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EURONET WORLDWIDE, INC. (EEFT)·Q1 2025 Earnings Summary
Executive Summary
- Record Q1 2025: revenue $915.5M (+7% YoY), operating income $75.2M (+18% YoY), adjusted EBITDA $118.7M (+9% YoY); adjusted EPS $1.13, or $1.33 excluding a $0.20 one-time operating tax charge, vs $1.28 (which included a $0.15 tax benefit) in Q1 2024 .
- Broad-based strength: Money Transfer outperformed (revenue +9%, operating income +21%, adjusted EBITDA +15%), EFT grew on market expansion and access fees; epay growth muted by a $4.5M non-recurring operating tax payment .
- Guidance reaffirmed: Management maintained FY 2025 adjusted EPS growth of 12%–16%, citing diversified global mix and no direct tariff impact; FX assumed flat in planning .
- Emerging catalysts: Visa Direct integration (push-to-card to 4B Visa debit cards) and LATM JV ATM launches in Peru and Dominican Republic expand digital payout and cross-border footprint, supporting volume and margin durability .
What Went Well and What Went Wrong
What Went Well
- Money Transfer delivered double-digit growth across all metrics; direct-to-consumer digital transactions +31% YoY, with gross margin expansion and scale leverage driving operating income up 21% .
- EFT expanded margins and grew via new markets and access/interchange fees; operations launched in Dominican Republic and Peru, supported by Prosegur JV .
- Management reaffirmed 12%–16% adjusted EPS growth for FY 2025 and highlighted resilience against tariff headlines: “we are reaffirming our expectation to produce 12% to 16% earnings growth for the year” .
What Went Wrong
- epay’s operating income was restrained by a non-recurring $4.5M operating tax payment; excluding it, adjusted operating income would have grown 22% YoY and adjusted EBITDA 20% .
- Consolidated other expense increased (FX loss $18.1M, interest expense $19.4M), pressuring below-the-line results; CFO flagged seasonal interest headwinds ahead as ATM cash rises into summer .
- Intra-U.S. money transfer volumes declined, partially offsetting cross-border gains; management continues to compete in a hyper-competitive independent channel ecosystem .
Financial Results
Consolidated Trend (oldest → newest)
Year-over-Year (Q1 2025 vs Q1 2024)
Segment Breakdown (Q1 2024 → Q1 2025)
KPIs (Q1 2024 → Q1 2025)
Guidance Changes
Earnings Call Themes & Trends
Management Commentary
- CEO: “We achieved double-digit constant currency growth in operating income and adjusted EBITDA… We didn’t just tiptoe into double-digit growth territory. We kicked in the door.” .
- CEO: “We do not see any direct impacts on our business as a result of the recent United States’ tariff actions… we are reaffirming our expectation to produce 12% to 16% earnings growth for the year.” .
- CFO: “Adjusted EPS of $1.13… included a one-time charge of $0.20 per share… prior year’s $1.28 included a benefit of ~$0.15… on a pro forma basis, adjusted EPS grew 18% year-over-year.” .
- CEO on Money Transfer: “Digital payout grew by 29% year-over-year, accounting now for 55% of our total volume… we’re hitting on all cylinders and money transfer.” .
- CFO on FX: “We generally just expect that the FX rates will hold flat… we don’t try to outguess it.” .
Q&A Highlights
- Visa Direct integration: switch activated only recently; no contribution in Q1 yet; expected to simplify and accelerate digital sends (name + card number), lowering payout costs vs cash .
- LATM JV rollout: aggressive expansion planned with Prosegur, leveraging multi-currency cross-border transaction economics; early deployments in DR and Peru .
- European ATM access fees: customers are accustomed to off-bank fees; bank “disloyalty” charges common; participation agreements extend bank reach and Euronet ATM utilization .
- Merchant services ramp: Greece “crushing it”; expansion into Portugal/Spain/Italy underway; Munich Airport contract underscores multi-rail acceptance (QR, APMs) and REN capabilities .
- FX/tariff backdrop: limited Q1 FX benefit; more activity starting in April; guidance incorporates no FX uplift; tariff headlines not impacting demand .
Estimates Context
Euronet modestly beat revenue and EPS consensus and missed EBITDA consensus in Q1.
Values retrieved from S&P Global.*
- Significant items: Q1 adjusted EPS included a $0.20 one-time operating tax charge (repurchase of convertible bonds/operating tax matter effects), while the prior-year quarter had a $0.15 tax benefit; on apples-to-apples, adjusted EPS grew 18% YoY to $1.33 vs $1.13 .
- Implication: Street likely raises Money Transfer estimates on sustained 30%+ digital growth and margin leverage; epay estimates should normalize higher after the one-time tax payment; consolidated below-the-line items (FX loss, interest) may keep EPS sensitivity to FX/seasonality in focus .
Key Takeaways for Investors
- Mix-driven durability: Money Transfer’s digital pivot and cross-border momentum, paired with EFT fee capture and market expansion, underpins consolidated margin expansion (+80 bps YoY) and multi-year growth visibility .
- Near-term catalysts: Visa Direct push-to-card enablement and LATM ATM launches extend distribution, lower payout cost, and add high-value FX transactions; expect contribution from Q2 onward .
- Estimates bias upward on an “apples-to-apples” basis: Excluding one-time tax effects, adjusted EPS grew 18% YoY in Q1; Money Transfer strength and epay normalization point to upward revisions despite seasonal interest headwinds .
- FX/interest sensitivity: Plan for higher interest expense into summer with elevated ATM cash and continued FX volatility; company models FX flat, limiting upside from currency unless sustained tailwinds emerge .
- Competitive moat: REN technology, omni-channel payouts, bank participation agreements, and regulatory/compliance credentials position Euronet to win across payment rails and geographies .
- Capital allocation: Ongoing buybacks (0.6M shares; ~1% future EPS uplift) and $492M convertible note repurchases signal balance sheet agility alongside net debt near ~1x EBITDA, per CFO commentary .
- Watch intra-U.S. money transfer softness vs robust cross-border/digital growth; sustained digital gains and Visa Direct should offset domestic pressure over time .