298736AH2 Filings — Euronet Worldwide, Inc. - FilingSpy
298736AH2
Euronet Worldwide, Inc.
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A global payments company, Euronet runs ATM networks, prepaid phone and digital-media top-ups, and the Ria and Xe money-transfer brands used across dozens of countries. It was founded in Budapest in 1994 by brothers-in-law Mike Brown and Dan Henry as BankNet, building the region's first independent ATM network before renaming to Euronet. Fun fact: the Xe currency brand began in 1993 as Xenon Laboratories, a computer-consulting firm that later pivoted to foreign exchange.
Cross-Border Payments operating income fell 34% as U.S. remittance headwinds offset digital growth, dragging consolidated net income down 21%.
Cross-Border Payments profitability fell sharply, even as digital transactions grew. rose 3% to $1.11 billion, but dropped 21% to $77.4 million as a 34% decline in Cross-Border Payments and a higher tax bill more than offset growth in the Payments Infrastructure and epay segments. The core money-transfer engine is under pressure from U.S. policy and competition, and the company is leaning on its payments and digital-content businesses to carry the top line.
Key takeaways
Cross-Border Payments fell 34% to $43.3 million, as the U.S. remittance tax, immigration policy changes, and competitive pricing pressured the business, outweighing a 33% increase in direct-to-consumer digital transactions.
Payments Infrastructure rose 11% to $377.1 million, driven by merchant acquiring, software solutions, and the CoreCard acquisition, though grew only 2% because of higher non-cash .
Section summaries
Management's Discussion and Analysis
Q2 2026 revenue rose 3% to $1.11B driven by Payments Infrastructure and epay, while Cross-Border Payments operating income fell 34% on U.S. remittance headwinds.
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Consolidated grew 3% to $1,108.4M in Q2 2026, with Payments Infrastructure up 11% and epay up 5%, partially offset by a 4% decline in Cross-Border Payments.
epay increased 5% to $294.0 million, with improving to 25.7% as a shift toward higher-value digital content and branded payments more than offset an 11% drop in transaction volumes.
attributable to Euronet decreased 21% to $77.4 million, weighed by a $13.1 million increase in income tax expense and the lower Cross-Border Payments profit, partially offset by a $7.6 million reduction in .
fell to $26.0 million from $184.6 million a year ago, driven by unfavorable timing, though total available liquidity remained at $2.74 billion.
What changed
The Q1 2026 watch item on Money Transfer margin stabilization did not materialize: Cross-Border Payments fell further to 9.8% in Q2 2026 from 9.9% in Q1, as the U.S. remittance tax and immigration policy headwinds intensified, confirming the digital marketing cost step-up is not the only pressure on the .
The Q1 2026 watch item on EFT Processing margin integrating CoreCard showed slight improvement: Payments Infrastructure rose to 8.5% in Q2 2026 from 7.9% in Q1, but remains far below the 25.0% level of Q2 2025, indicating the lower-margin CoreCard volumes have structurally reset profitability.
The negative flagged in Q1 2026 was a one-quarter event: operating cash flow turned positive at $26.0 million in Q2 2026, though it remains well below the $184.6 million generated in Q2 2025, suggesting cash conversion is still under pressure.
, a persistent watch item, fell 21% to $22.1 million in Q2 2026 from $28.2 million in Q2 2025, a reversal of the rising trend that had been driven by higher borrowings after the Convertible Notes .
What to watch
Whether Cross-Border Payments can recover in Q3 2026, the seasonally strongest quarter, or if the U.S. remittance tax and immigration policy changes represent a permanent reset of profitability.
The trajectory of Payments Infrastructure as CoreCard runs off, to see whether the can return toward the 25% margin level it held before the acquisition.
The outcome of the Italian withholding tax appeal, where the principal exposure of approximately €19.4 million remains reasonably possible but not probable, and multiple differing judicial decisions are now under appeal.
Whether the $26.0 million in Q2 2026 represents a new, lower run rate for cash generation, given the full-year of $135 million to $145 million and the $2.74 billion liquidity buffer.
Payments Infrastructure increased to $377.1M, driven by merchant acquiring, software solutions, and the CoreCard acquisition, though rose only 2% due to higher .
epay rose 5% to $294.0M on higher-value digital content and branded payments, with improving to 25.7% despite an 11% drop in transaction volumes from a shift in product mix.
Cross-Border Payments fell 4% to $439.6M and dropped 34% to $43.3M, pressured by the U.S. remittance tax, immigration policy changes, and competitive pricing, partly offset by 33% growth in digital consumer-to-consumer transactions.
attributable to Euronet decreased 21% to $77.4M, primarily due to a $13.1M increase in income tax expense and lower , partially offset by a $7.6M reduction in .
Liquidity remained strong with $2.74B in available cash and $993.2M available under the , though fell to $26.0M from $184.6M due to unfavorable timing.
Quantitative and Qualitative Disclosures About Market Risk
Interest rate risk is concentrated in variable-rate debt, while foreign exchange risk arises from 76% non-U.S. dollar revenue, partially managed with derivatives.
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As of June 30, 2026, 30% of total debt ($811.4M) was drawn on the , where a 1% rate increase would add ~$8.1M in annual .
Another 30% of debt ($800.0M) consists of short-term uncommitted credit agreements with variable rates, and 1% ($33.2M) is fixed-rate 2049 Convertible Notes.
Approximately 76% of was generated in non-U.S. dollar countries, with primary exposure to the euro, British pound, Australian dollar, and several other currencies.
A 10% adverse currency fluctuation is estimated to have a $135M–$145M annualized effect on reported and , and an $85M–$95M non-cash impact on .
The company uses foreign currency forwards and cross-currency swaps as economic hedges but does not apply hedge accounting; total outstanding notional was $422.1M for money transfer operations and $0.8B for Xe customer contracts.
Longer-term forward contracts with a of $297.4M, primarily in euros, are used to mitigate currency risk on certain other assets and liabilities.
No material proceedings; Italian withholding-tax matter and a custody loss are disclosed but not deemed probable or material.
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Management states there are no proceedings expected to have a material adverse effect on financial condition or results of operations.
Multiple Italian court decisions since July 2024 address withholding taxes on certain agency relationships in the Cross-Border Payments in Italy.
The Company, supported by a 2010 tax opinion, believes the withholding tax is not applicable and has concluded a liability is but not .
The principal amount of the agent-based withholding tax exposure is approximately €19.4 million for all open periods.
In March 2025, a fire at a third-party service provider resulted in the loss of Malaysian Ringgit notes; the provider bears the risk of loss contractually.
The related bank note balance of about $11.0 million was reclassified to other , and recovery from the provider is considered .
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, 2025, as filed with the SEC. 45
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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, 2025, as filed with the SEC.
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