Euronet Worldwide, Inc. (NASDAQ:EEFT) Q4 2018 Earnings Conference Call Transcript

Feb 08, 2019 • 09:00 am ET


Euronet Worldwide, Inc. (NASDAQ:EEFT) Q4 2018 Earnings Conference Call Transcript


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Greetings, and welcome to the Euronet Worldwide Fourth Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder, this conference call is being recorded.

It is now my pleasure to introduce your host, Mr. Jeff Newman, Executive Vice President and General Counsel for Euronet Worldwide.

Thank you. Mr. Newman, you may begin.

Jeffrey B. Newman

Thank you, Lauren. Good morning, and welcome everyone to Euronet's quarterly results conference call. We will present our results for the fourth quarter and full year 2018 on this call. We have Mike Brown, our Chairman and CEO; Rick Weller, our CFO; and Kevin Caponecchi, CEO of our epay division on the call.

Before we begin, I need to call your attention to the forward-looking statements disclaimer on the first page of the PowerPoint presentation we'll be making today. Statements made on this call that concern Euronet's or its management's intentions, expectations or predictions of future performance are forward-looking statements. Euronet's actual results may vary materially from those anticipated in such forward-looking statements as a result of a number of factors that are listed on the first page of our presentation.

Euronet does not intend to update these forward-looking statements and undertakes no duty to any person to provide any such update under any circumstances. In addition, the PowerPoint presentation includes a reconciliation of the non-GAAP financial measures that we will use during this call to their most comparable GAAP measures.

Now I'll turn the call over to our CFO, Rick Weller.

Rick L. Weller

Thanks, Jeff. Well, good morning and welcome to all who have joined us here today.

For your benefit, I will start my comments on Slide 5. Euronet delivered fourth quarter revenue of $649 million, adjusted operating income of $84.8 million, and adjusted EBITDA of $116.3 million. Our adjusted EPS for the fourth quarter was $1.37 per share, a 21% year-over-year increase and $0.10 ahead of our guidance we provided in October. These strong EPS results were driven by the performance of all three segments, and the amount we exceeded guidance by, was largely attributable to favorable tax, less share dilution, and improvements in foreign currency exchange rates with the lion's share coming from taxes.

The tax benefits largely stemmed from the additional tax deductions we got upon exercise of nearly expiring options and some benefits resulting from certain clarified IRS positions related to the December 2017 Tax Act.

Slide 6. Here we show our three-year trend of transactions by segment. EFT transactions grew 13% from expansion of our ATM and point of sale processing networks in Europe and India. epay transactions grew 21% with significant contributions from India and Germany. Money transfers grew 15% with growth across virtually all areas of the money transfer business.

Next slide, please. On Slide 7, we present our financial results on an as reported basis for the segments. On a year-over-year basis, there were significant swings in