Yahoo Finance International Money Express Inc (IMXI) (Q1 2024) Earnings Call Transcript Highlights: ...
Revenue: $150.4 million, a 3.5% increase year-over-year.
Adjusted EBITDA: $25.4 million, up 5.5% from last year.
Net Income: Achieved new first quarter records.
Earnings Per Share (EPS): Diluted EPS at $0.35, up 12.9%.
Adjusted EPS: $0.43, increased by 13.2%.
Free Cash Flow: $62 million generated in 2023, highest annual amount, driven by retail operations.
Digital Revenue Growth: Nearly 60% increase compared to the same period last year.
Customer Base: Expanded to 4.2 million, up 3%.
Release Date: May 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
International Money Express Inc reported a strong start to 2024 with record-breaking performance, including a company revenue of $150.4 million and adjusted EBITDA of $25.4 million.
Earnings per share (EPS) and adjusted EPS reached new first-quarter records of $0.35 and $0.43 respectively, surpassing market expectations.
The company achieved revenue highs in 10 countries, demonstrating the effectiveness of its global strategies and strong market presence.
The integration of the national business resulted in a fourfold increase in EBITDA, highlighting the strategic success of recent acquisitions.
International Money Express Inc's digital channels reached all-time high user engagement and profitability levels, underscoring the company's efficient financial management and strategic initiatives.
Negative Points
Despite overall strong performance, market growth in Mexico was slower than expected, which could pose challenges to future revenue projections if the trend continues.
The company faces economic and market-specific challenges, particularly in Mexico, where market growth did not meet expectations.
Interest expenses rose to $2.7 million due to a higher rate environment and increased usage of the revolving credit facility.
Depreciation expenses increased by 26.7% due to investments in new headquarters and ongoing investments in technology infrastructure.
The company anticipates a restructuring charge of approximately $2.4 million in the second quarter as part of a strategic restructuring initiative to maximize efficiency.
Q & A Highlights
Q: Can we talk about the growth assumption for the year in Mexico and what you're seeing for maybe strengthening USD versus the Mexican peso again? And also just general touch on what you're seeing for your remit or customers in terms of their go-to health in terms of jobs, wages. All that, thanks. A: Robert Lisy, Chairman of the Board, President, CEO of International Money Express, noted the volatility in Mexico's growth numbers and expects the market to improve as the year progresses. He highlighted the resilience of their customer base, primarily workers who are in the U.S. to work and send money back home. Despite the economic influences, such as housing starts affecting some segments of their workers, the core careers for their customers remain stable. Lisy emphasized the ongoing growth of their customer base and the strategic efforts in sales and digital partnerships to bolster numbers if the Mexico market rebounds.
Q: Can we talk about performance of your agent vintages? Maybe talk about those that are still ramping in terms of that wires per month per agent versus those already at scale and just a clarification, how are we doing versus that top five countries market share that you used to share? A: Lisy explained that the performance of new agents is better than in the past, with successful agents reaching 150-200 wires per month within two to three months. He discussed the strategic expansion of their sales force to increase the number of quality retailers in underserved zip codes, particularly in the western states, which presents a significant opportunity for growth. The focus is on adding new retailers to increase service reach and transaction volume.
Q: Hey, everyone. Thanks for taking my question, actually, two questions. First on slide 13 and just looking at this gross profit per transaction in digital, just curious if you could sort of expand when we look at the Intermex bar, what has sort of allowed for that expansion there, expansion of what revenue per, whereas transaction margin gross margin? A: Lisy and CFO Andras Bende discussed the expansion in gross profit per digital transaction, attributing it to competitive pricing and reduced costs. They emphasized the strong unit economics now in place, allowing for flexibility in pricing strategies to drive growth. The focus has shifted from merely acquiring customers to enhancing profitability per transaction, which aligns with their strategic goals.
Q: Just a quick follow-up on the Felix Pogo partnership. Just sort of if you would speak to the rationale there, maybe if there's any sort of indication of how the economics look of that type of transaction. A: Lisy described the partnership with Felix Pogo as a strategic move to expand their wire as a service solutions, leveraging their existing platform and expertise without the high costs associated with acquiring new consumers. This partnership allows them to tap into new consumer bases and enhance their service offerings efficiently.
Q: Hey, guys. A couple of questions. First off, just on the recent expansion in the outside sales force and inside sales force, how is that going kind of compared to internal plan productivity and growth that you're getting from that new investment? A: Lisy reported positive progress with the expansion of both the outside and inside sales forces. The inside sales team has tripled its reach, enhancing support for existing retailers and optimizing resource allocation to drive incremental wires. The outside sales team is strategically adding retailers in key markets to capitalize on significant untapped opportunities, aligning with their long-term growth strategy.
Q: Just coming back to the detail you gave on slide 13 on the gross profit per transaction in digital. Any way you could sort of frame what percentage of digital transactions are those Intermex branded? And what percentage of unbranded just trying to get a sense of the blended gross profit per digital transaction? A: Lisy clarified that about 40% to 45% of digital transactions are Intermex branded, with the remaining being co-branded with various partners. He emphasized the strategic importance of maintaining a strong gross margin while driving higher transaction volumes to enhance overall business growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
