Daniel Krebs

Daniel Krebs asked for a geographical breakdown of the EFT segment's consistent 4%-5% ATM growth, specifically the contribution from non-European ATMs. He also inquired about the long-term vision for European ATMs, questioning if Euronet anticipates having fewer ATMs in Europe five years from now, potentially offset by more outsourced banking deals, and how the 'cash deserts' phenomenon plays into this strategy.

Answer

CFO Rick Weller stated that ATM growth was slightly heavier weighted towards non-European regions like Morocco and Egypt, where opportunities are being pursued despite challenges with sponsor banks. Chairman and CEO Mike Brown added that non-European ATMs are considerably more profitable. Mr. Brown explained that while some unprofitable European ATMs might be culled if transaction stress continues, there's also an opportunity to expand as an extension of banking infrastructure. He cited Spain as an example, where government mandates for cash access and bank branch closures have led Euronet to expand its ATM network, playing a 'bank infrastructure game' that is not tourist-based.

Daniel Krebs asked for a geographical breakdown of the EFT segment's 4-5% ATM growth, specifically the portion driven by non-European ATMs. He also inquired about the long-term outlook for European ATMs, asking if the company envisions having fewer ATMs in Europe in five years, potentially offset by more outsourced banking deals.

Answer

CFO Rick Weller stated that ATM growth was heavier in non-European regions like Morocco, Egypt, and the Philippines, noting higher profitability in these markets despite entry challenges. Chairman and CEO Mike Brown added that while some unprofitable European ATMs might be culled if transaction stress continues, there's also an opportunity to expand as banks close branches and governments mandate cash access, positioning Euronet as a key banking infrastructure provider, as seen in Spain.

Daniel Krebs, on for Darrin Peller, asked about the sales cycle and timeline for material contributions from the Merchant Services expansion outside of Greece, and inquired about a potential shift in travel from the U.S. to Europe.

Answer

CEO Michael Brown projected that material contributions from the Merchant Services expansion would likely not be seen until late 2025 or early 2026. CFO Rick Weller added that signing the Munich Airport demonstrates the quality of their technology. Regarding travel, Weller acknowledged that a shift of international tourists to Europe is possible and would benefit Euronet, but they have not yet seen data to confirm this trend.

Daniel Krebs from Wolfe Research asked about the potential unit economics of stablecoin off-ramps versus traditional payouts and whether they could impact yield growth. He also inquired about the percentage of revenue driven by FX conversion fees.

Answer

CFO Bea Ordonez noted it was too early to comment on stablecoin economics but reiterated that adding utility, like stablecoin functionality, is key to their strategy of driving take rate expansion over time. She stated that Payoneer does not disaggregate revenue from FX fees but has been able to 'more effectively monetize FX' through product enhancements and optimized pricing.

Daniel Krebs of BMO Capital Markets inquired about customer reception to recent price increases, Payoneer's confidence in its pricing power, and the status of the previously guided $30 million pricing uplift for 2025. He also asked about historical trends in customer onboarding and retention over past business cycles.

Answer

CFO Bea Ordonez explained that Payoneer's pricing strategy remains customer-segment focused and has not changed, though the $30 million uplift figure was from a pre-tariff environment. CEO John Caplan added that net revenue retention is strongest among the largest Ideal Customer Profile (ICP) customers and that the company is seeing strong progress in its retention efforts, particularly with B2B customers and cross-selling products like cards and workforce management.

Daniel Krebs asked about the maximum potential size of a customer before product-market fit becomes an issue, and requested an update on the size and monetization strategy for intra-network payment flows.

Answer

CEO John Caplan responded that the company has not yet encountered a customer that is 'too large,' as the platform is built to scale with both self-service and high-touch support. CFO Bea Ordonez added that intra-network flows were approximately $11.5 billion in 2024 and are a key part of a broader, segment-based pricing strategy that generated ~$30 million in uplift in 2024 and is expected to deliver a similar amount in 2025.

Daniel Krebs asked for a more detailed profile of the target customer for WEX's direct accounts payable (AP) business, including size, geography, and key industry verticals.

Answer

CEO Melissa Smith described the target market as mid-market companies, noting that there is no specific industry vertical focus. Current clients span a wide variety of industries, including insurance, healthcare, and existing customers from WEX's Mobility business. The core offering is AP automation, with plans to expand sales as the product is enhanced.