Currency Exchange International - Q4 2025

Transcript

Operator (participant)

Good morning, ladies and gentlemen, and welcome to the Currency Exchange International Q4 year-end 2025 financial results. At this time, all lines are in the listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. Also note that this call is being recorded on Thursday, January 22nd, 2026. I would like to turn the conference over to Bill Mitoulas, Investor Relations. Please go ahead, sir.

Bill Mitoulas (Head of Investor Relations)

Thank you, Sylvie. Good morning, everyone. Welcome to the Currency Exchange International conference call to discuss the financial results for the fourth quarter and 2025 fiscal year. Thanks for joining us. With us today are President and CEO Randolph Pinna and Group CFO Gerhard Barnard. Gerhard will provide an overview of CXI's financial results, his latest perspective on the company's operations, and Randolph will then provide his commentary on CXI's strategic initiatives, sales efforts, and business activities, after which we'll open it up for your questions. Today's conference call is open to shareholders, prospective shareholders, members of the investment community, including the media. For those of you who may happen to leave the call before its conclusion, please be advised that this conference call will be recorded and then uploaded to CXI's Investor Relations website page, along with financial statements and the MD&A.

Please note that this conference call will include forward-looking information, which is based on a number of assumptions, and actual results could differ materially. Please refer to our financial statements and MD&A reports for more information about the factors that could cause these different results and the assumptions that we have made. With that, I'll turn the call over to Gerhard. Gerhard, please go ahead.

Gerhard Barnard (Group CFO)

Good morning, Bill, and thank you, everyone, for joining today's call. My overview of the company's performance, CXI, will also include the results of the discontinued operations of Exchange Bank of Canada, or EBC. These results are presented in U.S. dollars. As a reminder, on February 18th, 2025, the Group announced its decision to discontinue the operations of its wholly owned subsidiary, Exchange Bank of Canada. Now, EBC ceased operations as of October 31st, 2025, and on December the 19th, EBC issued its year-end audited financial statements to its regulators. EBC has formally applied to OSFI to recommend approval from the Minister of Finance for the discontinuance from the Bank Act. Following final regulatory approval, management and the directors will liquidate the remaining assets and liabilities and distribute EBC's net assets to CXI, its sole shareholder.

Management anticipates that all required regulatory approvals for discontinuance will be granted during the second quarter, the second fiscal quarter of 2026. Now, starting the second quarter of 2025 and following the Board's decision to discontinue the bank's operations, the Group updated its financial statements presentation to present continuing and discontinuing operations separately, in accordance with IFRS accounting standards. Therefore, included in the Group's financial statements are the results of the U.S., or United States, operations, that's CXI, which is under continuing operations, and the results of Exchange Bank of Canada, EBC, under discontinued operations. Before we go into the detail of the various results, I'd like to note that the Group measures and evaluates its performance using several financial metrics and measures, some of which do not have standardized meanings under generally accepted accounting principles, or GAAP, and may not be comparable to other companies.

We call these measures non-GAAP financial measures and or adjusted results. Management believes that these measures are more reflective of its operating results and provide a better understanding of management's perspective on the performance of the company. These measures enhance the comparability of our financial performance for the current period with the corresponding period in 2024. Management included a full reconciliation of the key performance and non-GAAP financial measures in the MD&A. I think it's pages 24-25. When we refer to reported results, we refer to the results as reported in the financial statement based on IFRS, the audited results. Whether we refer to adjusted results, such as adjusted net income, we refer to performance non-GAAP measures. Now, the Group reported net income of $10.3 million for the year ended October 31st, 2025, an increase of $7.8 million, or 317%, over the prior year, with yearly revenue growth of 5%.

This 2025 reported net income reflected $14 million of net income from continuing operations, that's CXI, and a net loss of roughly $3.7 million from discontinued operations, Exchange Bank of Canada. Reported unadjusted results for the continuing operations included non-recurring items, restructuring charges, roughly $340,000, related to the closure of CXI's Miami vault, and about $200,000 related to the discontinued operations in Canada. Now, it is important to note that the reported results of the prior year, 2024, included non-recurring items related to the discontinued operations and represented impairment losses, regulatory compliance charges, other tax items, and that totaled $7.7 million. Now, excluding restructuring and non-recurring charges, adjusted net income from continuing operations increased to $14.5 million, a 10% increase, and the Group's adjusted net income increased to $10.8 million, an increase of 6%.

The Group's adjusted diluted earnings per share increased to 177 cents, or $1.77, which is a 14% increase over the prior year. Now, certain operating expenses and personnel costs previously shared with EBC were fully assumed by CXI during the year. The annualized estimate of these costs, we called it stranded cost, was initially approximately $3 million after tax. However, it is now expected that the actual figure will be closer to 90% of this original estimate once a full 12-month period has been completed. With that, here is a summary of our current fourth quarter's results compared to the same quarter in 2024. Revenue grew to $19.8 million, up by $1.4 million, or 8%. Operating expenses increased to roughly $13 million, up by $743,000, or 6%, so revenue up 8%, expenses up 6%.

Reported EBITDA grew to $6.4 million, roughly 4%, and Adjusted EBITDA grew to $6.8 million by close to $750,000, or 10% over last year. Adjusted Group net income grew to $3.3 million, or by close to $500,000, or 19%, as a result of restructuring charges related to the closure of the Miami vault and charges related to EBC's discontinuance, which were partially offset by a recovery related to the judgment by the Federal Court of Canada, which reduced EBC's administrative monetary penalty by $1 million, or CAD 1.4 million, as agreed by both parties. Revenue growth was driven by 31% growth in the payments product line. 17% of CXI's total revenue is now from payments, and a 4% growth in the banknotes revenue. 83% of CXI's total revenue is in the banknotes product line, primarily through direct-to-consumer channels.

Now, payments grew $800,000, or 31% of, and it's roughly 17% of the total revenue. This growth was supported by a 40% increase in business trading volume and almost $2.1 billion due to the increased activity from existing financial institution customers and the onboarding of new customers. So that trading volume literally up 40% in this quarter. Also, banknotes revenue remained fairly flat year-over-year, presented roughly 40% of our revenue. Trading volumes declined slightly due to the impact of the U.S. federal government shutdown in October 2025, impacting several airports across the nation, as well as a slowdown in inbound international travelers, especially from Canada. This slowdown of inbound international travelers has been substantially offset by an increase in outbound travel by U.S. citizens to Europe and Asia.

Now, let's look at direct-to-consumer banknotes revenue growth of roughly $600,000, or 8%, and DTC represents 43% of our total revenue, with growth mainly in the OnlineFX platform due to the increased demand for exotic foreign currencies. During the current quarter, CXI added South Carolina to the states in which CXI's OnlineFX platform operates, added more than 51 new non-airport agents in several locations, and opened a new company-owned branch in New York. Now, the following is a highlight of the operating expenses from continuing operations for the fourth quarter of 2025 compared to the prior year's fourth quarter. As I mentioned, CXI's operating expenses increased by roughly $750,000, or 6%.

Variable costs, postage shipping, bank charges, sales commission, and incentive compensation totaled $3.4 million, an 8% increase, mostly attributable to shipping costs and bank service charges, partially offset by a decrease in variable compensation costs. Salaries and benefits remained fairly flat compared to the previous quarter, primarily due to general inflationary adjustments. This increase was partially offset by a reduction in headcount resulting from the closure of the Miami vault. Now, bank service charges are related to processing payments and banknote transactions, with the majority arising from the payments product line, where we're at a 40% increase in volume. During the current quarter, CXI fully transitioned its check clearing and payment processing activities away from EBC, eliminating the use of EBC's correspondent bank for such transactions. As a result, 100% of CXI's bank fees for the current quarter were reported in continuing operations.

Now, in the same period last year, bank charges incurred through EBC's correspondent banking relations were reported under discontinued operations. So you can see a bit of a change there in where we reported it. This transition accounted for roughly $150,000 of the variance reported above, and you'll see the variance in the financial statements and the growth in that cost. The remaining difference was primarily attributed to the 40% significant increase in payment transaction volume and the associated processing cost compared to the prior year. Marketing and publicity efforts grew mainly, and there we spent a lot of money on growing this marketing and publicity, mainly because of CXI's strategic emphasis on target marketing initiatives, comprehensive campaigns, retail investments, and the development of our customer referral programs to align with our corporate objectives, partially supporting the growth of the direct-to-consumer business line.

OnlineFX, DTC, marketing campaigns, we're on Instagram, social media, really making sure we get the word out. Restructuring and impairment charges represented the closure of CXI's Miami vault, and that was roughly $400,000, and impairment charges of assets related to some of our company-owned branches of close to $270,000. Now, interest revenue generated from excess cash holdings is noteworthy at the end of October 31st, 2025. CXI maintained nearly $25 million in AAA-rated money market funds compared to zero in the prior year. This was supplemented by interest earned on other investment-bearing bank accounts in the ordinary course of business. The increase in interest income reflects a substantial rise in available excess cash attributable to the decreased working capital requirements as a result of EBC's discontinuance and a well-executed exit plan.

Income tax expense in the current quarter reflected an effective tax rate of roughly 18%, where the majority of the decrease below the statutory rate was reflected or related to the tax benefit from a large amount of stock options exercised during the current quarter and accounted for roughly 9% of this effective tax rate. Now, let's look at the year. Summarizing the results of the Group for the year, 12 months ended October 31st, 2025, compared to 2024. Revenue grew to $72.5 million, up by about $3.5 million, or 5%. And expenses only grew by 3%, or $1.2 million, to a total of $48.5 million. That gave us net income from continuing operations that grew to $14 million, or close to a million bucks, $800,000, or 6%.

Now, reported EBITDA grew to $23.3 million, up $1.6 million, or 7%, and Adjusted EBITDA grew 10% to $24 million, compared to the previous year, up by $2.2 million. Now, it's important to note that adjusted reported Group net income, as I said, grew to $10.8 million. That's an increase of $600,000, or 6%, as CXI's restructuring charges related to the closure of Miami, as well as some legal and advisory fees, were adjusted as non-recurring items. This is for the year now. Now, looking at the Group's results, EBC's adjustments almost netted out with recovery from the Federal Court of Canada's judgment, reducing EBC's administrative monetary penalty, resulting in a benefit of $1 million, together with a net gain related to the lease terminations of roughly $360,000.

These benefits were partially offset by severance costs, non-recurring legal and advisory charges of $650,000, as reported in net discontinued operation results. Now, let's look at continued operations consolidated performance for the year, compared to the prior year. For the year, the revenue growth was driven by 19% growth in payments product line and a 3% growth in banknotes revenue, primarily through, as mentioned for the quarter as well, the DTC channels that we have. Now, payments revenue grew an impressive 19%, or $2 million. As I mentioned, it's now 17% of our total revenue. The growth was supported on a yearly basis by a 31% increase in trading volumes. For the quarter, that was 40%.

For the year, we're at a 31% increase in trading volumes, primarily from new customers, and a slight increase in volume from existing customers to almost $6.7 billion, up from $5.1 billion a year ago. Very proud of the team there. Also, banknotes revenue maintained relatively flat year-over-year, representing 42% of the total yearly revenue. Revenue growth came from both existing and new domestic financial institution customers, with declining volume from monetary services businesses and international financial institutions. Now, international travel levels were generally lower than last year, offset by an increase, as mentioned in the outbound U.S. travel to popular destinations in Europe, Asia, and Mexico. Consumer demand for euros and Mexican pesos drove growth, while the Canadian dollar volumes remained lower.

DTC direct-to-consumer banknotes revenue grew by $1.1 million, or 4%, and that represents 41% of our yearly revenue, with growth mainly from our OnlineFX platform due to the increased demand for exotic currencies and the addition of three new states during the year. At October 31st, 2025, CXI had 39 company-owned branch locations and operated in 50 airport agents, three more locations compared to last year, and we had 468 non-airport agent locations, almost 245 more locations than the prior year. The following is a highlight of our operating expenses for the continuing operations for the year. CXI operating expenses increased by $1.2 million, or 3% year-over-year. Now, that's an important number because variable costs, postage shipping, bank charges, sales commission, and incentive compensation totaled $11.8 million, only a 1% decrease due to a slight decline in variable compensation cost.

The ratio comparing total operating expenses to revenue for the current year improved to 67% compared to 69% last year. Now, stock-based compensation declined due to a 5% decline in share price throughout the year in comparison to last year, where the share price grew roughly 25%, which in turn reflected the increase in this expense last year. Foreign exchange gains for the current year were primarily driven by the U.S. dollar's depreciation against major currencies during the second quarter and the first half of the third quarter. The euro and British pound strengthened notably against the dollar, while the Mexican peso recovered from early year weakness, contributing to the favorable revaluation of banknotes holdings. Gains on euro and a basket of unhedged currencies exceeded losses on Mexican peso inventory for the year.

Foreign exchange losses in the same period in the prior year were largely driven by the weakening of the Mexican peso against the U.S. dollar, compounded by higher overall hedging cost. Now, let's look at discontinued operations related to Exchange Bank of Canada, where the bank had a net loss of $1.1 million in the fourth quarter of 2025 compared to a loss of roughly $6.1 million in the same period last year. For the year, the bank added a net loss. The bank had a net loss of $3.7 million compared to a net loss of $10.7 million for the same period in the prior year. That's where all those adjustments and write-ups happen.

Diluted loss per share from discontinued operations was a loss of $0.18 for the fourth quarter and a loss of $0.61 for the year, compared to $0.97 and $1.70 for the same three and 12 months periods in the prior year. Once final regulatory approval has been obtained, the Board of Directors, as I said, plan to liquidate the remaining assets and liabilities of EBC and distribute those net assets to CXI, its sole shareholder. As of October 31st, the net assets directly associated with the disposal group, EBC, were approximately $5 million. Now, let's review the balance sheet at year-end. Due to the company's business being subjected to seasonality, CXI uses a 12-month trailing net income amount to calculate ROE, which has been relatively consistent at 13% over the last 12 months, and it includes the discontinued operations results.

CXI has had net working capital of $73 million and a total equity of $85 million and 100% available unused line of credit amounting to $40 million. As indicated on page 22 of the year-end financial statements, CXI reported a cash balance of $95.5 million. Additionally, approximately $5 million, as I mentioned, is held in EBC, resulting in a total cash position slightly exceeding $100 million. Now, it is important to note that cash serves as CXI's primary product. It is our widgets, primarily used for transactional activities within the banknotes segment. CXI had $53.2 million cash held in the form of banknotes inventory in transit, in vaults, at tills, and on consignment locations at year-end. CXI maintains cyclical banknote inventories with optimal levels ranging from $50 million-$70 million, depending on the travel season. Now, cash deposited in bank accounts totaled $42.2 million.

This total, $42.2 million, includes the $25 million of excess cash designated for investment purposes. So that's the $25 million that we had at the end of the year in AAA-rated money market funds. The remaining balance of this $42 million is comprised of minimum cash reserves maintained by CXI in bank accounts with select banking partners to support our banknotes settlement operations, as well as operating cash balances corresponding with customer holding accounts. Maximizing shareholder returns through share buybacks under the Normal Course Issuer Bid, NCIB, or share buyback, continues to be a primary objective. Over the past year, CXI acquired and canceled 312,300 common shares at prevailing market prices on the TSX, totaling $4.75 million.

On November 26, 2025, the TSX accepted CXI's notice of intention to make another NCIB and an automatic share purchase plan to purchase for cancellation a maximum of 360,000 common shares, representing 10% of the company's public float as of November 18, 2025. As of yesterday, CXI purchased for cancellation approximately 170,000 common shares. Now, at this time, I will turn the call over to Randolph Pinna, our CEO, to provide his perspective. Thank you. Randolph?

Randolph Pinna (President and CEO)

Thank you, Gerhard, for the detailed review. And thank you, everybody, for joining, especially those out west, since I know it's quite early there, to give you guys time to ask questions. I'm going to try to keep this as short as possible, but I do want to highlight the main things from my perspective, please. So to begin with, as usual, and top of mind is Exchange Bank of Canada's discontinuance.

As you know, we executed on a discontinuance plan to the point where we are now, which is we have closed all operations last fiscal year. We took care of all the employees, so most of them have all found new homes. All of our customers have been referred to the two referral relationships we have, and the feedback has been good that the customers have switched and they are trading with those new providers. So therefore, in layman's term, I would say we're pretty much done, and we're just now waiting on the paperwork final process. But all dealings with regulators, employees, customers have all been satisfied, and it is just now in the final approval process for full discontinuance and our complete exit from Canada, which is expected in this second quarter that we're now just starting. Turning, and my focus has been now 100% on CXI.

And by the way, on Exchange Bank, I do want to just do a hats off to Katie Davis, our CFO of the bank, and our group treasurer, who led the execution of that detailed discontinuance plan to a T. And I want to thank all of the parties, both regulators, employees, legal advisors, everyone involved for their contribution to sticking to the plan so that we can discontinue as expected. So back to CXI. The main business, as we all know, is banknotes. And I will address that at a high level after I just covered the consumer unit and the wholesale unit and what we're doing. The consumer unit is what has shown continued growth, primarily because of our e-commerce channel. We now have the ability to deliver currency to homes or businesses in 46 states, representing over 93% of the entire U.S. population.

We see tremendous growth in this. In fact, we've done a survey, a qualified survey, confirming that there is a huge upside potential to continue to be able to sell currencies across America, and this will remain a focus. We are also continuing to have brick-and-mortar stores. Some of our stores are very good, and we've identified new stores like in New York, Carolina, and others to be announced. We will continue to invest in our direct-to-consumer business by adding agent locations. As you saw and Gerhard pointed out, we've grown our non-airport agents from 225 to 468, and we see a tremendous amount of opportunity going to existing retailers across the country and adding a significant value service like currency exchange to complement their current offerings, so we do see an upside potential in all of the consumer area.

While the wholesale banknote business was flat, this was primarily due to a reduction of a few customers and overall inbound travel being affected. We see upside potential in wholesale because our pipeline is full. We do have other financial institutions in the pipeline, both credit unions as well as banks, and we do have a renewed focus on banknote sales as a company. Before I go to payments, I do just want to talk about what some have called the melting iceberg. Reality is, if you look around the whole world, five of the major countries, America, Canada, Australia, Germany, and England, have all shown for the last three years that cash usage is slightly going up. Looking at cash providers such as ATMs, Euronet, the largest operator of ATMs in the world, continues to show growth in ATM output, cash output.

Cash will be still king, just as I'm looking at my notes on paper. People thought we would be paperless by now. Cash is here to stay. Central banks wanted to have digital currency. The U.S. abandoned its digital dollar project that was being led by the Federal Reserve and realized that cash is king. On a marketing front, I had verbal commitment from many of our customers as well as even competitors. Banks, currency exchanges in Europe, Canada, and America, including CXI, have already all verbally committed to putting marketing dollars towards educating younger consumers about cash, as well as pushing for legal legislation to ban the stores that are going cashless.

Not only are the currency exchanges and select banks willing to participate, there's been good support from the armored car companies who move this cash around the world, as well as the manufacturers of note acceptance machines and cash processing machines. So there will be a unification soon of all of these coalition, if you will, of all of these people that have a pro-cash interest, and we feel that you will see an improvement in cash usage, and we will be a part of that, trying to drive the cash is king movement because cash is freedom, so moving over to payments, we will continue to diversify our revenue sources in payments. You can see that our focus in the last few years in growing our payments business is compounding. We are continuing to see incredible demand for our payment offerings.

While our investment with Jack Henry and Fiserv and the other core bank software providers is working well, we will continue to grow those relationships doing our service of international payments, as well as U.S. dollar payments internationally and even potentially domestically. We will continue to invest into this business. We are now, as you know, EBC closed, so we gave up our SWIFT membership there. CXI is now fully a SWIFT member, using the full services of SWIFT, and that capabilities integrated with our technology has enhanced banks and credit unions' ability to offer international payments to their clients. We are also current with the new stablecoin movement. We are in the final stages of onboarding with a major stablecoin operator to test a USDC capability for moving domestic dollars in America.

Our focus is going to continue to invest into payments, and we are, as I said, our pipeline's full, and we will continue to quickly grow this business as we focus our overall growth efforts for financial institutions, credit unions, and non-bank customers. Well, that turns us to the M&A area. We have a lot of cash. We are looking to do a strategic, creative type of transaction in the payment spaces. The prices are too high. We will not overpay for an asset, but looking for strategic opportunities is a main focus of myself, the management team, as well as the board of directors. Lastly, I just want to remind everyone in March is our annual shareholder meeting.

Since we're no longer really in Canada, even though we're on the TSX for now, we will be having our annual shareholder meeting at our head office, our headquarters in Orlando. And so we really hope you can come in person. We are working on the technology capability so that you can video in should you not be able to physically attend, but I look forward to seeing you in person, ideally in March. So I'll end it there and open it up for questions. Thank you.

Operator (participant)

Thank you, sir. Ladies and gentlemen, if you do have any questions, please press star followed by one on your touchtone phone. You will then hear a prompt that your hand has been raised. And should you wish to decline from the polling process, please press star followed by two.

Out of consideration to other callers today, we ask that you please limit yourself to two questions. Thank you. And your first question will be from Robin Cornwell at Catalyst Research. Please go ahead.

Robin Cornwell (President and CEO)

Good morning. It's nice to see these results are perking up very well. Thank you. My first question is with Gerhard. Gerhard, the $3 million expenses that we're talking about, are they now kind of fully reflected in the expenses?

Gerhard Barnard (Group CFO)

Robin, a lot of them are in there. Obviously, as we exited EBC, it moved from discontinued operations into continued operations. Bank charges are fully there in the fourth quarter. Salaries and wages for the people that transferred are fully incorporated in the fourth quarter, not on the yearly numbers. As you know, we exited EBC during the 2025 financial year, but in our Q1 2026, it'll be fully incorporated.

Robin Cornwell (President and CEO)

Okay. Thank you.

Randolph, when you were looking for your future, discussing your future growth, what about the software as a service? I think I've asked this before, but where do you see that now because you've sort of got a new lease on life here going forward, and that's a very important part of your structure, your software. What are your thoughts on that?

Randolph Pinna (President and CEO)

Before we roll out nationally, we have done a pilot with four financial institutions in the U.S. utilizing our relationship with the Federal Reserve, part of what's called the Fed Direct program. And so we do have a direct connection to the Federal Reserve, and we are receiving monthly fee income for the usage of our software. Again, the domestic processing in America is not CXI actually touching the U.S. dollar moving from, let's say, a Florida bank to a California bank.

We are actually using the connection, which is our software that is often, in these four cases, we're already in the bank because they use us for either international wires and cash services. And they will connect that bank to their own account at the Federal Reserve by using this one platform and us as the one provider. And so we do see that revenue from software as a service for this service will grow. At this point, it is not a material item to have a separate line item on it, but that is another way of growing our payments business. So we do, as I said, see that these growth rates in payments are sustainable this year and hopefully even larger based on the success of our previous investments and integrations that we've done. Does that answer your question, Robin?

Robin Cornwell (President and CEO)

Yes. Thank you.

The payments, to grow that payments business, are you continually adding more people to drive that?

Randolph Pinna (President and CEO)

We have been conservative on our hiring. Controlling our costs is critical, especially in this last year where there's been a lot of layoffs. We are, again, just using the existing integrations we have. If you're familiar with how that works, the software providers that provide core banking systems have a whole variety of banks and credit unions using their software, and we have continued to grow that. It's just a matter of working these lists, and we have a sales team of about 10, and we feel that's sufficient. We are adding one more person dedicated for banknote sales, but as far as payment sales, our pipeline's good, and we are executing on adding new clients every week, doing new payments.

And so therefore, I'm comfortable with the current team and our marketing to the existing customers we have that haven't switched the wires to us yet or the new clients that are on these lists because of the integrations with these core software providers.

Robin Cornwell (President and CEO)

Okay. Thank you. I'll reach you.

Randolph Pinna (President and CEO)

Thank you, Robin.

Operator (participant)

Once again, ladies and gentlemen, if you do have any questions, please press star followed by one on your touchtone phone. The next question will be from Jim Byrne at Acumen Capital. Please go ahead.

Jim Byrne (Equity Research Analyst)

Yeah. Good morning, guys. Randolph, maybe just on the OnlineFX and the direct-to-consumer, just thinking you're pretty much in all 50 states now. You mentioned some agency ads and some new stores as well.

But I mean, when you go into a new state, can you talk about kind of the ramp-up of revenue and profitability on a new state versus something that's been operating for a couple of years? I mean, you kind of see an immediate impact, and then profitability grows after it gets to a certain level of revenue. Maybe just talk about that ramp-up.

Randolph Pinna (President and CEO)

Yeah. At least on my connection, your question was a bit faint, so hopefully I got it. But basically, I think it is what do we expect when we go into a new state that we didn't have a license in? And so I've required that we have a business case to support why we're going to get a license in a certain state. For example, to take an extreme one, we don't have yet the business case to support having a license in Alaska.

There are several states that we are still applying to because we do have a business case, and that is driven not just by the online home delivery service, so a business case that supports a new state license is usually a combination of the online home delivery, so the population of that state, but also the opportunity for agents. As you know, we are probably the primary provider to the largest automobile club in America, AAA, and they have what they call their AAA clubs in each of these states, and so that between the home delivery and the agent possibilities support us going into the state. As far as the dollars and cents, each state is different, and Gerhard is probably closer to the numbers to answer it fuller if you need that.

But basically, we do enter a state based on the projected expectation we see in a state, which will cover your administrative costs, the fees, and all of that to do it. So did that answer your question, Jim?

Jim Byrne (Equity Research Analyst)

Yeah. Sorry about that. I was kind of just thinking, as you said, you're kind of maxing out the number of states you're going to penetrate here. You still expect growth on the online platform as newer states kind of ramp up. Have you got mature states that have kind of plateaued in terms of growth rates?

Randolph Pinna (President and CEO)

No. So that's okay. And one, I hear you much better now. Thank you. The online is where we see the most growth in the consumer unit.

New stores will add growth as well, but the online, we spent a pretty penny doing a qualified survey of, I think, over 1,000 proven international travelers, and it shows that there's still about a 50% increase in capability of our home delivery, and we are refining our group marketing plan. The Cash is King campaign is a piece of that, but yes, we do see that there is still upside in every state we're in, and there's still one or two states that we are applying to now to have that. Eventually, we'll probably be licensed in all 50 states, but again, I won't approve a new state approach until we have enough reason, financial incentive to do so, but I think overall, the consumer unit, as well as the wholesale unit, will show increased growth this year, and that's contrary to this perception of a melting iceberg.

Jim Byrne (Equity Research Analyst)

Yeah.

Okay. No, that's great.

Gerhard Barnard (Group CFO)

I think what comment Randolph made there is Nevada right now has allowed us an exemption, so we are operating in Nevada. Tennessee requires GAAP financial statements, which means we're reporting under IFRS, so that one will have to sit out until we get the approval to send in IFRS statements. And as Randolph said, Alaska and North Dakota, we are currently deferring just due to that, we call it that management case of determining what the return would be. And as Randolph mentioned, OnlineFX, the scalability of that product is significant. If you think of, we've doubled our marketing spend in the last year on driving that revenue growth. And in our planning, that is a very important product line, OnlineFX payments.

Jim Byrne (Equity Research Analyst)

Okay. That's great. And then maybe just lastly, you mentioned the NCIB and the capital allocation priorities through M&A.

You are sitting on quite a bit of cash and potentially more cash coming in the door here with the EBC closure. Any thoughts on maybe an SIB or a special distribution or anything like that?

Randolph Pinna (President and CEO)

Yes. That is a topic that has to be considered every quarter by the Board. Again, we have some eyes set on one or two opportunities, strategic, but because the owners of that business are incredibly large, that process is a very long and slow process. We've even got a focus team to help us try to carve out an asset. However, I can't say it's imminent. Nothing's been signed. As soon as it is, we would tell you, but we are continuing to look for the best use, and right now, the best use is to acquire our stock and retire it.

There are restrictions, so an SIB is a next step of that, but as of this quarter, we have not chosen to do that. We do feel that cash capital allocation is critical, and dividend or an SIB is definitely a good use of cash as well. However, the best use will be to continue to grow our payment and banknote business. But I do not have anything that I can announce today.

Jim Byrne (Equity Research Analyst)

Okay. That's great. Thanks, guys.

Randolph Pinna (President and CEO)

Thank you.

Operator (participant)

Thank you. Next question will be from Robin Cornwell at Catalyst Research. Please go ahead.

Robin Cornwell (President and CEO)

Hi. I just have one quick follow-up. And have you considered changing your year-end back to December 31st?

Randolph Pinna (President and CEO)

That's a good one, Robin.

We have discussed that among the accounting team, we would really like to just finish this year-end at October, and then we'll revisit that because we've also, as you'll understand, just want to get through the discontinued operations, make sure we get our focus on the operating entity CXI. And yeah, that's a good point. I'm laughing because it came up in the last week in one of our discussions and said it would allow us to have a better Christmas than dealing with auditors.

Robin Cornwell (President and CEO)

Great. Thanks very much. That's all I have.

Randolph Pinna (President and CEO)

Thank you, Robin.

Operator (participant)

Next question will be from Peter Rabover at Artko Capital. Please go ahead, Peter.

Peter Rabover (Managing Director)

Hey, guys. Congratulations on the next quarter. Randolph, I wouldn't be doing my job if I didn't ask you on the little thing that I caught when you were describing your listing on the Toronto Stock Exchange as for now.

Any comment that you would like to share on your future listing plans?

Randolph Pinna (President and CEO)

We have been happy with the Toronto Stock Exchange and the Ontario Securities Commission. However, our exit from Canada does invite us to consider Nasdaq. Ironically, one of our employees that worked for me for several years is working there. So we have been in talks with them and sizing up that move. But as Gerhard just said, our focus right now is to really fully exit Canada, which we are 100% focused on America, and get some nice clean quarters going forward. But in like a 2027, you could see a potential move of our listing from the TSX to Nasdaq. But as of right now, we are not just like the SIB. These are all topics that the Board do discuss each quarter, but we have not chosen to hurry up to do that.

We don't think anything's on fire, and therefore, running our business as efficiently as we can, generating the highest return for our shareholders, and having that cash in our business and growing the value of our business is our number one priority.

Peter Rabover (Managing Director)

Great. Thanks. I appreciate the color. Hey, and maybe my second follow-up is on the color for the payments business. I know you guys had a great quarter, 31%, and I know it's now 17% of the business because you've exited Canada. I guess, how should we think about that 31% in terms of run rate? I know you added a state and etc., but what do you think the natural growth rate of the market is and what your share is in that market? Maybe that's the way to ask that without asking for future growth guidance. Thank you.

Randolph Pinna (President and CEO)

Peter, I do want to highlight which another shareholder told me that the foreign exchange market is probably one of the largest markets in the world because automotive, Toyota, there's a lot of foreign exchange, etc. The payment business, as well as cash, the foreign exchange market is the largest market. As I told you, our pipeline for the payments business is tremendous. There was a good question from Jim saying, well, Robin, whoever asked about, am I hiring more people? Right now, we have a sufficient team. We have improved our internal automation and onboarding. What we call our implementation team is geared up and ready to continue to add customers each week. While a new state helps us, it's really a matter of just getting through contract approval with the financial institution, training them, doing the testing, and then going rollout.

That is underway. So that 31%, I'm confident to say is sustainable, if not even increasing, because now that we're getting bigger, we have more reputation in the payment industry, and we can get even larger financial institutions than what we currently have. And so I feel that our payment business will continue to grow nicely each quarter, and our banknote business will continue. We'll get back to growing like we used to do, as we did just recently sign a very large financial institution for wholesale banknotes, which is going to be onboarded, hopefully, in this current quarter and start trading soon thereafter. So we are really doubling down on our sales and implementation of new clients across the United States.

Peter Rabover (Managing Director)

That's great. So maybe I'll sneak in one more. I know you mentioned Jack Henry and the Fiserv relationship.

Any color out of that 31%, or I guess maybe as part of your business, how big is that part of the distribution channel, I guess, or part of the growth and as part of the business?

Randolph Pinna (President and CEO)

So to broaden it, then those two I named, we have about five or six integrations, and the integrated relationship is well over the 50% mark for sure. So that is the significant component to our payments because, again, we do one provider, one product. We provide all the foreign exchange, and therefore, that allows a bank to use its platform that the tellers are already on and get all the benefits of our enhancements using the common denominator, their core banking system, because we've integrated into it.

All the bells and whistles, the SWIFT lookup, the IBAN validation tool, all the functions that our system, the SWIFT gpi, all of the bells and whistles, if you want to use that term, are available to banks that are already using a core from a Jack Henry or a Fiserv as an example. And therefore, that's where that pipeline is in the list of banks that say, "Yeah, I'm already using them." And luckily, a lot of our clients, some of these banks are using us for currency, so they're already familiar with us. So yes, that will continue to drive our payment growth. And then, as Robin brought up, that we soon will be having new opportunities with domestic payments as well, enabling the bank to use our software to do their own wires with the Fed.

We don't have the compliance cost of moving and touching the actual dollars. They will just use it and pay for the service by each login that they have. And that will generate new fee income to the business that's not dependent on international. And so that is an exciting expansion of our payment business this year.

Peter Rabover (Managing Director)

That's great. And then maybe sorry, I'll keep up. So what percent of the business, or sorry, of your, I guess, distributor business, what you call the Jack Henry and the Fiserv relationships, what percent of that is penetrated relative to what's available?

Randolph Pinna (President and CEO)

What's available? Every bank uses a core. So the entire market upside is there. We are still a very small provider. As you know, there's several large fintechs that have been acquiring other payment businesses and so forth, and so they're there.

But the natural competitor are the three or four mega money banks up in New York, example type, that are correspondents for the smaller banks. And we are trying to pick those off because those banks are using a software like a Jack Henry, and we are needing to convince them to switch to us as a boutique provider as opposed to being just using one of the three or four top largest banks in the country. So there's tremendous upside. And yes, to reiterate, it is because of that integration into these core software providers.

Peter Rabover (Managing Director)

Okay. Great. And I just want to say thanks for providing the really good color on the excess cash and the return on capital. Really good to see that as a shareholder. And have a great day.

Randolph Pinna (President and CEO)

Thank you, Peter.

Gerhard Barnard (Group CFO)

Thank you for always asking us to do a better job of that.

As you see, we listen to our shareholders.

Randolph Pinna (President and CEO)

Not unnoticed.

Operator (participant)

Thank you, and at this time, gentlemen, it appears we have no other questions registered. Please proceed.

Randolph Pinna (President and CEO)

Okay. Thank you again for your support, for all the questions. We feel this year we just closed is a successful year. We're continuing to be strongly profitable as a business, all while executing on our strategic vision to focus on America and grow our core banknotes as well as our payments business. So thank you for your support, and I look forward to hopefully seeing you at our annual shareholder meeting in March.

Operator (participant)

Thank you, sir. Ladies and gentlemen, this does conclude your conference call for today. Once again, thank you for attending, and at this time, we do ask that you please disconnect your lines. Enjoy the rest of your day.