Helped by strong transaction growth across all sectors, transaction processor Euronet Worldwide Inc. reported a healthy increase in third quarter revenue and positive adjusted cash earnings, the transaction processor announced Oct. 26.
Revenues rose 15.1% for the period ended Sept. 30, to $299.5 million from $260.2 million, while foreign-currency fluctuations caused the company to post a net loss of $3.2 million; it reported net income of $21 million a year earlier. Adjusting for currency fluctuations, Euronet’s cash earnings during the quarter were $19.4 million, up 7.8% from $18 million.
The Leawood, Kan.-based company benefited from growth in electronic funds-transfers in markets around the world, and for the first time since 2007 it posted an increase in funds-transfers from the United States to Mexico, Rick Weller, chief financial officer, told analysts during an Oct. 26 conference call to discuss the earnings.
The increase in funds transfers to Mexico was only about 2%, and it marks a turnaround from an extended series of quarter-over-quarter declines, Weller said.
The company’s EFT Processing segment reported revenue of $50.2 million, up 2.2% from $49.1 million a year earlier. Transaction volume rose 24.1%, to 247 million from 199 million.
Cross-border funds-transfer volume was strong, with growth concentrated in Poland, India and Pakistan, Weller said.
Euronet’s epay segment reported third-quarter revenues of $174.3 million, up 17.8% from $148 million a year earlier. The total number of transactions processed rose 22.1%, to 271 million from 222 million. The unit processed transactions initiated from 591,000 point-of-sale terminals, up 9.2% from 541,000. Total retailer locations rose 6%, to 282,000 from 266,000.
The company’s Money Transfer unit generated $75.1 million in revenues, up 19% from $63.1 million. Total funds transfers reached 6.1 million, up 13% from 5.4 million.
Euronet operated 140,000 total funds-transfer network locations as of Sept. 30, up 34.6% from 104,000 a year earlier.
During the quarter, Euronet expanded its operations in various sectors that will likely bear fruit in upcoming quarters, Mike Brown, Euronet chairman and CEO, told analysts. Examples include agreements to process e-commerce payments abroad for Zynga Game Network Inc. (
“While the impact of these new nonmobile products may not be immediately evident, I would like to reiterate that these products generally have a higher margin than mobile top-up, and, therefore, over the course of time I do expect them to make a significant impact to our operating income,” Brown said.
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