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Euronet Worldwide Reports Third Quarter 2013 Financial Results

Stocks in this article: EEFT

Segment and Other Results

The EFT Processing Segment reports the following results for the third quarter 2013 compared with the same period of 2012:

  • Revenues of $83.6 million, a 29% increase from $64.9 million (28% increase on a constant currency basis).
  • Operating income of $44.6 million, a 208% increase from $14.5 million (219% increase on a constant currency basis).
  • Adjusted operating income of $25.3 million, a 74% increase from $14.5 million (69% on a constant currency basis).
  • Adjusted EBITDA of $31.6 million, a 51% increase from $20.9 million (47% increase on a constant currency basis).
  • Transactions of 304 million for both periods.
  • Operated 17,795 ATMs as of September 30, 2013, a 2% increase from 17,370.

Revenue, adjusted EBITDA and operating income expanded as a result of increased demand for value added products, brown label ATMs in India and network expansion. Operating income also reflects a non-cash gain related to the reduction of contingent consideration on an acquisition. Adjusted operating income has been presented to exclude this non-cash accounting gain.

Transactions were flat and ATMs expanded 2% versus the same quarter last year as a result of growth in Serbia, Pakistan, Greece, Romania, China, India and Poland, largely offset by declines stemming from the previously announced contract termination by IDBI bank in India. The IDBI agreement had contributed a substantial number of transactions and ATMs, but added minimal revenue or operating profit. Excluding the termination of the contract in India, transactions and ATMs would have grown 10% and 13%, respectively.     

Revenue, adjusted operating income and adjusted EBITDA growth outpaced transactions and ATMs due to seasonally higher sales of value added products which earn a higher margin per transaction relative to other EFT products. 

The epay Segment reports the following results for the third quarter 2013 compared with the same period of 2012:

  • Revenues of $182.6 million, a 6% increase from $171.6 million (6% increase on a constant currency basis).
  • Operating income of $12.1 million, a 20% increase from $10.1 million (19% increase on a constant currency basis).
  • Adjusted EBITDA of $16.1 million, a 7% increase from $15.1 million (6% increase on a constant currency basis).
  • Transactions of 269 million, a 3% decrease from 277 million.
  • Point of sale ("POS") terminals of approximately 636,000 as of September 30, 2013, a 1% increase from approximately 631,000.
  • Retailer locations of approximately 291,000 as of September 30, 2013, a 4% decrease from approximately 304,000.

Revenue, operating income and adjusted EBITDA increases reflect growth in non-mobile content sales, particularly in Germany, expansion from sales of value added products in the U.S. and the November 2012 acquisition of ezi-pay in New Zealand. Partially offsetting this growth were declines in Australia and the Middle East, as well as start-up costs in Turkey and Russia. The increase in operating income also includes a benefit from lower intangible amortization expense due to the value of certain intangible assets being fully amortized. Excluding the benefit of reduced intangible amortization expense, operating income growth was consistent with revenue and adjusted EBITDA growth. 

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