Euronet Worldwide, Inc 10-Q for FY2022 Q1

Euronet Worldwide, Inc. (EEFT)

10-Q 2022-05-05 For: 2022-03-31

Added on April 05, 2026

About this 10-Q

Euronet Worldwide, Inc filed this 10-Q on May 5, 2022, covering the quarter ended March 31, 2022 (FY2022 Q1).

Headline figures

Quarter ended March 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $718.47M; up 10.1% from $652.67M a year earlier
Net income: $8.3M; compared with a net loss of $8.67M a year earlier
Diluted EPS: $0.16; compared with -$0.16 a year earlier

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Delaware		74-2806888
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
11400 Tomahawk Creek Parkway, Suite 300
Leawood,	Kansas	66211
(Address of principal executive offices)		(Zip Code)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	EEFT	Nasdaq Global Select Market
1.375% Senior Notes due 2026	EEFT26	Nasdaq Global Market

Large accelerated filer	þ	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	☐
		Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

		Page

PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	1
	Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021	1
	Consolidated Statements of Operations for the Three Months Ended March 31, 2022 and 2021	2
	Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2022 and 2021	3
	Consolidated Statements of Changes in Equity for the Three Months Ended March 31, 2022 and 2021	4
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021	6
	Notes to the Unaudited Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	39
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 6.	Exhibits	41
	Signatures	42

	As of
	March 31, 2022			December 31, 2021
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	986,534		$	1,260,466
ATM cash	644,436			543,422
Restricted cash	5,884			3,693
Settlement assets	1,037,367			1,102,389
Trade accounts receivable, net of credit losses of $4,274 and $4,469	180,070			203,010
Prepaid expenses and other current assets	271,538			195,443
Total current assets	3,125,829			3,308,423
Operating right of use lease assets	161,407			161,494
Property and equipment, net of accumulated depreciation of $536,675 and $532,631	344,429			345,381
Goodwill	846,241			641,605
Acquired intangible assets, net of accumulated amortization of $187,609 and $185,054	214,490			97,793
Other assets, net of accumulated amortization of $63,858 and $62,349	205,917			189,580
Total assets	$	4,898,313		$	4,744,276
LIABILITIES AND EQUITY
Current liabilities:
Settlement obligations	$	1,037,367		$	1,102,389
Trade accounts payable	157,738			193,529
Accrued expenses and other current liabilities	404,096			367,692
Current portion of operating lease liabilities	51,795			52,136
Short-term debt obligations and current maturities of long-term debt obligations	298			821
Income taxes payable	48,054			59,037
Deferred revenue	71,606			77,037
Total current liabilities	1,770,954			1,852,641
Debt obligations, net of current portion	1,762,278			1,420,085
Operating lease obligations, net of current portion	110,848			111,355
Deferred income taxes	37,136			46,505
Other long-term liabilities	73,503			58,166
Total liabilities	3,754,719			3,488,752
Equity:
Euronet Worldwide, Inc. stockholders’ equity:
Preferred Stock, $0.02 par value. 10,000,000 shares authorized; none issued	—			—
Common Stock, $0.02 par value. 90,000,000 shares authorized; shares issued 63,818,035 and 63,779,009	1,276			1,275
Additional paid-in-capital	1,211,830			1,274,118
Treasury stock, at cost, shares issued 13,269,513 and 12,631,125	(1,001,421		)	(931,212		)
Retained earnings	1,125,569			1,083,882
Accumulated other comprehensive loss	(193,659		)	(172,582		)
Total Euronet Worldwide, Inc. stockholders’ equity	1,143,595			1,255,481
Noncontrolling interests	(1		)	43
Total equity	1,143,594			1,255,524
Total liabilities and equity	$	4,898,313		$	4,744,276


	Three Months Ended March 31,
	2022			2021
Revenues	$	718,467		$	652,670
Operating expenses:
Direct operating costs, exclusive of depreciation	458,153			434,516
Salaries and benefits	126,765			115,668
Selling, general and administrative	63,856			58,776
Depreciation and amortization	32,990			33,261
Total operating expenses	681,764			642,221
Operating income	36,703			10,449
Other income (expense):
Interest income	145			182
Interest expense	(6,134		)	(9,189		)
Foreign currency exchange loss, net	(5,462		)	(4,032		)
Other gains, net	192			31
Other expense, net	(11,259		)	(13,008		)
Income (loss) before income taxes	25,444			(2,559		)
Income tax expense	(17,154		)	(6,062		)
Net income (loss)	8,290			(8,621		)
Net loss (income) attributable to noncontrolling interests	7			(44		)
Net income (loss) attributable to Euronet Worldwide, Inc.	$	8,297		$	(8,665)

Earnings (loss) per share attributable to Euronet Worldwide, Inc. stockholders:
Basic	$	0.16		$	(0.16)
Diluted	$	0.16		$	(0.16)

Weighted average shares outstanding:
Basic	51,057,951			52,762,845
Diluted	51,716,045			52,762,845

	Number of Shares Outstanding		Common Stock	Additional Paid-in Capital		Treasury Stock
Balance as of December 31, 2020	52,734,049	$	1,267	$	1,228,446	$	(703,032	)
Net (loss) income
Other comprehensive loss
Stock issued under employee stock plans	62,436		1		3,335		(482	)
Share-based compensation					8,492
Balance as of March 31, 2021	52,796,485		1,268		1,240,273		(703,514	)

	Retained Earnings		Accumulated Other Comprehensive Loss			Noncontrolling Interests			Total
Balance as of December 31, 2020	$	1,013,155	$	(94,214	)	$	281		$	1,445,903
Net (loss) income		(8,665)					44			(8,621	)
Other comprehensive loss				(42,845	)		(56	)		(42,901	)
Stock issued under employee stock plans										2,854
Share-based compensation										8,492
Balance as of March 31, 2021		1,004,490		(137,059	)		269			1,405,727


(in thousands)	As of March 15, 2022
Other current assets	$	1,707
Settlement assets		78,718
Property and equipment		6,095
Acquired intangible assets		122,455
Total assets acquired	$	208,975

Trade accounts payable	$	1,499
Settlement liabilities		66,925
Accrued expenses and other current liabilities		5,929
Deferred revenue		500
Other long-term liabilities		99
Total liabilities assumed	$	74,952

Goodwill		212,183

Net assets acquired	$	346,206

	As of
(in thousands)	March 31, 2022		December 31, 2021
Settlement assets:
Settlement cash and cash equivalents	$	245,415	$	203,624
Settlement restricted cash	50,426		74,897
Accounts receivable, net of credit losses of $29,015 and $27,341	588,984		619,738
Prepaid expenses and other current assets	152,542		204,130
Total settlement assets	$	1,037,367	$	1,102,389
Settlement obligations:
Trade account payables	$	384,119	$	461,135
Accrued expenses and other current liabilities	653,248		641,254
Total settlement obligations	$	1,037,367	$	1,102,389


(in thousands)	Acquired Intangible Assets			Goodwill			Total Intangible Assets
Balance as of December 31, 2021	$	97,793		$	641,605		$	739,398
Increases (decreases):
Acquisition	122,455			212,183			334,638
Amortization	(5,617		)	—			(5,617		)
Foreign currency exchange rate changes	(141)			(7,547		)	(7,688		)
Balance as of March 31, 2022	$	214,490		$	846,241		$	1,060,731


	As of
(in thousands)	March 31, 2022		December 31, 2021
Accrued expenses	$	327,596	$	285,098
Derivative liabilities	28,741		23,285
Accrued payroll expenses	44,223		55,162
Current portion of finance lease obligations	3,536		4,147
Total	$	404,096	$	367,692

	Asset Derivatives					Liability Derivatives
		Fair Value					Fair Value
(in thousands)	Balance Sheet Location	March 31, 2022		December 31, 2021		Balance Sheet Location	March 31, 2022			December 31, 2021
Derivatives not designated as hedging instruments
Foreign currency exchange contracts	Other current assets	$	36,997	$	27,582	Other current liabilities	$	(28,741	)	$	(23,285	)

							Gross Amounts Not Offset in the Consolidated Balance Sheet
As of March 31, 2022	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts Presented in the Consolidated Balance Sheet		Financial Instruments			Cash Collateral Received			Net Amounts
Derivatives subject to a master netting arrangement or similar agreement	$	36,997	$	—	$	36,997	$	(17,631	)	$	(3,052	)	$	16,314

As of December 31, 2021
Derivatives subject to a master netting arrangement or similar agreement	$	27,582	$	—	$	27,582	$	(14,875	)	$	(2,284	)	$	10,423

									Gross Amounts Not Offset in the Consolidated Balance Sheet
As of March 31, 2022	Gross Amounts of Recognized Liabilities			Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts Presented in the Consolidated Balance Sheet			Financial Instruments		Cash Collateral Paid		Net Amounts
Derivatives subject to a master netting arrangement or similar agreement	$	(28,741)		$	—	$	(28,741)		$	17,631	$	1,834	$	(9,276)

As of December 31, 2021
Derivatives subject to a master netting arrangement or similar agreement	$	(23,285	)	$	—	$	(23,285	)	$	14,875	$	640	$	(7,770	)

		Amount of Loss Recognized in Income on Derivative Contracts (a)
	Location of Loss Recognized in Income on Derivative Contracts	Three Months Ended March 31,
(in thousands)		2022			2021
Foreign currency exchange contracts - Ria Operations	Foreign currency exchange loss, net	$	(110	)	$	(2,468)

		As of March 31, 2022
(in thousands)	Balance Sheet Classification	Level 1		Level 2		Level 3		Total
Assets
Foreign currency exchange contracts	Other current assets	$	—	$	36,997	$	—	$	36,997
Liabilities
Foreign currency exchange contracts	Other current liabilities	$	—	$	28,741	$	—	$	28,741

	For the Three Months Ended March 31, 2022
(in thousands)	EFT Processing			epay		Money Transfer		Corporate Services, Eliminations and Other			Consolidated
Total revenues	$	145,571		$	235,838	$	338,966	$	(1,908	)	$	718,467
Operating expenses:
Direct operating costs, exclusive of depreciation	93,337			178,320		188,397		(1,901		)	458,153
Salaries and benefits	25,244			20,177		67,225		14,119			126,765
Selling, general and administrative	11,114			9,440		41,037		2,265			63,856
Depreciation and amortization	22,343			1,696		8,842		109			32,990
Total operating expenses	152,038			209,633		305,501		14,592			681,764
Operating (loss) income	$	(6,467	)	$	26,205	$	33,465	$	(16,500	)	$	36,703


	Total Assets as of
(in thousands)	March 31, 2022		December 31, 2021
EFT Processing	$	2,167,634	$	1,682,680
epay	773,056		1,234,074
Money Transfer	1,670,666		1,621,726
Corporate Services, Eliminations and Other	286,957		205,796
Total	$	4,898,313	$	4,744,276

	As of March 31, 2022
Maturity of Lease Liabilities (in thousands)	Operating Leases (1)
Remainder of 2022	$	36,760
2023	40,223
2024	30,573
2025	21,766
2026	15,077
Thereafter	23,207
Total lease payments	$	167,606
Less: imputed interest	(4,963		)
Present value of lease liabilities	$	162,643

Lease Expense (in thousands)	Income Statement Classification	Three Months Ended March 31, 2022		Three Months Ended March 31, 2021
Operating lease expense	Selling, general and administrative and Direct operating costs	$	13,517	$	13,858
Short-term and variable lease expense	Selling, general and administrative and Direct operating costs		29,723		22,549
Total lease expense		$	43,240	$	36,407


Lease Term and Discount Rate of Operating Leases	As of March 31, 2022
Weighted- average remaining lease term (years)	4.8
Weighted- average discount rate	2.3	%


Other Information (in thousands)	Three Months Ended March 31, 2022		Three Months Ended March 31, 2021
Cash paid for amounts included in the measurement of lease liabilities (a)	$	13,521	$	13,669
Supplemental non-cash information on lease liabilities arising from obtaining ROU assets:
ROU assets obtained in exchange for new operating lease liabilities	$	15,207	$	28,188

	Revenues for the Three Months Ended March 31,						Year-over-Year Change
(dollar amounts in thousands)	2022			2021			Increase (Decrease) Amount			Increase (Decrease) Percent
EFT Processing	$	145,571		$	87,076		$	58,495		67	%
epay	235,838			242,303			(6,465		)	(3)	%
Money Transfer	338,966			324,900			14,066			4	%
Total	720,375			654,279			66,096			10	%
Corporate services, eliminations and other	(1,908		)	(1,609		)	(299		)	19	%
Total	$	718,467		$	652,670		$	65,797		10	%

	Operating Income (Loss) for the Three Months Ended March 31,						Year-over-Year Change
(dollar amounts in thousands)	2022			2021			Increase (Decrease) Amount			Increase (Decrease) Percent
EFT Processing	$	(6,467	)	$	(40,096	)	$	33,629		(84)	%
epay	26,205			29,157			(2,952		)	(10)	%
Money Transfer	33,465			35,403			(1,938)			(5)	%
Total	53,203			24,464			28,739			117	%
Corporate services, eliminations and other	(16,500		)	(14,015		)	(2,485		)	18	%
Total	$	36,703		$	10,449		$	26,254		251	%

	Average Translation Rate Three Months Ended March 31,
Currency (dollars per foreign currency)	2022		2021		Decrease Percent
Australian dollar	$	0.7238	$	0.7725	(6)	%
British pounds sterling	$	1.3415	$	1.3790	(3)	%
Canadian dollar	$	0.7895	$	0.7899	(0)	%
euro	$	1.1221	$	1.2052	(7)	%
Hungarian forint	$	0.0031	$	0.0033	(6)	%
Indian rupee	$	0.0133	$	0.0137	(3)	%
Malaysian ringgit	$	0.2387	$	0.2461	(3)	%
New Zealand dollar	$	0.6761	$	0.7188	(6)	%
Polish zloty	$	0.2433	$	0.2655	(8)	%


Subsidiary	Percent Owned	Segment - Country
Movilcarga	95%	epay - Spain
Euronet China	85%	EFT - China
Euronet Pakistan	70%	EFT - Pakistan
Euronet Infinitium Solutions	65%	EFT - India


	Three Months Ended March 31,
Liquidity	2022			2021
Cash and cash equivalents and restricted cash provided by (used in):
Operating activities	$	5,671		$	(2,645	)
Investing activities	(356,848		)	(18,225		)
Financing activities	235,312			(269,211		)
Effect of foreign currency exchange rate changes on cash and cash equivalents and restricted cash	(37,542		)	(53,188		)
Decrease in cash and cash equivalents and restricted cash	$	(153,407	)	$	(343,269	)


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Programs (in thousands) (1)
January 1 - January 31, 2022	—	$	—	—	$	322,236
February 1 - February 28, 2022	—	—		—		300,000
March 1 - March 31, 2022	639,535	110.00		639,535	$	229,649
Total	639,535	$	110.00	639,535


Exhibit		Description

31.1*		Section 302 — Certification of Chief Executive Officer
31.2*		Section 302 — Certification of Chief Financial Officer
32.1**		Section 906 — Certification of Chief Executive Officer
32.2**		Section 906 — Certification of Chief Financial Officer
101*		The following materials from Euronet Worldwide, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at March 31, 2022 (unaudited) and December 31, 2021, (ii) Consolidated Statements of Operations (unaudited) for the three months ended March 31, 2022 and 2021, (iii) Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the three months ended March 31, 2022 and 2021, (iv) Consolidated Statements of Changes in Equity (unaudited) for the three months ended March 31, 2022 and 2021 (v) Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2022 and 2021, and (vi) Notes to the Unaudited Consolidated Financial Statements.
104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)



By:	/s/ MICHAEL J. BROWN
	Michael J. Brown
	Chief Executive Officer


By:	/s/ RICK L. WELLER
	Rick L. Weller
	Chief Financial Officer