Executive Summary

Q3 2024 delivered mixed topline but strong profitability: revenues of $171.9M (-0.3% YoY), diluted EPS $0.53 (+29.3% YoY), adjusted diluted EPS $0.61 (+19.6% YoY), and adjusted EBITDA $33.9M (+6.9% YoY, margin 19.7%) .
Management announced a formal strategic review, including potential private sale, citing undervaluation and a strengthened digital economics profile; guidance was withdrawn during this process, a key stock-reaction catalyst .
Digital momentum accelerated: digitally-sent money transfer revenues up 76% YoY and digital gross margin per transaction now exceeds retail; unique active customers rose 5% to 4.2M despite retail headwinds .
Balance sheet and capital returns: new $425M revolver at SOFR +175–225 bps and expanded buyback authorization to $100M; Q3 buybacks totaled ~1.09M shares for $20.3M, supporting EPS growth .
Macro/industry backdrop: retail softness amid a flat-to-low growth remittance market (Mexico) and FX dynamics; IMXI continues to gain share at retail and is doubling market growth in digital, positioning for omnichannel resilience .

What Went Well and What Went Wrong

What Went Well

Digital economics inflection: “a digital initiated transaction delivers a superior gross margin on average than a retail transaction,” supported by unit economics of ~$6–$6.50 per digital transaction .
Profitability and margins: adjusted EBITDA reached an all-time high of $33.9M with 19.7% margin; GAAP EPS rose 29.3% YoY; adjusted EPS rose 19.6% YoY .
Strategic flexibility and financing: upsized, lower-spread $425M revolver; increased buyback authorization; management retained FT Partners to evaluate strategic alternatives to unlock digital-led value .

What Went Wrong

Topline softness: revenues down 0.3% YoY with transactions down 0.9% (15.2M), reflecting retail market headwinds despite digital growth .
Retail mix pressure: IMXI remains underweight digital on the send side (<10%) relative to industry (~30%+ to LatAm), magnifying retail softness in reported mix .
Interest expense and macro drag: interest expense rose 14% YoY to $3.2M (partly due to refinancing fees), and the remittance market to Mexico/Guatemala faced FX and housing starts pressure .

Financial Results

Core Financials (oldest → newest)

Metric	Q1 2024	Q2 2024	Q3 2024
Revenue ($USD Millions)	$150.4	$171.5	$171.9
Diluted EPS ($)	$0.35	$0.42	$0.53
Adjusted Diluted EPS ($)	$0.43	$0.55	$0.61
Adjusted EBITDA ($USD Millions)	$25.4	$31.1	$33.9
Adjusted EBITDA Margin (%)	16.9%	18.1%	19.7%

Q3 2024 Comparative Snapshot

Metric	Q3 2023	Q2 2024	Q3 2024
Revenue ($USD Millions)	$172.4	$171.5	$171.9
Diluted EPS ($)	$0.41	$0.42	$0.53
Adjusted Diluted EPS ($)	$0.51	$0.55	$0.61
Adjusted EBITDA ($USD Millions)	$31.7	$31.1	$33.9
Adjusted EBITDA Margin (%)	18.4%	18.1%	19.7%

Notes:

Q3 actuals landed within/at the top end of company’s prior Q3 guidance ranges for revenue and EPS and beat guidance on adjusted EBITDA (see Guidance Changes) .

KPIs

KPI	Q1 2024	Q2 2024	Q3 2024
Unique Active Customers (Millions)	4.2	4.2	4.2
Transactions (Millions)	13.5	15.3	15.2
Principal Transferred ($USD Billions)	$5.5	$6.4	$6.4
Digitally-Sent Revenue Growth (% YoY)	N/A	~70% (call)	76.0%

Non-GAAP adjustments: Q3 adjusted EPS adds back share-based comp ($2.312M), amortization of intangibles ($0.959M), small restructuring ($0.027M), and other items, partly offset by tax effects (-$1.078M) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Millions)	Q3 2024	$170.6–$175.8	Actual: $171.9	Met (mid-range)
Adjusted EBITDA ($USD Millions)	Q3 2024	$32.1–$33.1	Actual: $33.9	Beat (above high end)
Diluted EPS ($)	Q3 2024	$0.49–$0.54	Actual: $0.53	High end met
Adjusted Diluted EPS ($)	Q3 2024	$0.57–$0.62	Actual: $0.61	Upper range met
Full-Year Guidance (Revenue/EPS/Adj EPS/Adj EBITDA)	FY 2024	Rev $657.6–$677.6; EPS $1.73–$1.87; Adj EPS $2.07–$2.25; Adj EBITDA $121.1–$124.7	Withdrawn during strategic review	Withdrawn

Additional guidance metrics (OpEx, OI&E, tax rate, dividends): No formal quantitative guidance disclosed in Q3; tax rate commentary: ~30% in Q3 (slightly down YoY) . No dividend program indicated in materials .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3 2024)	Trend
Digital strategy & unit economics	Q2: Digital gross margin per transaction “close to double” vs last year and ~40% higher than retail; CAC falling; wires-as-a-service partnerships scaling	Digital transaction economics now superior to retail; digital sends revenue +76% YoY; plan to invest assertively in customer acquisition	Strengthening
Retail market & competition	Q2: Retail headwinds; IMXI still beating market; retooled sales org (new EVP, regional VPs)	Retail growth spread vs market narrowed amid industry softness; targeted pricing/incentives and sales expansion continue	Soft but share-gaining
Macro (FX peso; housing starts)	Q2: Choppy Mexico trends; June peso weakness drove a spike; retail -3% to -4% implied	Expect continued softness near-term; weaker peso and lower rates could help housing and remittances over time	Choppy; potential improvement
Europe expansion/licensing	Q2: UK license via small acquisition; EU passportable license; digital expected to resonate; banking relationships key	EU/UK licenses “important step” for digital growth; European retail heavily debit-card based, aiding digital eligibility	Building footprint
Capital allocation/financing	Q2: $425M revolver maturing 2029; buyback activity stepped down for M&A; authorization increased to $100M	Refinancing completed; Q3 buybacks >1.0M shares; flexibility to fund digital growth and M&A	Ample flexibility
Guidance policy/strategic alternatives	Q2: Provided detailed Q3/FY guidance ranges	Formal strategic review initiated; guidance withdrawn; retained FT Partners	Pivot to review

Management Commentary

“A digital initiated transaction delivers a superior gross margin on average than a retail transaction.” – Robert Lisy, CEO .
“Adjusted EBITDA reached $33.9 million… margins remained strong at 19.7%.” – Andras Bende, CFO .
“We are initiating a process to assess strategic initiatives, which could include… a potential sale in a private transaction.” – Robert Lisy .
Digital unit economics: “Gross revenue per transaction around $11… card processing cost ~$2.50… chargebacks + payers ~ $3.20… brings us to $6–$6.50 per transaction.” – Marcelo Theodoro, Head of Digital & Product .
Retail strategy: “50 direct salespeople… targeted pricing where we don’t have the bulk of wires… incentives for longer-term agreements.” – Robert Lisy .

Q&A Highlights

Retail competitive dynamics: IMXI continues to beat retail market growth, though the spread narrowed amid a down market; targeted actions in pricing and sales execution ongoing .
Guidance removal clarified: With strategic review underway and imminent digital investments, management chose not to provide guidance; emphasized this is typical in such processes .
Digital CAC and payback: CAC “$40–$60” ballpark acknowledged without specifics; co-op marketing with partners and wires-as-a-service reduce acquisition costs .
Macro sensitivity: Weaker peso and lower interest rates could improve remittance incentives and housing-linked employment mix; near-term industry trends expected to be relatively flat .
Mix: Digital send under 10% for IMXI vs ~30%+ market to LatAm; payout-side bank deposits already ~25–30% for some payers .

Estimates Context

Wall Street consensus from S&P Global was unavailable at the time of analysis due to API limitations; as a proxy, we compared actuals to company-provided Q3 guidance ranges (revenue, EPS, adjusted EPS, adjusted EBITDA) .
Given the adjusted EBITDA beat vs guidance high end and strong EPS, near-term sell-side models may raise Q4/adj. EBITDA assumptions but temper FY trajectory due to guidance withdrawal and expected digital acquisition spending; explicit revisions will depend on updated S&P Global consensus, which was unavailable at this time.

Key Takeaways for Investors

Strategic review is a material catalyst; management believes valuation under-reflects cash flow and digital potential; retained FT Partners to explore alternatives, including a possible private sale .
Digital is now margin-accretive versus retail and growing rapidly (+76% YoY); planned CAC investments, wires-as-a-service, and EU/UK licensing should sustain growth .
Retail remains a cash-generating base (~$600M annual revenue) with ongoing share gains; targeted pricing and expanded sales force underpin resilience .
Balance sheet optionality: $425M revolver and expanded buyback authorization provide ample flexibility to fund growth and shareholder returns .
Q3 fundamentals were strong despite macro: EPS and margins rose; adjusted EBITDA exceeded guidance; buybacks supported per-share metrics .
Near-term watch items: FX peso trajectory, U.S. housing starts, and digital CAC/payback; any guidance reinstatement post-review would be a key signal .
Actionable setup: Omnichannel pivot with proven digital unit economics and strategic optionality creates asymmetric outcomes; monitor process milestones and potential bidders’ interest .

Additional references and context:

Q2 guidance ranges and rationale, including lowered FY outlook amid retail softness .
Leadership enhancements (Head of Sales) to drive retail execution .
Credit facility terms and buyback authorization details .

Disclosures and notes:

Any estimate comparisons to Wall Street consensus were not possible due to unavailable S&P Global data at the time of analysis; actual-vs-company guidance was used as a proxy .

International Money Express, Inc. (IMXI)·Q3 2024 Earnings Summary