EEFT 10-Q Quarterly Report Sept. 30, 2022

EURONET WORLDWIDE INC

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eeft-20220930.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☑

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission File Number: 001-31648

EURONET WORLDWIDE, INC.

(Exact name of registrant as specified in its charter)

Delaware		74-2806888
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
11400 Tomahawk Creek Parkway, Suite 300
Leawood,	Kansas	66211
(Address of principal executive offices)		(Zip Code)

(913) 327-4200

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	EEFT	Nasdaq Global Select Market
1.375% Senior Notes due 2026	EEFT26	Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	þ	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	☐
		Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

On November 4, 2022 , Euronet Worldwide, Inc. had 49,593,877 shares of common stock outstanding.

EURONET WORLDWIDE, INC. AND SUBSIDIARIES

Table of Contents

		Page

PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	1
	Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021	1
	Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2022 and 2021	2
	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2022 and 2021	3
	Consolidated Statements of Changes in Equity for the Three and Nine Months Ended September 30, 2022 and 2021	4
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021	6
	Notes to the Unaudited Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	42
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 6.	Exhibits	44
	Signatures	45

Table of Contents

PART I—FINANCIAL INFORMATION

ITEM 1 . FINANCIAL STATEMENTS (UNAUDITED)

EURONET WORLDWIDE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	As of
	September 30, 2022			December 31, 2021
	(unaudited)
ASSETS
Current assets:
Cash an d cas h equivalents	$	967,100		$	1,260,466
ATM cash	646,121			543,422
Restricted cash	8,396			3,693
Settlement assets	1,034,898			1,102,389
Trade accounts receivable, net of credit losses of $ 4,059 and $ 4,469	225,166			203,010
Prepaid expenses and other current assets	364,209			195,443
Total current assets	3,245,890			3,308,423
Operating right of use lease assets	137,993			161,494
Property and equipment, net of accumulated depreciation of $ 516,239 and $ 532,631	317,602			345,381
Goodwill	764,780			641,605
Acquired intangible assets, net of accumulated amortization of $ 180,280 and $ 185,054	180,257			97,793
Other assets, net of accumulated amortization of $ 64,542 and $ 62,349	181,305			189,580
Total assets	$	4,827,827		$	4,744,276
LIABILITIES AND EQUITY
Current liabilities:
Settlement obligations	$	1,034,898		$	1,102,389
Trade accounts payable	169,835			193,529
Accrued expenses and other current liabilities	494,745			367,692
Current portion of operating lease liabilities	45,562			52,136
Short-term debt obligations and current maturities of long-term debt obligations	303,549			821
Income taxes payable	62,783			59,037
Deferred revenue	59,071			77,037
Total current liabilities	2,170,443			1,852,641
Debt obligations, net of current portion	1,428,471			1,420,085
Operating lease obligations, net of current portion	95,057			111,355
Deferred income taxes	37,810			46,505
Other long-term liabilities	68,803			58,166
Total liabilities	3,800,584			3,488,752
Equity:
Euronet Worldwide, Inc. stockholders’ equity:
Preferred Stock, $ 0.02 par value. 10,000,000 shares authorized; none issued	—			—
Common Stock, $ 0.02 par value. 90,000,000 shares authorized; shares issued 63,863,162 and 63,779,009	1,277			1,275
Additional paid-in-capital	1,234,090			1,274,118
Treasury stock, at cost, shares issued 14,270,009 and 12,631,125	( 1,105,883		)	( 931,212		)
Retained earnings	1,280,509			1,083,882
Accumulated other comprehensive loss	( 382,224		)	( 172,582		)
Total Euronet Worldwide, Inc. stockholders’ equity	1,027,769			1,255,481
Noncontrolling interests	( 526		)	43
Total equity	1,027,243			1,255,524
Total liabilities and equity	$	4,827,827		$	4,744,276

See accompanying notes to the unaudited consolidated financial statements.

Table of Contents

EURONET WORLDWIDE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except share and per share data)


		Three Months Ended September 30,					Nine Months Ended September 30,
		2022			2021		2022			2021
Revenues	$	931,266		$	816,560		$	2,493,042		$	2,183,916
Operating expenses:
Direct operating costs, exclusive of depreciation		526,048			484,438		1,484,863			1,389,770
Salaries and benefits		134,471			119,421		392,544			356,160
Selling, general and administrative		69,508			64,298		207,613			182,193
Depreciation and amortization		32,781			33,909		101,784			100,729
Total operating expenses		762,808			702,066		2,186,804			2,028,852
Operating income		168,458			114,494		306,238			155,064
Other income (expense):
Interest income		600			153		990			539
Interest expense		( 11,716	)		( 10,072	)	( 26,712		)	( 28,718		)
Foreign currency exchange gain (loss), net		( 15,798	)		( 8,135	)	( 35,958		)	( 12,051		)
Other gains, net		10			—		202			31
Other expense, net		( 26,904	)		( 18,054	)	( 61,478		)	( 40,199		)
Income before income taxes		141,554			96,440		244,760			114,865
Income tax expense		( 44,002	)		( 22,726	)	( 81,884		)	( 41,140		)
Net income		97,552			73,714		162,876			73,725
Net income attributable to noncontrolling interests		170			168		361			127
Net income attributable to Euronet Worldwide, Inc.	$	97,722		$	73,882		$	163,237		$	73,852

Earnings per share attributable to Euronet Worldwide, Inc. stockholders:
Basic	$	1.97		$	1.40		$	3.24		$	1.40
Diluted	$	1.87		$	1.37		$	3.10		$	1.37

Weighted average shares outstanding:
Basic		49,583,317			52,829,386		50,345,293			52,799,199
Diluted		52,751,304			53,853,675		53,688,800			53,933,226

See accompanying notes to the unaudited consolidated financial statements.

Table of Contents

EURONET WORLDWIDE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited, in thousands)


		Three Months Ended September 30,					Nine Months Ended September 30,
		2022			2021			2022		2021
Net income	$	97,552		$	73,714		$	162,876		$	73,725
Translation adjustment		( 100,458	)		( 29,692	)	( 209,850		)	( 59,907		)
Comprehensive income (loss)		( 2,906	)		44,022		( 46,974		)	13,818
Comprehensive income attributable to noncontrolling interests		262			196		569			200
Comprehensive income (loss) attributable to Euronet Worldwide, Inc.	$	( 2,644	)	$	44,218		$	( 46,405	)	$	14,018

See accompanying notes to the unaudited consolidated financial statements.

Table of Contents

EURONET WORLDWIDE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited, in thousands, except share data)

	Number of Shares Outstanding		Common Stock	Additional Paid-in Capital		Treasury Stock
Balance as of December 31, 2020	52,734,049	$	1,267	$	1,228,446	$	( 703,032	)
Net (loss) income
Other comprehensive loss
Stock issued under employee stock plans	62,436		1		3,335		( 482	)
Share-based compensation					8,492
Balance as of March 31, 2021	52,796,485		1,268		1,240,273		( 703,514	)
Net (loss) income
Other comprehensive loss
Stock issued under employee stock plans	25,769		1		1,199		267
Share-based compensation					10,984
Balan ce as of June 30, 2021	52,822,254		1,269		1,252,456		( 703,247	)
Net income
Other comprehensive income
Stock issued under employee stock plans	33,217		1		1,022		111
Share-based compensation					6,805
Balance as of September 30, 2021	52,855,471		1,270		1,260,283		( 703,136	)

	Number of Shares Outstanding		Common Stock		Additional Paid-in Capital			Treasury Stock
Balance as of December 31, 2021	51,147,884		$	1,275	$	1,274,118		$	( 931,212	)
Net income (loss)
Other comprehensive loss
Stock issued under employee stock plans	40,173			1		1,989			142
Share-based compensation						9,803
Repurchase of shares	( 639,535	)							( 70,351	)
Adoption of ASU 2020-06						( 74,080	)
Balance as of March 31, 2022	50,548,522			1,276		1,211,830			( 1,001,421	)
Net income (loss)
Other comprehensive loss
Stock issued under employee stock plans	31,233			1		1,322			( 73	)
Share-based compensation						10,142
Repurchase of shares	( 1,000,000	)							( 104,600	)
Balance as of June 30, 2022	49,579,755			1,277		1,223,294			( 1,106,094	)
Net income
Other comprehensive income
Stock issued under employee stock plans	13,398			—		460			211
Share-based compensation						10,336
Repurchase of shares	—								—
Balance as of September 30, 2022	49,593,153			1,277		1,234,090			( 1,105,883	)

See accompanying notes to the unaudited consolidated financial statements.

Table of Contents

EURONET WORLDWIDE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (CONTINUED)

(Unaudited, in thousands)

	Retained Earnings			Accumulated Other Comprehensive Loss			Noncontrolling Interests			Total
Balance as of December 31, 2020	$	1,013,155		$	( 94,214	)	$	281		$	1,445,903
Net income (loss)		( 8,665	)					44			( 8,621	)
Other comprehensive loss					( 42,845	)		( 56	)		( 42,901	)
Stock issued under employee stock plans											2,854
Share-based compensation											8,492
Balance as of March 31, 2021		1,004,490			( 137,059	)		269			1,405,727
Net income (loss)		8,635						( 3	)		8,632
Other comprehensive loss					12,675			11			12,686
Stock issued under employee stock plans											1,467
Share-based compensation											10,984
Balance as of June 30, 2021		1,013,125			( 124,384	)		277			1,439,496
Net income		73,882						( 168	)		73,714
Other comprehensive income					( 29,664	)		( 28	)		( 29,692	)
Stock issued under employee stock plans											1,134
Share-based compensation											6,805
Balance as of September 30, 2021		1,087,007			( 154,048	)		81			1,491,457

	Retained Earnings		Accumulated Other Comprehensive Loss			Noncontrolling Interests			Total
Balance as of December 31, 2021	$	1,083,882	$	( 172,582	)	$	43		$	1,255,524
Net income (loss)		8,297					( 7	)	8,290
Other comprehensive loss				( 21,077	)		( 37	)	( 21,114		)
Stock issued under employee stock plans									2,132
Share-based compensation									9,803
Repurchase of shares									( 70,351		)
Adoption of ASU 2020-06		33,390							( 40,690		)
Balance as of March 31, 2022		1,125,569		( 193,659	)		( 1	)		1,143,594
Net income (loss)		57,218					( 184	)		57,034
Other comprehensive loss				( 88,199	)		( 79	)		( 88,278	)
Stock issued under employee stock plans										1,250
Share-based compensation										10,142
Repurchase of shares										( 104,600	)
Balance as of June 30, 2022		1,182,787		( 281,858	)		( 264	)		1,019,142
Net income (loss)		97,722					( 170	)		97,552
Other comprehensive loss				( 100,366	)		( 92	)		( 100,458	)
Stock issued under employee stock plans										671
Share-based compensation										10,336
Repurchase of shares		—								—
Balance as of September 30, 2022		1,280,509		( 382,224	)		( 526	)		1,027,243

See accompanying notes to the unaudited consolidated financial statements.

Table of Contents

EURONET WORLDWIDE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)


	Nine Months Ended September 30,
	2022			2021
Net income	$	162,876		$	73,725
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	101,784			100,729
Share-based compensation	30,281			26,281
Unrealized foreign exchange loss, net	35,958			12,051
Deferred income taxes	12,210			1,412
Accretion of convertible debt discount and amortization of debt issuance costs	2,351			15,099
Changes in working capital, net of amounts acquired:
Income taxes payable, net	9,153			17,464
Trade accounts receivable, including amounts in settlement assets	6,087			96,541
Prepaid expenses and other current assets, including amounts in settlement assets	( 205,363		)	119,698
Trade accounts payable, including amounts in settlement obligations	( 107,139		)	( 209,069		)
Deferred revenue	( 10,988		)	( 2,782		)
Accrued expenses and other current liabilities, including amounts in settlement obligations	400,955			47,254
Changes in noncurrent assets and liabilities	10,471			5,937
Net cash provided by operating activities	448,636			304,340
Cash flows from investing activities:
Acquisitions, net of cash acquired	( 331,372		)	-
Purchases of property and equipment	( 79,351		)	( 66,058		)
Purchases of other long-term assets	( 5,844		)	( 6,171		)
Other, net	528			1,277
Net cash used in investing activities	( 416,039		)	( 70,952		)
Cash flows from financing activities:
Proceeds from issuance of shares	4,421			6,443
Repurchase of shares	( 175,296		)	( 979		)
Borrowings from revolving credit agreements	5,924,100			3,539,100
Repayments of revolving credit agreements	( 5,581,200		)	( 3,756,300		)
Net borrowings (repayments) from short-term debt obligations	4,631			199
Other, net	( 3,119		)	( 4,754		)
Net cash provided by (used in) financing activities	173,537			( 216,291		)
Effect of exchange rate changes on cash and cash equivalents and restricted cash	( 413,669		)	( 82,667		)
Increase (decrease) in cash and cash equivalents and restricted cash	( 207,535		)	( 65,570		)
Cash and cash equivalents and restricted cash at beginning of period	2,086,102			2,099,508

Cash and cash equivalents and restricted cash at end of period	$	1,878,567		$	2,033,938

Supplemental disclosure of cash flow information:
Interest paid during the period	$	21,668		$	17,226
Income taxes paid during the period	$	65,658		$	28,752

See accompanying notes to the unaudited consolidated financial statements.

Table of Contents

EURONET WORLDWIDE, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

( 1 ) GENERAL

Organization

Euronet Worldwide, Inc. (the "Company", "Euronet", "we" and "us") was established as a Delaware corporation on December 13, 1996 and succeeded Euronet Holding N.V. as the group holding company, which was founded and established in 1994. Euronet is a leading electronic payments provider. Euronet offers payment and transaction processing and distribution solutions to financial institutions, retailers, service providers and individual consumers. Euronet's primary product offerings include comprehensive ATM, POS, card outsourcing, card issuing and merchant acquiring services, electronic distribution of prepaid mobile airtime and other electronic payment products, and international payment services.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared from the records of the Company, in conformity with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, such unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to fairly present the consolidated financial position and the results of operations, comprehensive income, changes in equity and cash flows for the interim periods. The unaudited consolidated financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2021 , including the notes thereto, set forth in our 2021 Annual Report on Form 10-K.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include computing income taxes, estimating the useful lives and potential impairment of long-lived assets and goodwill, as well as allocating the purchase price to assets acquired and liabilities assumed in acquisitions and revenue recognition. Actual results could differ from those estimates. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year ending December 31, 2022 .

Seasonality

Euronet’s EFT Processing Segment normally experiences its heaviest demand for DCC services during the third quarter of the fiscal year, normally coinciding with the tourism season. Epay Segment is normally impacted by seasonality during the fourth quarter and first quarter of each year due to higher transaction levels during the holiday season and lower levels following the holiday season. Also, epay sells large loyalty rewards campaigns to retailers, which could be deployed in any given quarter and will impact the activity in that quarter accordingly. Seasonality in the Money Transfer Segment varies by region of the world. In most markets, Euronet usually experiences increased demand for money transfer services from the month of May through the fourth quarter of each year, coinciding with the increase in worker migration patterns and various holidays, and its lowest transaction levels during the first quarter of the year.

( 2 ) RECENTLY ISSUED AND ADOPTED ACCOUNTING PRONOUNCEMENTS

In August 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-06, "Accounting for Convertible Instruments and Contracts in an Entity's Own Equity" which simplifies the accounting for convertible instruments by eliminating certain accounting models when the conversion features are not required to be accounted for as derivatives under Topic 815 , Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in-capital. Under this ASU, certain debt instruments with embedded conversion features will be accounted for as a single liability measured at its amortized cost. Additionally, this ASU eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments. We adopted this standard on January 1, 2022 using the modified retrospective approach, which resulted in our Convertible Senior Notes Due 2049 being recognized as a single liability. As a result of the adoption of this standard, we recorded a $ 99.7 million decrease to additional paid-in capital, a $ 56.8 million decrease in debt discounts and a $ 42.9 million increase in retained earnings. The adoption of this standard also impacted our deferred tax liability by decreasing our deferred tax liability by $ 15.0 million, decreasing retained earnings by $ 10.6 million, and increasing additional paid-in capital by $ 25.6 million. Additionally, the elimination of the treasury stock method will increase the number of dilutive shares used in the diluted earnings per share calculation, if dilutive, by 2.8 million shares.

( 3 ) ACQUISITIONS

On March 15, 2022 we completed the acquisition of the Merchant Acquiring Business of Piraeus Bank ("PBMA"). The acquisition includes 205,000 POS terminals at 170,000 merchants throughout Greece, as well as Piraeus Bank’s online merchant acquiring business and expands our omnichannel payments strategy where we use our proprietary technology to provide cash, card-based acquiring solutions, alternative payment acquiring, online acquiring, tokenized payment services and other payment products. Additionally, the acquisition includes a long-term commercial framework agreement between Piraeus Bank and Euronet which includes collaborative product distribution, processing and customer referrals.

The purchase price was € 313.8 million, or approximately $ 346.2 million, which includes $ 331 million cash paid at closing plus $ 15.2 million of estimated contingent consideration for a ten -year earnout contingent on performance targets outlined in the commercial framework agreement. The contingent consideration is related to a percentage of the net fee income received during the ten -year period of the commercial framework agreement and there is no contractual maximum amount of consideration under this agreement.

The initial accounting for this acquisition is not complete as of September 30, 2022. The purchase price was preliminarily allocated to the assets acquired and liabilities assumed, including identifiable intangible assets, based on their respective provisional fair values at the date of acquisition. Additional time is needed to refine and review the results of the valuation of assets and liabilities. The acquisition has been accounted for as a business combination in accordance with U.S. GAAP and the results of operations have been included from the date of acquisition in the EFT Processing Segment.

The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed as of the acquisition date.


(in thousands)		As of March 15, 2022
Other current assets	$	1,707
Settlement assets		78,718
Property and equipment		6,095
Acquired intangible assets		122,455
Total assets acquired	$	208,975

Trade accounts payable	$	1,499
Settlement liabilities		66,925
Accrued expenses and other current liabilities		5,929
Deferred revenue		500
Other long-term liabilities		99
Total liabilities assumed	$	74,952

Goodwill		212,183

Net assets acquired	$	346,206

Assets acquired, liabilities assumed, and consideration transferred were recorded at their estimated fair values on the acquisition date. The fair value measurements of intangible assets were based on significant inputs not observable in the market and represent Level 3 measurements within the fair value hierarchy. Level 3 inputs include discount rates that would be used by a market participant in valuing these assets, projections of revenues and cash flows, and customer attrition rates, among others.

We acquired a customer relationship intangible asset with a preliminary fair value of $ 112.2 million that is being amortized on a straight-line basis over 15 years and a contract related intangible asset of $ 10.3 million that is being amortized on a straight-line basis over 10 years.

Goodwill, with a preliminary value of $ 212.2 million, arising from the acquisition was included in the EFT Processing Segment. The factors that make up goodwill include synergies from combining PBMA operations and intangible assets that do not qualify for separate recognition. Goodwill and intangible assets associated with this acquisition are deductible for tax purposes.

The results of PBMA operations are included in our consolidated results of operation, as part of our EFT Processing business segment, beginning on March 16, 2022. For the three and nine months ended September 30, 2022, PBMA had $ 32.6 million and $ 63.8 million in revenue. The PBMA business is impacted by higher transaction volumes during the tourism season in the second and third quarters.

(4) SETTLEMENT ASSETS AND OBLIGATIONS

Settlement assets represent funds received or to be received from agents for unsettled money transfers and from merchants for unsettled prepaid transactions. We record corresponding settlement obligations relating to accounts payable. Settlement assets consist of cash and cash equivalents, restricted cash, accounts receivable and prepaid expenses and other current assets. The settlement cash held at the Company is primarily generated from the monies remitted by consumers through Company agents and financial institutions in payment of the face value of the payment service or foreign currency purchased and the related fees charged to purchase the currency. We use our cash and cash equivalents to pay the face value of the payment service product upon presentation by the recipient. Cash received by Company agents and merchants generally becomes available to us within two weeks after initial receipt by the business partner. Receivables from business partners represent funds collected by such business partners that are in transit to us.

Settlement obligations consist of accrued expenses for money transfers, content providers, and EFT customer deposits and accounts payable to agents and content providers. Money transfer accrued expenses represent amounts to be paid to transferees when they request funds. Most agents typically settle with transferees first then obtain reimbursement from us. Money order accrued expenses represent amounts not yet presented for payment. Due to the agent funding and settlement process, accrued expenses to agents represent amounts due to agents for money transfers that have not been settled with transferees.

	As of
(in thousands)	September 30, 2022		December 31, 2021
Settlement assets:
Settlement cash and cash equivalents	$	210,802	$	203,624
Settlement restricted cash	46,148		74,897
Accounts receivable, net of credit losses of $ 30,622 and $ 27,341	569,517		619,738
Prepaid expenses and other current assets	208,431		204,130
Total settlement assets	$	1,034,898	$	1,102,389
Settlement obligations:
Trade account payables	$	378,452	$	461,135
Accrued expenses and other current liabilities	656,446		641,254
Total settlement obligations	$	1,034,898	$	1,102,389

The table below reconciles cash and cash equivalents, restricted cash, ATM cash, settlement cash and cash equivalents, and settlement restricted cash as presented within "Cash and cash equivalents and restricted cash" in the Consolidated Statement of C ash Flows.

	As of
(in thousands)	September 30, 2022		December 31, 2021		September 30, 2021		December 31, 2020
Cash and cash equivalents	$	967,100	$	1,260,466	$	1,048,466	$	1,420,255
Restricted cash	8,396		3,693		3,626		3,334
ATM cash	646,121		543,422		669,686		411,054
Settlement cash and cash equivalents	210,802		203,624		259,727		188,191
Settlement restricted cash	46,148		74,897		52,433		76,674
Cash and cash equivalents and restricted cash at end of period	$	1,878,567	$	2,086,102	$	2,033,938	$	2,099,508

(5) STOCKHOLDERS' EQUITY

Earnings (Loss) Per Share

Basic earnings (loss) per share has been computed by dividing earnings (loss) available to common stockholders by the weighted average number of common shares outstanding during the respective period. Diluted earnings (loss) per share has been computed by dividing earnings (loss) available to common stockholders by the weighted average shares outstanding during the respective period, after adjusting for the potential dilution of options to purchase our common stock, assumed vesting of restricted stock and the assumed conversion of our convertible debt, if such conversion would be dilutive.

The following table provides the computation of diluted earnings and diluted weighted average number of common shares outstanding:

		Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021
Computation of diluted earnings:
Net income (loss)	$	97,722	$	73,882	$	163,237	$	73,852
Add: Interest expense from assumed conversion of convertible notes, net of tax		1,148		—		3,253		—
Net income (loss) for diluted earnings per share calculation	$	98,870	$	73,882	$	166,490	$	73,852

Computation of diluted weighted average shares outstanding:
Basic weighted average shares outstanding		49,583,317		52,829,386		50,345,293		52,799,199
Incremental shares from assumed exercise of stock options and vesting of restricted stock		386,169		1,024,289		561,689		1,134,027
Incremental shares from assumed conversion of convertible debt		2,781,818		—		2,781,818		—
Diluted weighted average shares outstanding		52,751,304		53,853,675		53,688,800		53,933,226

The table includes all stock options and restricted stock that are dilutive to our weighted average common shares outstanding during the period. The calculation of diluted earnings (loss) per share excludes stock options or shares of restricted stock that are anti-dilutive to our weighted average common shares outstanding of approximately 3,308,000 and 2,849,000 for the three and nine months ended September 30, 2022 and 770,000 and 751,000 for the three and nine months ended September 30, 2021 , respectively.

We issued Convertible Senior Notes ("Convertible Notes") due March 2049 on March 18, 2019. Our Convertible Notes currently have a settlement feature requiring us upon conversion to settle the principal amount of the debt and any conversion value in excess of the principal value ("conversion premium"), for cash or shares of our common stock or a combination thereof, at our option. We have stated our intent to settle any conversion of these notes by paying cash for the principal value and issuing common stock for any conversion premium; however, after adopting ASU 2020-06, 2.8 million incremental shares assumed for conversion of convertible notes shall be included in the dilutive earnings per share calculation, if dilutive, regardless of whether the market price trigger has been met. Therefore, our Convertible Notes were included in the calculation of diluted earnings (loss) per share if their inclusion was dilutive. The dilutive effect increases the more the market price exceeds the conversion price of $ 188.73 per share. See Note 9, Debt Obligations, to the consolidated financial statements for more information about the Convertible Notes.

Share repurchases

On February 26, 2020, we put a repurchase program in place to repurchase up to $ 250 million in value, but not more than 5.0 million shares of common stock through February 28, 2022. On December 8, 2021, we put a repurchase program in place to repurchase up to $ 300 million in value, but not more than 5.0 million shares of common stock through December 8, 2023. U nder the repurchase programs w e repurchased $ 0 million and $ 175.0 million of stock, f or the three and nine months ended September 30, 2022 , respectively . Re purchases under the current program may take place in the open market or in privately negotiated transactions, including derivative transactions, and may be made under a Rule 10b5-1 plan.

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss consists entirely of foreign currency translation adjustments. We recorded foreign currency translation losses of $ 100.5 million and $ 209.9 million for the three and nine months ended September 30, 2022 , respectively, and losses of $ 29.7 million and $ 59.9 million for the three and nine months ended September 30, 2021 . There were no reclassifications of foreign currency translation into the consolidated statements of income for the three and nine months ended September 30, 2022 and 2021 .

( 6 ) GOODWILL AND ACQUIRED INTANGIBLE ASSETS, NET

A summary of acquired intangible assets and goodwill activity for the nine months ended September 30, 2022 is presented below:


(in thousands)	Acquired Intangible Assets			Goodwill			Total Intangible Assets
Balance as of December 31, 2021	$	97,793		$	641,605		$	739,398
Increases (decreases):
Acquisition	122,455			212,183			334,638
Amortization	( 20,164		)	—			( 20,164		)
Foreign currency exchange rate changes	( 19,827		)	( 89,008		)	( 108,835		)
Balance as of September 30, 2022	$	180,257		$	764,780		$	945,037

Of the total goodwill balance of $ 764.8 million as of September 30, 2022 , $ 351.3 million relates to the Money Transfer Segment, $ 298.6 million relates to the EFT Processing Segment and the remaining $ 114.9 million relates to the epay Segment . Estimated amortization expense on acquired intangible assets with finite lives as of September 30, 2022, is expected to total $ 6.6 million for the remainder of 2022, $ 22.3 million for 2023, $ 16.6 million for 2024, $ 13.6 million for 2025, $ 13.3 million for 2026 and $ 12.1 million for 2027.

( 7 ) ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of the following:


	As of
(in thousands)	September 30, 2022		December 31, 2021
Accrued expenses	$	348,219	$	285,098
Derivative liabilities	85,799		23,285
Accrued payroll expenses	57,827		55,162
Current portion of finance lease obligations	2,900		4,147
Total	$	494,745	$	367,692

(8) DEFERRED REVENUES

We record deferred revenues when cash payments are received or due in advance of our performance. The decrease in the deferred revenue balance for the nine months ended September 30, 2022 is the result of $ 26.0 million of cash payments received in the current year for which we have not yet satisfied the performance obligations, offset by $ 43.9 million of revenues recognized that were included in the deferred revenue balance as of December 31, 2021.

(9) DEBT OBLIGATIONS

Debt obligations consist of the following:

	As of
(in thousands)	September 30, 2022			December 31, 2021
Credit Facility:
Revolving credit agreement	$	326,300		$	283,400

Uncommitted credit agreement		300,000			—
Convertible Debt:
0.75 % convertible notes, unsecured, due 2049	525,000			468,235

1.375 % Senior Notes, due 2026	588,360			682,080

Other obligations	3,616			920

Total debt obligations	1,743,276			1,434,635
Unamortized debt issuance costs	( 11,256		)	( 13,729		)
Carrying value of debt	1,732,020			1,420,906
Short-term debt obligations and current maturities of long-term debt obligations	( 303,549		)	( 821		)
Long-term debt obligations	$	1,428,471		$	1,420,085

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 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 and 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. dollars. Subject to certain conditions, the Company has the option to increase the credit facility by up to an additional $ 500 million by requesting additional commitments from existing or new lenders. Fees and interest on borrowings vary based upon the Company's corporate credit rating and will be based, in the case of letter of credit fees, on a margin, and in the case of interest, on a margin over a secured overnight financing rate, as defined in the agreement, with a margin, including the facility fee, ranging from 1.00 % to 1.625 % or the base rate, as selected by the Company. The applicable margin for borrowings under the credit facility, based on the Company's current credit rating is initially 1.25 % including the facility fee.

The Agreement contains customary affirmative and negative covenants, events of default and financial covenants, including (all as defined in the Credit Facility): (i) a Consolidated Total Leverage Ratio, depending on certain circumstances defined in the Credit Facility, not to exceed a range between 3.5 to 1.0 and 4.5 to 1.0; and (ii) a Consolidated Interest Coverage Ratio of not less than 3.0 to 1.0. Subject to meeting certain customary covenants (as defined in the Credit Facility), the Company is permitted to repurchase common stock and debt. The Company was in compliance with all debt covenants as of September 30, 2022.

Uncommitted Credit Agreements

On May 25, 2022, the Company entered into an Uncommitted Credit Agreement for $ 300 million, fully drawn and outstanding at September 30, 2022, for the sole purpose of providing vault cash for ATMs, that expires no later than November 30, 2022 . Each loan bears interest at the rate per annum equal to the secured overnight financing rate (“SOFR”) plus 1.00 %. The weighted-average interest rate from the loan inception date to September 30, 2022 was 2.70 %.

On June 24, 2022, the Company entered into an Uncommitted Loan Agreement for $ 150 million, for the sole purpose of providing vault cash for ATMs, that expires no later than June 23, 2023. The loan had no balance at September 30, 2022 . Each loan 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 bank and the Company at the time such loan is made. The weighted-average interest rate from the loan inception date to September 30, 2022 was 2.76 %.

Convertible Debt

On March 18, 2019, the Company completed the sale of $ 525.0 million of Convertible Senior Notes ("Convertible Notes"). The Convertible Notes mature in March 2049 unless redeemed or converted prior to such date, and are convertible into shares of Euronet common stock at a conversion price of approximately $ 188.73 per share if certain conditions are met (relating to the closing price of Euronet common stock exceeding certain thresholds for specified periods). Holders of the Convertible Notes have the option to require the Company to purchase their notes on each of March 15, 2025, March 15, 2029, March 15, 2034, March 15, 2039 and March 15, 2044 at a repurchase price equal to 100 % of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the relevant repurchase date.

Prior to the adoption of ASU 2020-06 as of January 1, 2022, in accordance with ASC 470-20-30-27, proceeds from the issuance of convertible debt was allocated between debt and equity components so that debt was discounted to reflect our nonconvertible debt borrowing rate. ASC 470-20-35-13 required the debt discount to be amortized over the period the convertible debt was expected to be outstanding as additional non-cash interest expense. The allocation resulted in an increase to additional paid-in capital of $ 99.7 million for the Convertible Notes. Contractual interest expense for the Convertible Notes was $ 4.0 million and $ 9.0 million for the three and nine months ended September 30, 2022 , respectively. Accretion expense for the Convertible Notes was $ 4.0 million and $ 11.9 million for the three and nine months ended September 30, 2021. See Footnote 2, Recently Issued and Adopted Accounting Pronouncements, for more information regarding this adoption.

1.375 % Senior Notes due 2026

On May 22, 2019, the Company completed the sale of € 600 million ( $ 669.9 million ) aggregate principal amount of Senior Notes that are due in May 2026 (the “Senior Notes”). The Senior Notes accrue interest at a rate of 1.375 % per year, payable annually in arrears commencing May 22, 2020, until maturity or earlier redemption. As of September 30, 2022 , the Company has outstanding € 600 million ( $ 588.4 million ) principal amount of the Senior Notes. In addition, the Company may redeem some or all of these notes on or after February 22, 2026 at their principal amount plus any accrued and unpaid interest.

Other obligations

Certain of the Company's subsidiaries have available lines of credit and overdraft credit facilities that generally provide for short-term borrowings that are used from time to time for working capital purposes. As of September 30, 2022 and December 31, 2021 , borrowings under these arrangements were $ 3.6 million and $ 0.9 million , respectively.

Debt Issuance Costs

As of September 30, 2022, we had unamortized debt issuance costs of $ 1.5 million for the Credit Facility, $ 5.3 million for the Convertible Notes and $ 4.4 million for the Senior Notes that will be amortized through October 2023, March 2025 and May 2026, respectively.

(10) DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company is exposed to foreign currency exchange risk resulting from (i) the collection of funds or the settlement of money transfer transactions in currencies other than the U.S. Dollar, (ii) derivative contracts written to its customers in connection with providing cross-currency money transfer services and (iii) certain foreign currency denominated other asset and liability positions. The Company enters into foreign currency derivative contracts, primarily foreign currency forwards and cross-currency swaps, to minimize its exposure related to fluctuations in foreign currency exchange rates. As a matter of Company policy, the derivative instruments used in these activities are economic hedges and are not designated as hedges under ASC 815 , primarily due to either the relatively short duration of the contract term or the effects of fluctuations in currency exchange rates are reflected concurrently in earnings for both the derivative instrument and the transaction and have an offsetting effect.

Foreign currency exchange contracts - Ria Operations and Corporate

In the United States, the Company uses short-duration foreign currency forward contracts, generally with maturities up to 14 days , to offset the fluctuation in foreign currency exchange rates on the collection of money transfer funds between initiation of a transaction and its settlement. Due to the short duration of these contracts and the Company’s credit profile, the Company is generally not required to post collateral with respect to these foreign currency forward contracts. Most derivative contracts executed with counterparties in the U.S. are governed by an International Swaps and Derivatives Association agreement that includes standard netting arrangements; therefore, asset and liability positions from forward contracts and all other foreign exchange transactions with the same counterparty are net settled upon maturity. T he Company had foreign currency forward contracts outstanding in the U.S. with a notional value of $ 415.8 million and $ 222.1 million as of September 30, 2022 and December 31, 2021, respectively . The foreign currency forward contracts consist primarily in Australian dollars, Canadian dollars, British pounds sterling, euro and Mexican pesos.

In addition, the Company uses forward contracts, typically with maturities from a few days to less than one year, to offset foreign exchange rate fluctuations on certain short-term borrowings that are payable in currencies other than the U.S dollar. T he Company had foreign currency forward contracts outstanding with a notional value of $ 7.4 million and $ 216.1 million as of September 30, 2022 and December 31, 2021, respectively , primarily in euro.

Foreign currency exchange contracts - xe Operations

xe writes derivative instruments, primarily foreign currency forward contracts and cross-currency swaps, mostly with counterparties comprised of individuals and small-to-medium size businesses and derives a currency margin from this activity as part of its operations. xe aggregates its foreign currency exposures arising from customer contracts and hedges the resulting net currency risks by entering into offsetting contracts with established financial institution counterparties. Foreign exchange revenues from xe's total portfolio of positions were $ 22.3 million and $ 66.5 million for the three and nine months ended September 30, 2022 , respectively, compared to $ 20.1 million and $ 58.5 million for the same periods in 2021, respectively. All of the derivative contracts used in the Company's xe operations are economic hedges and are not designated as hedges under ASC 815 . The duration of these derivative contracts is generally less than one year.

The fair value of xe's total portfolio of positions can change significantly from period to period based on, among other factors, market movements and changes in customer contract positions. xe manages counterparty credit risk (the risk that counterparties will default and not make payments according to the terms of the agreements) on an individual counterparty basis. It mitigates this risk by entering into contracts with collateral posting requirements and/or by performing financial assessments prior to contract execution, conducting periodic evaluations of counterparty performance and maintaining a diverse portfolio of qualified counterparties. xe does not expect any significant losses from counterparty defaults.

The aggregate equivalent U.S. dollar notional amount of foreign currency derivative customer contracts held by the Company in its xe operations was approximately $1.0 billion as of September 30, 2022 and December 31, 2021 . The significant majority of customer contracts are written in major currencies such as the euro, U.S. dollar, British pounds sterling, Australian dollar and New Zealand dollar.

Balance Sheet Presentation

The following table summarizes the fair value of the derivative instruments as recorded in the Consolidated Balance Sheets as of the dates below:

	Asset Derivatives					Liability Derivatives
		Fair Value					Fair Value
(in thousands)	Balance Sheet Location	September 30, 2022		December 31, 2021		Balance Sheet Location	September 30, 2022			December 31, 2021
Derivatives not designated as hedging instruments
Foreign currency exchange contracts	Other current assets	$	92,079	$	27,582	Other current liabilities	$	( 85,799	)	$	( 23,285	)

The following tables summarize the gross and net fair value of derivative assets and liabilities as of September 30, 2022 and December 31, 2021 (in thousands):

Offsetting of Derivative Assets

							Gross Amounts Not Offset in the Consolidated Balance Sheet
As of September 30, 2022	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts Presented in the Consolidated Balance Sheet		Financial Instruments			Cash Collateral Received			Net Amounts
Derivatives subject to a master netting arrangement or similar agreement	$	92,079	$	—	$	92,079	$	( 57,129	)	$	( 6,938	)	$	28,012

As of December 31, 2021
Derivatives subject to a master netting arrangement or similar agreement	$	27,582	$	—	$	27,582	$	( 14,875	)	$	( 2,284	)	$	10,423

Offsetting of Derivative Liabilities

									Gross Amounts Not Offset in the Consolidated Balance Sheet
As of September 30, 2022	Gross Amounts of Recognized Liabilities			Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts Presented in the Consolidated Balance Sheet			Financial Instruments		Cash Collateral Paid		Net Amounts
Derivatives subject to a master netting arrangement or similar agreement	$	( 85,799 )		$	—	$	( 85,799	)	$	57,129	$	4,495	$	( 24,175	)

As of December 31, 2021
Derivatives subject to a master netting arrangement or similar agreement	$	( 23,285	)	$	—	$	( 23,285	)	$	14,875	$	640	$	( 7,770	)

See Note 11, Fair Value Measurements, for the determination of the fair values of derivatives.

Income Statement Presentation

The following table summarizes the location and amount of losses on derivatives in the Consolidated Statements of Income for the three and nine months ended September 30, 2022 and 2021 :

		Amount of Gain (Loss) Recognized in Income on Derivative Contracts (a)
	Location of Gain (Loss) Recognized in Income on Derivative Contracts	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)		2022		2021			2022		2021
Foreign currency exchange contracts - Ria Operations	Foreign currency exchange gain (loss), net	$	( 7,402 )	$	3,915	$	( 689 )	$	1,447

(a) The Company enters into derivative contracts such as foreign currency exchange forwards and cross-currency swaps as part of its xe operations. These derivative contracts are excluded from this table as they are part of the broader disclosure of foreign currency exchange revenues for this business discussed above.

See Note 11, Fair Value Measurements, for the determination of the fair values of derivatives.

( 11 ) FAIR VALUE MEASUREMENTS

Fair value measurements used in the unaudited consolidated financial statements are based upon the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2 – Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.
Level 3 – Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the inputs that market participants would use in pricing.

The following table details financial assets and liabilities measured and recorded at fair value on a recurring basis:

		As of September 30, 2022
(in thousands)	Balance Sheet Classification	Level 1		Level 2			Level 3		Total
Assets
Foreign currency exchange contracts	Other current assets	$	—	$	92,079		$	—	$	92,079
Liabilities
Foreign currency exchange contracts	Other current liabilities	$	—	$	( 85,799	)	$	—	$	( 85,799	)

		As of December 31, 2021
(in thousands)	Balance Sheet Classification	Level 1		Level 2			Level 3		Total
Assets
Foreign currency exchange contracts	Other current assets	$	—	$	27,582		$	—	$	27,582
Liabilities
Foreign currency exchange contracts	Other current liabilities	$	—	$	( 23,285	)	$	—	$	( 23,285	)

Other Fair Value Disclosures

The carrying amounts of cash and cash equivalents, trade accounts receivable, trade accounts payable and short-term debt obligations approximate fair values due to their short maturities. The carrying values of the Company’s revolving credit agreements approximate fair values because interest as of September 30, 2022 was based on LIBOR that reset at various intervals of less than one year. The Company estimates the fair value of the Convertible Notes and Senior Notes using quoted prices in inactive markets for identical liabilities (Level 2). As of September 30, 2022 , the fair values of the Convertible Notes and Senior Notes were $ 503.9 million and $503.7 million , respectively, with carrying values of $ 525.0 million and $ 588.4 million , respectively.

(12) SEGMENT INFORMATION

Our reportable operating segments have been determined in accordance with ASC Topic 280, Segment Reporting ("ASC 280") . We currently operate in the following three reportable operating segments:

1) Through the EFT Processing Segment, we process transactions for a network of ATMs and 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 services, ATM network participation, outsourced ATM and POS management solutions, credit, debit and prepaid card outsourcing, dynamic currency conversion, domestic and international surcharges 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) T hrough the epay Segment, we provide distribution, processing and collection services for electronic payment products, and prepaid mobile airtime in Europe, the Middle East, Asia Pacific, the U.S., South America and North America.

3) Through the Money Transfer Segment, we provide global money transfer services under the brand names Ria, AFEX, IME, and xe. Ria, AFEX, and IME provide global consumer-to-consumer money transfer services through a network of sending agents, Company-owned stores and Company-owned websites, disbursing money transfers through a worldwide correspondent network. xe offers account-to-account international payment services to high-income individuals and small-to-medium sized businesses. xe is also a provider of foreign currency exchange information. We also offer customers bill payment services, payment alternatives such as money orders and prepaid debit cards, comprehensive check cashing services, foreign currency exchange services and mobile top-up. Furthermore, xe provides cash management solutions and foreign currency risk management services to small-to-medium sized businesses.

In addition, we account for non-operating activity, share-based compensation expense, certain intersegment eliminations and the costs of providing corporate and other administrative services in our administrative division, "Corporate Services, Eliminations and Other." These services are not directly identifiable with our reportable operating segments.

The following tables present our reportable segment results for the three and nine months ended September 30, 2022 and 2021 :

	For the Three Months Ended September 30, 2022
(in thousands)	EFT Processing		epay		Money Transfer		Corporate Services, Eliminations and Other			Consolidated
Total revenues	$	319,466	$	248,923	$	364,841	$	( 1,964	)	$	931,266
Operating expenses:
Direct operating costs, exclusive of depreciation	137,812		190,091		200,171		( 2,026		)	526,048
Salaries and benefits	30,020		19,756		69,703		14,992			134,471
Selling, general and administrative	12,167		8,506		46,256		2,579			69,508
Depreciation and amortization	23,071		1,436		8,169		105			32,781
Total operating expenses	203,070		219,789		324,299		15,650			762,808
Operating income (loss)	$	116,396	$	29,134	$	40,542	$	( 17,614	)	$	168,458

	For the Three Months Ended September 30, 2021
(in thousands)	EFT Processing		epay		Money Transfer		Corporate Services, Eliminations and Other			Consolidated
Total revenues	$	227,129	$	238,319	$	353,451	$	( 2,339	)	$	816,560
Operating expenses:
Direct operating costs, exclusive of depreciation	106,321		180,206		200,231		( 2,320		)	484,438
Salaries and benefits	23,665		20,104		65,285		10,367			119,421
Selling, general and administrative	11,301		9,802		41,533		1,662			64,298
Depreciation and amortization	22,640		2,253		8,897		119			33,909
Total operating expenses	163,927		212,365		315,946		9,828			702,066
Operating income (loss)	$	63,202	$	25,954	$	37,505	$	( 12,167	)	$	114,494

	For the Nine Months Ended September 30, 2022
(in thousands)	EFT Processing		epay		Money Transfer		Corporate Services, Eliminations and Other			Consolidated
Total revenues	$	714,067	$	712,467	$	1,072,266	$	( 5,758	)	$	2,493,042
Operating expenses:
Direct operating costs, exclusive of depreciation	354,907		542,066		593,631		( 5,741		)	1,484,863
Salaries and benefits	82,957		59,705		204,905		44,977			392,544
Selling, general and administrative	40,285		26,223		133,654		7,451			207,613
Depreciation and amortization	71,159		4,748		25,557		320			101,784
Total operating expenses	549,308		632,742		957,747		47,007			2,186,804
Operating income (loss)	$	164,759	$	79,725	$	114,519	$	( 52,765	)	$	306,238

	For the Nine Months Ended September 30, 2021
(in thousands)	EFT Processing		epay		Money Transfer		Corporate Services, Eliminations and Other			Consolidated
Total revenues	$	427,687	$	724,540	$	1,037,659	$	( 5,970	)	$	2,183,916
Operating expenses:
Direct operating costs	258,614		547,828		589,273		( 5,945		)	1,389,770
Salaries and benefits	71,334		59,248		188,535		37,043			356,160
Selling, general and administrative	33,062		28,594		115,975		4,562			182,193
Depreciation and amortization	66,907		6,524		26,886		412			100,729
Total operating expenses	429,917		642,194		920,669		36,072			2,028,852
Operating income (loss)	$	( 2,230 )	$	82,346	$	116,990	$	( 42,042	)	$	155,064

The following table presents our total assets by reportable segment:


	Total Assets as of
(in thousands)	September 30, 2022		December 31, 2021
EFT Processing	$	2,101,595	$	1,682,680
epay	760,088		1,234,074
Money Transfer	1,660,050		1,621,726
Corporate Services, Eliminations and Other	306,094		205,796
Total	$	4,827,827	$	4,744,276

The following table presents our revenues disaggregated by segment and region. Sales and usage-based taxes are excluded from revenues. We believe disaggregation by segment and region best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. The disaggregation of revenues by segment and region is based on management's assessment of segment performance together with allocation of financial resources, both capital and operating support costs, on a segment and regional level. Both segments and regions benefit from synergies achieved through concentration of operations and are influenced by macro-economic, regulatory and political factors in the respective segment and region.

	For the Three Months Ended September 30, 2022									For the Nine Months Ended September 30, 2022
(in thousands)	EFT Processing		epay		Money Transfer		Total				EFT Processing		epay		Money Transfer		Total
Europe	$	267,017	$	166,965	$	144,008	$	577,990		$	563,491	$	457,651	$	432,678	$	1,453,820
North America	17,241		32,934		180,796		230,971				51,044		98,538		519,185		668,767
Asia Pacific	34,070		36,853		26,960		97,883				96,821		118,636		80,669		296,126
Other	1,138		12,171		13,077		26,386				2,711		37,642		39,734		80,087
Eliminations	—		—		—		( 1,964		)		—		—		—		( 5,758	)
Total	$	319,466	$	248,923	$	364,841	$	931,266		$	714,067	$	712,467	$	1,072,266	$	2,493,042


	For the Three Months Ended September 30, 2021									For the Nine Months Ended September 30, 2021
(in thousands)	EFT Processing		epay		Money Transfer		Total				EFT Processing		epay		Money Transfer		Total
Europe	$	183,163	$	150,465	$	145,813	$	479,441		$	303,134	$	475,933	$	428,258	$	1,207,325
North America	16,341		35,876		169,473		221,690				46,010		104,318		492,099		642,427
Asia Pacific	27,381		39,303		24,588		91,272				78,110		111,998		79,581		269,689
Other	244		12,675		13,577		26,496				433		32,291		37,721		70,445
Eliminations	—		—		—		( 2,339		)		—		—		—		( 5,970	)
Total	$	227,129	$	238,319	$	353,451	$	816,560		$	427,687	$	724,540	$	1,037,659	$	2,183,916

( 13 ) INCOME TAXES

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 t he three and nine months 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 % a s a result of certain foreign earnings being subject to higher local statutory tax rates and the Company's U.S. deferred tax activity on foreign exchange positions.

(14) COMMITMENTS

As of September 30, 2022 , we had $ 78.6 million of stand-by letters of credit/bank guarantees issued on our behalf, of which $ 50.9 million are outstanding under the Credit Facility. The remaining stand-by letters of credit/bank guarantees are collateralized by $ 3.0 million of cash deposits held by the respective issuing banks.

Under certain circumstances, we grant guarantees in support of obligations of subsidiaries. As of September 30, 2022 , we had granted off balance sheet guarantees for cash in various ATM networks amounting to $ 9.9 million over the terms of the cash supply agreements and performance guarantees amounting to approximately $ 41.6 million over the terms of agreements with our customers.

From time to time, we enter into agreements with commercial counterparties that contain indemnification provisions, the terms of which may vary depending on the negotiated terms of each respective agreement. The amount of such potential obligations is generally not stated in the agreements. Our liability under such indemnification provisions may be mitigated by relevant insurance coverage and may be subject to time and materiality limitations, monetary caps and other conditions and defenses. Such indemnification obligations include the following:

In connection with contracts with financial institutions in the EFT Processing Segment, we are responsible for damage to ATMs and theft of ATM network cash. As of September 30, 2022 , the balance of such cash used in our ATM networks for which we were responsible was approximately $ 367.0 million . We maintain insurance policies to mitigate this exposure;
In connection with contracts with financial institutions in the EFT Processing Segment, we are responsible for losses suffered by our customers and other parties as a result of the breach of our computer systems, including in particular, losses arising from fraudulent transactions made using information stolen through our processing systems. We maintain insurance policies to mitigate this exposure;
In connection with the license of proprietary systems to customers, we provide certain warranties and infringement indemnities to the licensee, which generally warrant that such systems do not infringe on intellectual property owned by third parties and that the systems will perform in accordance with their specifications;
We have entered into purchase and service agreements with vendors and consulting agreements with providers of consulting services, pursuant to which we have agreed to indemnify certain of such vendors and consultants, respectively, against third-party claims arising from our use of the vendor’s product or the services of the vendor or consultant;
In connection with acquisitions and dispositions of subsidiaries, operating units and business assets, we have entered into agreements containing indemnification provisions, which can be generally described as follows: (i) in connection with acquisitions of operating units or assets made by us, we have agreed to indemnify the seller against third party claims made against the seller relating to the operating unit or asset and arising after the closing of the transaction, and (ii) in connection with dispositions made by us, we have agreed to indemnify the buyer against damages incurred by the buyer due to the buyer’s reliance on representations and warranties relating to the subject subsidiary, operating unit or business assets in the disposition agreement if such representations or warranties were untrue when made; and
We have entered into agreements with certain third parties, including banks that provide fiduciary and other services to us or our benefit plans. Under such agreements, we have agreed to indemnify such service providers for third-party claims relating to carrying out their respective duties under such agreements.

We are also required to meet minimum capitalization and cash requirements of various regulatory authorities in the jurisdictions in which we have operations. We have obtained surety bonds in compliance with money transfer licensing requirements of the applicable governmental authorities.

To date, we are not aware of any significant claims made by the indemnified parties or third parties to guarantee agreements with us and, accordingly, no liabilities were recorded as of September 30, 2022 or December 31, 2021 .

( 15 ) LITIGATION AND CONTINGENCIES

From time to time, we are a party to legal or regulatory proceedings arising in the ordinary course of our business. Currently, there are no legal proceedings or regulatory findings that management believes, either individually or in the aggregate, would have a material adverse effect on our consolidated financial condition or results of operations. In accordance with U.S. GAAP, we record a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case.

(16) LEASES

We enter into operating leases for ATM sites, office spaces, retail stores and equipment. Our finance leases are immaterial. Right of use assets and lease liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease terms.

The present value of lease payments is determined using the incremental borrowing rate based on information available at the lease commencement date. We recognize lease expense for these leases on a straight-line basis over the lease term.

Most leases include an option to renew, with renewal terms that can extend the lease terms. The exercise of lease renewal options is at our sole discretion. The depreciable life of assets and leasehold improvements are limited by the expected lease terms. We also have a unilateral termination right for most of the ATM site leases. Since we are not reasonably certain not to exercise termination options, p ayments for ATM site leases with termination options subject to the short-term lease exemption are expensed in the period incurred and corresponding leases are excluded from the right of use lease asset and lease liability balances. Certain of our lease agreements include variable rental payments based on revenues generated from the use of the leased location and certain leases include rental payments adjusted periodically for inflation. Variable lease payments are recognized when the event, activity or circumstance in the lease agreement on which those payments are assessed occurs and are excluded from the right of use assets and lease liabilities balances. The lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Future minimum lease payments

Future minimum lease payments under non-cancelable operating leases (with initial lease terms in excess of one year) as of September 30, 2022 are:

	As of September 30, 2022
Maturity of Lease Liabilities (in thousands)	Operating Leases (1)
Remainder of 2022	$	11,323
2023	39,786
2024	30,591
2025	22,111
2026	15,611
Thereafter	24,865
Total lease payments	$	144,287
Less: imputed interest	( 3,668		)
Present value of lease liabilities	$	140,619

(1) Operating lease payments reflect our current fixed obligations under the operating lease agreements.

Lease expense recognized in the Consolidated Statements of Income is summarized as follows:

Lease Expense (in thousands)	Income Statement Classification	Three Months Ended September 30, 2022		Three Months Ended September 30, 2021			Nine Months Ended September 30, 2022		Nine Months Ended September 30, 2021
Operating lease expense	Selling, general and administrative and Direct operating costs	$	12,222	$	13,880	$	38,766	$	41,884
Short-term and variable lease expense	Selling, general and administrative and Direct operating costs		40,304		34,808		107,333		84,279
Total lease expense		$	52,526	$	48,688	$	146,099	$	126,163

Other information about lease amounts recognized in the consolidated financial statements is summarized as follows:


Lease Term and Discount Rate of Operating Leases	As of September 30, 2022
Weighted- average remaining lease term (years)	4.8
W eighted- average discount rate	2.3	%

The following table presents supplemental cash flow and non-cash information related to leases.


Other Information (in thousands)	Nine Months Ended September 30, 2022		Nine months ended September 30, 2021
Cash paid for amounts included in the measurement of lease liabilities (a)	$	37,908	$	38,763
Supplemental non-cash information on lease liabilities arising from obtaining ROU assets:
ROU assets obtained in exchange for new operating lease liabilities	$	26,487	$	57,580

(a) Included in Net cash provided by operating activities on our Consolidated Statements of Cash Flows .

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The terms "Euronet," the "Company," "we" and "us" as used herein refer to Euronet Worldwide, Inc. and its subsidiaries.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This report contains statements that constitute forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and section 21E of the Securities Exchange Act of 1934 (“Exchange Act”). Generally, the words "believe," "expect," "anticipate," "intend," "estimate," "will" and similar expressions identify forward-looking statements. However, the absence of these words or similar expressions does not mean the statement is not forward-looking. All statements other than statements of historical facts included in this document are forward-looking statements, including, but not limited to, statements regarding the following:

our business plans and financing plans and requirements;
trends affecting our business plans and financing plans and requirements;
trends affecting our business;
the adequacy of capital to meet our capital requirements and expansion plans;
the assumptions underlying our business plans;
our ability to repay indebtedness;
our estimated capital expenditures;
the potential outcome of loss contingencies;
our expectations regarding the closing of any pending acqu isitions;
business strategy;
government regulatory action;
the expected effects of changes in laws or accounting standards;
technological advances; and
projected costs and revenues.

Although we believe that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these expectations will prove to be correct.

Investors are cautioned that any forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may materially differ from those in the forward-looking statements as a result of various factors, including, but not limited to, conditions in world financial markets and general economic conditions, including impacts from the COVID-19 pandemic; the war in the Ukraine and related economic sanctions; our ability to successfully integrate the operations of Piraeus Merchant Services; inflation; economic conditions in specific countries and regions; technological developments affecting the market for our products and services; our ability to successfully introduce new products and services; foreign currency exchange rate fluctuations; the effects of any breach of our computer systems or those of our customers or vendors, including our financial processing networks or those of other third parties; interruptions in any of our systems or those of our vendors or other third parties; our ability to renew existing contracts at profitable rates; changes in fees payable for transactions performed for cards bearing international logos or over switching networks such as card transactions on ATMs; our ability to comply with increasingly stringent regulatory requirements, including anti-money laundering, anti-terrorism, anti-bribery, sanctions, consumer and data protection and privacy and the European Union's General Data Protection Regulation, and Second Revised Payment Service Directive requirements; changes in laws and regulations affecting our business, including tax and immigration laws and any laws regulating payments, including DCC transactions, changes in our relationships with, or in fees charged by, our business partners; competition; the outcome of claims and other loss contingencies affecting Euronet; the cost of borrowing (including fluctuations in interest rates), availability of credit and terms of and compliance with debt covenants; and ren ewal of sources of funding as they expire and the availability of replacement funding and those factors referred to above and as set forth and more fully described in Part I, Item 1A — Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2021 and Part II, Item 1A - Risk Factors of our Quarterly Report on Form 10-Q for three months ended June 30, 2022. Our Annual Report on Form 10-K and Quarterly Report on Form 10-Q are available on the SEC's EDGAR website at www.sec.gov, and copies may also be obtained by contacting the Company. Any forward-looking statements made in this Form 10-Q speak only as of the date of this report. Except as required by law, we do not intend, and do not undertake any obligation, to update any forward-looking statements to reflect future events or circumstances after the date of such statements.

OVERVIEW

COMPANY OVERVIEW, GEOGRAPHIC LOCATIONS AND PRINCIPAL PRODUCTS AND SERVICES

Euronet is a leading electronic payments provider. We offer payment and transaction processing and distribution solutions to financial institutions, retailers, service providers and individual consumers. Our primary product offerings include comprehensive ATM, POS, card outsourcing, card issuing and merchant acquiring services, software solutions, electronic distribution of prepaid mobile airtime, managed services and other electronic payment products, foreign currency exchange services and global money transfer services. We operate in the following three segments:

1) The EFT Processing Segment processes transactions for a network of 49,617 ATMs and approximately 590,000 POS terminals across Europe, the Middle East, Africa, Asia Pacific, and the United States. We provide comprehensive electronic payment solutions consisting of ATM cash withdrawal and deposit services, ATM network participation, outsourced ATM and POS management solutions, credit, debit and prepaid card outsourcing, DCC, and other value added services. Through this segment, we also offer a suite of integrated electronic financial transaction software solutions for electronic payment and transaction delivery systems.

2) The epay Segment, which provides distribution, processing and collection services for prepaid mobile airtime and other electronic content. We operate a network of approximately 777,000 POS terminals providing electronic processing of prepaid mobile airtime top-up services and other electronic content in Europe, the Middle East, Asia Pacific, the United States and South America. We also provide vouchers and physical gift fulfillment services in Europe.

3) The Money Transfer Segment, which provides global consumer-to-consumer money transfer services, primarily under the brand names Ria, IME, AFEX, and xe and global account-to-account money transfer services under the brand name xe. We offer services under the brand names Ria and IME through a network of sending agents, Company-owned stores (primarily in North America, Europe and Malaysia) and our websites (riamoneytransfer.com and online.imeremit.com), disbursing money transfers through a worldwide correspondent network that includes approximately 509,000 locations. xe is a provider of foreign currency exchange information and of fers money transfer services on its currency data websit es (xe.com and x-rates.com). In addition to money transfers, we also offer customers bill payment services (primarily in the U.S.), payment alternatives such as money orders and prepaid debit cards, comprehensive check cashing services for a wide variety of issued checks, along with competitive foreign currency exchange services and prepaid mobile top-up. Through our xe brand, we offer cash management solutions and foreign currency risk management services to small-to-medium-sized businesses.

We have six processing centers in Europe, five in Asia Pacific and two in North America. We have 36 principal offices in Europe, 14 in Asia Pacific, 10 in North America, three in the Middle East, two in South America and one in Africa. Our executive offices are located in Leawood, Kansas, USA. With approximately 75 % of our revenues denominated in currencies other than the U.S. dollar, any significant changes in foreign currency exchange rates will likely have a significant impact on our results of operations (for a further discussion, see Item 1 A - Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2021 ).

SOURCES OF REVENUES AND CASH FLOW

Euronet earns revenues and income primarily from ATM management fees, transaction fees, commissions and foreign currency exchange margin. Each operating segment’s sources of revenues are described below.

EFT Processing Segment — Revenues in the EFT Processing Segment, which represented approximately 34% and 29% of total consolidated revenues for the three and nine months ended September 30, 2022, respectively, are derived from fees charged for transactions made by cardholders on our proprietary network of ATMs, fixed management fees and transaction fees we charge to customers for operating ATMs and processing debit and credit cards under outsourcing and cross-border acquiring agreements, foreign currency exchange margin on DCC transactions, domestic and international surcharge, foreign currency dispensing and other value added services such as advertising, prepaid telecommunication recharges, bill payment, and money transfers provided over ATMs. Revenues in this segment are also derived from cardless payment, banknote recycling, tax refund services, license fees, professional services and maintenance fees for proprietary applicati on software and sales of related hardware.

epay Segment — Revenues in the epay Segment, which represented approximately 27% and 29% of total consolidated revenues for the three and nine months ended September 30, 2022, respectively, a re primarily derived from commissions earned from the distribution of electronic content, vouchers, and physical gifts and commissions or processing fees rec eived from mobile phone operators for the processing and distribution of prepaid mobile airtime. Branded payments, which includes the distribution of digital media content, wer e 69% and 66% of epay Segment revenues for the three and nine months ended September 30, 2022. Branded payments include digital content such as music, games and software, as well as, other products including prepaid long distance calling card plans, prepaid Internet plans, prepaid debit cards, gift cards, vouchers, transport payments, lottery payments, bill payment, and money transfer.

Money Transfer Segment — Revenues in the Money Transfer Segment, which represented approximately 39% and 43% of total consolidated revenues for the three and nine months ended September 30, 2022 , are primarily derived from transaction fees, as well as the margin earned from purchasing foreign currency at wholesale exchange rates and selling the foreign currency to customers at retail exchange rates. We have a sending agent network in place comprised of agents, customer service representatives, Company-owned stores, primarily in North America, Europe and Malaysia, and Ria, and xe branded websites, along with a worldwide network of correspondent agents, consisting primarily of financial institutions in the transfer destination countries. Sending and correspondent agents each earn fees for cash collection and distribution services, which are recognized as direct operating costs at the time of sale.

We offer a money transfer product called Walmart-2-Walmart Money Transfer Service which allows customers to transfer money to and from Walmart stores in the U.S. Our Ria business executes the transfers with Walmart serving as both the sending agent and payout correspondent. Ria earns a lower margin from these transactions than its traditional money transfers; however, the arrangement has added a significant number of transactions to Ria's business. The agreement with Walmart establishes Ria as the only party through which Walmart will sell U.S. domestic money transfers branded with Walmart marks. The agreement is effective until April 2026. Thereafter, it will automatically renew for subsequent one -year terms unless either party provides notice to the contrary. The agreement imposes certain obligations on each party, the most significant being service level requirements by Ria and money transfer compliance requirements by Walmart. Any violation of these requirements by Ria could result in an obligation to indemnify Walmart or termination of the contract by Walmart. However, the agreement allows the parties to resolve disputes by mutual agreement without termination of the agreement.

Corporate Services, Eliminations and Other — In addition to operating in our principal operating segments described above, our “Corporate Services, Eliminations and Other” category includes non-operating activity, certain inter-segment eliminations and the cost of providing corporate and other administrative services to the operating segments, including most share-based compensation expense. These services are not directly identifiable with our reportable operating segments.

Opportunities and Challenges

The global product markets in which we operate are large and fragmented, which poses both opportunities and challenges for our technology to disrupt new and existing competition. As an organization, our focus is on increasing our market presence through both physical (ATMs, POS terminals, company stores and agent correspondents) and digital assets and providing new and improved products and services for customers through all of our channels, which may in turn drive an increase in the number of transactions on our networks. Each of these opportunities also presents us with challenges, including differentiating our portfolio of products and services in highly competitive markets, the successful development and implementation of our software products and access to financing for expansion.

1) The EFT Processing Segment opportunities include physical expansion into target markets, developing value added products or services, increasing high value DCC and surcharge transactions and efficiently leveraging our portfolio of software solutions. Our opportunities are dependent on renewing and expanding our card acceptance, ATM and POS management and outsourcing, cash supply and other commercial agreements with customers and financial institutions. Operational challenges in the EFT Processing Segment include obtaining and maintaining the required licenses and sponsorship agreements in markets in which we operate and navigating frequently changing rules imposed by international card organizations, such as Visa ^® and Mastercard ^® , that govern ATM interchange fees, direct access fees and other restrictions. Our profitability is dependent on the laws and regulations that govern DCC transactions, specifically in the E.U., as well as the laws and regulations of each country in which we operate. These laws and regulations may impact our cross-border and cross-currency transactions . The timing and amount of revenues in the EFT Processing Segment is uncertain and unpredictable due to inherent limitations in managing our estate of ATMs. Our ATM estate is dependent on contracts that cover large numbers of ATMs, and management is complicated by legal and regulatory considerations of local countries, as well as customers decisions whether to outsource ATMs or manage them internally.

2) The epay Segment opportunities include renewing existing and negotiating new agreements in target markets in which we operate, primarily with digital content providers, mobile operators, financial institutions and retailers. The overall growth rate in the digital media content and prepaid mobile phone markets, shifts between prepaid and postpaid services, and our market share in those respective markets will have a significant impact on our ability to maintain and grow the epay Segment revenues. There is significant competition in these markets that may impact our ability to grow organically and increase the margin we earn and the margin that we pay to retailers. The profitability of the epay Segment is dependent on our ability to adapt to new technologies that may compete with POS distribution of digital content and prepaid mobile airtime, as well as our ability to leverage cross-selling opportunities with our EFT and Money Transfer Segments. The epay Segment opportunities may be impacted by government-imposed restrictions on retailers and/or content providers with whom we partner in countries in which we have a presence, and corresponding licensure requirements mandated upon such parties to legally operate in such countries.

3) The Money Transfer Segment opportunities include expanding our portfolio of products and services to new and existing customers around the globe, which in turn may lead to an increase in transaction volumes. The opportunities to expand are contingent on our ability to effectively leverage our network of bank accounts for digital money transfer delivery, maintaining our physical agent network, cross selling opportunities with our EFT and epay segments and our penetration into high growth money transfer corridors. The challenges inherit in these opportunities include maintaining compliance with all regulatory requirements, maintaining all required licenses, ensuring the recoverability of funds advanced to agents and the continued reliance on the technologies required to operate our business. The volume of transactions processed on our network is impacted by shifts in our customer base, which can change rapidly with worker migration patterns and changes in unbanked populations across the globe. Foreign regulations that impact cross-border migration patterns and the money transfer markets can significantly impact our ability to grow the number of transactions on our network.

For all segments, our continued expansion may involve additional acquisitions that could divert our resources and management time and require integration of new assets with our existing networks and services. Our ability to effectively manage our growth has required us to expand our operating systems and employee base, particularly at the management level, which has added incremental operating costs. An inability to continue to effectively manage expansion could have a material adverse effect on our business, growth, financial condition or results of operations. Inadequate technology and resources would impair our ability to maintain current processing technology and efficiencies, as well as deliver new and innovative services to compete in the marketplace.

COVID-19

The outbreak of the COVID- 19 (coronavirus) pandemic has resulted in varying degrees of border and business closures, travel restrictions and other social distancing orders in most of the countries where we operate during the nine months ended September 30, 2022 and 2021 . As the number and rate of new cases has fluctuated in various locations around the globe, the closures, restrictions and other social distancing orders have been modified, rescinded and/or re-imposed. Although vaccines for COVID-19 are widely available, a significant portion of the population remains unvaccinated and long term effectiveness of the vaccines, especially against new variants, is still unknown. The EFT Segment has experienced declines in certain transaction volumes due to these restrictions, especially high-margin cross-border transactions. The epay Segment has experienced the impacts of consumer movement restrictions in certain markets, while other markets have been positively impacted where we have a higher mix of digital distribution or a higher concentration of retailers that are deemed essential and have remained open during the pandemic. The Money Transf er Segment continues to be impacted by the pandemic-related restrictions in certain markets that limit customers' ability to access our network of company-owned stores and agents as well as certain restrictions that may impact immigrant laborers.

SEGMENT SUMMARY RESULTS OF OPERATIONS

Revenues and operating income by segment for the three and nine months ended September 30, 2022 and 2021 are summarized in the tables below:

	Revenues for the Three Months Ended September 30,						Year-over-Year Change				Revenues for the Nine Months Ended September 30,						Year-over-Year Change
(dollar amounts in thousands)	2022			2021			Increase (Decrease) Amount		Increase (Decrease) Percent		2022			2021			Increase (Decrease) Amount			Increase (Decrease) Percent
EFT Processing	$	319,466		$	227,129		$	92,337	41	%	$	714,067		$	427,687		$	286,380		67	%
epay	248,923			238,319			10,604		4	%	712,467			724,540			(12,073		)	(2)	%
Money Transfer	364,841			353,451			11,390		3	%	1,072,266			1,037,659			34,607			3	%
Total	933,230			818,899			114,331		14	%	2,498,800			2,189,886			308,914			14	%
Corporate services, eliminations and other	(1,964		)	( 2,339		)	375		(16)	%	(5,758		)	(5,970		)	212			(4)	%
Total	$	931,266		$	816,560		$	114,706	14	%	$	2,493,042		$	2,183,916		$	309,126		14	%

	Operating Income (Loss) for the Three Months Ended September 30,						Year-over-Year Change					Operating Income (Loss) for the Nine Months Ended September 30,							Year-over-Year Change
(dollar amounts in thousands)	2022			2021			Increase (Decrease) Amount			Increase (Decrease) Percent		2022			2021			Increase (Decrease) Amount			Increase (Decrease) Percent
EFT Processing	$	116,396		$	63,202		$	53,194		(84)	%	$	164,759		$	(2,230	)	$	166,989		7,488	%
epay	29,134			25,954			3,180			12	%	79,725			82,346			(2,621		)	(3)	%
Money Transfer	40,542			37,505			3,037			8	%	114,519			116,990			(2,471		)	(2)	%
Total	186,072			126,661			59,411			47	%	359,003			197,106			161,897			82	%
Corporate services, eliminations and other	(17,614		)	( 12,167		)	(5,447		)	45	%	(52,765		)	(42,042		)	(10,723		)	26	%
Total	$	168,458		$	114,494		$	53,964		47	%	$	306,238		$	155,064		$	151,174		97	%

Impact of changes in foreign currency exchange rates

Our revenues and local expenses are recorded in the functional currencies of our operating entities, and then are translated into U.S. dollars for reporting purposes; therefore, amounts we earn outside the U.S. are negatively impacted by a stronger U.S. dollar and positively impacted by a weaker U.S. dollar. If significant, in our discussion we will refer to the impact of fluctuations in foreign currency exchange rates in our comparison of operating segment results.

To provide further perspective on the impact of foreign currency exchange rates, the following table shows the changes in values relative to the U.S. dollar of the currencies of the countries in which we have our most significant operations:

	Average Translation Rate Three Months Ended September 30,						Average Translation Rate Nine Months Ended September 30,
Currency (dollars per foreign currency)	2022		2021		Decrease Percent		2022		2021		Decrease Percent
Australian dollar	$	0.6834	$	0.7348	(7)	%	$	0.7074	$	0.7589	(7)	%
British pounds sterling	$	1.1766	$	1.3783	(15)	%	$	1.2585	$	1.3848	(9)	%
Canadian dollar	$	0.7662	$	0.7837	(2)	%	$	0.7798	$	0.7866	(1)	%
euro	$	1.0072	$	1.1787	(15)	%	$	1.0650	$	1.1962	(11)	%
Hungarian forint	$	0.0025	$	0.0033	(24)	%	$	0.0028	$	0.0034	(18)	%
Indian rupee	$	0.0125	$	0.0135	(7)	%	$	0.0129	$	0.0136	(5)	%
Malaysian ringgit	$	0.2233	$	0.2385	(6)	%	$	0.2307	$	0.2423	(5)	%
New Zealand dollar	$	0.6134	$	0.7007	(12)	%	$	0.6469	$	0.7114	(9)	%
Polish zloty	$	0.2128	$	0.2585	(18)	%	$	0.2286	$	0.2634	(13)	%

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

EFT PROCESSING SEGMENT

The following table summarizes the results of operations for our EFT Processing Segment for the three and nine months ended September 30, 2022 and 2021 :

	Three Months Ended September 30,				Year-over-Year Change				Three Months Ended September 30,					Year-over-Year Change
(dollar amounts in thousands)	2022		2021		Increase (Decrease) Amount		Increase (Decrease) Percent		2022		2021			Increase (Decrease) Amount		Increase (Decrease) Percent
Total revenues	$	319,466	$	227,129	$	92,337	41	%	$	714,067	$	427,687		$	286,380	67	%
Operating expenses:
Direct operating costs	137,812		106,321		31,491		30	%	354,907		258,614			96,293		37	%
Salaries and benefits	30,020		23,665		6,355		27	%	82,957		71,334			11,623		16	%
Selling, general and administrative	12,167		11,301		866		8	%	40,285		33,062			7,223		22	%
Depreciation and amortization	23,071		22,640		431		2	%	71,159		66,907			4,252		6	%
Total operating expenses	203,070		163,927		39,143		24	%	549,308		429,917			119,391		28	%
Operating income	$	116,396	$	63,202	$	53,194	84	%	$	164,759	$	(2,230	)	$	166,989	7,488	%
Transactions processed (millions)	1,733		1,173		560		48	%	4,634		3,086			1,548		50	%
Active ATMs as of September 30,	49,617		45,520		4,097		9	%	49,617		45,520			4,097		9	%
Average Active ATMs	50,411		45,595		4,816		11	%	47,581		40,913			6,668		16	%

Revenues

EFT Processing Segment total revenues were $319.5 million for the three months ended September 30, 2022 , an increase of $92.3 million or 41 % compared to the same period in 2021 . EFT Processing Segment total revenues were $714.1 million for the nine months ended September 30, 2022, an increase of $286.4 million or 67%. The increase in revenues was primarily due to the increase in domestic and international cash withdrawal transactions resulting from the reduction of travel restrictions across Europe, the increase in low-value point-of-sale transactions in Europe and low-value payment processing transactions in Asia Pacific. Foreign currency movements decreased revenues by approximately $48.6 million and $85.6 million for the three and nine months ended September 30, 2022 , respectively, compared to the same period in 2021 .

Average monthly revenues per ATM increased to $2,112 for the three months ended September 30, 2022 compared to $ 1,660 for the same period in 2021 . Average monthly revenues per ATM increased to $2,501 for the nine months ended September 30, 2022 compared to $1,162 for the same period in 2021 . Revenues per transaction decreased to $0.18 for the three m onths ended September 30, 2022 compared to $0.19 for the same period in 2021 . Revenues per transaction increased to $0.15 for the nine m onths ended September 30, 2022 compared to $0.14 for the same period in 2021 . The increases in average monthly revenues per ATM was primarily due to the increase in domestic and international cash withdrawal transactions resulting from the reduction in travel restrictions across Europe, partially offset by the increase in volume of low-value point-of-sale transactions in Europe and low-value payment processing transactions in Asia Pacific.

Direct operating costs

EFT Processing Segment direct operating costs were $137.8 million for the three months ended September 30, 2022 , an increase of $31.5 million or 30 % compared to the same period in 2021 . EFT Processing Segment direct operating costs were $354.9 million for the nine months ended September 30, 2022 , an increase of $96.3 million or 37 % compared to the same period in 2021 . Direct operating costs primarily consist of site rental fees, cash delivery costs, cash supply costs, maintenance, insurance, telecommunications, payment scheme processing fees, data center operations-related personnel, as well as the processing centers’ facility-related costs and other processing center-related expenses and commissions paid to retail merchants, banks and card processors.

The increase in direct costs was primarily due to the increase in domestic and international cash withdrawal transactions resulting from the reduction of travel restrictions across Europe, the increase in low-value point-of-sale transactions in Europe and low-value payment processing transactions in Asia Pacific. Foreign currency movements decreased direct operating costs by approximately $20.8 million and $40.3 million for the three and nine months ended September 30, 2022 , respectively, compared to the same periods in 2021 .

Gross profit

Gross profit, which is calculated as revenues less direct operating costs, was $181.7 million for the three months ended September 30, 2022 , an increase of $60.8 million or 50% compared to $120.8 million for the same period in 2021 . Gross profit, was $359.2 million for the nine months ended September 30, 2022 , an increase of $190.1 million or 112% compared to $169.1 million for the same period in 2021 . Gross profit as a percentage of revenues (“gross margin”) increased to 56.9 % and 50.3% for the three and nine months ended September 30, 2022 , respectively, compared to 53.2% and 39.5% for the same periods in 2021 . The increase in gross profit and gross margin were primarily due to the incremental volume of transactions that were processed on our network relative to the fixed costs incurred, and the higher proportion of high value and high margin DCC transactions due to reduction of travel restrictions.

Salaries and benefits

Salaries and benefits expenses were $30.0 million for the three months ended September 30, 2022, an increase of $6.4 million or 27% c ompared to the same period in 2021 . Salaries and benefits expenses were $83.0 million for the nine months ended September 30, 2022, an increase of $11.6 million or 16% c ompared to the same period in 2021 . The increase is primarily due to an increase in salaries and headcount to support the growth of the business. Foreign currency movements in the countries in which we employ our workforce reduced these expenses by $4.8 million and $9.9 million for the three and nine months ended September 30, 2022 , respectively, compared to the same period in 2021. As a percentage of revenues, these expenses decreased to 9.4 % and 11.6% for the three and nine months ended September 30, 2022 , respectively, compared to 10.4% and 16.7% for the same periods in 2021 .

Selling, general and administrative

Selling, general and administrative expenses were $12.2 million for the three months ended September 30, 2022 , an increase of $0.9 million or 8% compared to the same period in 2021 . Selling, general and administrative expenses were $40.3 million for the nine months ended September 30, 2022 , an increase of $7.2 million or 22% compared to the same period in 2021 . As a percentage of revenues, these expenses decreased to 3.8 % and 5.6% for the three and nine months ended September 30, 2022 , respectively, compared to 5.0 % and 7.7% for the same periods in 2021 .

Depreciation and amortization

Depreciation and amortization expenses were $23.1 million for the three months ended September 30, 2022, an increase of $0.4 million or 2% compared to the same period in 2021 . Depreciation and amortization expenses were $71.2 million for the nine months ended September 30, 2022, an increase of $4.3 million or 6% compared to the same period in 2021 . As a percentage of revenues, these expenses decreased to 7.2 % and 10.0% for the three and nine months ended September 30, 2022 , respectively, compared to 10.0 % and 15.6% for the same periods in 2021 .

Operating income

EFT Processing Segment had operating income of $116.4 million for the three months ended September 30, 2022, an increase of $53.2 million or 84% c ompared to the same period in 2021 . EFT Processing Segment had operating income of $164.8 million for the nine months ended September 30, 2022, compared to a loss of ($2.2 million) for the same period in 2021 . O perating income as a percentage of revenues (“operating margin”) increased to 36.4% and 23.1% for the three and nine months ended September 30, 2022 , respectively, compared to 27.8% and (0.5%) for the same periods in 2021, respectively . Operating income per transaction was less than $0.07 and $0.04 for the three and nine months ended September 30, 2022 compared to operating income (loss) of $0.05 and ($0.00) for the same periods in 2021 . The increase in operating income, improved operating margin and increase in operating income per transaction were primarily due to increased volumes processed on our network, and associated revenues, compared to the same periods in 2021.

EPAY SEGMENT

The following table presents the results of operations for the three and nine months ended September 30, 2022 and 2021 for our epay Segment:

	Three Months Ended September 30,				Year-over-Year Change					Nine Months Ended September 30,				Year-over-Year Change
(dollar amounts in thousands)	2022		2021		Increase (Decrease) Amount			Increase (Decrease) Percent		2022		2021		Increase (Decrease) Amount			Increase (Decrease) Percent
Total revenues	$	248,923	$	238,319	$	10,604		4	%	$	712,467	$	724,540	$	(12,073	)	(2)	%
Operating expenses:
Direct operating costs	190,091		180,206		9,885			5	%	542,066		547,828		(5,762		)	(1)	%
Salaries and benefits	19,756		20,104		(348		)	(2)	%	59,705		59,248		457			1	%
Selling, general and administrative	8,506		9,802		(1,296		)	(13)	%	26,223		28,594		(2,371		)	(8)	%
Depreciation and amortization	1,436		2,253		(817		)	(36)	%	4,748		6,524		(1,776		)	(27)	%
Total operating expenses	219,789		212,365		7,424			3	%	632,742		642,194		(9,452		)	(1)	%
Operating income	$	29,134	$	25,954	$	3,180		12	%	$	79,725	$	82,346	$	(2,621	)	(3)	%
Transactions processed (millions)	915		811		104			13	%	2,895		2,266		629			28	%

Revenues

epay Segment total revenues were $248.9 million for the three months ended September 30, 2022 , an increase of $10.6 million or 4% compared to the same period in 2021 . epay Segment total revenues were $712.5 million for the nine months ended September 30, 2022 , a decrease of ( $12.1 million) or (2%) compared to the same period in 2021 . The increase in revenue for the three months ended September 30, 2022 is driven by continued expansion in mobile and digital branded payments, together with continued growth of the digital distribution channel. Additionally, the annual recurring benefits of loyalty reward programs, which were previously recognized in earlier quarters in 2021, were recognized in the third quarter of 2022. Foreign currency movements decreased revenue by approximately $32.4 million and $66.1 million for the three and nine months ended September 30, 2022 , respectively, compared to the same periods in 2021.

Revenues per transaction decreased to $0.27 and $0.25 for the three and nine months ended September 30, 2022 , respectively, compared to $0.29 and $0.32 for the same periods in 2021 . The decrease in revenues per transaction was primarily due to the increase in the number of mobile transactions processed in a region where we generally earn lower revenues per transaction.

Direct operating costs

epay Segment direct operating costs were $190.1 million for the three months ended September 30, 2022 , an increase of $9.9 million or 5% compared to the same period in 2021 . epay Segment direct operating costs were $542.1 million for the nine months ended September 30, 2022 , a decrease of ( $5.8 million) or (1%) compared to the same period in 2021 . Direct operating costs primarily consist of the commissions paid to retail merchants for the distribution and sale of prepaid mobile airtime and other prepaid products, expenses incurred to operate POS terminals and the cost of vouchers sold and physical gifts fulfilled. The increase in direct operating costs was primarily due to an increase in activity, driven by benefits from loyalty reward programs. Foreign currency movements decrease direct operating costs by $24.3 million and $49.0 million for the three and nine months ended September 30, 2022 , respectively, compared to the same periods in 2021 .

Gross profit

Gross profit was $58.8 million for the three months ended September 30, 2022 , an increase of $0.7 million or 1.2% compared to $58.1 million for the same period in 2021 . Gross profit was $170.4 million for the nine months ended September 30, 2022 , a decrease of ($6.3 million) or (3.6%) compared to $176.7 million for the same period in 2021 . Gross margin decreased to 23.6 % and 23.9% for the three and nine months ended September 30, 2022 , respectively, compared to 24.4% for both the three and nine month periods in 2021 . The decrease in gross profit and gross margin is primarily due to a decrease in revenues associated with the shift in mix of transactions processed .

Salaries and benefits

Salaries and benefits expenses were $19.8 million for the three months ended September 30, 2022 , a decrease of ( $0.3 million) or (2%) compared to the same period in 2021 . Salaries and benefits expenses were $59.7 million for the nine months ended September 30, 2022 , an increase of $0.5 million or 1% compared to the same period in 2021 . The fluctuations in salaries and benefits was driven by an increase in salaries and headcount to support the growth of the business, offset by a $2.5 million and $5.4 million decrease from foreign currency movements for the three and nine months ended September 30, 2022 , respectively, compared to the same periods in 2021. As a percentage of revenues, these expenses decreased to 7.9 % and increased to 8.4% for the three and nine months ended September 30, 2022, respectively, compared to 8.4% and 8.2% for the three and nine months ended September 30, 2021, respectively .

Selling, general and administrative

Selling, general and administrative expenses were $8.5 million for the three months ended September 30, 2022 , a decrease of ($1.3 million) or (13 %) compared to the same period in 2021 . Selling, general and administrative expenses were $26.2 million for the nine months ended September 30, 2022 , a decrease of ($2.4 million) or (8 %) compared to the same period in 2021 . As a percentage of revenues, these expenses decreased to 3.4 % and 3.7% for the three and nine months ended September 30, 2022 , respectively, compared to 4.1 % and 3.9% for the same period in 2021 .

Depreciation and amortization

Depreciation and amortization expenses were $1.4 million for the three months ended September 30, 2022 , a decrease of ($0.8 million) or (36 %) compared to the same period in 2021 . Depreciation and amortization expenses were $4.7 million for the nine months ended September 30, 2022 , a decrease of ($1.8 million) or (27 %) compared to the same period in 2021 . Depreciation and amortization expense primarily represents depreciation of POS terminals we install in retail stores and amortization of acquired intangible assets. As a percentage of revenues, these expenses decreased to 0.6% and 0.7% for the three and nine months ended September 30, 2022 , respectively, compared to 0.9 % for both the three and nine months ended September 30, 2021.

Operating income

epay Segment operating income was $29.1 million for the three months ended September 30, 2022 , an increase of $3.2 million or 12% c ompared to the same period in 2021 . epay Segment operating income was $79.7 million for the nine months ended September 30, 2022 , a decrease of ( $2.6 million) or ( 3 %) c ompared to the same period in 2021 . Operating margin increased to 11.7 % and decreased to 11.2% for the three and nine months ended September 30, 2022 , respectively , compared to 10.9 % and 11.4% for the same periods in 2021 . Operating income per transaction was $0.03 for both the three and nine m onths ended September 30, 2022, respectively, compared to $0.03 and $0.04 for the same periods in 2021 . The changes in operating income, operating margin and operating income per transaction for the three and nine months ended September 30, 2022 compared to the same period in 2021 were primarily due to the shift in mix of transactions processed .

MONEY TRANSFER SEGMENT

The following table presents the results of operations for the three and nine months ended September 30, 2022 and 2021 for the Money Transfer Segment:

	Three Months Ended September 30,				Year-over-Year Change						Nine Months Ended September 30,				Year-over-Year Change
(dollar amounts in thousands)	2022		2021		Increase (Decrease) Amount				Increase (Decrease) Percent		2022		2021		Increase (Decrease) Amount				Increase (Decrease) Percent
Total revenues	$	364,841	$	353,451	$	11,390		$	3	%	$	1,072,266	$	1,037,659	$	34,607		$	3	%
Operating expenses:
Direct operating costs	200,171		200,231		(60		)		(0)	%	593,631		589,273		4,358				1	%
Salaries and benefits	69,703		65,285		4,418				7	%	204,905		188,535		16,370				9	%
Selling, general and administrative	46,256		41,533		4,723				11	%	133,654		115,975		17,679				15	%
Depreciation and amortization	8,169		8,897		(728		)		(8)	%	25,557		26,886		(1,329		)		(5)	%
Total operating expenses	324,299		315,946		8,353				3	%	957,747		920,669		37,078				4	%
Operating income	$	40,542	$	37,505	$	3,037		$	8	%	$	114,519	$	116,990	$	(2,471	)	$	(2)	%
Transactions processed (millions)	37.7		34.1		3.6				11	%	108.5		99.4		9.1				9	%

Revenues

Money Transfer Segment total revenues were $364.8 million for the three months ended September 30, 2022 , an increase of $11.4 million or 3 % compared to the same period in 2021 . Money Transfer Segment total revenues were $1,072.3 million for the nine months ended September 30, 2022 , an increase of $34.6 million or 3 % compared to the same period in 2021 . The increase in revenues was primarily due to the increase in international-originated money transfers, U.S. outbound transactions, and direct-to-consumer digital transactions, partially offset by a decrease in U.S. domestic transactions. Revenues per transaction decreased to $9.68 and $9.89 for the three and nine months ended September 30, 2022 , respectively, compared to $10.37 and $10.44 for the same periods in 2021 due to a shift in the mix of transactions processed. Foreign currency movements decreased revenues by approximately $28.2 million and $62.6 million for the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021 .

Direct operating costs

Money Transfer Segment direct operating costs were $200.2 million for the three months ended September 30, 2022 , and were essentially flat compared to the same period in 2021 . Money Transfer Segment direct operating costs were $593.6 million for the nine months ended September 30, 2022, an increase of $4.4 million or 1 % compared to the same period in 2021 . Direct operating costs primarily consist of commissions paid to agents who originate money transfers on our behalf and correspondent agents who disburse funds to the customers’ destination beneficiaries, together with less significant costs, such as bank depository fees. The increase in direct operating costs was primarily due to the increase in the number of international-originated and U.S. outbound money transfer transactions, offset by foreign currency movements that decreased direct operating costs by approximately $14.0 million and $31.3 million for the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021 .

Gross profit

Gross profit was $164.7 million for the three months ended September 30, 2022 , an increase of $11.5 million or 7.5% compared to $153.2 million for the same period in 2021 . Gross profit was $478.6 million for the nine months ended September 30, 2022 , an increase of $30.2 million or 6.7% compared to $448.4 million for the same period in 2021 . Gross margin increased to 45.1% and 44.6% for the three and nine months ended September 30, 2022, respectively, compared to 43.3% and 43.2% for the same periods in 2021. The increase in gross profit and gross margin was primarily due t o increases in international-originated money transfers, U.S. outbound money transfers and direct-to-consumer digital transactions .

Salaries and benefits

Salaries and benefits expenses were $69.7 million for the three months ended September 30, 2022, an increase of $4.4 million or 7% compared to the same period in 2021 . Salaries and benefits expenses were $204.9 million for the nine months ended September 30, 2022, an increase of $16.4 million or 9% compared to the same period in 2021 . The increase in salaries and benefits was primarily driven by an increase in salaries and headcount to support the growth of the business. As a percentage of revenues, these expenses increased to 19.1 % for both the three and nine months ended September 30, 2022 , compared to 18.5% and 18.2% for the same periods in 2021 .

Selling, general and administrative

Selling, general and administrative expenses were $46.3 million for the three months ended September 30, 2022 , an increase of $4.7 million or 11 % compared to the same period in 2021 . Selling, general and administrative expenses were $133.7 million for the nine months ended September 30, 2022 , an increase of $17.7 million or 15 % compared to the same period in 2021 . The increase was primarily due to an increase in marketing expenses and travel related expenses. As a percentage of revenues, these expenses increased to 12.7 % and 12.5% for the three and nine months ended September 30, 2022 , respectively, compared to 11.8% and 11.2% for the same periods in 2021 .

Depreciation and amortization

Depreciation and amortization expenses were $8.2 million for the three months ended September 30, 2022, a decrease of ( $0.7 million) or (8 %) compared to the same period in 2021 . Depreciation and amortization expenses were $25.6 million for the nine months ended September 30, 2022, a decrease of ( $ 1.3 million) or (5 %) compared to the same period in 2021 . Depreciation and amortization primarily represents amortization of acquired intangible assets and depreciation of money transfer terminals, computers and software, leasehold improvements and office equipment. As a percentage of revenues, these expenses decreased to 2.2 % and 2.4% for the three and nine months ended September 30, 2022, respectively, compared to 2.5 % and 2.6% for the same periods in 2021 .

Operating income

Money Transfer Segment operating income was $40.5 million for the three months ended September 30, 2022 , an increase of $3.0 million or 8 % compared to the same period in 2021 . Money Transfer Segment operating income was $114.5 million for the nine months ended September 30, 2022 , a decrease of ( $2.5 million) or (2 %) compared to the same period in 2021 . Operating margin increased to 11.1% and decreased to 10.7% for the three and nine months ended September 30, 2022 , respectively, compared to 10.6 % and 11.3% for the same periods in 2021 . Operating income per transaction decreased to $1.08 and $1.06 for the three and nine months ended September 30, 2022 , respectively, compared to $1.10 and $1.18 for the same periods in 2021 due to a shift in the mix of transactions processed .

CORPORATE SERVICES

The following table presents the operating expenses for the three and nine months ended September 30, 2022 and 2021 for Corporate Services:

	Three-Month Ended September 30,				Year-over-Year Change					Nine Months Ended September 30,					Year-over-Year Change
(dollar amounts in thousands)	2022		2021		Increase (Decrease) Amount			Increase (Decrease) Percent			2022		2021		Increase (Decrease) Amount			Increase (Decrease) Percent
Salaries and benefits	$	14,992	$	10,367	$	4,625		45	%		$	44,977	$	37,043	$	7,934		21	%
Selling, general and administrative		2,517		1,681		836		50	%			7,468		4,587		2,881		63	%
Depreciation and amortization		105		119		(14	)	(12)	%			320		412		(92	)	(22)	%
Total operating expenses	$	17,614	$	12,167	$	5,447		45	%		$	52,765	$	42,042	$	10,723		26	%

Corporate operating expenses

Total Corporate operating expenses were $17.6 million and $52.8 million for the three and nine months ended September 30, 2022 , respectively, an increase of $5.4 million or 45% and $10.7 million or 26% compared to the same periods in 2021 . The increase is primarily due to an increase in short-term compensation expense of $4.8 million and $7.6 million for the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021.

OTHER EXPENSE, NET

	Three Month Ended September 30,						Year-over-Year Change					Nine Month Ended September 30,						Year-over-Year Change
(dollar amounts in thousands)	2022			2021			Increase (Decrease) Amount			Increase (Decrease) Percent		2022			2021			Increase (Decrease) Amount			Increase (Decrease) Percent
Interest income	$	600		$	153		$	447		292	%	$	990		$	539		$	451		84	%
Interest expense	(11,716		)	( 10,072		)	(1,644		)	16	%		(26,712	)		( 28,718	)		2,006		(7)	%
Foreign currency exchange gain (loss), net	(15,798		)	(8,135		)	(7,663		)	94	%		(35,958	)		(12,051	)		(23,907	)	198	%
Other gains (losses)	10			—			10			100	%		202			31			171		552	%
Other expense, net	$	(26,904	)	$	( 18,054	)	$	(8,850	)	49	%	$	(61,478	)	$	( 40,199	)	$	(21,279	)	53	%

Interest expense

Interest expense was $11.7 million for the three months ended September 30, 2022 , an increase of $ 1.6 million or 16 % compared to the same period in 2021 . Interest expense was $26.7 million for the nine months ended September 30, 2022 , a decrease of ($2.0 million) or (7%) compared to the same period in 2021 . The decrease in interest expense relates to the $7.9 million accretion expense incurred for the nine months ended September 30, 2021 , which was eliminated for the nine months ended September 30, 2022 as a result of the adoption of ASU 2020-06, partially offset by increased interest rates and borrowings on the revolving Credit Facility for the nine months ended September 30, 2022 compared to the same period in 2021. See Footnote 2, Recently Issued and Adopted Accounting Pronouncements, for more information on the impact of this adoption.

Foreign currency exchange loss, net

Foreign currency exchange activity includes gains and losses on certain foreign currency exchange derivative contracts and the impact of remeasurement of assets and liabilities denominated in foreign currencies. Assets and liabilities denominated in currencies other than the local currency of each of our subsidiaries give rise to foreign currency exchange gains and losses. Foreign currency exchange gains and losses that result from remeasurement of these assets and liabilities are recorded in net income. The majority of our foreign currency exchange gains or losses are due to the remeasurement of intercompany loans which are not considered a long-term investment in nature and are in a currency other than the functional currency of one of the parties to the loan. For example, we make intercompany loans based in euros from our corporate division, which is composed of U.S. dollar functional currency entities, to certain European entities that use the euro as the functional currency. As the U.S. dollar strengthens against the euro, foreign currency exchange losses are recognized by our corporate entities because the number of euros to be received in settlement of the loans decreases in U.S. dollar terms. Conversely, in this example, in periods where the U.S. dollar weakens, our corporate entities will record foreign currency exchange gains.

We recorded net foreign currency exchange losses of $15.8 million and $36.0 million for the three and nine months ended September 30, 2022 , respectively, compared to a net foreign currency exchange losses of $8.1 million and $12.1 million for the same periods in 2021, respectively. These realized and unrealized foreign currency exchange losses reflect the fluctuation in the value of the U.S. dollar against the currencies of the countries in which we operated during the respective periods.

INCOME TAX EXPENSE

The Company's effective income tax rate was 31.1 % and 33.5% for the three and nine months ended September 30, 2022 , respectively, compared to 23.6% and 35.8% for the same periods ended September 30, 2021, respectively. The Company's effective income tax rate for the three and nine months ended September 30, 2022 was higher than the applicable statutory income tax rate of 21 % as a result of certain foreign earnings being subject to higher statutory tax rates and the Company's U.S. deferred tax activity on foreign exchange positions . The Company's effective income tax rate for the three and nine months ended September 30, 2021 was higher than the applicable statutory income tax rate of 21 % as a result of certain foreign earnings being subject to higher local tax rates, the non-recognition of tax benefits from losses in certain foreign countries where the Company has a limited history of profitable earnings and as a result of an increase in the valuation allowance in certain jurisdictions relating to the reversal of tax benefits recognized in the first quarter of 2021 for continuing net operating losses.

NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS

Noncontrolling interests represent the elimination of net income or loss attributable to the minority shareholders’ portion of the following consolidated subsidiaries that are not wholly owned:


Subsidiary	Percent Owned	Segment - Country
Movilcarga	95%	epay - Spain
Euronet China	85%	EFT - China
Euronet Pakistan	70%	EFT - Pakistan
Euronet Infinitium Solutions	65%	EFT - India

NET INCOME (LOSS) ATTRIBUTABLE TO EURONET

Net income attributable to Euronet was $97.7 million for the three months ended September 30, 2022, an increase of $23.8 million or 32% compared to t he same period in 2021 . The increase in net income was primarily attributable to the $114.7 million increase in revenues, largely driven by the increases within the EFT Segment as tourism and cross-border travel increased during the third quarter of 2022 compared to the third quarter of 2021. The increased revenues led to a $73.1 million increase in gross profit, with $60.9 million of this increase within the EFT Segment. The increase in gross profit was partially offset by $15.1 million increase in salaries and benefits expense, a $21.3 million increase in income tax expense and a $5.2 million increase in selling, general and administrative expense.

Net income attributable to Euronet was $163.2 million for the nine months ended September 30, 2022, an increase of $89.4 million, compared to t he net income of $73.9 million in the same period in 2021 . The increase in net income was primarily attributable to the $309.1 million increase in revenues, largely driven by the increases within the EFT Segment as tourism and cross-border travel increased during the third quarter of 2022 compared to the third quarter of 2021 . The increased revenues led to a $214.0 million increase in gross profit, with $190.1 million of this increase within the EFT Segment. The increase in gross profit was partially offset by a $36.4 million increase in salaries and benefits expense, a $40.7 million increase in income tax expense and a $25.4 million increase in selling, general and administrative expense.

LIQUIDITY AND CAPITAL RESOURCES

Working capital

As of September 30, 2022 , we had working capital of $1,075.4 million , which is calculated as the difference between total current assets and total current liabilities, compared to working capital of $1,455.8 million as of December 31, 2021 . The decrease in working capital was primarily due to the $331.0 million acquisition of PBMA and the $175.0 million of share repurchases, partially offset by a $42.9 million increase in borrowing on the Credit Facility as of September 30, 2022 compared to December 31, 2021 . Our ratio of current assets to current liabilities was 1.50 and 1.79 at September 30, 2022 and December 31, 2021 , respectively.

We require substantial working capital to finance operations. The Money Transfer Segment funds the payout of the majority of our consumer-to-consumer money transfer services before receiving the benefit of amounts collected from customers by agents. Working capital needs increase due to weekends and banking holidays. As a result, we may report more or less working capital for the Money Transfer Segment based solely upon the day on which the reporting period ends. The epay Segment produces positive working capital, some of which is restricted in connection with the administration of its customer collection and vendor remittance activities. In our EFT Processing Segment, we obtain a significant portion of the cash required to operate our ATMs through various cash supply arrangements, the amount of which is not recorded on Euronet's Consolidated Balance Sheets. However, in certain countries, we fund the cash required to operate our ATM network from borrowings under our revolving credit facilities, uncommitted credit agreements and cash flows from operations. As of September 30, 2022 , we had $646.1 million of our own cash in use or designated for use in our ATM network, which is recorded in ATM cash on Euronet's Consolidated Balance Sheet. ATM cash increased $102.7 million from $543.4 million as of December 31, 2021 to $646.1 million as of September 30, 2022 as a result of the increase in number of active ATMs as of September 30, 2022 compared to December 31, 2021. The Company has $967.1 million of unrestricted cash as of September 30, 2022 compared to $1,260.5 million as of December 31, 2021 . The decrease in unrestricted cash was primarily due to the $331.0 million acquisition of PBMA, the $102.7 million allocated from unrestricted cash to ATM cash and the $175.0 million of share repurchases during the nine months ended September 30, 2022, partially offset by the $42.9 million increase in borrowings on the Credit Facility. Including the $646.1 million of cash in ATMs at September 30, 2022 , we have access to $1,613.2 million in available cash, and $652.8 million available under the Credit Facility with no significant long-term debt principal payments until March 2025.

The following table identifies cash and cash equivalents provided by/(used in) our operating, investing and financing activities for the nine months ended September 30, 2022 and 2021 (in thousands):


	Nine Months Ended September 30,
Liquidity	2022		2021
Cash and cash equivalents and restricted cash provided by (used in):
Operating activities	$	448,636	$	304,340
Investing activities	(416,039)		(70,952		)
Financing activities	173,537		(216,291		)
Effect of foreign currency exchange rate changes on cash and cash equivalents and restricted cash	(413,669)		(82,667		)
Increase (decrease) in cash and cash equivalents and restricted cash	$	(207,535)	$	(65,570	)

Operating activity cash flow

Cash flows provided by operating activities were $448.6 million f or the three months ended September 30, 2022 compared to cash flows provided by operating activities of $304.3 million for the same period in 2021 . The increase in operating cash flows was primarily due to the $89.2 million increase in net income, partially offset by fluctuations in working capital mainly associated with the timing of the settlement processes with content providers in the epay Segment, with correspondents in the Money Transfer Segment, and with card organizations and banks in the EFT Processing Segment.

Investing activity cash flow

Cash flows used in investing activities were $416.0 million for the nine months ended September 30, 2022 compared to $71.0 million for the same period in 2021 . The increase in cash used in investing activities is primarily due to the $331.0 million of cash paid at the closing of PBMA in March 2022. Additionally, w e used $79.4 million for purchases of property and equipment for the nine months ended September 30, 2022 compared to $66.1 million for the same period in 2021 . The increase in purchases of property and equipment is primarily due to the prior period expenditures being reduced by the COVID-19 related impacts to the EFT segment. Cash used for software development and other investing activities totaled $5.3 million and $4.9 million for the nine months ended September 30, 2022 and 2021 , respectively.

Financing activity cash flow

Cash flows provided by financing activities were $173.5 million for the nine months ended September 30, 2022 compared to cash flows used in financing activities of $216.3 million for the same period in 2021 . Our borrowing activities on the Credit Facility for the nine months ended September 30, 2022 consisted of net borrowings of $342.9 million compared to net repayments of $217.2 million for the same period in 2021. The increase in net borrowings on the Credit Facility, during the nine months ended September 30, 2022, is primarily the result of treasury management relating to settlement requirements across currencies as well as increased funding requirements for acquisitions and share repurchases. We repurchased $175.3 million of common stock during the nine months ended September 30, 2022 compared to repurchases of $1.0 million during the same period of 2021 . We received proceeds of $4.4 million and $6.4 million during the nine months ended September 30, 2022 and 2021 , respectively, for the issuance of stock in connection with our Stock Incentive Plan.

Effect of exchange rates on cash, cash equivalents and restricted cash

F oreign currency exchange rates for the nine months ended September 30, 2022 and 2021 had a negative impact of $413.7 million and $82.7 million, respectively, on cash, cash equivalents, and restricted cash. The negative impact on cash, cash equivalents, and restricted cash for the nine months ended September 30, 2022 was due primarily to the negative impact in the exchange rate of the U.S. dollar to the Euro.

Other sources of capital

Credit Facility - On October 24, 2022, the Company amended its revolving credit agreement (the “Credit Facility”) to increase the facility from $1.0 billion to $1.25 billion which expires on October 24, 2027.

The revolving credit facility contains up to $250 million sublimit, with $150 million committed, for the issuance of letters of credit and a $75 million sublimit for U.S. dollar swingline loans and $75 million for swingline loans in euro or British pounds sterling. The Credit Facility allows for borrowings in British pounds sterling, euro and U.S. dollars. Subject to certain conditions, the Company has the option to increase the credit facility by up to an additional $500 million by requesting additional commitments from existing or new lenders. Fees and interest on borrowings vary based upon the Company's corporate credit rating and will be based, in the case of letter of credit fees, on a margin, and in the case of interest, on a margin over a secured overnight financing rate, as defined in the agreement, with a margin, including the facility fee, ranging from 1.00% to 1.625% or the base rate, as selected by the Company. The applicable margin for borrowings under the credit facility, based on the Company's current credit rating is initially 1.25% including the facility fee.

As of September 30, 2022 , we had $326.3 million of borrowings and $50.9 million of stand-by letters of credit outstanding under the Credit Facility. The remaining $652.8 million under the Credit Facility was available for borrowing.

Convertible debt - On March 18, 2019, we completed the sale of $ 525.0 million in principal amount of Convertible Senior Notes due 2049 (“Convertible Notes”). The Convertible Notes were issued pursuant to an indenture, dated as of March 18, 2019 (the “Indenture”), by and between us and U.S. Bank National Association, as trustee. The Convertible Notes have an interest rate of 0.75 % per annum payable semi-annually in March and September, and are convertible into shares of Euronet common stock at a conversion price of approximately $ 188.73 per share if certain conditions are met (relating to the closing prices of Euronet common stock exceeding certain thresholds for specified periods). Holders of the Convertible Notes have the option to require us to repurchase for cash all or part of their Convertible Notes on each of March 15, 2025, 2029 , 2034 , 2039 and 2044 at a repurchase price equal to 100 % of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the relevant repurchase date. In connection with the issuance of the Convertible Notes, we recorded $ 12.8 million in debt issuance costs, which are being amortized through March 1, 2025.

Senior Notes - On May 22, 2019, we completed the sale of €600 million ($669.9 million) aggregate principal amount of Senior Notes that expire on May 2026 (the “Senior Notes”). The Senior Notes accrue interest at a rate of 1.375% per year, payable annually in arrears on May 22 of each year, until maturity or earlier redemption. As of September 30, 2022 , we have outstanding €600 million ( $588.4 million ) principal amount of the Senior Notes. In addition, we may redeem some or all of these notes on or after February 22, 2026 at their principal amount plus any accrued and unpaid interest.

Uncommitted Loan s - On May 25, 2022, we entered into an uncommitted credit agreement for $300 million that expires no later than November 30, 2022. The credit agreement is fully drawn and outstanding at September 30, 2022. The credit agreement was entered into for the sole purpose of providing vault cash for ATMs . Each loan entered into under this agreement accrues interest at the rate per annum equal to the secured overnight financing rate (“SOFR”) plus 1.00 %.

On June 24, 2022, we entered into an uncommitted credit agreement for $150 million that expires no later than June 23, 2023. The credit agreement was entered into for the sole purpose of providing vault cash for ATMs. The loan had no balance at September 30, 2022. Each loan entered into under the agreement was either a Prime rate loan, a Bloomberg Short-term Bank Yield ("BSBY") rate loan or bears interest at the rate agreed to by the lender and the Company at the time such loan is made.

Other debt obligations — Certain of our subsidiaries have available credit lines and overdraft facilities to generally supplement short-term working capital requirements, when necessary. There were $3.6 million and $0.9 million outstanding under these other obligation arrangements as of September 30, 2022 and December 31, 2021 , respectively.

Other uses of capital

Capital expenditures and needs - Total capital expenditures for the nine months ended September 30, 2022 were $79.4 million . These capital expenditures were primarily for the purchase and installation of ATMs in key under-penetrated markets, the purchase of POS terminals for the epay and Money Transfer Segments, and office, data center and company store computer equipment and software. Total capital expenditures for 2022 are currently estimated to range from approximately $110 million to $120 million. At current and projected cash flow levels, we anticipate that cash generated from operations, together with cash on hand and amounts available under our Credit Facility and other existing and potential future financing will be sufficient to meet our debt, leasing, and capital expenditure obligations. If our capital resources are not sufficient to meet these obligations, we will seek to refinance our debt and/or issue additional equity under terms acceptable to us. However, we can offer no assurances that we will be able to obtain favorable terms for the refinancing of any of our debt or other obligations or for the issuance of additional equity.

Inflation and functional currencies

Historically, the countries in which we operate have experienced low and stable inflation. Therefore, the local currency in each of these markets is the functional currency. We have seen indications that the current inflationary period will put pressure on our results of operations and our financial position. We have seen some signs of inflation impacting discretionary spend items, such as gaming products, in our epay business as well as some pressure on send amounts in money transfer. A s a consequence of this inflationary period, w e expect to see increasing expenses forthcoming. We continually review inflation and the functional currency in each of the countries where we operate.

OFF BALANCE SHEET ARRANGEMENTS

On occasion, we grant guarantees of the obligations of our subsidiaries and we sometimes enter into agreements with unaffiliated third parties that contain indemnification provisions, the terms of which may vary depending on the negotiated terms of each respective agreement. Our liability under such indemnification provisions may be subject to time and materiality limitations, monetary caps and other conditions and defenses. As of September 30, 2022 , there were no material changes from the disclosure in our Annual Report on Form 10-K for the year ended December 31, 2021 . To date, we are not aware of any significant claims made by the indemnified parties or parties to whom we have provided guarantees on behalf of our subsidiaries and, accordingly, no liabilities have been recorded as of September 30, 2022 . See also Note 14, Commitments, to the unaudited consolidated financial statements included elsewhere in this report.

CONTRACTUAL OBLIGATIONS

As of September 30, 2022 , there have been no material changes outside the ordinary course of business in our future contractual obligations from the amounts reported within our Annual Report on Form 10-K for the year ended December 31, 2021 .

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest rate risk

As of September 30, 2022 , our total debt outstanding, excluding unamortized debt issuance costs, was $1,743.3 million . Of this amount, $525.0 million , net of debt discounts, or 30 % of our total debt obligations, relates to our contingent Convertible Notes that have a fixed coupon rate. Our $525.0 million outstanding principal amount of Convertible Notes accrue cash interest at a rate of 0.75% of the principal amount per annum. Based on quoted market prices, as of September 30, 2022 , the fair value of our fixed rate Convertible Notes was $513.6 million , compared to a carrying value of $525.0 million . Further, as of September 30, 2022 we had $326.3 million of borrowings under our Credit Facility, or 19% of our total debt obligations. The carrying values of the Credit Facility approximates fair value because interest as of September 30, 2022, was based on LIBOR that reset at various intervals of less than one year. Additionally, $588.4 million , or 34% of our total debt obligations, relates to Senior Notes having a fixed coupon rate. Our €600 million outstanding principal amount of Senior Notes accrue cash interest at a rate of 1.375% of the principal amount per annum. Based on quoted market prices, as of September 30, 2022 , the fair value of our fixed rate Senior Notes was $550.0 million , compared to a carrying value of $588.4 million . An additional $300.0 million, or 17% of our total debt, is related to short-term uncommitted credit agreements. The credit agreements are due within one year and accrue interest at variable rates. The remaining $3.6 million , or less than 1 % of our total debt obligations, is related to borrowings by certain subsidiaries to fund, from time to time, working capital requirements. These arrangements generally are due within one year and accrue interest at variable rates. Based on the outstanding borrowings accruing interest at variable rates, a 1% increase in the interest rate would result in a $6.3 million increase or decrease, as applicable, in our annual interest expense.

Our excess cash is invested in instruments with original maturities of three months or less or in certificates of deposit that may be withdrawn at any time without penalty; therefore, as investments mature and are reinvested, the amount we earn will increase or decrease with changes in the underlying short-term interest rates.

Foreign currency exchange rate risk

For the nine months ended September 30, 2022, approximately 74.1 % of our revenues were generated in non-U.S. dollar countries and we expect to continue generating a significant portion of our revenues in countries with currencies other than the U.S. dollar.

We are particularly vulnerable to fluctuations in exchange rates of the U.S. dollar to the currencies of countries in which we have significant operations, primarily the euro, British pound, Australian dollar, Polish zloty, Indian rupee, New Zealand dollar, Malaysian ringgit and Hungarian forint. As of September 30, 2022 , we estimate that a 10% fluctuation in these foreign curren cy exchange rates would have the combined annualized effect on reported net income and working capital of approximately $185 million to $190 million . This effect is estimated by applying a 10% adjustment factor to our non-U.S. dollar results from operations, intercompany loans that generate foreign currency gains or losses and working capital balances that require translation from the respective functional currency to the U.S. dollar reporting currency.

Additionally, we have other non-current, non-U.S. dollar assets and liabilities on our balance sheet that are translated to the U.S. dollar during consolidation. These items primarily represent goodwill and intangible assets recorded in connection with acquisitions in countries other than the U.S. and our Senior Notes. We estimate that a 10% fluctuation in foreign currency exchange rates would have a non-cash impact on total comprehensive income of approximately $50 million to $55 million as a result of the change in value of these items during translation to the U.S. dollar. For the fluctuations described above, a strengthening U.S. dollar produces a financial loss, while a weakening U.S. dollar produces a financial gain.

We believe this quantitative measure has inherent limitations and does not take into account any governmental actions or changes in either customer purchasing patterns or our financing or operating strategies. Because a majority of our revenues and expenses are incurred in the functional currencies of our international operating entities, the profits we earn in foreign currencies are positively impacted by a weakening of the U.S. dollar and negatively impacted by a strengthening of the U.S. dollar. Additionally, a significant portion of our debt obligations are in U.S. dollars; therefore, as foreign currency exchange rates fluctuate, the amount available for repayment of debt will also increase or decrease.

We use derivatives to minimize our exposures related to changes in foreign currency exchange rates and to facilitate foreign currency risk management services by writing derivatives to customers. Derivatives are used to manage the overall market risk associated with foreign currency exchange rates; however, we do not perform the extensive record-keeping required to account for the derivative transactions as hedges. Due to the relatively short duration of the derivative contracts, we use the derivatives primarily as economic hedges. Since we do not designate foreign currency derivatives as hedging instruments pursuant to the accounting standards, we record gains and losses on foreign exchange derivatives in earnings in the period of change.

We manage counterparty credit risk (the risk that counterparties will default and not make payments according to the terms of the agreements) on an individual counterparty basis. We mitigate this risk by entering into contracts with collateral posting requirements and/or by performing financial assessments prior to contract execution, conducting periodic evaluations of counterparty performance and maintaining a diverse portfolio of qualified counterparties. We do not expect any significant losses from counterparty defaults.

A majority of our consumer-to-consumer money transfer operations involve receiving and disbursing different currencies, in which we earn a foreign currency spread based on the difference between buying currency at wholesale exchange rates and selling the currency to consumers at retail exchange rates. We enter into foreign currency forward and cross-currency swap contracts to minimize exposure related to fluctuations in foreign currency exchange rates. The changes in fair value related to these contracts are recorded in Foreign currency exchange (loss) gain, net on the Consolidated Statements of Income. As of September 30, 2022 , we had foreign currency derivative contracts outstanding with a notional value of $415.8 million , primarily in Australian dollars, British pounds, Canadian dollars, euros and Mexican pesos, that were not designated as hedges and mature within a few days.

For derivative instruments our xe operations write to customers, we aggregate the foreign currency exposure arising from customer contracts, and hedge the resulting net currency risks by entering into offsetting contracts with established financial institution counterparties as part of a broader foreign currency portfolio. The changes in fair value related to the total portfolio of positions are recorded in Revenues on the Consolidated Statements of Income. As of September 30, 2022 , we held foreign currency derivative contracts outstanding with a notional value of $1,041.8 million , primarily in U.S. dollars, euros, British pounds, Australian dollars and New Zealand dollars, that were not designated as hedges and for which the majority mature within the next twelve months.

We use longer-term foreign currency forward contracts to mitigate risks associated with changes in foreign currency exchange rates on certain foreign currency denominated other asset and liability positions. As of September 30, 2022 , we had foreign currency forward contracts outstanding with a notional value of $7.4 million , primarily in euros.

See Note 10, Derivative Instruments and Hedging Activities, to our unaudited consolidated financial statements for additional information.

ITEM 4. CONTROLS AND PROCEDURES

Our executive management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(b) under the Exchange Act as of September 30, 2022 . Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that the design and operation of these disclosure controls and procedures were effective as of such date to provide reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. On March 15, 2022, we completed the acquisition of the Merchant Acquiring Business of Piraeus Bank ("PBMA"). We are currently integrating PBMA into our operations and internal control processes and, pursuant to the Securities and Exchange Commission staff interpretive guidance, the assessment of a recently acquired business may be omitted from the scope of an assessment for a period not to exceed one year from the date of acquisition. The scope of our assessment of our internal controls over f inancial reporting as of September 30, 2022 does not include PBMA.

Change in Internal Controls

Except for internal controls related to integrati on activities associated with our acquisition of PBMA, there has been no change in our internal control over financial reporting during the third quarter of 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is, from time to time, a party to legal or regulatory proceedings arising in the ordinary course of its business.

The discussion regarding contingencies in Part I, Item 1 — Financial Statements (unaudited), Note 15, Litigation and Contingencies, to the unaudited consolidated financial statements in this report is incorporated herein by reference.

Currently, there are no legal or regulatory proceedings that management believes, either individually or in the aggregate, would have a material adverse effect on the Company's consolidated financial condition or results of operations. In accordance with U.S. GAAP, we record a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These liabilities are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case or proceeding.

ITEM 1A. RISK FACTORS

Except as otherwise described herein, there were no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021 and our Quarterly Report on Form 10-Q for the three months ended June 30, 2022, as filed with the SEC.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides information with respect to shares of the Company's common stock that were purchased by the Company during the three months ended September 30, 2022.


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Programs (in thousands) (1)
July 1 - July 31, 2022	—	$	—	—	$	125,049
August 1 - August 31 , 2022	—	—		—		125,049
September 1 - September 30 , 2022	—	—		—	$	125,049
Total	—	$	—	—

(1) On February 26, 2020, the Company put a repurchase program in place to repurchase up to $250 million in value, but not more than 5.0 million shares of common stock through February 28, 2022. On December 8, 2021, the Company put a repurchase program in place to repurchase up to $300 million in value, but not more than 5.0 million shares of common stock through December 8, 2023. Repurchases may take place in the open market or in privately negotiated transactions, including derivative transactions, and may be made under a Rule 10b5-1 plan.

ITEM 6. EXHIBITS


Exhibit		Description

31.1*		Section 302 — Certification of Chief Executive Officer
31.2*		Section 302 — Certification of Chief Financial Officer
32.1**		Section 906 — Certification of Chief Executive Officer
32.2**		Section 906 — Certification of Chief Financial Officer
101*		The following materials from Euronet Worldwide, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at September 30, 2022 (unaudited) and December 31, 2021 , (ii) Consolidated Statements of Operations (unaudited) for the three and nine months ended September 30 , 2022 and 2021, (iii) Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the three and nine months ended September 30 , 2022 and 2021, (iv) Consolidated Statements of Changes in Equity (unaudited) for the three and nine months ended September 30 , 2022 and 2021 (v) Consolidated Statements of Cash Flows (unaudited) for the three and nine months ended September 30 , 2022 and 2021, and (vi) Notes to the Unaudited Consolidated Financial Statements.
104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

_________________________

* Filed herewith.

** Pursuant to Item 601(b)(32) of Regulation S-K, this Exhibit is furnished rather than filed with this Form 10-Q.

PLEASE NOTE: Pursuant to the rules and regulations of the SEC, we have filed or incorporated by reference the agreements referenced above as exhibits to this Annual Report on Form 10-K. The agreements have been filed to provide investors with information regarding their respective terms. The agreements are not intended to provide any other factual information about the Company or its business or operations. In particular, the assertions embodied in any representations, warranties and covenants contained in the agreements may be subject to qualifications with respect to knowledge and materiality different from those applicable to investors and may be qualified by information in confidential disclosure schedules not included with the exhibits. These disclosure schedules may contain information that modifies, qualifies and creates exceptions to the representations, warranties and covenants set forth in the agreements. Moreover, certain representations, warranties and covenants in the agreements may have been used for the purpose of allocating risk between the parties, rather than establishing matters as facts. In addition, information concerning the subject matter of the representations, warranties and covenants may have changed after the date of the respective agreement, which subsequent information may or may not be fully reflected in our public disclosures. Accordingly, investors should not rely on the representations, warranties and covenants in the agreements as characterizations of the actual state of facts about us or our business or operations on the date hereof.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

November 4, 2022

Euronet Worldwide, Inc.



By:	/s/ MICHAEL J. BROWN
	Michael J. Brown
	Chief Executive Officer


By:	/s/ RICK L. WELLER
	Rick L. Weller
	Chief Financial Officer

TABLE OF CONTENTS

Item 2. Management S Discussion and Analysis Of Financial Condition and Results Of Operations Item 3. Quantitative and Qualitative Disclosures About Market Risk Item 4. Controls and Procedures Part II Other Information Item 1. Legal Proceedings Item 1A. Risk Factors Item 2. Unregistered Sales Of Equity Securities and Use Of Proceeds Item 6. Exhibits

Exhibits

31.1* Section302 Certification of Chief Executive Officer 31.2* Section302 Certification of Chief Financial Officer 32.1** Section906 Certification of Chief Executive Officer 32.2** Section906 Certification of Chief Financial Officer

EEFT 10-Q Quarter ended Sept. 30, 2022

Exhibits