Euronet Worldwide, Inc. — FY2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021. This is an annual report; it does not provide a standalone fourth-quarter income statement or full Q4 comparison. Euronet provides electronic payments, prepaid-content distribution and money-transfer services through EFT Processing, epay and Money Transfer segments.
Financial performance and liquidity
| Metric | FY2021 | FY2020 |
|---|
| Revenue | $2,995.4 million | $2,482.7 million |
| Operating income | $184.0 million | $46.6 million |
| Net income (loss) attributable to Euronet | $70.7 million | $(3.4) million |
| Diluted EPS | $1.32 | $(0.06) |
| Cash provided by operating activities | $406.6 million | $253.5 million |
| Capital expenditures | $92.2 million | $97.6 million |
- Revenue rose 21% and operating income increased substantially as transaction volumes recovered and grew across all three segments. FY2021 operating margin was approximately 6.1%, versus 1.9% in FY2020.
- Net income improved despite $65.1 million of income tax expense and $48.3 million of net other expense, including $38.2 million interest expense and $10.9 million foreign-exchange losses.
- Working capital was $1,455.8 million, down from $1,510.5 million; the current ratio was 1.79 versus 1.81. Cash and cash equivalents were $1,260.5 million, while company-funded ATM cash was $543.4 million.
- Management reported $1,803.9 million of available cash including ATM cash, plus $689.3 million of remaining credit-facility availability. Cash and cash equivalents plus restricted cash totaled $2,086.1 million at year-end.
- Total debt obligations were $1,434.6 million before unamortized debt costs; carrying value was $1,420.9 million. Long-term debt on the balance sheet was $1,420.1 million. The company was in compliance with credit-facility covenants.
- Approximately 73% of revenue was generated outside the U.S. FY2021 foreign-currency translation reduced comprehensive income by $78.5 million.
Segment results
| Segment | FY2021 revenue | FY2021 operating income (loss) | Change versus FY2020 |
|---|
| EFT Processing | $591.1 million | $(0.5) million | Revenue +26%; operating loss narrowed from $66.7 million |
| epay | $1,011.5 million | $123.0 million | Revenue +21%; operating income +27% |
| Money Transfer | $1,401.0 million | $119.6 million | Revenue +18%; operating income +100% |
Material changes and unusual items
- COVID-19 restrictions eased unevenly. Higher travel-related DCC and surcharge activity supported EFT recovery, though cross-border transactions remained below pre-pandemic levels. Money Transfer volumes grew, particularly for U.S. outbound and international-originated transfers; epay growth included digital-media transactions.
- FY2021 included a $38.6 million non-cash impairment of Money Transfer contract costs after expected transaction volumes on certain contracts fell short. FY2020 included $106.6 million of non-cash goodwill and acquired-intangible impairment charges. No goodwill or acquired-intangible impairment was recorded in 2021.
- The effective tax rate was 48.0% in 2021; management’s adjusted rate excluding specified impairment and foreign-exchange items was 36.1%. The filing cites valuation allowances, losses in certain foreign jurisdictions and higher local tax rates among the factors affecting the rate.
- Euronet repurchased $227.8 million of shares under repurchase programs in 2021; total cash-flow-statement share repurchases were $229.9 million. No common-stock dividends were paid.
Outlook, risks and contingencies
- No quantified revenue or earnings guidance is provided. Management estimated 2022 capital expenditures of approximately $95–$100 million and stated that operating cash flow, cash on hand and available financing were expected to cover debt, lease and capital-expenditure needs.
- The planned purchase of Piraeus Bank’s merchant-acquiring business for €300 million (approximately $360 million) was targeted to close in the first half of 2022, subject to regulatory approvals, commercial agreements and customary conditions; Euronet expected to use cash on hand.
- Principal risks include continuing pandemic effects and travel recovery; foreign-exchange volatility; regulation of money transfer, payments, DCC, privacy and anti-money-laundering activities; cybersecurity and processing outages; competition and margin pressure; and the renewal of bank, retailer, content-provider, agent and cash-supply arrangements.
- Debt and funding exposures include the $1.0 billion revolving facility maturing in October 2023, convertible notes with holder repurchase options beginning in March 2025, and €600 million of 1.375% senior notes due in 2026. The filing identifies no significant long-term debt principal payment before October 2023, while its debt schedule reflects the 2025 convertible-note put date.
- ATM operations used approximately $558.1 million of cash supplied by third parties, for which Euronet is responsible under certain contracts. The company also disclosed $84.2 million of standby letters of credit and bank guarantees, along with other performance and indemnification commitments; it reported no significant claims requiring a recorded liability.
- Management reported no legal or regulatory proceedings believed likely to have a material adverse effect. KPMG issued an unqualified opinion on the financial statements and concluded internal control over financial reporting was effective.
Important facts for investors to verify
- Whether EFT profitability and high-margin DCC and surcharge volumes continue to recover as travel patterns normalize.
- Whether Money Transfer growth offsets higher agent commissions and the $38.6 million contract-cost impairment; review the performance of the affected contracts.
- Closing status, final terms and funding impact of the Piraeus merchant-acquiring acquisition.
- Cash availability and debt repayment capacity after ATM funding needs, share repurchases, foreign-currency effects and upcoming facility and convertible-note milestones.
- Exposure to foreign exchange, tax audits and the $41.0 million balance of unrecognized tax benefits, as well as regulatory, cyber and third-party cash-supply risks.
