What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-10-28 compared with 2021-08-03 · 192 added, 177 removed, 329 unchanged (53% of the section changed)

25 unchanged sentences

Actual results may materially differ from those in the forward-looking statements as a result of various factors, including, but not limited to, conditions in world financial markets and general economic conditions, including impacts from the COVID-19 pandemic;

the speed and effectiveness of rollouts for vaccines and treatments for COVID-19;

the effects in Europe of the U.K.'s departure from the E.U.

39 unchanged sentences

Each operating segment’s sources of revenues are described below.

EFT Processing Segment — Revenues in the EFT Processing Segment, which represented approximately 16 % and 15% of total consolidated revenues for the three and six months ended June 30, 2021, respectively, are derived from fees charged for transactions made by cardholders on our proprietary network of ATMs, fixed management fees and transaction fees we charge to customers for operating ATMs and processing debit and credit cards under outsourcing and cross-border acquiring agreements, foreign currency exchange margin on DCC transactions, domestic and international surcharge, foreign currency dispensing and other value added services such as advertising, prepaid telecommunication recharges, bill payment, and money transfers provided over ATMs.

EFT Processing Segment — Revenues in the EFT Processing Segment, which represented approximately 28 % and 20% of total consolidated revenues for the three and nine months ended September 30, 2021, respectively, are derived from fees charged for transactions made by cardholders on our proprietary network of ATMs, fixed management fees and transaction fees we charge to customers for operating ATMs and processing debit and credit cards under outsourcing and cross-border acquiring agreements, foreign currency exchange margin on DCC transactions, domestic and international surcharge, foreign currency dispensing and other value added services such as advertising, prepaid telecommunication recharges, bill payment, and money transfers provided over ATMs.

Revenues in this segment are also derived from cardless payment, banknote recycling, tax refund services, license fees, professional services and maintenance fees for proprietary application software and sales of related hardware.

epay Segment — Revenues in the epay Segment, which represented approximately 34 % and 35% of total consolidated revenues for the three and six months ended June 30, 2021, respectively, are primarily derived from commissions or processing fees received from mobile phone operators for the processing and distribution of prepaid mobile airtime and commissions earned from the distribution of other electronic content, vouchers, and physical gifts.

epay Segment — Revenues in the epay Segment, which represented approximately 29 % and 33% of total consolidated revenues for the three and nine months ended September 30, 2021, respectively, are primarily derived from commissions or processing fees received from mobile phone operators for the processing and distribution of prepaid mobile airtime and commissions earned from the distribution of other electronic content, vouchers, and physical gifts.

The proportion of epay Segment revenues earned from the distribution of prepaid mobile phone time compared with other electronic products has decreased over time, and digital media content now produces approximately 67 % of epay Segment revenues.

Other electronic content offered by this segment includes digital content such as music, games and software, as well as other products, including mobile wallets, prepaid long distance calling card plans, prepaid Internet plans, prepaid debit cards, gift cards, vouchers, transport payments, lottery payments, bill payment and money transfer.

Money Transfer Segment — Revenues in the Money Transfer Segment, which represented approximately 50 % of total consolidated revenues for both the three and six months ended June 30, 2021, respectively, a re primarily derived from transaction fees, as well as the margin earned from purchasing foreign currency at wholesale exchange rates and selling the foreign currency to customers at retail exchange rates.

Money Transfer Segment — Revenues in the Money Transfer Segment, which represented approximately 43 % and 47% of total consolidated revenues for the three and nine months ended September 30, 2021, respectively, a re primarily derived from transaction fees, as well as the margin earned from purchasing foreign currency at wholesale exchange rates and selling the foreign currency to customers at retail exchange rates.

We have a sending agent network in place comprised of agents, customer service representatives, Company-owned stores, primarily in North America, Europe and Malaysia, and Ria, IME and xe branded websites, along with a worldwide network of correspondent agents, consisting primarily of financial institutions in the transfer destination countries.

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Inadequate technology and resources would impair our ability to maintain current processing technology and efficiencies, as well as deliver new and innovative services to compete in the marketplace.

The outbreak of the COVID- 19 (coronavirus) pandemic has resulted in varying degrees of border and business closures, travel restrictions and other social distancing orders in most of the countries where we operate during the three and six months ended June 30, 2021 and 2020 .

These types of orders were first put into effect in late February 2020 or early March 2020.

As the number and rate of new cases has fluctuated in various locations around the global, the closures, restrictions and other social distancing orders have been modified, rescinded and/or re-imposed.

Some version of these orders remains in almost every location in which we operate.

Although vaccines for COVID-19 are becoming widely available in the U.S.

and parts of Europe, their availability is still limited in many parts of the world where we operate.

Although vaccines for COVID-19 are widely available in the U.S.

and the European Union, their availability is still limited in many parts of the world where we operate.

In addition, the rate of acceptance and long term effectiveness of the vaccines, especially against new variants, are still unknown.

2 unchanged sentences

The Money Transf er Segment continues to be impacted by the pandemic-related restrictions in certain markets that limit customers' ability to access our network of company-owned stores and agents.

In response to the COVID- 19 pandemic driven impacts, we implemented several key measures to offset the impact across the business, including renegotiating certain third party contracts, reducing travel, decreasing capital expenditures, and increasing the number of seasonal ATM deactivations (placing them in dormancy status, terminating, or re-negotiating) in more sites and more markets.

In response to the COVID- 19 pandemic driven impacts, we implemented several key measures to offset the impact across the business, including re-negotiating certain third party contracts, reducing travel, decreasing capital expenditures, and increasing the number of seasonal ATM deactivations (placing them in dormancy status, terminating, or re-negotiating) in more sites and more markets.

SEGMENT SUMMARY RESULTS OF OPERATIONS

Revenues and operating income by segment for the three and six months ended June 30, 2021 and 2020 are summarized in the tables below:

Revenues and operating income by segment for the three and nine months ended September 30, 2021 and 2020 are summarized in the tables below:

Revenues for the Three Months Ended

September 30,

Year-over-Year Change

Revenues for the Six Months Ended

Revenues for the Nine Months Ended

September 30,

Year-over-Year Change

3 unchanged sentences

Corporate Services, Eliminations and Other

Operating (Loss) Income for the Three Months Ended June 30,

Operating Income (Expense) for the Three Months Ended

September 30,

Year-over-Year Change

Operating (Loss) Income for the Six Months Ended June 30,

Operating (Loss) Income for the Nine Months Ended

September 30,

Year-over-Year Change

13 unchanged sentences

Average Translation Rate

Three Months Ended June 30,

Three Months Ended September 30,

Average Translation Rate

Six Months Ended June 30,

Nine Months Ended September 30,

Currency (dollars per foreign currency)

Increase Percent

Increase (Decrease) Percent

Australian dollar

3 unchanged sentences

New Zealand dollar

COMPARISON OF OPERATING RESULTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30 , 2021 AND 2020

COMPARISON OF OPERATING RESULTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

EFT PROCESSING SEGMENT

The following table summarizes the results of operations for our EFT Processing Segment for the three and six months ended June 30, 2021 and 2020 :

The following table summarizes the results of operations for our EFT Processing Segment for the three and nine months ended September 30, 2021 and 2020 :

Three Months Ended

September 30,

Year-over-Year Change

Six Months Ended

Nine Months Ended

September 30,

Year-over-Year Change

12 unchanged sentences

Total operating expenses

Operating (loss)

Operating income (loss)

Transactions processed (millions)

Active ATMs as of June 30,

Active ATMs as of September 30,

Average active ATMs

EFT Processing Segment total revenues were $113.5 million for the three months ended June 30, 2021, an increase of $35.0 million or 45% compared to the same period in 2020.

EFT Processing Segment total revenues were $200.6 million for the six months ended June 30, 2021, a decrease of $23.8 million or 11% compared to the same period in 2020.

Beginning in the late first quarter of 2020, the COVID-19 related government-imposed border and business closures, travel restrictions and other orders significantly reduced tourism throughout Europe, which led to a significant decrease in high-margin cross-border transactions (DCC) and surcharge transactions from March through June of 2020.

EFT Processing Segment total revenues were $227.1 million for the three months ended September 30, 2021, an increase of $83.1 million or 58% compared to the same period in 2020.

EFT Processing Segment total revenues were $427.7 million for the nine months ended September 30, 2021, an increase of $59.3 million or 16% compared to the same period in 2020.

During 2021, we began increasing our estate of active ATMs as certain countries began easing COVID-19 restrictions;

however, many countries continue to have restrictions that prevented our volume of DCC and surcharge transactions from returning to pre-COVID-19 levels.

Revenues increased for the three months ended June 30, 2021 compared to the same period in 2020 primarily due to the reactivation of ATMs and gradual increase in high-margin cross-border transaction volumes during 2021.

Revenues decreased for the six months ended June 30, 2021 compared to the same period in 2020 primarily because the six months ended June 30, 2020 included two months of pre-COVID-19 level DCC and surcharge transaction volumes compared to the six months ended June 30, 2021 which had various levels of restrictions throughout the entire six month period.

Foreign currency movements increased revenues by approximately $7.1 million and $10.3 million for the three and six months ended June 30, 2021 , respectively, compared to the same periods in 2020 .

Average monthly revenues per ATM increased to $934 for the three months ended June 30, 2021 compared to $648 for the same period in 2020.

Average monthly revenues per ATM decreased to $867 for the six months ended June 30, 2021 compared to $878 for the same period in 2020.

Revenues per transaction decreased to $0.11 for the three m onths ended June 30, 2021 compared to $0.12 for the same period in 2020.

Revenues per transaction decreased to $0.10 for the six m onths ended June 30, 2021 compared to $0.15 for the same period in 2020.

For the three months ended June 30, 2021, the increase in average monthly revenues per ATM were attributable to the limited easing of COVID-19 restrictions throughout Europe and corresponding increase in cross-border DCC and surcharge transactions and the decrease in revenue per transaction was attributable to a shift in the mix of our transaction volume as we experienced a significant increase in the volume of lower revenue transactions (processing bank wallet transactions and payments for e-commerce sites) primarily in our Asia Pacific region.

For the six months ended June 30, 2021, the average monthly revenues per ATM and revenues per transaction decreased due to the effect of lower DCC and surcharge revenues during January and February of 2021 compared to January and February 2020 prior to COVID-19's initial emergence.

however, remaining cross-border travel patterns prevented our volume of DCC and surcharge transactions from returning to pre-COVID-19 levels.

Revenues increased for the three months ended September 30, 2021 compared to the same period in 2020 primarily due to the reactivation of ATMs and increase in high-margin cross-border transaction volumes during 2021.

Revenues increased for the nine months ended September 30, 2021 compared to the same period in 2020 as cross-border travel and corresponding DCC and surcharge revenues increased, partially offset by the nine months ended September 30, 2020 including two months of pre-COVID-19 level DCC and surcharge transaction volumes compared to the nine months ended September 30, 2021 which had various levels of restrictions throughout the entire nine month period.

Foreign currency movements increased revenues by approximately $1.7 million and $12.0 million for the three and nine months ended September 30, 2021 , respectively, compared to the same periods in 2020 .

Average monthly revenues per ATM increased to $1,660 for the three months ended September 30, 2021 compared to $1,085 for the same period in 2020.

Average monthly revenues per ATM increased to $1,162 for the nine months ended September 30, 2021 compared to $949 for the same period in 2020.

Revenues per transaction increased to $0.19 for the three m onths ended September 30, 2021 compared to $0.16 for the same period in 2020.

Revenues per transaction decreased to $0.14 for the nine m onths ended September 30, 2021 compared to $0.16 for the same period in 2020.

For the three months ended September 30, 2021, the increase in average monthly revenues per ATM and revenues per transaction were attributable to the easing of COVID-19 restrictions throughout Europe and corresponding increase in cross-border DCC and surcharge transactions, partially offset by a shift in the mix of our transaction volume as we experienced a significant increase in the volume of lower revenue transactions (processing bank wallet transactions and payments for e-commerce sites) primarily in our Asia Pacific region.

For the nine months ended September 30, 2021, the average monthly revenues per ATM increased primarily due to the lower average ATM count as we modified our estate of ATMs beginning in the second quarter of 2020, and revenues per transaction decreased due to the effect of lower DCC and surcharge revenues during January and February of 2021 compared to January and February 2020 prior to COVID-19's initial emergence as well as a shift in the mix of our transaction volume .

Direct operating costs

EFT Processing Segment direct operating costs were $82.7 million for the three months ended June 30, 2021 , an increase of $20.2 million or 32 % compared to the same period in 2020 .

EFT Processing Segment direct operating costs were $152.3 million for the six months ended June 30, 2021 , an increase of $2.3 million or 2 % compared to the same period in 2020 .

EFT Processing Segment direct operating costs were $106.3 million for the three months ended September 30, 2021 , an increase of $23.7 million or 29 % compared to the same period in 2020 .

EFT Processing Segment direct operating costs were $258.6 million for the nine months ended September 30, 2021 , an increase of $26.0 million or 11% co mpared to the same period in 2020 .

Direct operating costs primarily consist of site rental fees, cash delivery costs, cash supply costs, maintenance, insurance, telecommunications, payment scheme processing fees, data center operations-related personnel, as well as the processing centers’ facility-related costs and other processing center-related expenses and commissions paid to retail merchants, banks and card processors involved with POS DCC transactions.

For the three months ended June 30, 2021, the increase in direct operating costs was primarily due to the increase in the number of ATMs under management in Europe and the increase in transaction volumes.

For the six months ended June 30, 2021, the increase in direct operating costs was primarily due to the weakening of the U.S.

dollar and increase in transaction volumes, partially offset by the decrease in number of ATMs under management .

Foreign currency movements increased direct operating costs by approximately $5.5 million and $8.7 million for the three and six months ended June 30, 2021, respectively, compared to the same periods in 2020 .

Gross profit, which is calculated as revenues less direct operating costs, was $30.8 million for the three months ended June 30, 2021, an increase of $14.8 million or 93% compared to $16.0 million for the same period in 2020 .

Gross profit was $48.3 million for the six months ended June 30, 2021, a decrease of $26.0 million or 35% compared to $74.3 million for the same period in 2020 .

Gross profit as a percentage of revenues (“gross margin”) increased to 27.1 % and decreased to 24.1% for the three and six months ended June 30, 2021, respectively , compared to 20.4% and 33.1% for the same periods in 2020, respectively.

For the three months ended June 30, 2021, the increase in gross profit and gross margin was primarily driven by the increase in cross-border transactions and the reactivation of ATMs.

For the six months ended June 30, 2021, the decrease in gross profit and gross margin was primarily attributable to the lower DCC transactions and domestic and international surcharge transactions during the months of January and February 2021 compared to January and February 2020, as these months in the prior period were before the emergence of COVID-19.

For the three months ended September 30, 2021, the increase in direct operating costs was primarily due to the increase in the number of ATMs under management in Europe and the increase in transaction volumes.

For the nine months ended September 30, 2021, the increase in direct operating costs was primarily due to the increase in transaction volumes, costs associated with modifying our estate of ATMs, and the weakening of the U.S.

Foreign currency movements increased direct operating costs by approximately $0.6 million and $9.3 million for the three and nine months ended September 30, 2021, respectively, compared to the same periods in 2020 .

Gross profit, which is calculated as revenues less direct operating costs, was $120.8 million for the three months ended September 30, 2021, an increase of $59.4 million or 97% compared to $61.4 million for the same period in 2020 .

Gross profit was $169.1 million for the nine months ended September 30, 2021, an increase of $33.4 million or 25% compared to $135.7 million for the same period in 2020 .

Gross profit as a percentage of revenues (“gross margin”) increased to 53.2 % and 39.5% for the three and nine months ended September 30, 2021, respectively , compared to 42.6% and 36.9% for the same periods in 2020, respectively.

For the three and nine months ended September 30, 2021, the increase in gross profit and gross margin was primarily driven by the increase in cross-border transactions and overall increase in transaction volumes.

Salaries and benefits

Salaries and benefits expenses were $24.1 million for the three months ended June 30, 2021, an increase of $2.8 million or 13% c ompared to the same period in 2020 .

Salaries and benefits expenses were $47.7 million for the six months ended June 30, 2021, an increase of $4.3 million or 10% c ompared to the same period in 2020 .

The increase in salaries and benefits was primarily driven by an increase in foreign currency movements and an increase in bonus expense.

Foreign currency movements in the countries where we employ our workforce increased these expenses by $1.8 million and $3.1 million for the three and six months ended June 30, 2021, respectively, compared to the same periods in 2020.

As a percentage of revenues, these expenses decreased to 21.2% and increased to 23.8% for the three and six months ended June 30, 2021, respectively, compared to 27.1% and 19.3% for the same periods in 2020, respectively .

Salaries and benefits expenses were $23.7 million for the three months ended September 30, 2021, a decrease of $1.5 million or 6% c ompared to the same period in 2020 .

Salaries and benefits expenses were $71.3 million for the nine months ended September 30, 2021, an increase of $2.8 million or 4% c ompared to the same period in 2020 .

The increase in salaries and benefits for the nine months ended September 30, 2021 compared to the same period in 2020 was primarily driven by a $3.3 million increase from foreign currency movements in the countries where we employ our workforce.

As a percentage of revenues, these expenses decreased to 10.4% and 16.7% for the three and nine months ended September 30, 2021, respectively, compared to 17.5% and 18.6% for the same periods in 2020, respectively .

Selling, general and administrative

Selling, general and administrative expenses were $9.8 million for the three months ended June 30, 2021, an increase of $0.3 million or 3% compared to the same period in 2020 .

Selling, general and administrative expenses were $21.8 million for the six months ended June 30, 2021, an increase of $1.3 million or 6% compared to the same period in 2020 .

As a percentage of revenues, these expenses decreased to 8.6 % and increased to 10.9 % for the three and six m onths ended June 30, 2021, respectively, compared to 12.1 % and 9.1% for the same periods in 2020, respectively .

Selling, general and administrative expenses were $11.3 million for the three months ended September 30, 2021, an increase of $2.7 million or 32% compared to the same period in 2020 .

Selling, general and administrative expenses were $33.1 million for the nine months ended September 30, 2021, an increase of $4.0 million or 14% compared to the same period in 2020 .

The increase in these expenses is primarily driven by an increase in professional fees and travel related expenses.

As a percentage of revenues, these expenses decreased to 5.0 % and 7.7 % for the three and nine m onths ended September 30, 2021, respectively, compared to 6.0 % and 7.9% for the same periods in 2020, respectively .

Goodwill impairment

2 unchanged sentences

Depreciation and amortization

Depreciation and amortization expenses were $22.2 million for the three months ended June 30, 2021, an increase of $2.3 million or 12% compared to the same period in 2020 .

Depreciation and amortization expenses were $44.3 million for the six months ended June 30, 2021, an increase of $4.0 million or 10% compared to the same period in 2020 .

Foreign currency movements increased these expenses by $1.6 million and $2.8 million for the three and six months ended June 30, 2021, respectively, compared to the same periods in 2020, with the remainder of the increase driven by the acquisition of additional ATMs and software assets.

As a percentage of revenues, these expenses decreased to 19.6 % and increased to 22.1% for the three and six months ended June 30, 2021 , respectively, compared to 25.4 % and 17.9% for the same periods in 2020, respectively .

Depreciation and amortization expenses were $22.6 million for the three months ended September 30, 2021, an increase of $1.1 million or 5% compared to the same period in 2020 .

Depreciation and amortization expenses were $66.9 million for the nine months ended September 30, 2021, an increase of $5.1 million or 8% compared to the same period in 2020 .

Foreign currency movements increased these expenses by $0.1 million and $2.9 million for the three and nine months ended September 30, 2021, respectively, compared to the same periods in 2020, with the remainder of the increase driven by the acquisition of additional ATMs and software assets.

As a percentage of revenues, these expenses decreased to 10.0 % and 15.6% for the three and nine months ended September 30, 2021 , respectively, compared to 14.9 % and 16.8% for the same periods in 2020, respectively .

Operating income (loss)

EFT Processing Segment had an operating loss of ( $25.3 million) for the three months ended June 30, 2021, a decrease of $31.2 million or (55%) compared to the same period in 2020 .

EFT Processing Segment had an operating loss of ( $65.4 million) for the six months ended June 30, 2021, an increase of ($13.8 million) or 27% compared to the same period in 2020 .

O perating income (loss) as a percentage of revenues (“operating margin”) decreased to (22.3 %) and increased to (32.6%) for the three and six months ended June 30, 2021, respectively, compared to (72.1%) and (23.0%) for the same periods in 2020, respectively .

Operating loss per transaction was ( $0.03) for both the three and six months ended June 30, 2021, compared to ( $0.08) and ($0.04) for the same periods in 2020, respectively .

For the three months ended June 30, 2021, the decreases in operating loss, operating margin and operating loss per transaction were primarily driven by the $21.9 million decrease in non-cash goodwill impairment charges and the easing of COVID-19 restrictions in limited regions where we operate.

For the six months ended June 30, 2021, the increases in operating loss and operating margin were primarily driven by the decrease in tourism in the months of January and February 2021 compared to the same periods in the prior period, partially offset by the $21.9 million decrease in non-cash goodwill impairment charges.

The following table presents the results of operations for the three and six months ended June 30, 2021 and 2020 for our epay Segment:

EFT Processing Segment had operating income of $63.2 million for the three months ended September 30, 2021, an increase of $57.0 million or 926% compared to the same period in 2020 .

EFT Processing Segment had an operating loss of ( $2.2 million) for the nine months ended September 30, 2021, a decrease of $43.3 million or 95% compared to the operating loss in the same period in 2020 .

O perating income (loss) as a percentage of revenues (“operating margin”) increased to 27.8 % and (0.5%) for the three and nine months ended September 30, 2021, respectively, compared to 4.3% and (12.3%) for the same periods in 2020, respectively .

Operating income (loss) per transaction was $0.05 and ($0.00) for the three and nine months ended September 30, 2021, respectively, compared to $0.01 and ($0.02) for the same periods in 2020, respectively .

For the three months ended September 30, 2021, the increases in operating income, operating margin and operating income per transaction were primarily driven by the easing of COVID-19 restrictions in limited regions where we operate.

For the nine months ended September 30, 2021, the decrease in operating loss and increase in operating margin was primarily driven by the easing of COVID-19 restrictions in limited regions where we operate and the $21.9 million decrease in non-cash goodwill impairment charges , partially offset by the decrease in tourism in the months of January and February 2021 compared to the same periods in the prior period.

The following table presents the results of operations for the three and nine months ended September 30, 2021 and 2020 for our epay Segment:

Three Months Ended

September 30,

Year-over-Year Change

Six Months Ended

Nine Months Ended

September 30,

Year-over-Year Change

11 unchanged sentences

Transactions processed (millions)

epay Segment total revenues were $243.9 million for the three months ended June 30, 2021, an increase of $56.4 million or 30% compared to the same period in 2020.

epay Segment total revenues were $486.2 million for the six months ended June 30, 2021, an increase of $125.7 million or 35% compared to the same period in 2020.

epay Segment total revenues were $238.3 million for the three months ended September 30, 2021, an increase of $39.4 million or 20% compared to the same period in 2020.

epay Segment total revenues were $724.5 million for the nine months ended September 30, 2021, an increase of $165.1 million or 30% compared to the same period in 2020.

The increase in revenues was primarily due to an increase in the number of transactions processed driven by continued digital media growth and the U.S.

dollar weakening against key foreign currencies during 2021.

Foreign currency movements in creased revenues by approximately $16.0 million and $28.9 million for the three and six months ended June 30, 2021, respectively, compared to the same periods in 2020 .

Foreign currency movements in creased revenues by approximately $2.1 million and $31.0 million for the three and nine months ended September 30, 2021, respectively, compared to the same periods in 2020 .

The epay segment was impacted by COVID-19 pandemic-driven government-imposed lockdowns and business closures, primarily at retail outlets, which were offset by increases in digital media offerings in Asia and revenues derived from businesses that were classified as essential and remained open during the pandemic .

Revenues per transaction decreased to $0.31 and $0.33 for the three and six months ended June 30, 2021, respectively, compared to $0.32 and $0.35 for the same periods in 2020, respectively .

Revenues per transaction decreased to $0.29 and $0.32 for the three and nine months ended September 30, 2021, respectively, compared to $0.30 and $0.33 for the same periods in 2020, respectively .

The decreases in revenues per transaction were primarily driven by the increase in the number of mobile transactions processed in a region where we generally earn lower revenues per transaction.

Direct operating costs

epay Segment direct operating costs were $185.0 million for the three months ended June 30, 2021 , an increase of $40.9 million or 28 % compared to the same period in 2020 .

epay Segment direct operating costs were $367.6 million for the six months ended June 30, 2021 , an increase of $93.5 million or 34 % compared to the same period in 2020 .

epay Segment direct operating costs were $180.2 million for the three months ended September 30, 2021 , an increase of $30.2 million or 20 % compared to the same period in 2020 .

epay Segment direct operating costs were $547.8 million for the nine months ended September 30, 2021 , an increase of $123.7 million or 29 % compared to the same period in 2020 .

Direct operating costs primarily consist of the commissions paid to retail merchants for the distribution and sale of prepaid mobile airtime and other prepaid products, expenses incurred to operate POS terminals and the cost of vouchers sold and physical gifts fulfilled.

The increases in direct operating costs were primarily due to the increase in transaction volumes of low-value mobile top-up transactions and by the U.S.

The increases in direct operating costs were primarily due to the increase in transaction volumes of low-value mobile top-up transactions, an increase in retailer commissions and the U.S.

dollar weakening against key foreign currencies during 2021.

Foreign currency movements increased direct operating costs by approximately $11.9 million and $21.3 million for the three and six months ended June 30, 2021, respectively, compared to the same periods in 2020 .

Gross profit was $58.9 million for the three months ended June 30, 2021, an increase of $15.4 million or 35% compared to $43.5 million for the same period in 2020 .

Gross profit was $118.6 million for the six months ended June 30, 2021, an increase of $32.3 million or 37% compared to $86.3 million for the same period in 2020 .

Gross margin in creased to 24.2 % and 24.4% for the three and six months ended June 30, 2021, respectively , compared to 23.2% and 24.0% for the same periods in 2020, respectively .

The increase in gross profit and gross margin is driven by the increase in transaction volumes.

Foreign currency movements increased direct operating costs by approximately $1.6 million and $22.9 million for the three and nine months ended September 30, 2021, respectively, compared to the same periods in 2020 .

Gross profit was $58.1 million for the three months ended September 30, 2021, an increase of $9.2 million or 19% compared to $48.9 million for the same period in 2020 .

Gross profit was $176.7 million for the nine months ended September 30, 2021, an increase of $41.4 million or 31% compared to $135.3 million for the same period in 2020 .

Gross margin was 24.4 % for both the three and nine months ended September 30, 2021, compared to 24.6% and 24.2% for the same periods in 2020, respectively .

The increase in gross profit is primarily driven by the increase in transaction volumes at relatively flat margins.

Salaries and benefits

Salaries and benefits expenses were $19.8 million for the three months ended June 30, 2021, an increase of $4.6 million or 30% compared to the same period in 2020 .

Salaries and benefits expenses were $39.1 million for the six months ended June 30, 2021, an increase of $8.3 million or 27% c ompared to the same period in 2020 .

Salaries and benefits expenses were $20.1 million for the three months ended September 30, 2021, an increase of $4.0 million or 25% compared to the same period in 2020 .

Salaries and benefits expenses were $59.2 million for the nine months ended September 30, 2021, an increase of $12.3 million or 26% c ompared to the same period in 2020 .

The increase in salaries and benefits was primarily driven by an increase in headcount to support the growth of the business and an increase in bonus expense.

Foreign currency movements in the countries where we employ our workforce increased these expenses by $1.5 million and $2.7 million for the three and six months ended June 30, 2021, respectively, compared to the same periods in 2020.

As a percentage of revenues, these expenses were 8.1% for both the three and six months ended June 30, 2021, compared to 8.1% and 8.6% for the same periods in 2020, respectively .

Foreign currency movements in the countries where we employ our workforce increased these expenses by $0.3 million and $3.0 million for the three and nine months ended September 30, 2021, respectively, compared to the same periods in 2020.

As a percentage of revenues, these expenses were 8.4% and 8.2% for the three and nine months ended September 30, 2021, respectively, compared to 8.1% and 8.4% for the same periods in 2020, respectively .

Selling, general and administrative

Selling, general and administrative expenses were $9.8 million for the three months ended June 30, 2021, an increase of $1.1 million or 13% compared to the same period in 2020 .

Selling, general and administrative expenses were $18.8 million for the six months ended June 30, 2021, an increase of $1.3 million or 8% compared to the same period in 2020 .

Foreign currency movements increased these expenses by $0.9 million and $1.5 million for the three and six months ended June 30, 2021, respectively, compared to the same periods in 2020 .

As a percentage of revenues, these expenses decreased to 4.0% and 3.9% for the three and six months ended June 30, 2021, respectively, compared to 4.6 % and 4.8% for the same periods in 2020, respectively.

Selling, general and administrative expenses were $9.8 million for the three months ended September 30, 2021, an increase of $1.3 million or 16% compared to the same period in 2020 .

Selling, general and administrative expenses were $28.6 million for the nine months ended September 30, 2021, an increase of $2.7 million or 10% compared to the same period in 2020 .

Foreign currency movements increased these expenses by $0.1 million and $1.6 million for the three and nine months ended September 30, 2021, respectively, compared to the same periods in 2020 .

As a percentage of revenues, these expenses decreased to 4.1% and 3.9% for the three and nine months ended September 30, 2021, respectively, compared to 4.3 % and 4.6% for the same periods in 2020, respectively.

Depreciation and amortization

Depreciation and amortization expenses were $2.1 million for the three months ended June 30, 2021, an increase of $0.5 million or 30% compared to the same period in 2020 .

Depreciation and amortization expenses were $4.3 million for the six months ended June 30, 2021, an increase of $0.8 million or 22% compared to the same period in 2020 .

Depreciation and amortization expenses were $2.3 million for the three months ended September 30, 2021, an increase of $0.1 million or 6% compared to the same period in 2020 .

Depreciation and amortization expenses were $6.5 million for the nine months ended September 30, 2021, an increase of $0.9 million or 16% compared to the same period in 2020 .

Depreciation and amortization expense primarily represents depreciation of POS terminals we install in retail stores and amortization of acquired intangible assets.

As a percentage of revenues, these expenses were 0.9 % for both the three and six months ended June 30, 2021 , compared to 0.9 % and 1.0% for the same periods in 2020, respectively .

As a percentage of revenues, these expenses decreased to 0.9% for both the three and nine months ended September 30, 2021 , compared to 1.1 % and 1.0% for the same periods in 2020, respectively .

Operating income

epay Segment operating income was $27.2 million for the three months ended June 30, 2021 , an increase of $9.2 million or 51% c ompared to the same period in 2020 .

epay Segment operating income was $56.4 million for the six months ended June 30, 2021 , an increase of $21.9 million or 64% c ompared to the same period in 2020 .

Operating margin increased to 11.2 % and 11.6% for the three and six months ended June 30, 2021 , respectively, compared to 9.6 % for both of the same periods in 2020 .

Operating income per transaction was $0.03 and $0.04 for the three and six m onths ended June 30, 2021, respectively, compared to $0.03 for both of the same periods in 2020.

The increases in operating income and operating margin for the three and six months ended June 30, 2021 compared to the same periods in 2020 were primarily due to an increase in the number of higher-margin digital media transactions.

epay Segment operating income was $26.0 million for the three months ended September 30, 2021 , an increase of $3.7 million or 17% c ompared to the same period in 2020 .

epay Segment operating income was $82.3 million for the nine months ended September 30, 2021 , an increase of $25.6 million or 45% c ompared to the same period in 2020 .

Operating margin decreased to 10.9 % and increased to 11.4% for the three and nine months ended September 30, 2021 , respectively, compared to 11.2 % and 10.1% for the same periods in 2020 , respectively.

Operating income per transaction was $0.03 and $0.04 for the three and nine m onths ended September 30, 2021, respectively, compared to $0.03 for both of the same periods in 2020.

The increase in operating income and relatively flat operating margin for the three months ended September 30, 2021 compared to the same period in 2020 was primarily due to an increase in the number of overall transactions.

The increases in operating income and operating margin for the nine months ended September 30, 2021 compared to the same period in 2020 was primarily due to an increase in the number of higher-margin digital media transactions .

MONEY TRANSFER SEGMENT

The following table presents the results of operations for the three and six months ended June 30, 2021 and 2020 for the Money Transfer Segment:

The following table presents the results of operations for the three and nine months ended September 30, 2021 and 2020 for the Money Transfer Segment:

Three Months Ended

September 30,

Year-over-Year Change

Six Months Ended

Nine Months Ended

September 30,

Year-over-Year Change

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Selling, general and administrative

Goodwill impairment

Goodwill and acquired intangible assets impairment

Depreciation and amortization

Total operating expenses

Operating income (loss)

Operating income

Transactions processed (millions)

Money Transfer Segment total revenues were $359.3 million for the three months ended June 30, 2021, an increase of $96.4 million or 37% compared to the same period in 2020.

Money Transfer Segment total revenues were $684.2 million for the six months ended June 30, 2021, an increase of $155.1 million or 29% compared to the same period in 2020.

Money Transfer Segment total revenues were $353.5 million for the three months ended September 30, 2021, an increase of $30.4 million or 9% compared to the same period in 2020.

Money Transfer Segment total revenues were $1,037.7 million for the nine months ended September 30, 2021, an increase of $185.5 million or 22% compared to the same period in 2020.

The increase in revenues was primarily due to increases in U.S.

outbound and international-originated money transfers, partially offset by decreases in the U.S.

domestic business.

Revenues per transaction increased to $10.51 and $10.48 for the three and six months ended June 30, 2021, respectively , compared to $10.19 and $9.95 for the same periods in 2020, respectively .

Foreign currency movements increased revenues by approximately $17.9 million and $32.2 million for the three and six months ended June 30, 2021, respectively, compared to the same periods in 2020 .

domestic business and transactions in the Middle East region.

Revenues per transaction decreased to $10.37 and increased to $10.44 for the three and nine months ended September 30, 2021, respectively , compared to $10.46 and $10.13 for the same periods in 2020, respectively .

Foreign currency movements increased revenues by approximately $3.2 million and $35.4 million for the three and nine months ended September 30, 2021, respectively, compared to the same periods in 2020 .

Direct operating costs

Money Transfer Segment direct operating costs were $205.2 million for the three months ended June 30, 2021, an increase of $60.6 million or 42 % compared to the same period in 2020.

Money Transfer Segment direct operating costs were $389.0 million for the six months ended June 30, 2021, an increase of $101.5 million or 35 % compared to the same period in 2020.

Money Transfer Segment direct operating costs were $200.2 million for the three months ended September 30, 2021, an increase of $23.5 million or 13 % compared to the same period in 2020.

Money Transfer Segment direct operating costs were $589.3 million for the nine months ended September 30, 2021, an increase of $125.1 million or 27 % compared to the same period in 2020.

Direct operating costs primarily consist of commissions paid to agents who originate money transfers on our behalf and correspondent agents who disburse funds to the customers’ destination beneficiaries, together with less significant costs, such as bank depository fees.

The increase in direct operating costs was primarily due to the increase in the number of U.S.

outbound and international-originated money transfer transactions and the impact of the U.S.

dollar weakening against key foreign currencies.

Foreign currency movements increased direct operating costs by approximately $9.2 million and $16.3 million for the three and six months ended June 30, 2021, respectively, compared to the same periods in 2020 .

Gross profit was $154.1 million for the three months ended June 30, 2021, an increase of $35.8 million or 30% compared to $118.3 million for the same period in 2020 .

Gross profit was $295.2 million for the six months ended June 30, 2021, an increase of $53.6 million or 22% compared to $241.6 million for the same period in 2020 .

Gross margin decreased to 42.9 % and 43.1% for the three and six months ended June 30, 2021, respectively , compared to 45.0% and 45.7% for the same periods in 2020, respectively .

The decrease in gross margin is primarily attributable to the increase in direct operating costs driven by increased agent commissions in three and six months ended June 30, 2021 compared to the same periods in 2020.

outbound and international-originated money transfer transactions and corresponding increase in agent commissions.

Foreign currency movements increased direct operating costs by approximately $1.6 million and $17.9 million for the three and nine months ended September 30, 2021, respectively, compared to the same periods in 2020 .

During the third quarter of 2021, the Company evaluated $40.8 million of deferred contract acquisition costs related to a large retail contract due to lower than expected cash flows.

An undiscounted cash flow analysis was performed comparing the carrying amount of the deferred contract acquisition costs to the projected undiscounted cash flows.

The undiscounted cash flows exceeded the carrying amount indicating no impairment at September 30, 2021 .

Gross profit was $153.2 million for the three months ended September 30, 2021, an increase of $6.8 million or 5% compared to $146.4 million for the same period in 2020 .

Gross profit was $448.4 million for the nine months ended September 30, 2021, an increase of $60.4 million or 16% compared to $388.0 million for the same period in 2020 .

Gross margin decreased to 43.3 % and 43.2% for the three and nine months ended September 30, 2021, respectively , compared to 45.3% and 45.5% for the same periods in 2020, respectively .

The increase in gross profit is primarily attributable to the increase in transactions and the decrease in gross margin is primarily attributable to the increase in direct operating costs driven by increased agent commissions for the three and nine months ended September 30, 2021 compared to the same periods in 2020.

Salaries and benefits

Salaries and benefits expenses were $62.7 million for the three months ended June 30, 2021, an increase of $13.7 million or 28% c ompared to the same period in 2020 .

Salaries and benefits expenses were $123.3 million for the six months ended June 30, 2021, an increase of $20.3 million or 20% c ompared to the same period in 2020 .

Salaries and benefits expenses were $65.3 million for the three months ended September 30, 2021, an increase of $13.3 million or 25% c ompared to the same period in 2020 .

Salaries and benefits expenses were $188.5 million for the nine months ended September 30, 2021, an increase of $33.6 million or 22% c ompared to the same period in 2020 .

The increase in salaries and benefits was primarily driven by an increase in headcount to support the growth of the business and an increase in bonus expense.

Foreign currency movements in the countries where we employ our workforce increased these expenses by $3.2 million and $5.8 million for the three and six months ended June 30, 2021, respectively, compared to the same periods in 2020.

As a percentage of revenues, these expenses decreased to 17.5% and 18.0% for the three and six months ended June 30, 2021, respectively, compared to 18.7% and 19.5% for the same periods in 2020, respectively .

Foreign currency movements in the countries where we employ our workforce increased these expenses by $0.9 million and $6.7 million for the three and nine months ended September 30, 2021, respectively, compared to the same periods in 2020.

As a percentage of revenues, these expenses increased to 18.5% and were flat at 18.2% for the three and nine months ended September 30, 2021, respectively, compared to 16.1% and 18.2% for the same periods in 2020, respectively .

Selling, general and administrative

Selling, general and administrative expenses were $38.3 million for the three months ended June 30, 2021, an increase of $5.2 million or 16% compared to the same period in 2020 .

Selling, general and administrative expenses were $74.4 million for the six months ended June 30, 2021, an increase of $2.7 million or 4% compared to the same period in 2020 .

Foreign currency movements increased these expenses by $2.4 million and $5.0 million for the three and six months ended June 30, 2021, respectively, compared to the same periods in 2020 .

As a percentage of revenues, these expenses decreased to 10.7% and 10.9% for the three and six months ended June 30, 2021, respectively, compared to 12.6 % and 13.6% for the same periods in 2020, respectively.

Goodwill impairment

Selling, general and administrative expenses were $41.5 million for the three months ended September 30, 2021, an increase of $4.9 million or 13% compared to the same period in 2020 .

Selling, general and administrative expenses were $116.0 million for the nine months ended September 30, 2021, an increase of $7.6 million or 7% compared to the same period in 2020 .

The increase in these expenses is primarily driven by an increase in professional fees and travel related expenses.

Foreign currency movements decreased these expenses by $0.1 million and increased these expenses by $4.9 million for the three and nine months ended September 30, 2021, respectively, compared to the same periods in 2020 .

As a percentage of revenues, these expenses increased to 11.8% and decreased to 11.2% for the three and nine months ended September 30, 2021, respectively, compared to 11.3% and 12.7% for the same periods in 2020, respectively.

Goodwill and acquired intangible assets impairment

Due to the economic impacts of the COVID-19 pandemic, the Company recorded an $82.7 million non-cash goodwill impairment charge related to the xe reporting unit during the second quarter of 2020.

The non-cash goodwill impairment charge was recorded for xe as a result of declines in the international payments business stemming from economic uncertainty.

During the third quarter of 2020, a $1.5 million non-cash acquired intangible asset impairment charge was recorded for xe on previously acquired customer relationship intangible assets due to the discontinuation of trading with certain customers during the quarter.

Depreciation and amortization

Depreciation and amortization expenses were $9.0 million for the three months ended June 30, 2021, an increase of $0.4 million or 5% compared to the same period in 2020 .

Depreciation and amortization expenses were $18.0 million for the six months ended June 30, 2021, an increase of $0.8 million or 5% compared to the same period in 2020 .

Depreciation and amortization expenses were $8.9 million for the three months ended September 30, 2021, an increase of $0.3 million or 3% compared to the same period in 2020 .

Depreciation and amortization expenses were $26.9 million for the nine months ended September 30, 2021, an increase of $1.1 million or 4% compared to the same period in 2020 .

Depreciation and amortization primarily represents amortization of acquired intangible assets and depreciation of money transfer terminals, computers and software, leasehold improvements and office equipment.

As a percentage of revenues, these expenses decreased to 2.5 % and 2.6% for the three and six months ended June 30, 2021 , respectively, compared to 3.3 % and 3.2% for the same periods in 2020, respectively .

Operating income (loss)

Money Transfer Segment operating income was $44.1 million for the three months ended June 30 , 2021, an increase of $99.3 million or 180% compared to an operating loss in the same period in 2020 .

Money Transfer Segment operating income was $79.5 million for the six months ended June 30 , 2021, an increase of $112.4 million or 341% compared to an operating loss in the same period in 2020 .

Operating margin increased to 12.3% and 11.6% for the three and six months ended June 30, 2021, respectively, compared to (21.0 %) and (6.2%) for the same periods in 2020, respectively .

The increases in operating income and operating margin were primarily driven by the decrease in goodwill impairment charges, and an increase in transaction volume, specifically the higher margin transactions for U.S.

outbound and international-originated money transfers.

Operating income (loss) per transaction increased to $1.29 and $1.22 for the three and six months ended June 30, 2021, respectively , compared to ( $2.14) and ($0.62) for the same periods in 2020, respectively .

As a percentage of revenues, these expenses decreased to 2.5 % and 2.6% for the three and nine months ended September 30, 2021 , respectively, compared to 2.7 % and 3.0% for the same periods in 2020, respectively .

Operating income

Money Transfer Segment operating income was $37.5 million for the three months ended September 30 , 2021, a decrease of $10.1 million or 21% compared to the same period in 2020 .

Money Transfer Segment operating income was $117.0 million for the nine months ended September 30 , 2021, an increase of $102.3 million or 695% compared to the same period in 2020 .

Operating margin decreased to 10.6% and increased to 11.3% for the three and nine months ended September 30, 2021, respectively, compared to 14.7 % and 1.7% for the same periods in 2020, respectively .

Operating income per transaction decreased to $1.10 and increased to $1.18 for the three and nine months ended September 30, 2021, respectively , compared to $1.54 and $0.17 for the same periods in 2020, respectively .

The decrease in operating income, operating margin and operating income per transaction for the three months ended September 30, 2021 compared to the same period in 2020 was primarily driven by the increase in agent commissions and increase in headcount to support the growth of the business.

The increase in operating income, operating margin and operating income per transaction for the nine months ended September 30, 2021 compared to the same period in 2020 was primarily driven by the decrease in non-cash goodwill impairment charges, and an increase in transaction volume, specifically the higher margin transactions for U.S.

outbound and international-originated money transfers, partially offset by the increase in agent commissions and increase in headcount to support the growth of the business.

CORPORATE SERVICES

The following table presents the operating expenses for the three and six months ended June 30, 2021 and 2020 for Corporate Services:

The following table presents the operating expenses for the three and nine months ended September 30, 2021 and 2020 for Corporate Services:

Three Months Ended

September 30,

Year-over-Year Change

Six Months Ended

Nine Months Ended

September 30,

Year-over-Year Change

9 unchanged sentences

Corporate operating expenses

Total Corporate operating expenses were $15.9 million and $29.9 million for the three and six months ended June 30, 2021, respectively, an increase of $8.4 million or 112% and $10.3 million or 52%, respectively, compared to the same periods in 2020 .

The increase is primarily due to a $7.8 million and $10.0 million increase in share based compensation for the three and six months ended June 30, 2021, respectively, compared to the same periods in 2020.

Total Corporate operating expenses were $12.2 million and $42.0 million for the three and nine months ended September 30, 2021, respectively, an increase of $2.2 million or 22% and $12.5 million or 42%, respectively, compared to the same periods in 2020 .

The increases are primarily due to $1.8 million and $11.8 million increases in share based compensation for the three and nine months ended September 30, 2021, respectively, compared to the same periods in 2020.

OTHER EXPENSE, NET

Three Months Ended

September 30,

Year-over-Year Change

Six Months Ended

Nine Months Ended

September 30,

Year-over-Year Change

6 unchanged sentences

Interest expense

Foreign currency exchange gain (loss), net

Other gains (losses)

Foreign currency exchange loss, net

Other expense, net

Foreign currency exchange gain (loss), net

Foreign currency exchange loss, net

Foreign currency exchange activity includes gains and losses on certain foreign currency exchange derivative contracts and the impact of remeasurement of assets and liabilities denominated in foreign currencies.

8 unchanged sentences

dollar weakens, our corporate entities will record foreign currency exchange gains.

We recorded a net foreign currency exchange gain of $0.1 million and a loss of $3.9 million for the three and six months ended June 30, 2021, respectively, compared to a net foreign currency exchange gain of $2.5 million and a net foreign currency exchange loss of $16.3 million for the same periods in 2020, respectively.

These realized and unrealized foreign currency exchange gains and losses reflect the fluctuation in the value of the U.S.

We recorded a net foreign currency exchange loss of $8.1 million and $12.1 million for the three and nine months ended September 30, 2021, respectively, compared to a net foreign currency exchange loss of $1.4 million and $17.7 million for the same periods in 2020, respectively.

These realized and unrealized foreign currency exchange losses reflect the fluctuation in the value of the U.S.

dollar against the currencies of the countries in which we operated during the respective periods.

INCOME TAX EXPENSE

Our effective income tax rate was 58.9% and 99.9% for the three and six months ended June 30, 2021 , respectively, compared to (8.4)% and (11.1)% for the same periods in 2020, respectively.

Our effective income tax rate for the three and six months ended June 30, 2021 was higher than the applicable statutory income tax rate of 21 % as a result of certain foreign earnings being subject to higher local statutory tax rates, the non-recognition of tax benefits from losses in certain foreign countries where we have a limited history of profitable earnings and as a result of an increase in the valuation allowance in certain jurisdictions relating to the reversal of tax benefits recognized in the first quarter of 2021 for continuing net operating losses.

Our effective income tax rate for the three and six months ended June 30, 2020 was different than the applicable statutory income tax rate of 21% primarily due to the non-deductible goodwill impairment charge during the second quarter of 2020 and as a result of an increase in the valuation allowance in certain jurisdictions relating to the reversal of tax benefits recognized in the first quarter of 2020 for net operating losses in those jurisdictions which have a limited history of profitable earnings.

Our effective income tax rate was 23.6% and 35.8% for the three and nine months ended September 30, 2021 , respectively, compared to 27.2% and (55.9)% for the same periods in 2020, respectively.

Our effective income tax rate for the three and nine months ended September 30, 2021 was higher than the applicable statutory income tax rate of 21 % as a result of certain foreign earnings being subject to higher local statutory tax rates, the non-recognition of tax benefits from losses in certain foreign countries where we have a limited history of profitable earnings and as a result of an increase in the valuation allowance in certain jurisdictions relating to the reversal of tax benefits recognized in the first quarter of 2021 for continuing net operating losses.

Our effective income tax rate for the three and nine months ended S eptember 30, 2020 was different than the applicable statutory income tax rate of 21% primarily due to the non-deductible goodwill impairment charge during the second quarter of 2020 and as a result of an increase in the valuation allowance in certain jurisdictions relating to the reversal of tax benefits recognized in the first quarter of 2020 for net operating losses in those jurisdictions which have a limited history of profitable earnings.

NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS

7 unchanged sentences

NET INCOME (LOSS) ATTRIBUTABLE TO EURONET

Net income attributable to Euronet was $8.6 million for the three months ended June 30, 2021, an increase of $124.4 million or 107% compared to t he net loss in the same period in 2020 .

For the three months ended June 30, 2021, the increase in net income was primarily attributable to the $104.6 million decrease in non-cash goodwill impairment charges and a $66.1 million increase in gross profit, partially offset by a $30.1 million increase in salaries and benefits, a $5.8 million increase in selling, general and administrative expenses, a $2.4 million decrease in net foreign currency exchange gains, and an increase in other expenses aggregating $8.0 million.

Net loss attributable to Euronet was ($0.03 million) for the six months ended June 30, 2021, an increase of $113.9 million or 100% compared to the net loss in the same period in 2020 .

For the six months ended June 30, 2021, the increase in net income was primarily attributable to the $104.6 million decrease in non-cash goodwill impairment charges, a $59.8 million increase in gross profit and a $12.4 million decrease in net foreign currency exchange losses, partially offset by a $44.5 million increase in salaries and benefits, a $7.0 million increase in income tax expense, and an increase in other expenses aggregating $11.4 million.

Net income attributable to Euronet was $73.9 million for the three months ended September 30, 2021, an increase of $33.6 million or 84% compared to the same period in 2020 .

For the three months ended September 30, 2021, the increase in net income was primarily attributable to the $75.4 million increase in gross profit driven by an increase in transaction volumes, partially offset by a $17.8 million increase in salaries and benefits, a $9.1 million increase in selling, general and administrative expenses, a $7.7 million increase in income tax expense, a $6.8 million increase in net foreign currency exchange losses and an increase in other expenses aggregating $0.4 million .

Net income attributable to Euronet was $73.9 million for the nine months ended September 30, 2021, an increase of $147.5 million or 200% compared to the net loss in the same period in 2020 .

For the nine months ended September 30, 2021, the increase in net income was primarily attributable to the $135.2 million increase in gross profit driven by an increase in transaction volumes, a $106.0 million decrease in non-cash goodwill and intangible assets impairment charges and a $5.6 million decrease in foreign currency exchange losses, partially offset by a $62.4 million increase in salaries and benefits, a $14.7 million increase in income tax expense, a $12.9 million increase in selling, general and administrative expenses, a $7.3 million increase in depreciation and amortization expenses and an increase in other expenses aggregating $2.0 million.

LIQUIDITY AND CAPITAL RESOURCES

Working capital

As of June 30, 2021 , we had working capital of $1,280.2 million , which is calculated as the difference between total current assets and total current liabilities, compared to working capital of $1,510.5 million as of December 31, 2020 .

The decrease in working capital was primarily due to the $249.6 million decrease in the outstanding balance on the Credit Facility during the six months ended June 30, 2021 .

Our ratio of current assets to current liabilities was 1.79 and 1.81 at June 30, 2021 and December 31, 2020 , respectively.

As of September 30, 2021 , we had working capital of $1,395.5 million , which is calculated as the difference between total current assets and total current liabilities, compared to working capital of $1,510.5 million as of December 31, 2020 .

The decrease in working capital was primarily due to the $217.2 million decrease in the outstanding balance on the Credit Facility during the nine months ended September 30, 2021, partially offset by a $35.0 million increase in trade accounts receivable and a $34.7 million decrease in accrued expenses and other current liabilities .

Our ratio of current assets to current liabilities was 1.85 and 1.81 at September 30, 2021 and December 31, 2020 , respectively.

We require substantial working capital to finance operations.

5 unchanged sentences

However, in certain countries, we fund the cash required to operate our ATM network from borrowings under the revolving credit facilities and cash flows from operations.

As of June 30, 2021 , we had $565.1 million of our own cash in use or designated for use in our ATM network, which is recorded in ATM cash on Euronet's Consolidated Balance Sheet.

ATM cash increased $154.0 million from $411.1 million as of December 31, 2020 to $565.1 million as of June 30, 2021 as a result of the increase in number of active ATMs as of June 30, 2021 compared to December 31, 2020.

The Company has $994.5 million of unrestricted cash as of June 30, 2021 compared to $1,420.3 million as of December 31, 2020 .

The decrease in unrestricted cash was primarily due to the $249.6 million net repayment of the outstanding balance on the Credit Facility during the six months ended June 30, 2021 and the $154.0 million increase in ATM cash as unrestricted cash was utilized to fill the additional active ATMs.

Including the $565.1 million of cash in ATMs at June 30, 2021, the Company has access to $1,559.6 million in available cash, and $949.7 million available under the Credit Facility with no significant long-term debt principal payments until March 2025.

The following table identifies cash and cash equivalents provided by/(used in) our operating, investing and financing activities for the six months ended June 30, 2021 and 2020 (in thousands):

Six Months Ended

As of September 30, 2021 , we had $669.7 million of our own cash in use or designated for use in our ATM network, which is recorded in ATM cash on Euronet's Consolidated Balance Sheet.

ATM cash increased $258.6 million from $411.1 million as of December 31, 2020 to $669.7 million as of September 30, 2021 as a result of the increase in the number of active ATMs as of September 30, 2021 compared to December 31, 2020.

The Company has $1,048.5 million of unrestricted cash as of September 30, 2021 compared to $1,420.3 million as of December 31, 2020 .

The decrease in unrestricted cash was primarily due to the $217.2 million net repayment of the outstanding balance on the Credit Facility during the nine months ended September 30, 2021 and the $258.6 million increase in ATM cash as unrestricted cash was utilized to fill the additional active ATMs.

Including the $669.7 million of cash in ATMs at September 30, 2021, the Company has access to $1,718.2 million in available cash, and $918.9 million available under the Credit Facility with no significant long-term debt principal payments until March 2025.

The following table identifies cash and cash equivalents provided by/(used in) our operating, investing and financing activities for the nine months ended September 30, 2021 and 2020 (in thousands):

Nine Months Ended

September 30,

Cash and cash equivalents and restricted cash provided by (used in):

5 unchanged sentences

Operating activity cash flow

Cash flows provided by operating activities were $173.3 million f or the six months ended June 30, 2021 compared to $178.6 million for the same period in 2020 .

The decrease in operating cash flows was primarily due to fluctuations in working capital mainly associated with the timing of the settlement processes with content providers in the epay Segment, with correspondents in the Money Transfer Segment, and with card organizations and banks in the EFT Processing Segment.

Cash flows provided by operating activities were $304.3 million f or the nine months ended September 30, 2021 compared to $220.4 million for the same period in 2020 .

The increase in operating cash flows was primarily due to the increase in net income and fluctuations in working capital mainly associated with the timing of the settlement processes with content providers in the epay Segment, with correspondents in the Money Transfer Segment, and with card organizations and banks in the EFT Processing Segment.

Investing activity cash flow

Cash flows used in investing activities were $48.3 million for the six months ended June 30, 2021 compared to $48.6 million for the same period in 2020 .

We used $45.1 million for purchases of property and equipment for the six months ended June 30, 2021 compared to $45.5 million for the same period in 2020 .

Cash used for software development and other investing activities totaled $3.3 million and $3.6 million for the six months ended June 30, 2021 and 2020 , respectively.

Cash flows used in investing activities were $71.0 million for the nine months ended September 30, 2021 compared to $77.1 million for the same period in 2020 .

We used $66.1 million for purchases of property and equipment for the nine months ended September 30, 2021 compared to $71.4 million for the same period in 2020 .

Cash used for software development and other investing activities totaled $4.9 million and $5.7 million for the nine months ended September 30, 2021 and 2020 , respectively.

Financing activity cash flow

Cash flows used in financing activities were $248.6 million for the six months ended June 30, 2021 compared to $241.0 million for the same period in 2020 .

Our borrowing activities for the six months ended June 30, 2021 consisted of net cash outflows of $249.6 million compared to no net borrowings for the same period in 2020 .

The decrease in net borrowings for the six months ended June 30, 2021 compared to the same period in 2020 was the result of the net repayment of $249.6 million of the outstanding balance on the Credit Facility.

We repurchased $0.9 million of common stock during the six months ended June 30, 2021 compared to repurchases of $240.7 million for the same period in 2020 .

The $0.9 million of share repurchases during the six months ended June 30, 2021 were in connection with the settlement of RSU awards and the exercise of option awards in certain countries in which we operate.

We received proceeds of $5.3 million and $5.7 million during the six months ended June 30, 2021 and 2020 , respectively, for the issuance of stock in connection with our Stock Incentive Plan.

Cash flows used in financing activities were $216.3 million for the nine months ended September 30, 2021 compared to $244.1 million for the same period in 2020 .

Our borrowing activities for the nine months ended September 30, 2021 consisted of net cash outflows of $217.0 million compared to net cash outflows of $5.0 million for the same period in 2020 .

The increase in net cash outflows for the nine months ended September 30, 2021 compared to the same period in 2020 was the result of the net repayment of $217.2 million of the outstanding balance on the Credit Facility.

We repurchased $1.0 million of common stock during the nine months ended September 30, 2021 compared to repurchases of $240.8 million for the same period in 2020 .

The $1.0 million of share repurchases during the nine months ended September 30, 2021 were in connection with the settlement of Restricted Stock Unit awards and the exercise of option awards in certain countries in which we operate.

We received proceeds of $6.4 million and $6.6 million during the nine months ended September 30, 2021 and 2020 , respectively, for the issuance of stock in connection with our Stock Incentive Plan.

Other sources of capital

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Dollar swingline loans, and a $90 million sublimit for certain foreign currencies swingline loans.

As of June 30, 2021 , fees and interest on borrowings are based upon our corporate credit rating (as defined in the credit agreement) and are based, in the case of letter of credit fees, on a margin, and in the case of interest, on a margin over the London InterBank Offered Rate ("LIBOR") or a margin over the base rate, as selected by us, with the applicable margin ranging from 1.125% to 2.0% (or 0.175% to 1.0% for base rate loans).

As of June 30, 2021 , we had $20.8 million of borrowings and $59.5 million of stand-by letters of credit outstanding under the Credit Facility.

As of September 30, 2021 , fees and interest on borrowings are based upon our corporate credit rating (as defined in the credit agreement) and are based, in the case of letter of credit fees, on a margin, and in the case of interest, on a margin over the London InterBank Offered Rate ("LIBOR") or a margin over the base rate, as selected by us, with the applicable margin ranging from 1.125% to 2.0% (or 0.175% to 1.0% for base rate loans).

As of September 30, 2021 , we had $53.2 million of borrowings and $57.9 million of stand-by letters of credit outstanding under the Credit Facility.

The remaining $918.9 million under the Credit Facility was available for borrowing.

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The Senior Notes accrue interest at a rate of 1.375% per year, payable annually in arrears on May 22 of each year, until maturity or earlier redemption.

As of June 30, 2021 , we have outstanding €600 million ( $711.3 million ) principal amount of the Senior Notes.

As of September 30, 2021 , we have outstanding €600 million ( $694.9 million ) principal amount of the Senior Notes.

In addition, we may redeem some or all of these notes on or after February 22, 2026 at their principal amount plus any accrued and unpaid interest.

Other debt obligations - Certain of our subsidiaries have available credit lines and overdraft facilities to generally supplement short-term working capital requirements, when necessary.

There were $0.8 million and $0.9 million outstanding under these other obligation arrangements as of June 30, 2021 and December 31, 2020, respectively.

There were $1.1 million and $0.9 million outstanding under these other obligation arrangements as of September 30, 2021 and December 31, 2020, respectively.

Other uses of capital

Capital expenditures and needs - Total capital expenditures for the six months ended June 30, 2021 were $45.1 million .

Capital expenditures and needs - Total capital expenditures for the nine months ended September 30, 2021 were $66.1 million .

These capital expenditures were primarily for the purchase and installation of ATMs in key under-penetrated markets, the purchase of POS terminals for the epay and Money Transfer Segments, and office, data center and company store computer equipment and software.

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Our liability under such indemnification provisions may be subject to time and materiality limitations, monetary caps and other conditions and defenses.

As of June 30, 2021 , there were no material changes from the disclosure in our Annual Report on Form 10-K for the year ended December 31, 2020 .

To date, we are not aware of any significant claims made by the indemnified parties or parties to whom we have provided guarantees on behalf of our subsidiaries and, accordingly, no liabilities have been recorded as of June 30, 2021 .

As of September 30, 2021 , there were no material changes from the disclosure in our Annual Report on Form 10-K for the year ended December 31, 2020 .

See also Note 14, Commitments, to the unaudited consolidated financial statements included elsewhere in this report.

CONTRACTUAL OBLIGATIONS

As of June 30, 2021 , there have been no material changes outside the ordinary course of business in our future contractual obligations from the amounts reported within our Annual Report on Form 10-K for the year ended December 31, 2020 .

As of September 30, 2021 , there have been no material changes outside the ordinary course of business in our future contractual obligations from the amounts reported within our Annual Report on Form 10-K for the year ended December 31, 2020 .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis