Euronet Worldwide, Inc. Net Income jumped on 48.5% and Revenue surged on 12.6%
02/07/2019 • About Euronet Worldwide, Inc. (
$EEFT) • By InTwits
Euronet Worldwide, Inc. reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Euronet Worldwide, Inc. is a growth stock: 2018 revenue growth was 12.6%, 5 year revenue CAGR was 12.4% at 2018 ROIC 19.5%
- Euronet Worldwide, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.2%. At the same time it's in pair with industry average of 13.3%
- CAPEX is quite volatile: $39m in 2018, $27m in 2017, $16m in 2016, $17m in 2015, $18m in 2014
- The company has highly profitable business model: ROIC is 19.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 12.6%. Revenue growth showed slowdown in 18Q4 - it was 7.4% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.6 pp from 20.0% to 21.7% in 2018. EBITDA Margin followed a growing trend at 0.94 pp per annum in 2014-2018.
Gross Margin increased slightly on 1.5 pp from 39.8% to 41.3% in 2018. Gross Margin stuck to a growing trend at 0.77 pp per annum in the last 5 years. SG&A as a % of Revenue showed almost no change in 2018. During the last 5 years SG&A as a % of Revenue bottomed in 2016 at 8.4% and was growing since that time. Stock Based Compensation (SBC) as a % of Revenue showed almost no change in 2018.
Net Income margin increased on 2.2 pp from 7.0% to 9.2% in 2018. The efficient tax rate was 21.2% in 2018 while the average for the last five years was 28.4%.
Investments (CAPEX, working capital and M&A)
In 2018 Euronet Worldwide, Inc. had CAPEX/Revenue of 4.4%. Euronet Worldwide, Inc.'s CAPEX/Revenue showed almost no change from 2015 to 2018. For the last three years the average CAPEX/Revenue was 4.4%.
Accounts receivable as a % of Revenue decreased on 5.7 pp from 33.1% to 27.3% in 2018. Accounts payable as a % of Revenue decreased slightly on 0.95 pp from 36.5% to 35.5% in 2018.
Euronet Worldwide, Inc. has spent
$13m on M&A in 2018 which accounts for 0.51% of revenue.
Return on investment
The company operates at good ROIC (19.5%) and ROE (19.2%). ROIC increased on 3.3 pp from 16.2% to 19.5% in 2018. ROE increased on 4.2 pp from 15.0% to 19.2% in 2018.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.9x and Debt / EBITDA is 1.4x. Debt jumped on 39.3% while cash surged on 28.7%.
Euronet Worldwide, Inc. has good short term financial stability: Interest coverage ratio (ICR) is 9.5x. Euronet Worldwide, Inc. has no short term refinancing risk: cash is higher than short term debt (2,425.2%).
Average interest expence charged on company's debt was 5.9% in 2018.
Valuation and dividends
The company's trades at EV/EBITDA 13.3x and P/E 28.3x.
Management team
The company's CEO Michael J Brown is a founder and has spent 17 years with the company. CEO total compensation was
$6,455,198 in 2018 which included
$850,000 salary. Euronet Worldwide, Inc.'s CFO is Rick L Weller. Rick L Weller has 16 years tenure at the company.
4.1% of the company is owned by insiders. Insider ownership didn't change in 2018.
At the end of financial year the company had 7,100 employees. The number of employees increased on 7.6%. Average revenue per employee in 2018 was
$357,272 and it increased on 4.7%.
Financial and operational results
FY ended 12/31/2018
Euronet Worldwide, Inc. ($EEFT) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 1,664 | 1,772 | 1,959 | 2,252 | 2,537 | 12.6% |
| Gross Profit | 631 | 690 | 784 | 896 | 1,048 | 17.0% |
| SG&A | 157 | 156 | 165 | 190 | 217 | 13.9% |
| EBITDA | 230 | 275 | 330 | 361 | 464 | 28.5% |
| EBIT | 159 | 205 | 250 | 266 | 358 | 34.6% |
| Interest expence | 12 | 25 | 28 | 33 | 38 | 15.4% |
| Tax | 40 | 43 | 59 | 99 | 63 | -36.8% |
| Net Income | 102 | 99 | 174 | 157 | 233 | 48.5% |
| Stock Based Compensation | 13 | 13 | 15 | 16 | 17 | 7.3% |
Balance Sheet
|
|---|
| Cash | 468 | 458 | 734 | 819 | 1,054 | 28.7% |
| Accounts Receivable | 376 | 423 | 503 | 745 | 694 | -6.9% |
| Inventory | 86 | 72 | 78 | 96 | | |
| Accounts Payable | 446 | 456 | 457 | 495 | 529 | 6.9% |
| Short Term Debt | 13 | 14 | 35 | 47 | 43 | -6.8% |
| Long Term Debt | 399 | 410 | 569 | 414 | 598 | 44.5% |
Cash flow
|
|---|
| Capex | 63 | 75 | 87 | 97 | 112 | 15.7% |
| Acquisitions | 85 | 114 | 68 | | 13 | |
Ratios
|
|---|
| Revenue growth | 17.8% | 6.5% | 10.5% | 15.0% | 12.6% | |
| EBITDA growth | 25.5% | 19.4% | 20.2% | 9.3% | 28.5% | |
|
|---|
| Gross Margin | 37.9% | 39.0% | 40.0% | 39.8% | 41.3% | 1.5% |
| EBITDA Margin | 13.8% | 15.5% | 16.9% | 16.0% | 18.3% | 2.3% |
| EBIT Margin | 9.5% | 11.6% | 12.8% | 11.8% | 14.1% | 2.3% |
| SG&A, % of revenue | 9.5% | 8.8% | 8.4% | 8.4% | 8.5% | 0.1% |
| SBC, % of revenue | 0.8% | 0.7% | 0.8% | 0.7% | 0.7% | -0.0% |
| Net Income Margin | 6.1% | 5.6% | 8.9% | 7.0% | 9.2% | 2.2% |
| CAPEX, % of revenue | 3.8% | 4.2% | 4.5% | 4.3% | 4.4% | 0.1% |
|
|---|
| ROIC | 15.4% | 16.6% | 17.6% | 16.2% | 19.5% | 3.3% |
| ROE | 14.9% | 12.7% | 20.2% | 15.0% | 19.2% | 4.2% |
| Net Debt/EBITDA | -0.2x | -0.1x | -0.4x | -1.0x | -0.9x | 0.1x |
| Interest expence / Average debt | 3.0% | 5.9% | 5.5% | 6.1% | 5.9% | -0.3% |
People
|
|---|
| Insider ownership | 4.1% | 4.1% | 4.1% | 4.1% | 4.1% | 0.0% |
| Employees | 4,600 | 5,600 | 6,200 | 6,600 | 7,100 | 7.6% |
| Revenue/Employee, th. $ | 362 | 316 | 316 | 341 | 357 | 4.7% |
Euronet Worldwide, Inc. ($EEFT) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 551 | 622 | 715 | 649 | | 16.3% | 16.0% | 12.0% | 7.4% |
| EBITDA | 71 | 117 | 177 | 98 | | 13.6% | 29.8% | 25.3% | 47.9% |
| Net Income | 26 | 44 | 103 | 60 | | -6.1% | -14.9% | 2.4% | |
Balance Sheet
|
|---|
| Cash | 886 | 1,163 | 1,129 | 1,054 | | 16.0% | 9.2% | 6.3% | 28.7% |
| Short Term Debt | 52 | 624 | 238 | 43 | | 53.5% | 362.5% | 68.1% | -6.8% |
| Long Term Debt | 583 | 381 | 650 | 598 | | 2.1% | -48.1% | 8.0% | 44.5% |
Ratios
|
|---|
| Gross Margin | 37.6% | 41.9% | 45.7% | 39.1% | | 0.3% | 1.0% | 2.9% | 1.6% |
| EBITDA Margin | 13.0% | 18.7% | 24.8% | 15.2% | | -0.3% | 2.0% | 2.6% | 4.1% |
| Net Income Margin | 4.8% | 7.0% | 14.4% | 9.2% | | -1.1% | -2.5% | -1.3% | 13.0% |
Peers in Data Processing & Outsourced S
Below we provide Euronet Worldwide, Inc. benchmarking against other companies in Data Processing & Outsourced S industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Verra Mobility Corp ($VRRM) | | | | | 167.8% |
| StoneCo Ltd ($STNE) | | | | 74.3% | 106.0% |
| PagSeguro Digital Ltd. ($PAGS) | | 107.1% | 68.7% | 121.7% | 71.8% |
| Payment Data Systems, Inc. ($PYDS) | | 7.4% | -16.0% | 20.7% | 71.7% |
| StarTek, Inc. ($SRT) | | 12.8% | 8.9% | -4.8% | 66.4% |
| |
|---|
| Median (55 companies) | | 7.1% | 7.6% | 10.1% | 7.4% |
|---|
| Euronet Worldwide, Inc. ($EEFT) | | 6.5% | 10.5% | 15.0% | 12.6% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Verra Mobility Corp ($VRRM) | | | | 97.4% | 97.5% |
| Everi Holdings Inc. ($EVRI) | 25.8% | 38.3% | 36.1% | 34.5% | 79.9% |
| StoneCo Ltd ($STNE) | | | 69.7% | 70.8% | 79.5% |
| Paychex, Inc. ($PAYX) | 70.9% | 70.5% | 71.0% | 70.8% | 69.9% |
| Global Payments Inc. ($GPN) | 62.7% | 63.2% | 60.4% | 51.5% | 67.5% |
| |
|---|
| Median (44 companies) | 39.3% | 39.6% | 39.2% | 38.9% | 40.9% |
|---|
| Euronet Worldwide, Inc. ($EEFT) | 37.9% | 39.0% | 40.0% | 39.8% | 41.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Visa Inc. ($V) | 64.0% | 68.9% | 55.6% | 69.2% | 65.8% |
| FleetCor Technologies, Inc. ($FLT) | 56.1% | 50.4% | 52.0% | 50.8% | 55.9% |
| StoneCo Ltd ($STNE) | | | 31.4% | 26.0% | 53.0% |
| Mastercard Incorporated ($MA) | 57.5% | 56.3% | 56.9% | 56.5% | 51.8% |
| Everi Holdings Inc. ($EVRI) | 9.6% | 14.7% | 3.0% | 20.4% | 45.2% |
| |
|---|
| Median (56 companies) | 20.6% | 21.2% | 21.3% | 21.1% | 19.4% |
|---|
| Euronet Worldwide, Inc. ($EEFT) | 13.8% | 15.5% | 16.9% | 16.0% | 18.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Crypto Co/The ($CRCW) | 0.0% | 0.0% | | 1,216.6% | 853.5% |
| Steel Connect, Inc. ($STCN) | 0.6% | 1.5% | 1.7% | 1.1% | 75.6% |
| Everi Holdings Inc. ($EVRI) | 3.0% | 9.3% | 9.4% | 9.9% | 21.9% |
| StoneCo Ltd ($STNE) | | | 7.2% | 18.4% | 8.9% |
| Cardtronics plc ($CATM) | 10.2% | 11.9% | 9.9% | 9.6% | 8.0% |
| |
|---|
| Median (56 companies) | 3.1% | 3.0% | 3.2% | 2.9% | 3.0% |
|---|
| Euronet Worldwide, Inc. ($EEFT) | 3.8% | 4.2% | 4.5% | 4.3% | 4.4% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| GreenSky, Inc. ($GSKY) | | | | 156.4% | 93.7% |
| Mastercard Incorporated ($MA) | 63.5% | 57.5% | 57.5% | 60.6% | 64.7% |
| Paychex, Inc. ($PAYX) | 54.5% | 58.7% | 61.9% | 63.9% | 64.5% |
| NIC Inc. ($EGOV) | 64.6% | 61.2% | 63.1% | 52.1% | 39.3% |
| Automatic Data Processing, Inc. ($ADP) | 23.9% | 28.9% | 37.9% | 36.6% | 37.5% |
| |
|---|
| Median (62 companies) | 13.3% | 12.8% | 11.1% | 10.6% | 10.2% |
|---|
| Euronet Worldwide, Inc. ($EEFT) | 15.4% | 16.6% | 17.6% | 16.2% | 19.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| StarTek, Inc. ($SRT) | -0.1x | | 2.2x | 2.3x | 18.4x |
| Square, Inc. ($SQ) | | | | | 13.3x |
| Steel Connect, Inc. ($STCN) | -12.5x | | | | 12.6x |
| Exela Technologies Inc ($XELAU) | | | 8.1x | | 9.7x |
| Alliance Data Systems Corporation ($ADS) | 9.3x | 9.1x | 10.7x | 10.1x | 9.0x |
| |
|---|
| Median (54 companies) | 0.6x | 0.7x | 1.6x | 2.3x | 2.2x |
|---|
| Euronet Worldwide, Inc. ($EEFT) | -0.2x | -0.1x | -0.4x | -1.0x | -0.9x |
