Euronet grows in Q1 22 despite strong headwinds

Euronet grows in Q1 22 despite strong headwinds

Euronet has reported its Q1 2022 earnings, and while its money transfer and digital transaction segments saw revenue growth, the quarter was characterised by uncertainty caused by the Omicron variant, the Russian invasion of Ukraine and global inflation. However, partnership growth as well as product and market diversification showed Euronet’s core business resilience.

Ria, XE face strong headwinds, hampering Euronet growth: Euronet money transfer performance, 2016-2022

Euronet Q1 22 earnings highlights

  • Euronet achieved 10% year-on-year revenue growth to $718.5m. The company also delivered double-digit consolidated revenue and adjusted EBITDA growth rates for the third consecutive quarter. This was aided by the recovery of travel in Europe, which drove a rebound in its Electronic Funds Transfer transactions, which climbed 67% YoY.
  • However, the company’s money transfer segment, which includes Ria and XE, saw revenue grow only 4% YoY to $339m. This is the result of significant headwinds offsetting otherwise healthy performance. The segment saw 38% growth in direct-to-consumer digital transactions and 11% growth in international money transfers during the quarter, while European-outbound transactions climbed 15%. However, transactions from Asia Pacific and the Middle East, which are still facing significant impacts from Covid-19, saw a 9% decline. The suspension of services to Russia, Belarus and Tajikistan also had a “nominal” impact on revenue.
  • The money transfer segment also saw its EBITDA decline as a result of the ongoing expansion of its physical and digital network, as well as increased costs associated with R&D and advertising.
  • Euronet continues to look to partnerships to help grow its presence in the cross-border payments space, and this quarter extended its partnership with Walmart US to 2026. It also launched the Ria-backed Walmart2Walmart service in Mexico, while XE launched in Malaysia.
  • The company also provided an update on its Dandelion platform, which sees it offer its cross-border payment rails on an as-a-service basis. It announced it had added a direct connection to the Single Euro Payments Area, covering 43 countries and territories and the West African Economic and Monetary Union, covering eight countries. It also added nine additional countries, including the US, Canada and UAE.

How does Euronet compete in remittances?

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