcome your questions. Please limit yourself to one question due to time constraints.

There was a lot of information shared today, and you made a compelling case. Regarding the repositioning of the current ATM footprint, how are you viewing the differences between Europe and Asia Pacific, perhaps including Northern Africa? Also, do you anticipate that wage inflation will lead to a normalization of withdrawal transaction activity in the third quarter of next year?

This year's inflationary pressures were unexpected for many people. Data indicates that one-third of home mortgages were adjusted for inflation this year, as long mortgages are not common. We believe that much of this year's developments were influenced by ongoing inflation from last year. One of our major retailers anticipates improved purchasing power next summer, which is promising, especially since wages have been raised across various countries due to union actions, similar to trends in the U.S. We maintain a cautiously optimistic outlook for increased consumer spending next year. However, we will eliminate unprofitable ATMs in Europe. Conversely, our expansion markets outside Europe are already profitable and becoming increasingly so as we enter their peak season. Historical data shows these markets are more than twice as profitable as our ATM locations in Europe. We plan to expand into Malaysia, the Philippines, Morocco, and Egypt, and we also have several other countries in mind for potential openings next year. We'll continue pursuing this growth strategy. Additionally, I want to inform everyone that we may extend this call by around five minutes because I've spoken a bit longer than planned.

Really appreciate all the work that went into this. A lot of stuff here. I wanted to go to Slide 10 in which you talked about the adjusted EBITDA by segment. Fully understanding the simplicity that you're trying to put in. I do think it's important to kind of talk about relative growth rates here, just as you think about the long term. And it's good to see the EFT other breakout, which I think contains your digital initiatives. But how should we think about just the growth of the EFT other more digital items versus the growth of EFT ATMs over the longer term from an adjusted EBITDA perspective? I think that might be helpful for folks.

We won’t go into detail by breaking down our numbers for each segment, but other digital initiatives are experiencing rapid growth. If you look at the current figures of 12 and 35, you’ll see that they will change significantly over time. For example, our POS acquiring business has doubled its profit in the past 18 to 24 months, which is just one segment of our operations. It’s important to focus on our overall performance as a combined entity. We generate revenue from various sources and anticipate a compounded growth rate of 10% to 15% year-over-year.

Yes. And I would just also add that, that smaller wedge in the EFT segment, remember, scarcely five years ago, that wasn't in there.

In 2019, it wasn’t even there.

And so I think that really kind of speaks to the fact that, that piece we would expect is probably going to have a more accelerated growth there. But I think it's also reflective of how we've continued to diversify the business and put a lot more of the digital processing in the framework. So again, just recognize that five years ago, that piece was not an element on the page.

I wanted to follow up on that last question. Can you discuss the margin profile for the EFT segment moving forward, considering how the business mix has changed over time?

Yes. Well, as we said, we're going to refrain from getting eight different data points out there to be measured by. But certainly, with respect to comparisons against today's numbers, we would expect that to improve because, as Mike said, we're taking a look at the profitability of every one of our ATMs with some new transactional data. We've already identified a big pile of costs that we'll take out of the picture. And these other digital products will have very high margins on them. So that will continue to expand that. So certainly, against the numbers we see today, I would expect to see that those will be expanding. But I don't want to start putting another number out there to be measured against. Because all the detailed measuring really is kind of eclipsing the fundamental contribution, and I think you look at that chart there is why is it that the S&P for 7% growth gets a more than 2x value than we are. The production of the money that we make year in and year out is just simply not valued, and we believe maybe part of it is that you deliver on seven items, you miss on one, and the market wants to beat you up. So I appreciate your question, but we're going to try to be pretty consistent on really focusing on our earnings and cash production here.

It's great to see the data on card usage, particularly international card usage improving. I was a bit surprised that transaction growth rates haven't increased at the same pace. The ATM transaction growth isn't showing the same trend yet. Perhaps it's still early, so I would like to know your thoughts on what might be causing this disconnect. Additionally, what are your expectations for Piraeus compared to core ATM transactions? Finally, regarding guidance, you can achieve a 10% to 15% growth based on your cash generation from stock buybacks and other activities. However, when considering the potential for transaction growth, do you anticipate a robust embedded opportunity, or is it not really part of your projections?

Well, first of all, when you look at the transactions that occur in a given quarter like Q3, most of them happen in July and August, with fewer in September and even fewer in October. We did see an increase in September, so it’s too early to see how that will impact the entire quarter. That's why you don't see much this quarter; it's just a timing issue. I think that addressed your first question. I'm trying to remember what your second question was. Rick, do you recall?

I'm just trying to think about next year, you guys are giving us a 10% to 15% guide on EPS. I would think there should be a lot of levers to get there without even transactions....

And we think we're even taking the negative FX headwinds plus the share repurchases, plus what everybody else has on their page right now, looks like we're at the upper end of that range. But I want to tell you, that's our range. And that's all we'll say. But our goal will be to do better than that. I mean, everybody in our company is focused. We really love the fact that from 2010 to 2019, for 10 years in a row, we never grew at less than a 20% growth rate over the prior year. Those were the good times. We'd love to have those back, but we're just giving everybody a guidance now of 10% to 15%. And when we beat it, then we'll all be happy.

Appreciate the attempt to simplify everything. I think that makes a ton of sense. Mike, I want to shift gears a little bit and ask you about Money Transfer. You've done a really nice job building out the agent network and you mentioned the growth in deposits into connected accounts. Can you talk a little bit about the slowdown we've seen in the last 12 months in your digital transaction growth and whether that's just sort of law of large numbers or normalization? And how you position yourself versus some of the digital-only competition in the market that has maintained significantly faster digital growth and kind of just how you think about the competitive positioning of the business overall, I guess?

I believe we've made significant progress, although we've noticed a slight slowdown, and we're closely examining ways to reignite growth. It's important to note that there has been a general slowdown in the market, which will likely become evident in the next couple of quarters. In the $800 billion family remittance market, only about 35% is conducted digitally. Many individuals coming to a new country continue to operate as cash-based citizens or workers, similar to their previous circumstances. This presents an advantage for us as we combine both physical and digital services. With only 35% of the market being digital, there's a point where, after capturing market share, growth may hit a plateau. I anticipate that we, along with others, may experience this challenge. However, we are exploring new strategies that we hope will help us regain momentum as we move forward.

Thanks for all the data on the ATM business. You talked about redeploying some of that ATM fleet and $20 million of cost savings next year. Roughly, are you talking 1,500 ATMs that need to be moved, 3,000? Just trying to get a feel for how many you've identified or what you think you need to move.

There are over 1,000, but we will have to wait for the final numbers. We also need to consider some other changes coming up. For instance, some countries are thinking about increasing their domestic interchange fees, while others are contemplating surcharges. We want to avoid removing an ATM that is currently generating some revenue but could potentially generate more with these changes. We'll proceed with caution, but we have already pinpointed some ATMs for this purpose. Ultimately, our goal is to focus on growing EFT's profits, which I believe is more crucial than the sheer number of ATMs we have operating.

The high-value transactions obviously had a nice rebound in September, and it sounds like some of this is just European travelers delaying their summer vacation from June, July to a less costly September. So I guess, is the expectation that you had this kind of jump this pop and that from here, you have a slower recovery because I'm not sure if people are taking their summer trip in the fourth quarter? And then I guess, more broadly, like what gives you the confidence that this isn't just another headshake and that you're going to track your own control trends more closely going forward?

The most evident point is that when looking beyond Europeans, we have exceeded our targets each month this year. Travelers from outside Europe are using ATMs more than ever. Our current challenge lies within Europe’s economic conditions. The strategy to overcome this is to keep expanding into new territories. The emerging markets outside Europe are highly profitable, and we will continue to focus on them. We will identify underperforming ATMs and remove them, reallocating the resources instead of investing in new machines. In Europe, we are starting to expand in several markets, such as France, Belgium, and Albania. Although France is not a new market for us, the other two represent untapped opportunities. We recently secured a contract for 150 ATMs in France, which attracts more tourists than any other country in the world. There are still profitable opportunities available, and that’s where we plan to reposition the ATMs we take out.

Most of my questions have been asked already, but I wanted to get your perspective on capital allocation. You got about $1 billion in cash on hand, and you've been pretty active buying back shares, but M&A has also been a small part of the strategy, and I think you did the Philippines deal last year. So I'm curious how you're thinking about that balance going forward if the redeployment of ATM strategy changes anything with respect to going out and acquiring ATMs like you've done in the past?

Actually, nothing will have changed. I always prefer an acquisition. You saw what we did with the Piraeus Bank merchant acquiring business, now called EMF, Euronet merchant acquiring, which has doubled its profits in less than two years. Those are the kinds of successes that keep on providing benefits. We really appreciate that. We will consider repurchasing shares if the market conditions are unfavorable, as we did last quarter. Regardless, whether we are pulling out ATMs, which cost about $11,000 each, we used to buy around 3,000 to 3,500, costing approximately $40 million in capital expenditures. If we only need to spend half of that this coming year, it does free up some cash, but it won’t significantly impact our overall strategy. We will continue on our established path and are currently evaluating several companies that could be candidates for acquisition. However, we are cautious; we conduct thorough due diligence and often find issues that lead us to walk away. We are deal-oriented and love pursuing opportunities, so if something appealing arises, we will take action, but we'll have to be patient and see what develops. And thank you, everybody, for taking your time with us today. I really appreciate it. I look forward to talking to you after Q4 is complete. Thank you very much.

This concludes today's conference call. Thank you for participating. You may now disconnect.