The recent acquisition of HiFX shored up an already strong money transfer business segment, which is best known for Euronet subsidiary Ria. Image source:

Leawood, Kansas-based Euronet Worldwide (NASDAQ:EEFT) shows little sign of slowing down in 2015. Excepting the U.S. dollar, which impacts 70% of the company's transactions that occur outside the U.S., there seems little to harness this payment processor's growth at the moment. Recent acquisitions have bolstered its revenue prospects, and the business is still being propelled by a 2014 agreement inked with Wal-Mart Stores (NYSE:WMT) to provide money transfer services within the retail giant's ubiquitous locations.

Euronet Worldwide: The raw numbers

 Q3 2015 ActualQ3 2014 ActualYear-Over-Year Growth (Decline)
Revenue $481.4 million $453.4 million 6.1%
Net Income Attributable to Euronet Worldwide $31.3 million $35.0 million (10.5)%
Diluted EPS $0.57 $0.64 (10.9)%

Image source: Euronet Worldwide 8K-filing, Oct. 21, 2015.

What happened with Euronet Worldwide this quarter?
It's official: The money transfer segment has surpassed the "epay" segment to become Euronet's largest generator of revenue. During the quarter, money transfer juiced revenue by 24% to $188.2 million, epay's top line decreased by 11% to $174.6 million, and the EFT processing segment recorded a sales increase of 11%, to $118.9 million.

Because the company handles most of its transactions outside the U.S. (roughly 70% as mentioned above), currency fluctuations against the greenback dampened top-line results. Euronet's revenue increased 22% on a constant currency basis.

Currency effects also hit net income and earnings per share. In fact, a $16 million currency loss in Q3 2015 (versus only $700,000 loss in the comparable quarter last year) shaved about $0.29 from the company's third-quarter EPS.

The following are a few brief highlights relevant to each business segment in the earnings report:

Money transfer

  • Euronet cited subsidiary RIA's "Walmart-2-Walmart" solution as a growth proponent in this rapidly expanding segment. Money transfer experienced 40% transaction growth during the quarter.
  • The June 2015 acquisition of Malaysian money transfer agent IME, and the July 2015 purchase of Canadian Forex firm XE, were also cited by management as contributing to money transfer's revenue.

EFT processing

  • While the EFT processing segment isn't growing as quickly money transfer, it's still the most profitable segment, contributing $40.3 million of the corporation's total $70.3 million of operating income in Q3 2015.
  • EFT processing enlarged its ATM network by 7% to 21,128. The addition of 2,850 new ATM units in Europe and India was somewhat neutralized by the disposition of 1,300 loss-generating ATMs in China.


  • But for unfavorable currency translation, epay's 11% revenue decline would have been a 5% gain.
  • At least, profits grew nicely: Operating income of $14.7 million represented a 19% increase from the prior year.

What management had to say
Euronet Worldwide CEO Michael Brown was eager to focus on the impressive "cash earnings per share," an adjusted number which removes the effect of currency fluctuations, among other items. "We had an exceptional third quarter, highlighted by adjusted cash earnings per share of $1.04, a 30% year-over-year increase, and for the first time in our history we produced a dollar or more per share in a single quarter," Brown stated.

Looking forward
In future quarters shareholders can expect that money transfer's phenomenal growth will cool. For the present, the relationship with Wal-Mart continues to justify the investment. Reassuringly for investors, in response to an analyst's question on the earnings conference call, management confirmed that even after removing the Wal-Mart boost and the effects of acquisitions, money transfer's business is still growing by "good double-digits." Coupled with bottom-line improvements in the corporation's other segments and excepting currency effects, Euronet is operating, at least for now, with a strong wind at its back.