EURONET WORLDWIDE, INC. 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The terms "Euronet," the "Company," "we" and "us" as used herein refer to Euronet Worldwide, Inc. and its subsidiaries. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This report contains statements that constitute forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and section 21E of the Securities Exchange Act of 1934 (“Exchange Act”). Generally, the words "believe," "expect," "anticipate," "intend," "estimate," "will" and similar expressions identify forward-looking statements. However, the absence of these words or similar expressions does not mean the statement is not forward-looking. All statements other than statements of historical facts included in this document are forward-looking statements, including, but not limited to, statements regarding the following: our business plans and financing plans and requirements; trends affecting our business plans and financing plans and requirements; trends affecting our business; the adequacy of capital to meet our capital requirements and expansion plans; the assumptions underlying our business plans; our ability to repay indebtedness; our estimated capital expenditures; the potential outcome of loss contingencies; our expectations regarding the closing of any pending acqu isitions; business strategy; government regulatory action; the expected effects of changes in laws or accounting standards; technological advances; and projected costs and revenues. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these expectations will prove to be correct. Investors are cautioned that any forward-looking statements are not guarantees of future performance and involve risks and uncertainties. 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 war in the Ukraine and related economic sanctions; our ability to successfully integrate the operations of Piraeus Merchant Services; inflation; economic conditions in specific countries and regions; technological developments affecting the market for our products and services; our ability to successfully introduce new products and services; foreign currency exchange rate fluctuations; the effects of any breach of our computer systems or those of our customers or vendors, including our financial processing networks or those of other third parties; interruptions in any of our systems or those of our vendors or other third parties; our ability to renew existing contracts at profitable rates; changes in fees payable for transactions performed for cards bearing international logos or over switching networks such as card transactions on ATMs; our ability to comply with increasingly stringent regulatory requirements, including anti-money laundering, anti-terrorism, anti-bribery, sanctions, consumer and data protection and privacy and the European Union's General Data Protection Regulation, and Second Revised Payment Service Directive requirements; changes in laws and regulations affecting our business, including tax and immigration laws and any laws regulating payments, including DCC transactions, changes in our relationships with, or in fees charged by, our business partners; competition; the outcome of claims and other loss contingencies affecting Euronet; the cost of borrowing (including fluctuations in interest rates), availability of credit and terms of and compliance with debt covenants; and ren ewal of sources of funding as they expire and the availability of replacement funding and those factors referred to above and as set forth and more fully described in Part I, Item 1A — Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2021 and Part II, Item 1A - Risk Factors of our Quarterly Report on Form 10-Q for three months ended June 30, 2022. Our Annual Report on Form 10-K and Quarterly Report on Form 10-Q are available on the SEC's EDGAR website at www.sec.gov, and copies may also be obtained by contacting the Company. Any forward-looking statements made in this Form 10-Q speak only as of the date of this report. Except as required by law, we do not intend, and do not undertake any obligation, to update any forward-looking statements to reflect future events or circumstances after the date of such statements. 24 OVERVIEW COMPANY OVERVIEW, GEOGRAPHIC LOCATIONS AND PRINCIPAL PRODUCTS AND SERVICES Euronet is a leading electronic payments provider. We offer payment and transaction processing and distribution solutions to financial institutions, retailers, service providers and individual consumers. Our primary product offerings include comprehensive ATM, POS, card outsourcing, card issuing and merchant acquiring services, software solutions, electronic distribution of prepaid mobile airtime, managed services and other electronic payment products, foreign currency exchange services and global money transfer services. We operate in the following three segments: 1) The EFT Processing Segment processes transactions for a network of 49,617 ATMs and approximately 590,000 POS terminals across Europe, the Middle East, Africa, Asia Pacific, and the United States. We provide comprehensive electronic payment solutions consisting of ATM cash withdrawal and deposit services, ATM network participation, outsourced ATM and POS management solutions, credit, debit and prepaid card outsourcing, DCC, and other value added services. Through this segment, we also offer a suite of integrated electronic financial transaction software solutions for electronic payment and transaction delivery systems. 2) The epay Segment, which provides distribution, processing and collection services for prepaid mobile airtime and other electronic content. We operate a network of approximately 777,000 POS terminals providing electronic processing of prepaid mobile airtime top-up services and other electronic content in Europe, the Middle East, Asia Pacific, the United States and South America. We also provide vouchers and physical gift fulfillment services in Europe. 3) The Money Transfer Segment, which provides global consumer-to-consumer money transfer services, primarily under the brand names Ria, IME, AFEX, and xe and global account-to-account money transfer services under the brand name xe. We offer services under the brand names Ria and IME through a network of sending agents, Company-owned stores (primarily in North America, Europe and Malaysia) and our websites (riamoneytransfer.com and online.imeremit.com), disbursing money transfers through a worldwide correspondent network that includes approximately 509,000 locations. xe is a provider of foreign currency exchange information and of fers money transfer services on its currency data websit es (xe.com and x-rates.com). In addition to money transfers, we also offer customers bill payment services (primarily in the U.S.), payment alternatives such as money orders and prepaid debit cards, comprehensive check cashing services for a wide variety of issued checks, along with competitive foreign currency exchange services and prepaid mobile top-up. Through our xe brand, we offer cash management solutions and foreign currency risk management services to small-to-medium-sized businesses. We have six processing centers in Europe, five in Asia Pacific and two in North America. We have 36 principal offices in Europe, 14 in Asia Pacific, 10 in North America, three in the Middle East, two in South America and one in Africa. Our executive offices are located in Leawood, Kansas, USA. With approximately 75 % of our revenues denominated in currencies other than the U.S. dollar, any significant changes in foreign currency exchange rates will likely have a significant impact on our results of operations (for a further discussion, see Item 1 A - Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2021 ). SOURCES OF REVENUES AND CASH FLOW Euronet earns revenues and income primarily from ATM management fees, transaction fees, commissions and foreign currency exchange margin. Each operating segment’s sources of revenues are described below. EFT Processing Segment — Revenues in the EFT Processing Segment, which represented approximately 34% and 29% of total consolidated revenues for the three and nine months ended September 30, 2022, 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 applicati on software and sales of related hardware. 25 epay Segment — Revenues in the epay Segment, which represented approximately 27% and 29% of total consolidated revenues for the three and nine months ended September 30, 2022, respectively, a re primarily derived from commissions earned from the distribution of electronic content, vouchers, and physical gifts and commissions or processing fees rec eived from mobile phone operators for the processing and distribution of prepaid mobile airtime. Branded payments, which includes the distribution of digital media content, wer e 69% and 66% of epay Segment revenues for the three and nine months ended September 30, 2022. Branded payments include digital content such as music, games and software, as well as, other products including 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 39% and 43% of total consolidated revenues for the three and nine months ended September 30, 2022 , are 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, and xe branded websites, along with a worldwide network of correspondent agents, consisting primarily of financial institutions in the transfer destination countries. Sending and correspondent agents each earn fees for cash collection and distribution services, which are recognized as direct operating costs at the time of sale. We offer a money transfer product called Walmart-2-Walmart Money Transfer Service which allows customers to transfer money to and from Walmart stores in the U.S. Our Ria business executes the transfers with Walmart serving as both the sending agent and payout correspondent. Ria earns a lower margin from these transactions than its traditional money transfers; however, the arrangement has added a significant number of transactions to Ria's business. The agreement with Walmart establishes Ria as the only party through which Walmart will sell U.S. domestic money transfers branded with Walmart marks. The agreement is effective until April 2026. Thereafter, it will automatically renew for subsequent one -year terms unless either party provides notice to the contrary. The agreement imposes certain obligations on each party, the most significant being service level requirements by Ria and money transfer compliance requirements by Walmart. Any violation of these requirements by Ria could result in an obligation to indemnify Walmart or termination of the contract by Walmart. However, the agreement allows the parties to resolve disputes by mutual agreement without termination of the agreement. Corporate Services, Eliminations and Other — In addition to operating in our principal operating segments described above, our “Corporate Services, Eliminations and Other” category includes non-operating activity, certain inter-segment eliminations and the cost of providing corporate and other administrative services to the operating segments, including most share-based compensation expense. These services are not directly identifiable with our reportable operating segments. Opportunities and Challenges The global product markets in which we operate are large and fragmented, which poses both opportunities and challenges for our technology to disrupt new and existing competition. As an organization, our focus is on increasing our market presence through both physical (ATMs, POS terminals, company stores and agent correspondents) and digital assets and providing new and improved products and services for customers through all of our channels, which may in turn drive an increase in the number of transactions on our networks. Each of these opportunities also presents us with challenges, including differentiating our portfolio of products and services in highly competitive markets, the successful development and implementation of our software products and access to financing for expansion. 1) The EFT Processing Segment opportunities include physical expansion into target markets, developing value added products or services, increasing high value DCC and surcharge transactions and efficiently leveraging our portfolio of software solutions. Our opportunities are dependent on renewing and expanding our card acceptance, ATM and POS management and outsourcing, cash supply and other commercial agreements with customers and financial institutions. Operational challenges in the EFT Processing Segment include obtaining and maintaining the required licenses and sponsorship agreements in markets in which we operate and navigating frequently changing rules imposed by international card organizations, such as Visa ® and Mastercard ® , that govern ATM interchange fees, direct access fees and other restrictions. Our profitability is dependent on the laws and regulations that govern DCC transactions, specifically in the E.U., as well as the laws and regulations of each country in which we operate. These laws and regulations may impact our cross-border and cross-currency transactions . The timing and amount of revenues in the EFT Processing Segment is uncertain and unpredictable due to inherent limitations in managing our estate of ATMs. Our ATM estate is dependent on contracts that cover large numbers of ATMs, and management is complicated by legal and regulatory considerations of local countries, as well as customers decisions whether to outsource ATMs or manage them internally. 26 2) The epay Segment opportunities include renewing existing and negotiating new agreements in target markets in which we operate, primarily with digital content providers, mobile operators, financial institutions and retailers. The overall growth rate in the digital media content and prepaid mobile phone markets, shifts between prepaid and postpaid services, and our market share in those respective markets will have a significant impact on our ability to maintain and grow the epay Segment revenues. There is significant competition in these markets that may impact our ability to grow organically and increase the margin we earn and the margin that we pay to retailers. The profitability of the epay Segment is dependent on our ability to adapt to new technologies that may compete with POS distribution of digital content and prepaid mobile airtime, as well as our ability to leverage cross-selling opportunities with our EFT and Money Transfer Segments. The epay Segment opportunities may be impacted by government-imposed restrictions on retailers and/or content providers with whom we partner in countries in which we have a presence, and corresponding licensure requirements mandated upon such parties to legally operate in such countries. 3) The Money Transfer Segment opportunities include expanding our portfolio of products and services to new and existing customers around the globe, which in turn may lead to an increase in transaction volumes. The opportunities to expand are contingent on our ability to effectively leverage our network of bank accounts for digital money transfer delivery, maintaining our physical agent network, cross selling opportunities with our EFT and epay segments and our penetration into high growth money transfer corridors. The challenges inherit in these opportunities include maintaining compliance with all regulatory requirements, maintaining all required licenses, ensuring the recoverability of funds advanced to agents and the continued reliance on the technologies required to operate our business. The volume of transactions processed on our network is impacted by shifts in our customer base, which can change rapidly with worker migration patterns and changes in unbanked populations across the globe. Foreign regulations that impact cross-border migration patterns and the money transfer markets can significantly impact our ability to grow the number of transactions on our network. For all segments, our continued expansion may involve additional acquisitions that could divert our resources and management time and require integration of new assets with our existing networks and services. Our ability to effectively manage our growth has required us to expand our operating systems and employee base, particularly at the management level, which has added incremental operating costs. An inability to continue to effectively manage expansion could have a material adverse effect on our business, growth, financial condition or results of operations. 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. COVID-19 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 nine months ended September 30, 2022 and 2021 . As the number and rate of new cases has fluctuated in various locations around the globe, the closures, restrictions and other social distancing orders have been modified, rescinded and/or re-imposed. Although vaccines for COVID-19 are widely available, a significant portion of the population remains unvaccinated and long term effectiveness of the vaccines, especially against new variants, is still unknown. The EFT Segment has experienced declines in certain transaction volumes due to these restrictions, especially high-margin cross-border transactions. The epay Segment has experienced the impacts of consumer movement restrictions in certain markets, while other markets have been positively impacted where we have a higher mix of digital distribution or a higher concentration of retailers that are deemed essential and have remained open during the pandemic. 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 as well as certain restrictions that may impact immigrant laborers. 27 SEGMENT SUMMARY RESULTS OF OPERATIONS Revenues and operating income by segment for the three and nine months ended September 30, 2022 and 2021 are summarized in the tables below: Revenues for the Three Months Ended September 30, Year-over-Year Change Revenues for the Nine Months Ended September 30, Year-over-Year Change (dollar amounts in thousands) 2022 2021 Increase (Decrease) Amount Increase (Decrease) Percent 2022 2021 Increase (Decrease) Amount Increase (Decrease) Percent EFT Processing $ 319,466 $ 227,129 $ 92,337 41 % $ 714,067 $ 427,687 $ 286,380 67 % epay 248,923 238,319 10,604 4 % 712,467 724,540 (12,073 ) (2) % Money Transfer 364,841 353,451 11,390 3 % 1,072,266 1,037,659 34,607 3 % Total 933,230 818,899 114,331 14 % 2,498,800 2,189,886 308,914 14 % Corporate services, eliminations and other (1,964 ) ( 2,339 ) 375 (16) % (5,758 ) (5,970 ) 212 (4) % Total $ 931,266 $ 816,560 $ 114,706 14 % $ 2,493,042 $ 2,183,916 $ 309,126 14 % Operating Income (Loss) for the Three Months Ended September 30, Year-over-Year Change Operating Income (Loss) for the Nine Months Ended September 30, Year-over-Year Change (dollar amounts in thousands) 2022 2021 Increase (Decrease) Amount Increase (Decrease) Percent 2022 2021 Increase (Decrease) Amount Increase (Decrease) Percent EFT Processing $ 116,396 $ 63,202 $ 53,194 (84) % $ 164,759 $ (2,230 ) $ 166,989 7,488 % epay 29,134 25,954 3,180 12 % 79,725 82,346 (2,621 ) (3) % Money Transfer 40,542 37,505 3,037 8 % 114,519 116,990 (2,471 ) (2) % Total 186,072 126,661 59,411 47 % 359,003 197,106 161,897 82 % Corporate services, eliminations and other (17,614 ) ( 12,167 ) (5,447 ) 45 % (52,765 ) (42,042 ) (10,723 ) 26 % Total $ 168,458 $ 114,494 $ 53,964 47 % $ 306,238 $ 155,064 $ 151,174 97 % 28 Impact of changes in foreign currency exchange rates Our revenues and local expenses are recorded in the functional currencies of our operating entities, and then are translated into U.S. dollars for reporting purposes; therefore, amounts we earn outside the U.S. are negatively impacted by a stronger U.S. dollar and positively impacted by a weaker U.S. dollar. If significant, in our discussion we will refer to the impact of fluctuations in foreign currency exchange rates in our comparison of operating segment results. To provide further perspective on the impact of foreign currency exchange rates, the following table shows the changes in values relative to the U.S. dollar of the currencies of the countries in which we have our most significant operations: Average Translation Rate Three Months Ended September 30, Average Translation Rate Nine Months Ended September 30, Currency (dollars per foreign currency) 2022 2021 Decrease Percent 2022 2021 Decrease Percent Australian dollar $ 0.6834 $ 0.7348 (7) % $ 0.7074 $ 0.7589 (7) % British pounds sterling $ 1.1766 $ 1.3783 (15) % $ 1.2585 $ 1.3848 (9) % Canadian dollar $ 0.7662 $ 0.7837 (2) % $ 0.7798 $ 0.7866 (1) % euro $ 1.0072 $ 1.1787 (15) % $ 1.0650 $ 1.1962 (11) % Hungarian forint $ 0.0025 $ 0.0033 (24) % $ 0.0028 $ 0.0034 (18) % Indian rupee $ 0.0125 $ 0.0135 (7) % $ 0.0129 $ 0.0136 (5) % Malaysian ringgit $ 0.2233 $ 0.2385 (6) % $ 0.2307 $ 0.2423 (5) % New Zealand dollar $ 0.6134 $ 0.7007 (12) % $ 0.6469 $ 0.7114 (9) % Polish zloty $ 0.2128 $ 0.2585 (18) % $ 0.2286 $ 0.2634 (13) % 29 COMPARISON OF OPERATING RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30 , 2022 AND 2021 EFT PROCESSING SEGMENT The following table summarizes the results of operations for our EFT Processing Segment for the three and nine months ended September 30, 2022 and 2021 : Three Months Ended September 30, Year-over-Year Change Three Months Ended September 30, Year-over-Year Change (dollar amounts in thousands) 2022 2021 Increase (Decrease) Amount Increase (Decrease) Percent 2022 2021 Increase (Decrease) Amount Increase (Decrease) Percent Total revenues $ 319,466 $ 227,129 $ 92,337 41 % $ 714,067 $ 427,687 $ 286,380 67 % Operating expenses: Direct operating costs 137,812 106,321 31,491 30 % 354,907 258,614 96,293 37 % Salaries and benefits 30,020 23,665 6,355 27 % 82,957 71,334 11,623 16 % Selling, general and administrative 12,167 11,301 866 8 % 40,285 33,062 7,223 22 % Depreciation and amortization 23,071 22,640 431 2 % 71,159 66,907 4,252 6 % Total operating expenses 203,070 163,927 39,143 24 % 549,308 429,917 119,391 28 % Operating income $ 116,396 $ 63,202 $ 53,194 84 % $ 164,759 $ (2,230 ) $ 166,989 7,488 % Transactions processed (millions) 1,733 1,173 560 48 % 4,634 3,086 1,548 50 % Active ATMs as of September 30, 49,617 45,520 4,097 9 % 49,617 45,520 4,097 9 % Average Active ATMs 50,411 45,595 4,816 11 % 47,581 40,913 6,668 16 % Revenues EFT Processing Segment total revenues were $319.5 million for the three months ended September 30, 2022 , an increase of $92.3 million or 41 % compared to the same period in 2021 . EFT Processing Segment total revenues were $714.1 million for the nine months ended September 30, 2022, an increase of $286.4 million or 67%. The increase in revenues was primarily due to the increase in domestic and international cash withdrawal transactions resulting from the reduction of travel restrictions across Europe, the increase in low-value point-of-sale transactions in Europe and low-value payment processing transactions in Asia Pacific. Foreign currency movements decreased revenues by approximately $48.6 million and $85.6 million for the three and nine months ended September 30, 2022 , respectively, compared to the same period in 2021 . Average monthly revenues per ATM increased to $2,112 for the three months ended September 30, 2022 compared to $ 1,660 for the same period in 2021 . Average monthly revenues per ATM increased to $2,501 for the nine months ended September 30, 2022 compared to $1,162 for the same period in 2021 . Revenues per transaction decreased to $0.18 for the three m onths ended September 30, 2022 compared to $0.19 for the same period in 2021 . Revenues per transaction increased to $0.15 for the nine m onths ended September 30, 2022 compared to $0.14 for the same period in 2021 . The increases in average monthly revenues per ATM was primarily due to the increase in domestic and international cash withdrawal transactions resulting from the reduction in travel restrictions across Europe, partially offset by the increase in volume of low-value point-of-sale transactions in Europe and low-value payment processing transactions in Asia Pacific. Direct operating costs EFT Processing Segment direct operating costs were $137.8 million for the three months ended September 30, 2022 , an increase of $31.5 million or 30 % compared to the same period in 2021 . EFT Processing Segment direct operating costs were $354.9 million for the nine months ended September 30, 2022 , an increase of $96.3 million or 37 % compared to the same period in 2021 . 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. 30 The increase in direct costs was primarily due to the increase in domestic and international cash withdrawal transactions resulting from the reduction of travel restrictions across Europe, the increase in low-value point-of-sale transactions in Europe and low-value payment processing transactions in Asia Pacific. Foreign currency movements decreased direct operating costs by approximately $20.8 million and $40.3 million for the three and nine months ended September 30, 2022 , respectively, compared to the same periods in 2021 . Gross profit Gross profit, which is calculated as revenues less direct operating costs, was $181.7 million for the three months ended September 30, 2022 , an increase of $60.8 million or 50% compared to $120.8 million for the same period in 2021 . Gross profit, was $359.2 million for the nine months ended September 30, 2022 , an increase of $190.1 million or 112% compared to $169.1 million for the same period in 2021 . Gross profit as a percentage of revenues (“gross margin”) increased to 56.9 % and 50.3% for the three and nine months ended September 30, 2022 , respectively, compared to 53.2% and 39.5% for the same periods in 2021 . The increase in gross profit and gross margin were primarily due to the incremental volume of transactions that were processed on our network relative to the fixed costs incurred, and the higher proportion of high value and high margin DCC transactions due to reduction of travel restrictions. Salaries and benefits Salaries and benefits expenses were $30.0 million for the three months ended September 30, 2022, an increase of $6.4 million or 27% c ompared to the same period in 2021 . Salaries and benefits expenses were $83.0 million for the nine months ended September 30, 2022, an increase of $11.6 million or 16% c ompared to the same period in 2021 . The increase is primarily due to an increase in salaries and headcount to support the growth of the business. Foreign currency movements in the countries in which we employ our workforce reduced these expenses by $4.8 million and $9.9 million for the three and nine months ended September 30, 2022 , respectively, compared to the same period in 2021. As a percentage of revenues, these expenses decreased to 9.4 % and 11.6% for the three and nine months ended September 30, 2022 , respectively, compared to 10.4% and 16.7% for the same periods in 2021 . Selling, general and administrative Selling, general and administrative expenses were $12.2 million for the three months ended September 30, 2022 , an increase of $0.9 million or 8% compared to the same period in 2021 . Selling, general and administrative expenses were $40.3 million for the nine months ended September 30, 2022 , an increase of $7.2 million or 22% compared to the same period in 2021 . As a percentage of revenues, these expenses decreased to 3.8 % and 5.6% for the three and nine months ended September 30, 2022 , respectively, compared to 5.0 % and 7.7% for the same periods in 2021 . Depreciation and amortization Depreciation and amortization expenses were $23.1 million for the three months ended September 30, 2022, an increase of $0.4 million or 2% compared to the same period in 2021 . Depreciation and amortization expenses were $71.2 million for the nine months ended September 30, 2022, an increase of $4.3 million or 6% compared to the same period in 2021 . As a percentage of revenues, these expenses decreased to 7.2 % and 10.0% for the three and nine months ended September 30, 2022 , respectively, compared to 10.0 % and 15.6% for the same periods in 2021 . Operating income EFT Processing Segment had operating income of $116.4 million for the three months ended September 30, 2022, an increase of $53.2 million or 84% c ompared to the same period in 2021 . EFT Processing Segment had operating income of $164.8 million for the nine months ended September 30, 2022, compared to a loss of ($2.2 million) for the same period in 2021 . O perating income as a percentage of revenues (“operating margin”) increased to 36.4% and 23.1% for the three and nine months ended September 30, 2022 , respectively, compared to 27.8% and (0.5%) for the same periods in 2021, respectively . Operating income per transaction was less than $0.07 and $0.04 for the three and nine months ended September 30, 2022 compared to operating income (loss) of $0.05 and ($0.00) for the same periods in 2021 . The increase in operating income, improved operating margin and increase in operating income per transaction were primarily due to increased volumes processed on our network, and associated revenues, compared to the same periods in 2021. 31 EPAY SEGMENT The following table presents the results of operations for the three and nine months ended September 30, 2022 and 2021 for our epay Segment: Three Months Ended September 30, Year-over-Year Change Nine Months Ended September 30, Year-over-Year Change (dollar amounts in thousands) 2022 2021 Increase (Decrease) Amount Increase (Decrease) Percent 2022 2021 Increase (Decrease) Amount Increase (Decrease) Percent Total revenues $ 248,923 $ 238,319 $ 10,604 4 % $ 712,467 $ 724,540 $ (12,073 ) (2) % Operating expenses: Direct operating costs 190,091 180,206 9,885 5 % 542,066 547,828 (5,762 ) (1) % Salaries and benefits 19,756 20,104 (348 ) (2) % 59,705 59,248 457 1 % Selling, general and administrative 8,506 9,802 (1,296 ) (13) % 26,223 28,594 (2,371 ) (8) % Depreciation and amortization 1,436 2,253 (817 ) (36) % 4,748 6,524 (1,776 ) (27) % Total operating expenses 219,789 212,365 7,424 3 % 632,742 642,194 (9,452 ) (1) % Operating income $ 29,134 $ 25,954 $ 3,180 12 % $ 79,725 $ 82,346 $ (2,621 ) (3) % Transactions processed (millions) 915 811 104 13 % 2,895 2,266 629 28 % Revenues epay Segment total revenues were $248.9 million for the three months ended September 30, 2022 , an increase of $10.6 million or 4% compared to the same period in 2021 . epay Segment total revenues were $712.5 million for the nine months ended September 30, 2022 , a decrease of ( $12.1 million) or (2%) compared to the same period in 2021 . The increase in revenue for the three months ended September 30, 2022 is driven by continued expansion in mobile and digital branded payments, together with continued growth of the digital distribution channel. Additionally, the annual recurring benefits of loyalty reward programs, which were previously recognized in earlier quarters in 2021, were recognized in the third quarter of 2022. Foreign currency movements decreased revenue by approximately $32.4 million and $66.1 million for the three and nine months ended September 30, 2022 , respectively, compared to the same periods in 2021. Revenues per transaction decreased to $0.27 and $0.25 for the three and nine months ended September 30, 2022 , respectively, compared to $0.29 and $0.32 for the same periods in 2021 . The decrease in revenues per transaction was primarily due to 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 $190.1 million for the three months ended September 30, 2022 , an increase of $9.9 million or 5% compared to the same period in 2021 . epay Segment direct operating costs were $542.1 million for the nine months ended September 30, 2022 , a decrease of ( $5.8 million) or (1%) compared to the same period in 2021 . 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 increase in direct operating costs was primarily due to an increase in activity, driven by benefits from loyalty reward programs. Foreign currency movements decrease direct operating costs by $24.3 million and $49.0 million for the three and nine months ended September 30, 2022 , respectively, compared to the same periods in 2021 . Gross profit Gross profit was $58.8 million for the three months ended September 30, 2022 , an increase of $0.7 million or 1.2% compared to $58.1 million for the same period in 2021 . Gross profit was $170.4 million for the nine months ended September 30, 2022 , a decrease of ($6.3 million) or (3.6%) compared to $176.7 million for the same period in 2021 . Gross margin decreased to 23.6 % and 23.9% for the three and nine months ended September 30, 2022 , respectively, compared to 24.4% for both the three and nine month periods in 2021 . The decrease in gross profit and gross margin is primarily due to a decrease in revenues associated with the shift in mix of transactions processed . 32 Salaries and benefits Salaries and benefits expenses were $19.8 million for the three months ended September 30, 2022 , a decrease of ( $0.3 million) or (2%) compared to the same period in 2021 . Salaries and benefits expenses were $59.7 million for the nine months ended September 30, 2022 , an increase of $0.5 million or 1% compared to the same period in 2021 . The fluctuations in salaries and benefits was driven by an increase in salaries and headcount to support the growth of the business, offset by a $2.5 million and $5.4 million decrease from foreign currency movements for the three and nine months ended September 30, 2022 , respectively, compared to the same periods in 2021. As a percentage of revenues, these expenses decreased to 7.9 % and increased to 8.4% for the three and nine months ended September 30, 2022, respectively, compared to 8.4% and 8.2% for the three and nine months ended September 30, 2021, respectively . Selling, general and administrative Selling, general and administrative expenses were $8.5 million for the three months ended September 30, 2022 , a decrease of ($1.3 million) or (13 %) compared to the same period in 2021 . Selling, general and administrative expenses were $26.2 million for the nine months ended September 30, 2022 , a decrease of ($2.4 million) or (8 %) compared to the same period in 2021 . As a percentage of revenues, these expenses decreased to 3.4 % and 3.7% for the three and nine months ended September 30, 2022 , respectively, compared to 4.1 % and 3.9% for the same period in 2021 . Depreciation and amortization Depreciation and amortization expenses were $1.4 million for the three months ended September 30, 2022 , a decrease of ($0.8 million) or (36 %) compared to the same period in 2021 . Depreciation and amortization expenses were $4.7 million for the nine months ended September 30, 2022 , a decrease of ($1.8 million) or (27 %) compared to the same period in 2021 . 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 decreased to 0.6% and 0.7% for the three and nine months ended September 30, 2022 , respectively, compared to 0.9 % for both the three and nine months ended September 30, 2021. Operating income epay Segment operating income was $29.1 million for the three months ended September 30, 2022 , an increase of $3.2 million or 12% c ompared to the same period in 2021 . epay Segment operating income was $79.7 million for the nine months ended September 30, 2022 , a decrease of ( $2.6 million) or ( 3 %) c ompared to the same period in 2021 . Operating margin increased to 11.7 % and decreased to 11.2% for the three and nine months ended September 30, 2022 , respectively , compared to 10.9 % and 11.4% for the same periods in 2021 . Operating income per transaction was $0.03 for both the three and nine m onths ended September 30, 2022, respectively, compared to $0.03 and $0.04 for the same periods in 2021 . The changes in operating income, operating margin and operating income per transaction for the three and nine months ended September 30, 2022 compared to the same period in 2021 were primarily due to the shift in mix of transactions processed . 33 MONEY TRANSFER SEGMENT The following table presents the results of operations for the three and nine months ended September 30, 2022 and 2021 for the Money Transfer Segment: Three Months Ended September 30, Year-over-Year Change Nine Months Ended September 30, Year-over-Year Change (dollar amounts in thousands) 2022 2021 Increase (Decrease) Amount Increase (Decrease) Percent 2022 2021 Increase (Decrease) Amount Increase (Decrease) Percent Total revenues $ 364,841 $ 353,451 $ 11,390 $ 3 % $ 1,072,266 $ 1,037,659 $ 34,607 $ 3 % Operating expenses: Direct operating costs 200,171 200,231 (60 ) (0) % 593,631 589,273 4,358 1 % Salaries and benefits 69,703 65,285 4,418 7 % 204,905 188,535 16,370 9 % Selling, general and administrative 46,256 41,533 4,723 11 % 133,654 115,975 17,679 15 % Depreciation and amortization 8,169 8,897 (728 ) (8) % 25,557 26,886 (1,329 ) (5) % Total operating expenses 324,299 315,946 8,353 3 % 957,747 920,669 37,078 4 % Operating income $ 40,542 $ 37,505 $ 3,037 $ 8 % $ 114,519 $ 116,990 $ (2,471 ) $ (2) % Transactions processed (millions) 37.7 34.1 3.6 11 % 108.5 99.4 9.1 9 % Revenues Money Transfer Segment total revenues were $364.8 million for the three months ended September 30, 2022 , an increase of $11.4 million or 3 % compared to the same period in 2021 . Money Transfer Segment total revenues were $1,072.3 million for the nine months ended September 30, 2022 , an increase of $34.6 million or 3 % compared to the same period in 2021 . The increase in revenues was primarily due to the increase in international-originated money transfers, U.S. outbound transactions, and direct-to-consumer digital transactions, partially offset by a decrease in U.S. domestic transactions. Revenues per transaction decreased to $9.68 and $9.89 for the three and nine months ended September 30, 2022 , respectively, compared to $10.37 and $10.44 for the same periods in 2021 due to a shift in the mix of transactions processed. Foreign currency movements decreased revenues by approximately $28.2 million and $62.6 million for the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021 . Direct operating costs Money Transfer Segment direct operating costs were $200.2 million for the three months ended September 30, 2022 , and were essentially flat compared to the same period in 2021 . Money Transfer Segment direct operating costs were $593.6 million for the nine months ended September 30, 2022, an increase of $4.4 million or 1 % compared to the same period in 2021 . 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 international-originated and U.S. outbound money transfer transactions, offset by foreign currency movements that decreased direct operating costs by approximately $14.0 million and $31.3 million for the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021 . Gross profit Gross profit was $164.7 million for the three months ended September 30, 2022 , an increase of $11.5 million or 7.5% compared to $153.2 million for the same period in 2021 . Gross profit was $478.6 million for the nine months ended September 30, 2022 , an increase of $30.2 million or 6.7% compared to $448.4 million for the same period in 2021 . Gross margin increased to 45.1% and 44.6% for the three and nine months ended September 30, 2022, respectively, compared to 43.3% and 43.2% for the same periods in 2021. The increase in gross profit and gross margin was primarily due t o increases in international-originated money transfers, U.S. outbound money transfers and direct-to-consumer digital transactions . 34 Salaries and benefits Salaries and benefits expenses were $69.7 million for the three months ended September 30, 2022, an increase of $4.4 million or 7% compared to the same period in 2021 . Salaries and benefits expenses were $204.9 million for the nine months ended September 30, 2022, an increase of $16.4 million or 9% compared to the same period in 2021 . The increase in salaries and benefits was primarily driven by an increase in salaries and headcount to support the growth of the business. As a percentage of revenues, these expenses increased to 19.1 % for both the three and nine months ended September 30, 2022 , compared to 18.5% and 18.2% for the same periods in 2021 . Selling, general and administrative Selling, general and administrative expenses were $46.3 million for the three months ended September 30, 2022 , an increase of $4.7 million or 11 % compared to the same period in 2021 . Selling, general and administrative expenses were $133.7 million for the nine months ended September 30, 2022 , an increase of $17.7 million or 15 % compared to the same period in 2021 . The increase was primarily due to an increase in marketing expenses and travel related expenses. As a percentage of revenues, these expenses increased to 12.7 % and 12.5% for the three and nine months ended September 30, 2022 , respectively, compared to 11.8% and 11.2% for the same periods in 2021 . Depreciation and amortization Depreciation and amortization expenses were $8.2 million for the three months ended September 30, 2022, a decrease of ( $0.7 million) or (8 %) compared to the same period in 2021 . Depreciation and amortization expenses were $25.6 million for the nine months ended September 30, 2022, a decrease of ( $ 1.3 million) or (5 %) compared to the same period in 2021 . 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 2.2 % and 2.4% for the three and nine months ended September 30, 2022, respectively, compared to 2.5 % and 2.6% for the same periods in 2021 . Operating income Money Transfer Segment operating income was $40.5 million for the three months ended September 30, 2022 , an increase of $3.0 million or 8 % compared to the same period in 2021 . Money Transfer Segment operating income was $114.5 million for the nine months ended September 30, 2022 , a decrease of ( $2.5 million) or (2 %) compared to the same period in 2021 . Operating margin increased to 11.1% and decreased to 10.7% for the three and nine months ended September 30, 2022 , respectively, compared to 10.6 % and 11.3% for the same periods in 2021 . Operating income per transaction decreased to $1.08 and $1.06 for the three and nine months ended September 30, 2022 , respectively, compared to $1.10 and $1.18 for the same periods in 2021 due to a shift in the mix of transactions processed . CORPORATE SERVICES The following table presents the operating expenses for the three and nine months ended September 30, 2022 and 2021 for Corporate Services: Three-Month Ended September 30, Year-over-Year Change Nine Months Ended September 30, Year-over-Year Change (dollar amounts in thousands) 2022 2021 Increase (Decrease) Amount Increase (Decrease) Percent 2022 2021 Increase (Decrease) Amount Increase (Decrease) Percent Salaries and benefits $ 14,992 $ 10,367 $ 4,625 45 % $ 44,977 $ 37,043 $ 7,934 21 % Selling, general and administrative 2,517 1,681 836 50 % 7,468 4,587 2,881 63 % Depreciation and amortization 105 119 (14 ) (12) % 320 412 (92 ) (22) % Total operating expenses $ 17,614 $ 12,167 $ 5,447 45 % $ 52,765 $ 42,042 $ 10,723 26 % 35 Corporate operating expenses Total Corporate operating expenses were $17.6 million and $52.8 million for the three and nine months ended September 30, 2022 , respectively, an increase of $5.4 million or 45% and $10.7 million or 26% compared to the same periods in 2021 . The increase is primarily due to an increase in short-term compensation expense of $4.8 million and $7.6 million for the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021. OTHER EXPENSE, NET Three Month Ended September 30, Year-over-Year Change Nine Month Ended September 30, Year-over-Year Change (dollar amounts in thousands) 2022 2021 Increase (Decrease) Amount Increase (Decrease) Percent 2022 2021 Increase (Decrease) Amount Increase (Decrease) Percent Interest income $ 600 $ 153 $ 447 292 % $ 990 $ 539 $ 451 84 % Interest expense (11,716 ) ( 10,072 ) (1,644 ) 16 % (26,712 ) ( 28,718 ) 2,006 (7) % Foreign currency exchange gain (loss), net (15,798 ) (8,135 ) (7,663 ) 94 % (35,958 ) (12,051 ) (23,907 ) 198 % Other gains (losses) 10 — 10 100 % 202 31 171 552 % Other expense, net $ (26,904 ) $ ( 18,054 ) $ (8,850 ) 49 % $ (61,478 ) $ ( 40,199 ) $ (21,279 ) 53 % Interest expense Interest expense was $11.7 million for the three months ended September 30, 2022 , an increase of $ 1.6 million or 16 % compared to the same period in 2021 . Interest expense was $26.7 million for the nine months ended September 30, 2022 , a decrease of ($2.0 million) or (7%) compared to the same period in 2021 . The decrease in interest expense relates to the $7.9 million accretion expense incurred for the nine months ended September 30, 2021 , which was eliminated for the nine months ended September 30, 2022 as a result of the adoption of ASU 2020-06, partially offset by increased interest rates and borrowings on the revolving Credit Facility for the nine months ended September 30, 2022 compared to the same period in 2021. See Footnote 2, Recently Issued and Adopted Accounting Pronouncements, for more information on the impact of this adoption. 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. Assets and liabilities denominated in currencies other than the local currency of each of our subsidiaries give rise to foreign currency exchange gains and losses. Foreign currency exchange gains and losses that result from remeasurement of these assets and liabilities are recorded in net income. The majority of our foreign currency exchange gains or losses are due to the remeasurement of intercompany loans which are not considered a long-term investment in nature and are in a currency other than the functional currency of one of the parties to the loan. For example, we make intercompany loans based in euros from our corporate division, which is composed of U.S. dollar functional currency entities, to certain European entities that use the euro as the functional currency. As the U.S. dollar strengthens against the euro, foreign currency exchange losses are recognized by our corporate entities because the number of euros to be received in settlement of the loans decreases in U.S. dollar terms. Conversely, in this example, in periods where the U.S. dollar weakens, our corporate entities will record foreign currency exchange gains. We recorded net foreign currency exchange losses of $15.8 million and $36.0 million for the three and nine months ended September 30, 2022 , respectively, compared to a net foreign currency exchange losses of $8.1 million and $12.1 million for the same periods in 2021, 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 The Company's effective income tax rate was 31.1 % and 33.5% for the three and nine months ended September 30, 2022 , respectively, compared to 23.6% and 35.8% for the same periods ended September 30, 2021, respectively. The Company's effective income tax rate for the three and nine months ended September 30, 2022 was higher than the applicable statutory income tax rate of 21 % as a result of certain foreign earnings being subject to higher statutory tax rates and the Company's U.S. deferred tax activity on foreign exchange positions . The Company's 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 tax rates, the non-recognition of tax benefits from losses in certain foreign countries where the Company has 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. 36 NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS Noncontrolling interests represent the elimination of net income or loss attributable to the minority shareholders’ portion of the following consolidated subsidiaries that are not wholly owned: Subsidiary Percent Owned Segment - Country Movilcarga 95% epay - Spain Euronet China 85% EFT - China Euronet Pakistan 70% EFT - Pakistan Euronet Infinitium Solutions 65% EFT - India NET INCOME (LOSS) ATTRIBUTABLE TO EURONET Net income attributable to Euronet was $97.7 million for the three months ended September 30, 2022, an increase of $23.8 million or 32% compared to t he same period in 2021 . The increase in net income was primarily attributable to the $114.7 million increase in revenues, largely driven by the increases within the EFT Segment as tourism and cross-border travel increased during the third quarter of 2022 compared to the third quarter of 2021. The increased revenues led to a $73.1 million increase in gross profit, with $60.9 million of this increase within the EFT Segment. The increase in gross profit was partially offset by $15.1 million increase in salaries and benefits expense, a $21.3 million increase in income tax expense and a $5.2 million increase in selling, general and administrative expense. Net income attributable to Euronet was $163.2 million for the nine months ended September 30, 2022, an increase of $89.4 million, compared to t he net income of $73.9 million in the same period in 2021 . The increase in net income was primarily attributable to the $309.1 million increase in revenues, largely driven by the increases within the EFT Segment as tourism and cross-border travel increased during the third quarter of 2022 compared to the third quarter of 2021 . The increased revenues led to a $214.0 million increase in gross profit, with $190.1 million of this increase within the EFT Segment. The increase in gross profit was partially offset by a $36.4 million increase in salaries and benefits expense, a $40.7 million increase in income tax expense and a $25.4 million increase in selling, general and administrative expense. LIQUIDITY AND CAPITAL RESOURCES Working capital As of September 30, 2022 , we had working capital of $1,075.4 million , which is calculated as the difference between total current assets and total current liabilities, compared to working capital of $1,455.8 million as of December 31, 2021 . The decrease in working capital was primarily due to the $331.0 million acquisition of PBMA and the $175.0 million of share repurchases, partially offset by a $42.9 million increase in borrowing on the Credit Facility as of September 30, 2022 compared to December 31, 2021 . Our ratio of current assets to current liabilities was 1.50 and 1.79 at September 30, 2022 and December 31, 2021 , respectively. We require substantial working capital to finance operations. The Money Transfer Segment funds the payout of the majority of our consumer-to-consumer money transfer services before receiving the benefit of amounts collected from customers by agents. Working capital needs increase due to weekends and banking holidays. As a result, we may report more or less working capital for the Money Transfer Segment based solely upon the day on which the reporting period ends. The epay Segment produces positive working capital, some of which is restricted in connection with the administration of its customer collection and vendor remittance activities. In our EFT Processing Segment, we obtain a significant portion of the cash required to operate our ATMs through various cash supply arrangements, the amount of which is not recorded on Euronet's Consolidated Balance Sheets. However, in certain countries, we fund the cash required to operate our ATM network from borrowings under our revolving credit facilities, uncommitted credit agreements and cash flows from operations. As of September 30, 2022 , we had $646.1 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 $102.7 million from $543.4 million as of December 31, 2021 to $646.1 million as of September 30, 2022 as a result of the increase in number of active ATMs as of September 30, 2022 compared to December 31, 2021. The Company has $967.1 million of unrestricted cash as of September 30, 2022 compared to $1,260.5 million as of December 31, 2021 . The decrease in unrestricted cash was primarily due to the $331.0 million acquisition of PBMA, the $102.7 million allocated from unrestricted cash to ATM cash and the $175.0 million of share repurchases during the nine months ended September 30, 2022, partially offset by the $42.9 million increase in borrowings on the Credit Facility. Including the $646.1 million of cash in ATMs at September 30, 2022 , we have access to $1,613.2 million in available cash, and $652.8 million available under the Credit Facility with no significant long-term debt principal payments until March 2025. 37 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, 2022 and 2021 (in thousands): Nine Months Ended September 30, Liquidity 2022 2021 Cash and cash equivalents and restricted cash provided by (used in): Operating activities $ 448,636 $ 304,340 Investing activities (416,039) (70,952 ) Financing activities 173,537 (216,291 ) Effect of foreign currency exchange rate changes on cash and cash equivalents and restricted cash (413,669) (82,667 ) Increase (decrease) in cash and cash equivalents and restricted cash $ (207,535) $ (65,570 ) Operating activity cash flow Cash flows provided by operating activities were $448.6 million f or the three months ended September 30, 2022 compared to cash flows provided by operating activities of $304.3 million for the same period in 2021 . The increase in operating cash flows was primarily due to the $89.2 million increase in net income, partially offset by 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 $416.0 million for the nine months ended September 30, 2022 compared to $71.0 million for the same period in 2021 . The increase in cash used in investing activities is primarily due to the $331.0 million of cash paid at the closing of PBMA in March 2022. Additionally, w e used $79.4 million for purchases of property and equipment for the nine months ended September 30, 2022 compared to $66.1 million for the same period in 2021 . The increase in purchases of property and equipment is primarily due to the prior period expenditures being reduced by the COVID-19 related impacts to the EFT segment. Cash used for software development and other investing activities totaled $5.3 million and $4.9 million for the nine months ended September 30, 2022 and 2021 , respectively. Financing activity cash flow Cash flows provided by financing activities were $173.5 million for the nine months ended September 30, 2022 compared to cash flows used in financing activities of $216.3 million for the same period in 2021 . Our borrowing activities on the Credit Facility for the nine months ended September 30, 2022 consisted of net borrowings of $342.9 million compared to net repayments of $217.2 million for the same period in 2021. The increase in net borrowings on the Credit Facility, during the nine months ended September 30, 2022, is primarily the result of treasury management relating to settlement requirements across currencies as well as increased funding requirements for acquisitions and share repurchases. We repurchased $175.3 million of common stock during the nine months ended September 30, 2022 compared to repurchases of $1.0 million during the same period of 2021 . We received proceeds of $4.4 million and $6.4 million during the nine months ended September 30, 2022 and 2021 , respectively, for the issuance of stock in connection with our Stock Incentive Plan. Effect of exchange rates on cash, cash equivalents and restricted cash F oreign currency exchange rates for the nine months ended September 30, 2022 and 2021 had a negative impact of $413.7 million and $82.7 million, respectively, on cash, cash equivalents, and restricted cash. The negative impact on cash, cash equivalents, and restricted cash for the nine months ended September 30, 2022 was due primarily to the negative impact in the exchange rate of the U.S. dollar to the Euro. 38 Other sources of capital Credit Facility - On October 24, 2022, the Company amended its revolving credit agreement (the “Credit Facility”) to increase the facility from $1.0 billion to $1.25 billion which expires on October 24, 2027. The revolving credit facility contains up to $250 million sublimit, with $150 million committed, for the issuance of letters of credit and a $75 million sublimit for U.S. dollar swingline loans and $75 million for swingline loans in euro or British pounds sterling. The Credit Facility allows for borrowings in British pounds sterling, euro and U.S. dollars. Subject to certain conditions, the Company has the option to increase the credit facility by up to an additional $500 million by requesting additional commitments from existing or new lenders. Fees and interest on borrowings vary based upon the Company's corporate credit rating and will be based, in the case of letter of credit fees, on a margin, and in the case of interest, on a margin over a secured overnight financing rate, as defined in the agreement, with a margin, including the facility fee, ranging from 1.00% to 1.625% or the base rate, as selected by the Company. The applicable margin for borrowings under the credit facility, based on the Company's current credit rating is initially 1.25% including the facility fee. As of September 30, 2022 , we had $326.3 million of borrowings and $50.9 million of stand-by letters of credit outstanding under the Credit Facility. The remaining $652.8 million under the Credit Facility was available for borrowing. Convertible debt - On March 18, 2019, we completed the sale of $ 525.0 million in principal amount of Convertible Senior Notes due 2049 (“Convertible Notes”). The Convertible Notes were issued pursuant to an indenture, dated as of March 18, 2019 (the “Indenture”), by and between us and U.S. Bank National Association, as trustee. The Convertible Notes have an interest rate of 0.75 % per annum payable semi-annually in March and September, and are convertible into shares of Euronet common stock at a conversion price of approximately $ 188.73 per share if certain conditions are met (relating to the closing prices of Euronet common stock exceeding certain thresholds for specified periods). Holders of the Convertible Notes have the option to require us to repurchase for cash all or part of their Convertible Notes on each of March 15, 2025, 2029 , 2034 , 2039 and 2044 at a repurchase price equal to 100 % of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the relevant repurchase date. In connection with the issuance of the Convertible Notes, we recorded $ 12.8 million in debt issuance costs, which are being amortized through March 1, 2025. Senior Notes - On May 22, 2019, we completed the sale of €600 million ($669.9 million) aggregate principal amount of Senior Notes that expire on May 2026 (the “Senior Notes”). 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 September 30, 2022 , we have outstanding €600 million ( $588.4 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. Uncommitted Loan s - On May 25, 2022, we entered into an uncommitted credit agreement for $300 million that expires no later than November 30, 2022. The credit agreement is fully drawn and outstanding at September 30, 2022. The credit agreement was entered into for the sole purpose of providing vault cash for ATMs . Each loan entered into under this agreement accrues interest at the rate per annum equal to the secured overnight financing rate (“SOFR”) plus 1.00 %. On June 24, 2022, we entered into an uncommitted credit agreement for $150 million that expires no later than June 23, 2023. The credit agreement was entered into for the sole purpose of providing vault cash for ATMs. The loan had no balance at September 30, 2022. Each loan entered into under the agreement was either a Prime rate loan, a Bloomberg Short-term Bank Yield ("BSBY") rate loan or bears interest at the rate agreed to by the lender and the Company at the time such loan is made. 39 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 $3.6 million and $0.9 million outstanding under these other obligation arrangements as of September 30, 2022 and December 31, 2021 , respectively. Other uses of capital Capital expenditures and needs - Total capital expenditures for the nine months ended September 30, 2022 were $79.4 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. Total capital expenditures for 2022 are currently estimated to range from approximately $110 million to $120 million. At current and projected cash flow levels, we anticipate that cash generated from operations, together with cash on hand and amounts available under our Credit Facility and other existing and potential future financing will be sufficient to meet our debt, leasing, and capital expenditure obligations. If our capital resources are not sufficient to meet these obligations, we will seek to refinance our debt and/or issue additional equity under terms acceptable to us. However, we can offer no assurances that we will be able to obtain favorable terms for the refinancing of any of our debt or other obligations or for the issuance of additional equity. Inflation and functional currencies Historically, the countries in which we operate have experienced low and stable inflation. Therefore, the local currency in each of these markets is the functional currency. We have seen indications that the current inflationary period will put pressure on our results of operations and our financial position. We have seen some signs of inflation impacting discretionary spend items, such as gaming products, in our epay business as well as some pressure on send amounts in money transfer. A s a consequence of this inflationary period, w e expect to see increasing expenses forthcoming. We continually review inflation and the functional currency in each of the countries where we operate. OFF BALANCE SHEET ARRANGEMENTS On occasion, we grant guarantees of the obligations of our subsidiaries and we sometimes enter into agreements with unaffiliated third parties that contain indemnification provisions, the terms of which may vary depending on the negotiated terms of each respective agreement. Our liability under such indemnification provisions may be subject to time and materiality limitations, monetary caps and other conditions and defenses. As of September 30, 2022 , there were no material changes from the disclosure in our Annual Report on Form 10-K for the year ended December 31, 2021 . 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 September 30, 2022 . See also Note 14, Commitments, to the unaudited consolidated financial statements included elsewhere in this report. CONTRACTUAL OBLIGATIONS As of September 30, 2022 , 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, 2021 . 40