What changed in this filing

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Item 1A. Risk Factors

2024-02-22 compared with 2023-02-22 · 70 added, 49 removed, 345 unchanged (26% of the section changed)

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GOVERNMENT AND REGULATION

Because we are a multinational company conducting a complex business in many markets worldwide, we are subject to legal and operational risks related to a broad array of local legal and regulatory requirements which could adversely affect our operations.

Because we are a multinational company conducting complex business in many markets worldwide, we are subject to legal and operational risks related to a broad array of local legal and regulatory requirements which could adversely affect our operations.

Operating outside of the U.S.

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or Western Europe.

Recent changes to the political climate in certain Eastern European countries increases the risk that a potential military conflict may adversely impact our operations in that region and disrupt our ATM network.

Recent changes to the political climate in certain Eastern European and Middle Eastern countries increase the risk that a potential military conflict may adversely impact our operations in that region and disrupt our ATM network.

In particular, changes in laws or regulations or in the interpretation of existing laws or regulations, whether caused by a change in government or otherwise, could materially adversely affect our business, growth, financial condition or results of operations.

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Also, in some circumstances, it may not be possible to obtain the legal remedies provided for under these laws and regulations in a reasonably timely manner, if at all.

We conduct business in many international markets with complex and evolving tax rules, including value added tax rules, which subjects us to international tax compliance risks which could adversely affect our operating results.

We conduct business in many international markets with complex and evolving tax rules, including value added tax rules, which subject us to international tax compliance risks which could adversely affect our operating results.

While we obtain advice from legal and tax advisors as necessary to help assure compliance with tax and regulatory matters, most tax jurisdictions that we operate in have complex and subjective rules regarding the valuation of intercompany services, cross-border payments between affiliated companies and the related effects on income tax, value added tax (“VAT”), transfer tax and share registration tax.

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Any such tax increases, whether borne by us or our customers, could negatively impact our operating results or the demand for our products and services.

The European Union ("EU") member states formally adopted the EU's Pillar Two Directive, which was established by the Organization for Economic Co-operation and Development, and which generally provides for a 15 percent minimum effective tax rate for multinational enterprises, in every jurisdiction in which they operate.

While we do not anticipate that the Pillar Two Directive will have a material impact on our tax provision or effective tax rate, we continue to monitor evolving tax legislation in the jurisdictions in which we operate.

We could be adversely affected by violations of the U.S.

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Our expansion into new markets is dependent upon our ability to successfully apply our existing technology or to develop new applications to satisfy market demand.

We may not have adequate financial and technological resources to expand our distribution channels and product applications to satisfy these demands, which may have an adverse impact on our ability to achieve expected growth in revenues and earnings.

Expectations relating to environmental, social and governance considerations and related reporting obligations expose us to potential liabilities, increased costs, reputational harm, and other adverse effects on our business .

Many governments, regulators, investors, employees, customers, and other stakeholders are increasingly focused on environmental, social and governance considerations relating to businesses, including climate change and greenhouse gas emissions, human and civil rights, and diversity, equity and inclusion.

In addition, we make statements about our goals and initiatives through our various non-financial reports, information provided on our website, press statements and other communications.

Responding to these environmental, social and governance considerations and implementation of these goals and initiatives involves risks and uncertainties, requires investments, and depends in part on third-party performance or data that is outside our control.

We cannot guarantee that we will achieve our environmental, social and governance goals and initiatives.

In addition, some stakeholders may disagree with our goals and initiatives.

Any failure, or perceived failure, by us to achieve our goals, further our initiatives, adhere to our public statements, comply with federal, state, or international environmental, social and governance laws and regulations, or meet evolving and varied stakeholder expectations and standards could result in legal and regulatory proceedings against us and materially adversely affect our business, reputation, results of operations, financial condition and stock price.

Our business, results of operations and financial condition could be adversely impacted by unfavorable results of legal proceedings or government investigations.

We are subject to various claims, legal proceedings and government investigations that have arisen in the ordinary course of business and have not yet been fully resolved, and new matters may arise in the future.

In addition, agreements entered into by us sometimes include indemnification provisions which can subject us to costs and damages in the event of a claim against an indemnified third party.

The number of claims, legal proceedings and government investigations involving us, and the alleged magnitude of such claims, proceedings, and government investigations, has generally increased over time and may continue to increase.

In recognition of these considerations, we may enter into agreements or other arrangements to settle litigation and resolve such challenges.

There can be no assurance such agreements can be obtained on acceptable terms or that litigation will not occur.

These agreements can also significantly increase our cost of sales and operating expenses and require us to change its business practices and limit our ability to offer certain products and services.

The outcome of litigation or government investigations is inherently uncertain.

If one or more legal matters were resolved against us or an indemnified third party in a reporting period for amounts above management’s expectations, our results of operations and financial condition for that reporting period could be materially adversely affected.

Further, such an outcome can result in significant compensatory, punitive or trebled monetary damages, disgorgement of revenue or profits, remedial corporate measures or injunctive relief against us, and has from time to time required, and can in the future require, us to change our business practices and limit our ability to offer certain products and services, all of which could materially adversely affect the Company’s business, reputation, results of operations and financial condition.

While we maintain insurance coverage for certain types of claims, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise.

SUPPLY CHAIN AND THIRD PARTIES

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Commission and margin revenue or fee reductions by any of the content providers could also have a material adverse effect on our business, financial condition, or results of operations.

The prepaid marketplace is currently experiencing high growth in the differentiation of product offerings.

While our epay business is focused on expanding and differentiating its suite of prepaid product offerings on a global basis, there can be no assurance that we will be able to enter into relationships on favorable terms with additional content providers or renew or expand current relationships and contracts on favorable terms.

Inability to continue to grow our suite of electronic content and electronic payment product offerings could have a material adverse effect on our business, financial condition and results of operations.

Our epay business is focused on expanding and differentiating its suite of prepaid digital product offerings on a global basis, there can be no assurance that we will be able to enter into relationships on favorable terms with additional content providers or renew or expand current relationships and contracts on favorable terms.

The inability to continue to grow our suite of electronic content and electronic payment product offerings could have a material adverse effect on our business, financial condition, and results of operations.

The stability and growth of our EFT Processing Segment may be adversely affected if we are unable to maintain our current card acceptance and ATM management agreements with banks and international card organizations, and to secure new arrangements for card acceptance and ATM management.

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If a bankcard issuer fails to settle transactions in accordance with those rules, we are dependent upon cooperation from such associations or switching networks to enforce our right of settlement against such associations.

Failure by such organizations or switches to provide the required cooperation could result in our inability to obtain settlement of funds relating to transactions and adversely affect our business.

Failure by such organizations or switches to provide the required cooperation could result in our inability to obtain a settlement of funds relating to transactions and adversely affect our business.

Moreover, international card associations and issuers of their cards (and, in the case of Visa, member banks) have the ability to change or apply their rules in ways that could negatively impact our business.

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Our acquisition targets could fail to perform in accordance with our expectations at the time of purchase.

Future acquisitions may be effected through the issuance of our common stock or securities convertible into our common stock, which could substantially dilute the ownership percentage of our current stockholders.

Future acquisitions may be affected through the issuance of our common stock or securities convertible into our common stock, which could substantially dilute the ownership percentage of our current stockholders.

In addition, shares issued in connection with future acquisitions could be publicly tradable, which could result in a material decrease in the market price of our common stock.

Certain factors on which our ability to expand each of our divisions is dependent are set forth at Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations - Opportunities and Challenges.

If any of such factors impede our ability to expand our businesses, our results of operations and financial condition could be materially and adversely affected.

If any of such factors impede our ability to expand our businesses, the results of operations and financial condition could be materially and adversely affected.

Our operating results depend, in part, on the volume of transactions on ATMs in our network and the fees we can collect from processing these transactions.

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Per-transaction fees paid by international card organizations have declined in certain markets in the past and competitive factors have required us to reduce the transaction fees we charge customers.

If we cannot continue to increase our transaction levels and per-transaction fees generally decline, our results would be adversely affected.

If we cannot continue to increase our transaction levels and per-transaction fees generally decline, our results will be adversely affected.

If consumer confidence in our business or brands declines, our business may be adversely affected.

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CAPITAL MARKETS AND ECONOMIC CONDITIONS

The outbreak of COVID-19 (coronavirus) has negatively impacted and could continue to negatively impact the global economy.

In addition, the COVID-19 pandemic could disrupt or otherwise negatively impact global credit markets and our operations, including the demand for our products and services.

The significant outbreak of COVID-19 has resulted in a widespread health crisis, which has negatively impacted and could continue to negatively impact the global economy.

In addition, the global and regional impact of the outbreak, including official or unofficial quarantines and governmental restrictions on activities taken in response to such event, has had, and could continue to have a negative impact on our operations, reduced consumer demand for our products and services due to reduced consumer traffic in, or closure of, retail and other locations where our products and services are offered, including voluntary or mandatory temporary closures of our facilities or those of our agents or customers; interruptions in our supply chain, which could impact the cost or availability of equipment; disruptions or restrictions on our ability to travel or to market and distribute our products and services; and labor shortages.

For example, the COVID-19 pandemic has resulted in travel restrictions within and between countries, including mandatory quarantine requirements for travelers from certain locations, and varying degrees of social distancing orders in most of the countries where we do business, beginning in early 2020.

These travel restrictions and orders, as well as increased unemployment and general economic uncertainty caused by the pandemic, have negatively impacted our financial results.

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.

The Money Transfer Segment has experienced the impacts by the pandemic-related restrictions in certain markets that limit customers' ability to access our network of company-owned stores and agents.

All of these factors, in turn, may not only impact our operations, financial condition and demand for our products and services but our overall ability to react timely to mitigate the impact of this event.

The COVID-19 outbreak could disrupt or otherwise negatively impact credit markets, which could adversely affect the availability and cost of capital.

Such impacts could limit our ability to fund our operations and satisfy our obligations.

The extent and potential impact of the COVID-19 outbreak on our operational and financial performance will depend on future developments, including the duration, severity and spread of the virus, the effectiveness of vaccines and treatments against variants of the virus, actions that may be taken by governmental authorities and the impact on our supply chain, customers, operations, workforce and the financial markets, all of which are highly uncertain and cannot be predicted.

These and other potential impacts of an epidemic, pandemic or other health crisis, such as COVID-19, could therefore materially and adversely affect our business, financial condition and results of operations.

We are subject to political tension, the outbreak of wars, economic downturns all over the world

Economic conditions around the world, and in certain markets in which the Company does business, could impact sales price and volume.

We are subject to political tension, the outbreak of wars, pandemics, and economic downturns all over the world.

Economic conditions around the world, and in certain markets in which we do business, could impact sales price and volume.

As a result, market uncertainty or an economic downturn driven by inflationary pressures;

political tensions;

war, including the ongoing conflict between Russia and Ukraine and the related sanctions and export restrictions;

or political instability in the geographic regions or industries in which the Company provides services and products could reduce demand and result in decreased sales volume, which could have a negative impact on the Company’s results of operations.

In February 2022, Russia invaded Ukraine resulting in the United States, Canada, the European Union and other countries imposing economic sanctions on Russia.

Euronet suspended its operations and product offerings in Russia.

This action has not had a material impact on the Company's financial condition or results of operations.

However, the fluidity and continuation of the conflict may result in additional economic sanctions and other impacts which could have a negative impact on the Company’s financial condition, results of operations and cash flows.

war and related sanctions and export restrictions;

or political instability in the geographic regions or industries in which we provide services and products could reduce demand and result in decreased sales volume, which could have a negative impact on our results of operations.

In February 2022, Russia invaded Ukraine resulting in the United States, Canada, the EU and other countries imposing economic sanctions on Russia.

We suspended our operations and product offerings in Russia.

This action has not had a material impact on our financial condition or results of operations.

However, the fluidity and continuation of the conflict may result in additional economic sanctions and other impacts which could have a negative impact on our financial condition, results of operations and cash flows.

These include decreased sales;

potential disruptions in neighboring countries where Euronet has operations;

potential disruptions in neighboring countries where we have operations;

volatility in foreign exchange rates and interest rates;

inflationary pressures;

and heightened cybersecurity threats.

and heightened cyber security threats.

We are subject to business cycles, seasonality and other outside factors that may negatively affect our business.

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As a result of these seasonal variations, our quarterly operating results may fluctuate materially and could lead to volatility in the price of our shares.

Additionally, economic or political instability, wars, civil unrest, terrorism, epidemics and natural disasters may make money transfers to, from or within a particular country more difficult.

Additionally, economic, or political instability, wars, civil unrest, terrorism, epidemics, pandemics, and natural disasters may make money transfers to, from or within a particular country more difficult.

The inability to timely complete money transfers could adversely affect our business.

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We have had material impairment write-downs of goodwill and acquired intangible assets in the past and we may have additional impairment write-downs in the future.

If operating results in any of our key markets, including Australia, Germany, Greece, Malaysia, India, New Zealand, the U.S., U.K., Poland and Romania, deteriorate or our plans do not progress as expected when we acquired these entities, or if capital markets depress our value or that of similar companies, we may be required to record additional impairment write-downs of goodwill, intangible assets or other long-lived assets.

If operating results in any of our key markets deteriorate or our plans do not progress as expected when we acquired these entities, or if capital markets depress our value or that of similar companies, we may be required to record additional impairment write-downs of goodwill, intangible assets, or other long-lived assets.

This could have a material adverse effect on our results of operations and financial condition.

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dollar, the euro, and other currencies fluctuate, the impact of these fluctuations may have a material adverse effect on our results of operations or financial condition as reported in U.S.

A significant number of our ATMs are located in countries in the European Union that use the euro.

From time to time, some of these countries, have considered leaving the European Union and adopting another currency.

A significant number of our ATMs are located in countries in the EU that use the euro.

From time to time, some of these countries have considered leaving the EU and adopting another currency.

If such an event were to occur, the conversion of cash that we hold in banks and in our ATM network in that country from euros to another currency could have an adverse effect on our financial condition or results of operations, either from initial conversion or from subsequent changes in currency exchange rates.

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This, in turn, requires the maintenance of computer equipment and infrastructure, including telecommunications and electrical systems, and the integration and enhancement of complex software applications.

There are operational risks inherent in this type of business that can result in the temporary shutdown of part or all of our processing systems, such as failure of electrical supply, failure of computer hardware, security breaches and software errors.

Any operational problem in our processing centers may have a significant adverse impact on the operation of our networks.

Even with disaster recovery procedures in place, these risks cannot be eliminated entirely, and any technical failure that prevents operation of our systems for a significant period of time will prevent us from processing transactions during that period of time and will directly and adversely affect our revenues and financial results.

We are subject to security breaches of our systems.

We are subject to security breaches of our systems or those of our partners.

Any such breach may cause us to incur financial losses, liability, harm to our reputation, litigation, regulatory enforcement actions and limitations on our ability to conduct our businesses.

We capture, transmit, handle and store sensitive information in conducting and managing electronic, financial and mobile transactions, such as card information, PIN numbers and personal information of various types.

We and our partners capture, transmit, handle and store sensitive information in conducting and managing electronic, financial, and mobile transactions, such as card information, PIN numbers and personal information of various types.

These businesses involve certain inherent security risks, in particular:

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Further, our controls, procedures and technology may not be able to detect when there is a breach, causing a delay in our ability to mitigate it.

As previously disclosed in our SEC filings, we have been the subject of computer security breaches, and we cannot exclude the possibility of additional breaches in the future.

As previously disclosed, we have been the subject of computer security breaches, and we cannot exclude the possibility of additional breaches in the future.

Any breach in our security systems could result in the perpetration of fraudulent financial transactions for which we may bear the liability.

We are insured against various risks, including theft and negligence, but such insurance coverage is subject to deductibles, exclusions and limits that may leave us bearing some or all of any losses arising from security breaches.

We also collect, transfer and retain personal data as part of our businesses.

We and our partners also collect, transfer, and retain personal data as part of our business.

These activities are subject to certain privacy laws and regulations in the U.S.

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While we have selected these third-party vendors carefully, we do not control their actions.

A failure of these services by a third party could have a material impact upon our delivery of services to customers.

The failure of these services by a third-party could have a material impact upon our delivery of services to customers.

Such a failure could lead to damage claims, loss of customers, and reputational harm, depending on the duration and severity of the failure.

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If a critical vendor is unable to meet our needs in a timely manner or if the services or products provided by such a vendor are terminated or otherwise delayed and if we are not able to develop alternative sources for these services and products quickly and cost-effectively, our customers could be negatively impacted, and it could have a material adverse effect on our business.

Our business is subject to a variety of U.S.

and international laws, rules, policies and other obligations regarding data protection.

We are subject to an increasing number of federal, state, and international laws relating to the collection, use, retention, security and transfer of various types of personal information.

In many cases, these laws apply not only to third-party transactions, but also restrict transfers of personal information among us and its our international subsidiaries.

Several jurisdictions have passed laws in this area, and additional jurisdictions are considering imposing additional restrictions or have laws that are pending.

These laws continue to develop and may be inconsistent from jurisdiction to jurisdiction.

Complying with emerging and changing requirements causes us to incur substantial costs and has required and may in the future require us to change its our business practices.

Noncompliance could result in significant penalties or legal liability.

We make statements about its our use and disclosure of personal information through its our privacy policy, information provided on its our website, press statements and other privacy notices provided to customers.

Any failure by us to comply with these public statements or with other federal, state or international privacy or data protection laws and regulations could result in inquiries or proceedings against us by governmental entities or others.

In addition to reputational impacts, penalties could include ongoing audit requirements and significant legal liability.

In addition to the risks generally relating to the collection, use, retention, security and transfer of personal information, we are also subject to specific obligations relating to information considered sensitive under applicable laws, such as health data, financial data and biometric data.

Health data and financial data are subject to additional privacy, security and breach notification requirements, and we are subject to audit by governmental authorities regarding our compliance with these obligations.

If we fail to adequately comply with these rules and requirements, or if health data or financial data is handled in a manner not permitted by law or under our agreements with healthcare or financial institutions, we can be subject to litigation or government investigations, and can be liable for associated investigatory expenses, and can also incur significant fees or fines.

Payment card data is also subject to additional requirements.

Under payment card rules and obligations, if cardholder information is potentially compromised, we can be liable for associated investigatory expenses and can also incur significant fees or fines if we fail to follow payment card industry data security standards.

We could also experience a significant increase in payment card transaction costs or lose the ability to process payment cards if it fails we fail to follow payment card industry data security standards, which could materially adversely affect our business, reputation, results of operations and financial condition.

COMPETITIVE LANDSCAPE

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Thus , upon exercise of their options or sale of shares for which restrictions have lapsed, these affiliates' shares would be subject to the trading restrictions imposed by Rule 144.

The remainder of the common shares issuable under option and restricted stock award arrangements would be freely tradable in the public market.

The remainder of the common shares i ssuable under option and restricted stock award arrangements would be freely tradable in the public market.

Over the course of time, all of the issued shares have the potential to be publicly traded, perhaps in large blocks.

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Retaining the founder and key executives of our Company, and of companies that we acquire, and finding and retaining qualified personnel is important to our continued success, and any inability to attract and retain such personnel could harm our operations.

The development and implementation of our strategy has depended in large part on the co-founder of our company, Michael J.

The development and implementation of our strategy has depended in large part on our co-founder, Michael J.

The retention of Mr.

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The competition for qualified personnel in the markets where we conduct our business is intense and, accordingly, we cannot assure you that we will be able to continue to hire or retain the required personnel.

Our officers and some of our key personnel have entered into service or employment agreements containing non-competition, non-disclosure and non-solicitation covenants, which grant incentive stock options and/or restricted stock with long-term vesting requirements.

Our officers a nd some of our key personnel have entered into service or employment agreements containing non-competition, non-disclosure, and non-solicitation covenants, which grant incentive stock options and/or restricted stock wi th long-term vesting requirements.

However, most of these contracts do not guarantee that these individuals will continue their employment with us.

The loss of our key personnel could have a material adverse effect on our business, growth, financial condition, or results of operations.

Unresolved Staff Comments

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-K

Item 1A. Risk Factors