What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-05-09 compared with 2022-11-04 · 157 added, 229 removed, 281 unchanged (58% of the section changed)

25 unchanged sentences

the war in the Ukraine and related economic sanctions;

our ability to successfully integrate the operations of Piraeus Merchant Services;

our ability to successfully integrate any acquired operations;

economic conditions in specific countries and regions;

7 unchanged sentences

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;

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;

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.

and renewal 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 1 A — Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2022 .

Our Annual Report on Form 10-K is 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.

6 unchanged sentences

1) The EFT Processing Segment processes transactions for a network of 47,430 ATMs and approximately 618,000 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.

2) 2 ) The epay Segment, which provides distribution, processing and collection services for electronic payment products and prepaid mobile airtime through a network of approximately 799,000 POS terminals in Europe, the Middle East, Asia Pacific, North America 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).

We offer services under the brand names Ria and IME through a network of sending agents, Company-owned stores, our websites and mobile applications, disbursing money transfers through a worldwide correspondent network that includes approximately 528,000 locations.

xe is a provider of foreign currency exchange information and of fers money transfer services on its currency data websit es.

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.

3 unchanged sentences

Our executive offices are located in Leawood, Kansas, USA.

With approximately 75 % of our revenues denominated in currencies other than the U.S.

With approximat ely $583.2 million 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, 2022 ).

2 unchanged sentences

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.

EFT Processing Segment — Revenues in the EFT Processing Segment, which represented approximately 24% of total consolidated revenues for the three months ended March 31, 2023 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.

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.

epay Segment — Revenues in the epay Segment, which represented approximately 30% o f total consolidated revenues for the three months ended March 31, 2023 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, were 66 % o f epay Segment revenues for the three months ended March 31, 2023.

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.

Money Transfer Segment — Revenues in the Money Transfer Segment, which represented approximately 46% of total consolidated revenues for the three months ended March 31, 2023 , 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 network in place comprised of agents, customer service representatives, Company-owned stores, our websites and mobile applications, 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.

17 unchanged sentences

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.

Our opportunities are dependent on renewing and expanding our card acceptance, ATM, POS and merchant acquiring services , 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.

3 unchanged sentences

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.

The EFT Segment is also dependent to a large degree on consumer travel patterns over which we have no control.

Although international travel is returning to pre-pandemic levels in many parts of the globe, the war in Ukraine and related sanctions on Russia are negatively affecting the number of individuals traveling to and from Ukraine and the countries that border Ukraine and the number of Russian tourists in many locations where we have ATMs .

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.

12 unchanged sentences

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 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.

Recently, inflation has been increasing our cost structure in many parts of the world in which we operate.

During the three months ended March 31, 2023, almost all of the remaining COVID-19 related travel restrictions and social distancing orders were lifted.

We recognize that there is a fair amount of uncertainty regarding COVID-19 now.

COVID-19 related cases continue to be reported globally and new variants continue to evolve.

New developments related to COVID-19 or other diseases could also result in the re-imposition of travel restrictions or social distancing orders to various parts of the world.

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,

Revenues and operating income by segment for the three months ended March 31, 2023 and 2022 are summarized in the tables below:

Revenues for the Three Months Ended March 31,

Year-over-Year Change

(dollar amounts in thousands)

Increase (Decrease)

(dollar amounts in millions)

EFT Processing

1 unchanged sentence

Corporate services, eliminations and other

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

Year-over-Year Change

Operating Income (Loss) for the Nine Months Ended September 30,

Operating Income (Loss) for the Three Months Ended March 31,

Year-over-Year Change

(dollar amounts in thousands)

Increase (Decrease)

(dollar amounts in millions )

Increase (Decrease)

12 unchanged sentences

Average Translation Rate

Three Months Ended September 30,

Average Translation Rate

Nine Months Ended September 30,

Three Months Ended March 31,

Currency (dollars per foreign currency)

5 unchanged sentences

New Zealand dollar

COMPARISON OF OPERATING RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30 , 2022 AND 2021

COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED MARCH 31 , 2023 AND 2022

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,

The following table summarizes the results of operations for our EFT Processing Segment for the three months ended March 31, 2023 and 2022 :

Three Months Ended March 31,

Year-over-Year Change

(dollar amounts in thousands)

Increase (Decrease) Amount

(Decrease) Percent

Increase (Decrease) Amount

(dollar amounts in millions )

(Decrease) Percent

6 unchanged sentences

Total operating expenses

Operating income

Operating income(loss)

Transactions processed (millions)

Active ATMs as of September 30,

Active ATMs as of March 31,

Average Active ATMs

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%.

EFT Processing Segment total revenues were $192.2 million for the three months ended March 31, 2023 , an increase of $46.6 million or 32 % compared to the same period in 2022 .

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.

Foreign currency movements decreased revenues by approximately $11.7 m illion for the three months ended March 31, 2023 compared to the same period in 2022 .

Average monthly revenues per ATM increased to $1,384 for the three months ended March 31, 2023 compared to $ 1,118 for the same period in 2022 .

Revenues per transaction decreased to $0.10 for the three months ended March 31, 2023 compared to $ 0.11 for the same period in 2022 .

The increase in average monthly revenues per ATM was primarily due to the increase in domestic and international cash withdrawal transactions resulting from increased travel 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 .

EFT Processing Segment direct operating costs were $119.0 million for the three months ended March 31, 2023 , an increase of $25.7 million or 28 % compared to the same period in 2022 .

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.

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, 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.

The increase in direct costs was primarily due to the increase in domestic and international cash withdrawal transactions resulting from the increase in travel 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 $6.6 million for the three months ended March 31, 2023 compared to the same period in 2022 .

Gross profit, which is calculated as revenues less direct operating costs, was $73.2 million for the three months ended March 31, 2023 , an increase of $20.9 million or 40% compared to $52.3 million for the same period in 2022 .

Gross profit as a percentage of revenues (“gross margin”) increased to 38.1% for the three months ended March 31, 2023 , compared to 35.9 % for the same period in 2022 .

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 number of high value and high margin DCC transactions due to increased travel.

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 .

Salaries and benefits expenses were $27.5 million for the three months ended March 31, 2023, an increase of $2.3 million or 9% c ompared to the same period in 2022 .

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 .

Foreign currency movements in the countries in which we employ our workforce reduced these expenses by $1.9 million for the three months ended March 31, 2023 compared to the same period in 2022.

As a percentage of revenues, these expenses decreased to 14.3 % for the three months ended March 31, 2023 , compared to 17.3% for the same period in 2022 .

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 .

Selling, general and administrative expenses were $16.1 million for the three months ended March 31, 2023 , an increase of $5.0 million or 45% compared to the same period in 2022 .

The increase was primarily due to an increase in professional fees.

As a percentage of revenues, these expenses increased to 8.4 % for the three months ended March 31, 2023 , compared to 7.6 % for the same period in 2022 .

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 .

Depreciation and amortization expenses were $22.7 million for the three months ended March 31, 2023, an increase of $0.4 million or 2% compared to the same period in 2022 .

As a percentage of revenues, these expenses decreased to 11.8 % for the three months ended March 31, 2023 , compared to 15.3 % for the same period in 2022 .

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.

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,

EFT Processing Segment had operating income of $6.9 million for the three months ended March 31, 2023, an increase of $13.2 million or 210% c ompared to the same period in 2022 .

O perating income as a percentage of revenues (“operating margin”) increased to 3.6% for the three months ended March 31, 2023 , compared to (4.3%) for the same period in 2022 .

The increase in operating income and improved operating margin were primarily due to increased volumes processed on our network, and associated revenues, compared to the same period in 2022.

The following table presents the results of operations for the three months ended March 31, 2023 and 2022 for our epay Segment:

Three Months Ended March 31,

Year-over-Year Change

(dollar amounts in thousands)

Increase (Decrease) Amount

(Decrease) Percent

(dollar amounts in millions )

Increase (Decrease) Amount

9 unchanged sentences

Transactions processed (millions)

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.

epay Segment total revenues were $237.4 million for the three months ended March 31, 2023 , an increase of $1.6 million or 1% compared to the same period in 2022 .

The increase in revenue for the three months ended March 31, 2023 is driven by continued expansion in mobile and digital branded payments.

Foreign currency movements decreased revenue by approximately $10.2 million for the three months ended March 31, 2023 , compared to the same period in 2022.

Revenue per transaction decreased to $0.24 for the three months ended March 31, 2023 , compared to $0.27 for the same period in 2022 .

The decrease in revenue 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 .

epay Segment direct operating costs were $178.1 million for the three months ended March 31, 2023 , and were essentially flat .

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 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 .

Foreign currency movements decrease direct operating costs by $7.4 million for the three moths ended March 31, 2023 compared to the same period in 2022 .

Gross profit was $59.3 million for the three months ended March 31, 2023 , an increase of $1.8 million or 3.1% compared to $57.5 million for the same period in 2022 .

Gross margin increased to 25.0% for the three months ended March 31, 2023 , compared to 24.4 % for the same period in 2022 .

The increase in gross profit and gross margin is primarily due to shift in mix of transactions processed .

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 .

Salaries and benefits expenses were $21.4 million for the three months ended March 31, 2023 , an increase of $1.2 million or 6% compared to the same period in 2022 .

The fluctuations in salaries and benefits were driven by an increase in salaries and headcount to support the growth of the business, offset by a $0.9 million decrease from foreign currency movements for the three months ended March 31, 2023 , compared to the same period in 2022.

As a percentage of revenues, these expenses increased to 9.0 % for the three months ended March 31, 2023, compared to 8.6% for the same period in 2022 .

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 .

Selling, general and administrative expenses were $8.8 million for the three months ended March 31, 2023 , a decrease of ($0.6 million) or (6 %) compared to the same period in 2022 .

As a percentage of revenues, these expenses decreased to 3.7 % for the three months ended March 31, 2023 , compared to 4.0 % for the same period in 2022 .

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 expenses were $1.6 million for the three months ended March 31, 2023 , a decrease of ($0.1 million) or (6 %) compared to the same period in 2022 .

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.

As a percentage of revenues, these expenses were 0.7% for the three months ended March 31, 2023

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 .

epay Segment operating income was $27.5 million for the three months ended March 31, 2023 , an increase of $1.3 million or 5% c ompared to the same period in 2022 .

Operating margin increased to 11.6 % for the three months ended March 31, 2023 , compared to 11.1 % for the same period in 2022 .

Operating income per transaction was $0.03 for both the three m onths ended March 31, 2023 and 2022 .

The changes in operating income and operating margin for the three months ended March 31, 2023 compared to the same period in 2022 were primarily due to the shift in the mix of transactions processed .

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,

The following table presents the results of operations for the three months ended March 31, 2023 and 2022 for the Money Transfer Segment:

Three Months Ended March 31,

Year-over-Year Change

(dollar amounts in thousands)

Increase (Decrease) Amount

(Decrease) Percent

(dollar amounts in millions )

Increase (Decrease) Amount

9 unchanged sentences

Transactions processed (millions)

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.

Money Transfer Segment total revenues were $359.4 million for the three months ended March 31, 2023 , an increase of $20.4 million or 6 % compared to the same period in 2022 .

The increase in revenues was primarily due to an 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 .

Revenues per transaction decreased to $9.57 for the three months ended March 31, 2023 , compared to $10.12 for the same period in 2022 due to a shift in the mix of transactions processed.

Foreign currency movements decreased revenues by approximately $10.1 million for the three months ended March 31, 2023, compared to the same period in 2022 .

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 .

Money Transfer Segment direct operating costs were $196.3 million for the three months ended March 31, 2023 , an increase of 7.8 million or 4% c ompared to the same period in 2022 .

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 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.

outbound money transfer transactions, offset by foreign currency movements that decreased direct operating costs by approximately $5.1 million for the three months ended March 31, 2023, compared to the same period in 2022 .

Gross profit was $163.1 million for the three months ended March 31, 2023 , an increase of $12.6 million or 8.4% compared to $150.5 million for the same period in 2022 .

Gross margin increased to 45.4% for the three months ended March 31, 2023, compared to 44.4 % for the same period in 2022.

The increase in gross profit and gross margin was primarily due t o increases in international-originated money transfers, U.S.

1 unchanged sentence

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 .

Salaries and benefits expenses were $74.3 million for the three months ended March 31, 2023, an increase of $7.0 million or 10% compared to the same period in 2022 .

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 .

As a percentage of revenues, these expenses increased to 20.7 % for the three months ended March 31, 2023 , compared to 19.9% for the same period in 2022 .

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 .

Selling, general and administrative expenses were $47.7 million for the three months ended March 31, 2023 , an increase of $6.7 million or 16 % compared to the same period in 2022 .

The increase was primarily due to an increase in hardware and software expenses, professional fees, marketing expenses and travel related expenses.

As a percentage of revenues, these expenses increased to 13.3 % for the three months ended March 31, 2023 , compared to 12.1% for the same period in 2022 .

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 expenses were $8.5 million for the three months ended March 31, 2023, a decrease of $0.4 million or 4 % compared to the same period in 2022 .

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 .

As a percentage of revenues, these expenses decreased to 2.4 % for the three months ended March 31, 2023, compared to 2.6 % for the same period in 2022 .

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 .

Money Transfer Segment operating income was $32.6 million for the three months ended March 31, 2023 , a decrease of $0.7 million or 2 % compared to the same period in 2022 .

Operating margin decreased to 9.1% for the three months ended March 31, 2023 , compared to 9.8 % for the same period in 2022 .

Operating income per transaction decreased to $0.87 for the three months ended March 31, 2023 , compared to $1.00 for the same period in 2022 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,

The following table presents the operating expenses for the three months ended March 31, 2023 and 2022 for Corporate Services:

Three-Month Ended March 31,

Year-over-Year Change

(dollar amounts in thousands)

Increase (Decrease) Amount

(Decrease) Percent

Increase (Decrease) Amount

(Decrease) Percent

(dollar amounts in millions )

Salaries and benefits

3 unchanged sentences

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.

Total Corporate operating expenses were $21.4 million for the three months ended March 31, 2023 , an increase of $4.9 million or 30% compared to the same period in 2022 .

The increase is primarily due to an increase in long-term and short-term incentive compensation expense of $4.5 million for the three months ended March 31, 2023, compared to the same period in 2022, due to improved company performance.

OTHER EXPENSE, NET

Three Month Ended September 30,

Year-over-Year Change

Nine Month Ended September 30,

Three Month Ended March 31,

Year-over-Year Change

(dollar amounts in thousands)

Increase (Decrease) Amount

(Decrease) Percent

(dollar amounts in millions )

Increase (Decrease) Amount

6 unchanged sentences

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.

Interest expense was $10.1 million for the three months ended March 31, 2023 , an increase of $ 4.0 million or 66 % compared to the same period in 2022 .

This increase was driven by an increase in interest rates on our Credit Facility from 1.29% at March 31, 2022 to 5.97% at March 31, 2023.

Foreign currency exchange loss, net

9 unchanged sentences

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.

We recorded net foreign currency exchange losses of $1.1 million for the three months ended March 31, 2023 , compared to a net foreign currency exchange losses of $5.5 million for the same period in 2022.

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

1 unchanged sentence

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.

The Company's effective income tax rate was 4 6.

5% for the three months ended March 31, 2023 , compared to 67.4% for the same period ended March 31, 2022.

The Company's effective income tax rate for the three months ended March 31, 2023 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.

The Company's effective income tax rate for the three months ended March 31, 2022 was higher than the applicable statutory income tax rate of 21 % mainly as a result of certain foreign earnings being subject to higher local tax rates.

The Company's effective income tax rate for the three months ended March 31, 2022 was higher than the applicable statutory income tax rate of 21% as a result of the Company’s U.S.

deferred tax activity on foreign exchange positions and certain foreign earnings being subject to higher local statutory tax rates.

NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS

7 unchanged sentences

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.

Net income attributable to Euronet was $20.1 million for the three months ended March 31, 2023, an increase of $11.9 million or 145% compared to t he same period in 2022 .

The increase in net income was primarily attributable to the $68.7 million increase in revenues, largely driven by the increases within the EFT Segment as tourism and cross-border travel increased during the first quarter of 2023 compared to the first quarter of 2022.

The increased revenues led to a $35.3 million increase in gross profit, with $20.9 million of this increase within the EFT Segment and with $12.6 million of this increase within the Money Transfer Segment .

The increase in gross profit of money transfer was partially offset by a $7.0 million increase in salaries and benefits expense, and a $6.7 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.

As of March 31, 2023 , we had working capital of $1,436.2 million , which is calculated as the difference between total current assets and total current liabilities, compared to working capital of $1,372.6 million as of December 31, 2022 .

The increase in working capital was primarily due to a positive earnings, partially offset by $28.3 million of share repurchases during the quarter ended March 31, 2023 .

Also the change in working capital line items was negatively impacted as December 31, 2022 ended on a weekend day, which increased funding needs for our agents.

Our ratio of current assets to current liabilities was 1.75 and 1.58 at March 31, 2023 and December 31, 2022 , 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.

Working capital needs increase in order to cover 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.

2 unchanged sentences

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.

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,

As of March 31, 2023 , we had $627.2 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 $111.6 million from $515.6 million as of December 31, 2022 to $627.2 million as of March 31, 2023 as a result of the increase in number of active ATMs as of March 31, 2023 compared to December 31, 2022.

The Company has $1,065.8 million of unrestricted cash as of March 31, 2023 compared to $1,131.2 million as of December 31, 2022 .

The decrease in unrestricted cash was primarily due to $111.6 million allocated from unrestricted cash to ATM cash and the $28.3 million of share repurchases during the first quarter of 2023, partially offset by positive earnings.

Including the $627.2 million of cash in ATMs at March 31, 2023 , we have access to $1,937.8 million in available cash, and $715.9 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 three months ended March 31, 2023 and 2022 (in millions):

Three Months Ended March 31,

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 $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.

Cash flows provided by operating activities were $3.3 million f or the three months ended March 31, 2023 compared to cash flows provided by operating activities of $5.7 million for the same period in 2022 .

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, partially offset by the $ 20.1 million increase in net income,

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.

Cash flows used in investing activities were $18.1 million for the three months ended March 31, 2023 compared to $356.9 million for the same period in 2022 .

The decrease 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 $18.6 million for purchases of property and equipment for the three months ended March 31, 2023 compared to $23.8 million for the same period in 2022 .

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.

Cash flows used in financing activities were $4.4 million for the three months ended March 31, 2023 compared to cash flows provided by financing activities of $235.3 million for the same period in 2022 .

Our borrowing activities on the Credit Facility for the three months ended March 31, 2023 consisted of net borrowings of $24.3 million compared to net borrowings of $303.5 million for the same period in 2022.

The decrease in net borrowings on the Credit Facility, during the three months ended March 31, 2023, is primarily the result of decreased funding requirements for acquisitions.

We repurchased $29.2 million of common stock during the three months ended March 31, 2023 compared to $70.5 repurchases during the same period of 2022 .

We received proceeds of $1.0 million and $2.3 million during the three months ended March 31, 2023 and 2022 , 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.

F oreign currency exchange rates for the three months ended March 31, 2023 and 2022 had a negative impact of $33.9 million and $37.5 million, respectively, on cash, cash equivalents, and restricted cash.

The negative impact on cash, cash equivalents, and restricted cash for the three months ended March 31, 2023 was due primarily to the negative impact in the exchange rate of the U.S.

dollar to the Euro.

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.

Credit Facility - On October 24, 2022, the Company amended its revolving credit agreement (the “Credit Facility”) to increase the facility from $1.03 billion to $1.25 billion and to extend the expiration to October 24, 2027.

The revolving credit facility contains a sublimit of up to $250 million, with $150 million committed, for the issuance of letters of credit, a $75 million sublimit for U.S.

dollar swingline loans and a $75 million sublimit for swingline loans in euros or British pounds sterling.

The Credit Facility allows for borrowings in British pounds sterling, euro and U.S.

1 unchanged sentence

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 applicable margin for borrowings under the credit facility, based on the Company's current credit rating is 1.25% including the facility fee.

As of March 31, 2023 , we had $479.1 million of borrowings and $55.0 million of stand-by letters of credit outstanding under the Credit Facility.

The remaining $715.9 million under the Credit Facility was available for borrowing.

7 unchanged sentences

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.

As of March 31, 2023 , we have outstanding €600 million ( $650.4 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.

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.

There were $0.2 million outstanding under these other obligation arrangements as of March 31, 2023 and December 31, 2022 .

Other uses of capital

Capital expenditures and needs - Total capital expenditures for the nine months ended September 30, 2022 were $79.4 million .

Capital expenditures and needs - Total capital expenditures for the three months ended March 31, 2023 were $18.6 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.

13 unchanged sentences

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 .

As of March 31, 2023 , there were no material changes from the disclosure in our Annual Report on Form 10-K for the year ended December 31, 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 .

As of March 31, 2023 , 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, 2022 .

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