SEC Filing - Euronet Worldwide, Inc.

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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 June 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 August 2, 2022, Euronet Worldwide, Inc. had 49,581,198 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 June 30, 2022 and December 31, 2021	1
	Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2022 and 2021	2
	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2022 and 2021	3
	Consolidated Statements of Changes in Equity for the Three and Six Months Ended June 30, 2022 and 2021	4
	Consolidated Statements of Cash Flows for the Six Months Ended June 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
	June 30, 2022			December 31, 2021
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	1,014,859		$	1,260,466
ATM cash	890,834			543,422
Restricted cash	6,616			3,693
Settlement assets	1,057,423			1,102,389
Trade accounts receivable, net of credit losses of $4,392 and $4,469	195,355			203,010
Prepaid expenses and other current assets	344,219			195,443
Total current assets	3,509,306			3,308,423
Operating right of use lease assets	150,995			161,494
Property and equipment, net of accumulated depreciation of $527,234 and $532,631	332,856			345,381
Goodwill	807,848			641,605
Acquired intangible assets, net of accumulated amortization of $185,145 and $185,054	197,281			97,793
Other assets, net of accumulated amortization of $64,197 and $62,349	197,232			189,580
Total assets	$	5,195,518		$	4,744,276
LIABILITIES AND EQUITY
Current liabilities:
Settlement obligations	$	1,057,423		$	1,102,389
Trade accounts payable	184,155			193,529
Accrued expenses and other current liabilities	478,820			367,692
Current portion of operating lease liabilities	48,899			52,136
Short-term debt obligations and current maturities of long-term debt obligations	450,319			821
Income taxes payable	46,668			59,037
Deferred revenue	63,260			77,037
Total current liabilities	2,329,544			1,852,641
Debt obligations, net of current portion	1,638,663			1,420,085
Operating lease obligations, net of current portion	103,625			111,355
Deferred income taxes	33,811			46,505
Other long-term liabilities	70,733			58,166
Total liabilities	4,176,376			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 63,850,934 and 63,779,009	1,277			1,275
Additional paid-in-capital	1,223,294			1,274,118
Treasury stock, at cost, shares issued 14,271,179 and 12,631,125	(1,106,094		)	(931,212		)
Retained earnings	1,182,787			1,083,882
Accumulated other comprehensive loss	(281,858		)	(172,582		)
Total Euronet Worldwide, Inc. stockholders’ equity	1,019,406			1,255,481
Noncontrolling interests	(264		)	43
Total equity	1,019,142			1,255,524
Total liabilities and equity	$	5,195,518		$	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 June 30,					Six Months Ended June 30,
		2022			2021		2022			2021
Revenues	$	843,309		$	714,686		$	1,561,776		$	1,367,356
Operating expenses:
Direct operating costs, exclusive of depreciation		500,662			470,816		958,815			905,332
Salaries and benefits		131,308			121,071		258,073			236,739
Selling, general and administrative		74,249			59,119		138,105			117,895
Depreciation and amortization		36,013			33,559		69,003			66,820
Total operating expenses		742,232			684,565		1,423,996			1,326,786
Operating income		101,077			30,121		137,780			40,570
Other income (expense):
Interest income		245			204		390			386
Interest expense		(8,862	)		(9,457	)	(14,996		)	(18,646		)
Foreign currency exchange gain (loss), net		(14,698	)		116		(20,160		)	(3,916		)
Other gains, net		—			—		192			31
Other expense, net		(23,315	)		(9,137	)	(34,574		)	(22,145		)
Income before income taxes		77,762			20,984		103,206			18,425
Income tax expense		(20,728	)		(12,352	)	(37,882		)	(18,414		)
Net income		57,034			8,632		65,324			11
Net income (loss) attributable to noncontrolling interests		184			3		191			(41		)
Net income (loss) attributable to Euronet Worldwide, Inc.	$	57,218		$	8,635		$	65,515		$	(30	)

Earnings per share attributable to Euronet Worldwide, Inc. stockholders:
Basic	$	1.13		$	0.16		$	1.29		$	0.00
Diluted	$	1.08		$	0.16		$	1.25		$	0.00

Weighted average shares outstanding:
Basic		50,394,610			52,805,367		50,726,281			52,784,106
Diluted		53,766,914			54,008,839		54,133,724			52,784,106

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 June 30,					Six Months Ended June 30,
		2022			2021		2022			2021
Net income	$	57,034		$	8,632		$	65,324		$	11
Translation adjustment		(88,278	)		12,686		(109,392		)	(30,215		)
Comprehensive income (loss)		(31,244	)		21,318		(44,068		)	(30,204		)
Comprehensive income (loss) attributable to noncontrolling interests		(263	)		(8	)	(307		)	4
Comprehensive income (loss) attributable to Euronet Worldwide, Inc.	$	(31,507	)	$	21,310		$	(44,375	)	$	(30,200	)

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
Balance as of June 30, 2021	52,822,254		1,269		1,252,456		(703,247	)

	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	)

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 (loss) income		(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 (loss) income		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

	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

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)


	Six Months Ended June 30,
	2022			2021
Net income	$	65,324		$	11
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	69,003			66,820
Share-based compensation	19,945			19,476
Unrealized foreign exchange loss, net	20,160			3,916
Deferred income taxes	3,407			1,271
Accretion of convertible debt discount and amortization of debt issuance costs	2,351			10,012
Changes in working capital, net of amounts acquired:
Income taxes payable, net	(9,390		)	(785		)
Trade accounts receivable, including amounts in settlement assets	58,157			136,121
Prepaid expenses and other current assets, including amounts in settlement assets	(153,256		)	136,331
Trade accounts payable, including amounts in settlement obligations	(119,462		)	(213,158		)
Deferred revenue	(9,925		)	(30		)
Accrued expenses and other current liabilities, including amounts in settlement obligations	255,516			17,340
Changes in noncurrent assets and liabilities	(21,171		)	(4,018		)
Net cash provided by operating activities	180,659			173,307
Cash flows from investing activities:
Acquisitions, net of cash acquired	(330,023		)	-
Purchases of property and equipment	(53,052		)	(45,076		)
Purchases of other long-term assets	(3,856		)	(4,273		)
Other, net	(35		)	1,017
Net cash used in investing activities	(386,966		)	(48,332		)
Cash flows from financing activities:
Proceeds from issuance of shares	3,732			5,271
Repurchase of shares	(175,287		)	(943		)
Borrowings from revolving credit agreements	4,049,100			1,606,100
Repayments of revolving credit agreements	(3,385,400		)	(1,855,700		)
Net borrowings (repayments) from short-term debt obligations	1,345			(45		)
Other, net	(2,248		)	(3,236		)
Net cash provided by (used in) financing activities	491,242			(248,553		)
Effect of exchange rate changes on cash and cash equivalents and restricted cash	(195,239		)	(43,278		)
Increase (decrease) in cash and cash equivalents and restricted cash	89,696			(166,856		)
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	$	2,175,798		$	1,932,652

Supplemental disclosure of cash flow information:
Interest paid during the period	$	15,858		$	13,688
Income taxes paid during the period	$	47,119		$	18,886

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. Additionally, the EFT Processing and epay Segments are 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. 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 June 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 six months ended June 30, 2022, PBMA had $27.5 million and $31.2 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)	June 30, 2022		December 31, 2021
Settlement assets:
Settlement cash and cash equivalents	$	213,649	$	203,624
Settlement restricted cash	49,840		74,897
Accounts receivable, net of credit losses of $30,009 and $27,341	593,738		619,738
Prepaid expenses and other current assets	200,196		204,130
Total settlement assets	$	1,057,423	$	1,102,389
Settlement obligations:
Trade account payables	$	383,652	$	461,135
Accrued expenses and other current liabilities	673,771		641,254
Total settlement obligations	$	1,057,423	$	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 Cash Flows.

	As of
(in thousands)	June 30, 2022		December 31, 2021		June 30, 2021		December 31, 2020
Cash and cash equivalents	$	1,014,859	$	1,260,466	$	994,488	$	1,420,255
Restricted cash	6,616		3,693		3,328		3,334
ATM cash	890,834		543,422		565,084		411,054
Settlement cash and cash equivalents	213,649		203,624		311,131		188,191
Settlement restricted cash	49,840		74,897		58,621		76,674
Cash and cash equivalents and restricted cash at end of period	$	2,175,798	$	2,086,102	$	1,932,652	$	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 June 30,				Six Months Ended June 30,
		2022		2021		2022		2021
Computation of diluted earnings:
Net income (loss)	$	57,218	$	8,635	$	65,515	$	(30	)
Add: Interest expense from assumed conversion of convertible notes, net of tax		1,098		—		2,113		—
Net income (loss) for diluted earnings per share calculation	$	58,316	$	8,635	$	67,628	$	(30	)

Computation of diluted weighted average shares outstanding:
Basic weighted average shares outstanding		50,394,610		52,805,367		50,726,281		52,784,106
Incremental shares from assumed exercise of stock options and vesting of restricted stock		590,486		1,203,472		625,625		—
Incremental shares from assumed conversion of convertible debt		2,781,818		—		2,781,818		—
Diluted weighted average shares outstanding		53,766,914		54,008,839		54,133,724		52,784,106

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 2,971,768 and 2,972,786 for the three and six months ended June 30, 2022 and 1,239,000 and 2,429,000 for the three and six months ended June 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. Under the repurchase programs we repurchased $104.6 million and $175.0 million of stock, for the three and six months ended June 30, 2022, respectively. Repurchases 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 $88.3 million and $109.4 million for the three and six months ended June 30, 2022, respectively, and gain of $12.7 million and loss of $30.2 million for the same periods in 2021. There were no reclassifications of foreign currency translation into the consolidated statements of income for the three and six months ended June 30, 2022 and 2021.

(6) GOODWILL AND ACQUIRED INTANGIBLE ASSETS, NET

A summary of acquired intangible assets and goodwill activity for the six months ended June 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	(13,325		)	—			(13,325		)
Foreign currency exchange rate changes	(9,642		)	(45,940		)	(55,582		)
Balance as of June 30, 2022	$	197,281		$	807,848		$	1,005,129

Of the total goodwill balance of $807.8 million as of June 30, 2022, $371.5 million relates to the Money Transfer Segment, $315.1 million relates to the EFT Processing Segment and the remaining $121.2 million relates to the epay Segment. Estimated amortization expense on acquired intangible assets with finite lives as of June 30, 2022, is expected to total $13.9 million for the remainder of 2022, $23.7 million for 2023, $17.6 million for 2024, $14.4 million for 2025, $14.0 million for 2026 and $12.8 million for 2027.

(7) ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of the following:


	As of
(in thousands)	June 30, 2022		December 31, 2021
Accrued expenses	$	376,386	$	285,098
Derivative liabilities	51,074		23,285
Accrued payroll expenses	48,098		55,162
Current portion of finance lease obligations	3,262		4,147
Total	$	478,820	$	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 six months ended June 30, 2022 is the result of $20.2 million of cash payments received in the current year for which we have not yet satisfied the performance obligations, offset by $34.0 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)	June 30, 2022			December 31, 2021
Credit Facility:
Revolving credit agreement	$	497,100		$	283,400

Uncommitted Credit Agreements		450,000			—
Convertible Debt:
0.75% convertible notes, unsecured, due 2049	525,000			468,235

1.375% Senior Notes, due 2026	628,920			682,080

Other obligations	396			920

Total debt obligations	2,101,416			1,434,635
Unamortized debt issuance costs	(12,434		)	(13,729		)
Carrying value of debt	2,088,982			1,420,906
Short-term debt obligations and current maturities of long-term debt obligations	(450,319		)	(821		)
Long-term debt obligations	$	1,638,663		$	1,420,085

Credit Facility

On October 17, 2018, the Company entered into an unsecured revolving credit agreement (the "Credit Facility") for $1.0 billion that expires on October 17, 2023. Fees and interest on borrowings are based upon the Company's corporate credit rating and are based, in the case of letter of credit fees, on a margin, and in the case of interest, on a margin over London Inter-Bank Offered Rate (“LIBOR”) or a margin over the base rate, as selected by the Company, with the applicable margin ranging from 1.125% to 2.0% (or 0.175% to 1.0% for base rate loans). The Credit Facility allows for borrowings in Australian dollars, British pounds sterling, Canadian dollars, Czech koruna, Danish krone, euro, Hungarian forints, Japanese yen, New Zealand dollars, Norwegian krone, Polish zlotys, Swedish krona, Swiss francs and U.S. dollars. The Credit Facility contains a $200 million sublimit for the issuance of letters of credit, a $50 million sublimit for U.S. dollar swingline loans, and a $90 million sublimit for certain foreign currencies swingline loans. The Credit Facility contains customary affirmative and negative covenants, events of default and financial covenants. The Company was in compliance with all debt covenants as of June 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 June 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 June 30, 2022 was 1.900%.

On June 24, 2022, the Company entered into an Uncommitted Loan Agreement for $150 million, fully drawn and outstanding at June 30, 2022, for the sole purpose of providing vault cash for ATMs, that expires no later than June 23, 2023. Each loan is 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 June 30, 2022 was 2.317%.

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 $1.0 million and $2.0 million for the three and six months ended June 30, 2021, respectively. Accretion expense for the Convertible Notes was $4.0 million and $7.9 million for the three and six months ended June 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 June 30, 2022, the Company has outstanding €600 million ($628.9 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 June 30, 2022 and December 31, 2021, borrowings under these arrangements were $0.4 million and $0.9 million, respectively.

Debt Issuance Costs

As of June 30, 2022, we had unamortized debt issuance costs of $1.8 million for the Credit Facility, $5.9 million for the Convertible Notes and $4.7 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. The Company had foreign currency forward contracts outstanding in the U.S. with a notional value of $304.5 million and $222.1 million as of June 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. The Company had foreign currency forward contracts outstanding with a notional value of $304.5 million and $216.1 million as of June 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 $21.7 million and $44.2 million for the three and six months ended June 30, 2022, respectively, compared to $19.9 million and $38.4 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 as of June 30, 2022 and December 31, 2021 was approximately $0.9 billion and $1.0 billion, respectively. 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

(in thousands)

Balance Sheet Location

June 30, 2022

December 31, 2021

Balance Sheet Location

June 30,

2022

December 31, 2021

Derivatives not designated as hedging instruments