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 March 31, ~~2020~~2021



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



For the transition period from				to

Commission File Number: 001-31648

EURONET WORLDWIDE, INC.

(Exact name of registrant as specified in its charter)

Delaware		74-2806888

~~Delaware~~		~~74-2806888~~
(State or other jurisdiction		~~(I.R.S. Employer~~
of incorporation or organization)		(I.R.S. Employer Identification No.)

~~3500 College Boulevard~~ 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 þ 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 þNo 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
~~Large accelerated filer~~ þ	~~Accelerated filer~~ o	Non-accelerated filer o	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 þ

On May ~~6, 2020,~~3, 2021, Euronet Worldwide, Inc. had ~~52,205,743~~52,797,354 shares of ~~Common Stock~~common stock outstanding.

EURONET WORLDWIDE, INC. AND SUBSIDIARIES

Table of Contents

		Page

			~~Page~~
PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	3 1
	Consolidated Balance Sheets as of March 31, ~~2020~~2021 and December 31, ~~2019~~2020	3 1
	Consolidated Statements of ~~Income~~Operations for the Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020	4 2
	Consolidated Statements of Comprehensive ~~Income~~Loss for the Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020	5 3
	Consolidated Statements of Changes in Equity for the Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020	6 4
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020	8 6
	Notes to the Unaudited Consolidated Financial Statements	9 7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	23 21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41 39
Item 4.	Controls and Procedures	42 40
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	42 40
Item 1A.	Risk Factors	43 41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43 41
Item 6.	Exhibits	45 42
	Signatures	43

Table of Contents

ITEM 1.1. FINANCIAL STATEMENTS (UNAUDITED)

EURONET WORLDWIDE, INC. AND SUBSIDIARIES

(In thousands, except share and per share data)


	As of						As of
	March 31, 2020			December 31, 2019			March 31, 2021			December 31, 2020
	(unaudited)						(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	709,521		$	786,081		$	1,145,406		$	1,420,255
ATM cash	558,580			665,641			339,883			411,054
Restricted cash	28,953			34,301			2,897			3,334
Settlement assets	773,336			1,013,067			960,313			1,140,875
Trade accounts receivable, net of credit losses of $3,967 at March 31, 2020 and $3,892 at December 31, 2019	92,860			201,935
Trade accounts receivable, net of credit losses of $4,717 and $5,926							111,384			117,517
Prepaid expenses and other current assets	309,385			217,707			253,308			272,900
Total current assets	2,472,635			2,918,732			2,813,191			3,365,935
Operating right of use lease assets	379,584			377,543			171,852			162,074
Property and equipment, net of accumulated depreciation of $411,616 at March 31, 2020 and $410,243 at December 31, 2019	356,558			359,980
Property and equipment, net of accumulated depreciation of $485,467 and $490,429							357,272			378,441
Goodwill	714,499			743,823			653,128			665,821
Acquired intangible assets, net of accumulated amortization of $201,810 at March 31, 2020 and $204,853 at December 31, 2019	130,177			141,847
Other assets, net of accumulated amortization of $47,941 at March 31, 2020 and $46,788 at December 31, 2019	130,932			115,741
Acquired intangible assets, net of accumulated amortization of $178,219 and $175,210							114,768			121,883
Other assets, net of accumulated amortization of $57,118 and $55,710							240,623			232,557
Total assets	$	4,184,385		$	4,657,666		$	4,350,834		$	4,926,711
LIABILITIES AND EQUITY
Current liabilities:
Settlement obligations	$	773,336		$	1,013,067		$	960,313		$	1,140,875
Trade accounts payable	88,392			81,743			125,007			147,593
Accrued expenses and other current liabilities	365,326			294,557			361,139			404,021
Current portion of operating lease liabilities	129,151			127,353			51,461			52,436
Short-term debt obligations and current maturities of long-term debt obligations	3,528			6,089			743			797
Income taxes payable	40,090			52,583			29,323			36,359
Deferred revenue	61,767			58,588			74,737			73,360
Total current liabilities	1,461,590			1,633,980			1,602,723			1,855,441
Debt obligations, net of current portion	1,083,618			1,090,939			1,143,026			1,437,589
Operating lease obligations, net of current portion	243,639			241,977			120,260			106,502
Deferred income taxes	52,613			56,067			39,708			37,875
Other long-term liabilities	53,653			55,361			39,390			43,401
Total liabilities	2,895,113			3,078,324			2,945,107			3,480,808
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; 62,853,785 issued at March 31, 2020 and 62,775,762 issued at December 31, 2019	1,257			1,256
Preferred Stock, $0.02 par value. 10,000,000 shares authorized; NaN issued							0—			0—
Common Stock, $0.02 par value. 90,000,000 shares authorized; shares issued 63,429,190 and 63,366,010							1,268			1,267
Additional paid-in-capital	1,198,097			1,190,058			1,240,273			1,228,446
Treasury stock, at cost, 10,648,096 shares at March 31, 2020 and 8,554,908 shares at December 31, 2019	(703,716		)	(463,704		)
Treasury stock, at cost, shares issued 10,632,705 and 10,631,961							(703,514		)	(703,032		)
Retained earnings	1,018,475			1,016,554			1,004,490			1,013,155
Accumulated other comprehensive loss	(224,667		)	(164,890		)	(137,059		)	(94,214		)
Total Euronet Worldwide, Inc. stockholders’ equity	1,289,446			1,579,274			1,405,458			1,445,622
Noncontrolling interests	(174		)	68			269			281
Total equity	1,289,272			1,579,342			1,405,727			1,445,903
Total liabilities and equity	$	4,184,385		$	4,657,666		$	4,350,834		$	4,926,711

EURONET WORLDWIDE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF ~~INCOME~~OPERATIONS

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


	Three Months Ended March 31,
	2021			2020
Revenues	$	652,670		$	583,907
Operating expenses:
Direct operating costs	434,516			359,456
Salaries and benefits	115,668			101,240
Selling, general and administrative	58,776			60,793
Depreciation and amortization	33,261			30,816
Total operating expenses	642,221			552,305
Operating income	10,449			31,602
Other income (expense):
Interest income	182			567
Interest expense	(9,189		)	(9,233		)
Foreign currency exchange loss, net	(4,032		)	(18,806		)
Other gains, net	31			31
Other expense, net	(13,008		)	(27,441		)
(Loss) income before income taxes	(2,559		)	4,161
Income tax expense	(6,062		)	(2,441		)
Net (loss) income	(8,621		)	1,720
Net (income) loss attributable to noncontrolling interests	(44		)	201
Net (loss) income attributable to Euronet Worldwide, Inc.	$	(8,665	)	$	1,921

(Loss) earnings per share attributable to Euronet Worldwide, Inc. stockholders:
Basic	$	(0.16	)	$	0.04
Diluted	$	(0.16	)	$	0.04

Weighted average shares outstanding:
Basic	52,762,845			53,607,104
Diluted	52,762,845			54,779,321

Three Months Ended
March 31,
2020 2019
Revenues $ 583,907
$ 577,509
Operating expenses:
Direct operating costs 359,456
353,833
Salaries and benefits 101,240
92,795
Selling, general and administrative 60,793
48,147
Depreciation and amortization 30,816
26,640
Total operating expenses 552,305
521,415
Operating income 31,602
56,094
Other income (expense):
Interest income 567
343
Interest expense (9,233 ) (8,199 )
Loss on early retirement of debt —
(928 )
Foreign currency exchange (loss) gain, net (18,806 ) 3,208
Other gains 31
25
Other expense, net (27,441 ) (5,551 )
Income before income taxes 4,161
50,543
Income tax expense (2,441 ) (15,964 )
Net income 1,720
34,579
Net loss (income) attributable to noncontrolling interests 201
(36 )
Net income attributable to Euronet Worldwide, Inc. $ 1,921
$ 34,543

Earnings per share attributable to Euronet Worldwide, Inc. stockholders:
Basic $ 0.04
$ 0.67
Diluted $ 0.04
$ 0.62

Weighted average shares outstanding:
Basic 53,607,104
51,880,534
Diluted 54,779,321
55,576,867

~~See accompanying notes to the unaudited consolidated financial statements.~~

~~EURONET WORLDWIDE, INC. AND SUBSIDIARIES~~

~~CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME~~

~~(Unaudited, in thousands)~~

Three Months Ended
March 31,
2020 2019
Net income $ 1,720
$ 34,579
Translation adjustment (59,818 ) (16,156 )
Comprehensive (loss) income (58,098 ) 18,423
Comprehensive loss (income) attributable to noncontrolling interests 242
(7 )
Comprehensive (loss) income attributable to Euronet Worldwide, Inc. $ (57,856 ) $ 18,416

~~See accompanying notes to the unaudited consolidated financial statements.~~

~~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, 2018 51,819,998
$ 1,198
$ 1,104,264
$ (391,551 )
Net income
Other comprehensive loss
Stock issued under employee stock plans 130,136
3
5,194
(1,756 )
Share-based compensation 4,490

Issuance of convertible notes, net of tax 71,660

Repurchase and conversions of convertible notes, net of tax 6
(42,917 )
Balance as of March 31, 2019 51,950,140
$ 1,201
$ 1,142,691
$ (393,307 )

Number of
Shares
Outstanding

Common
Stock

Additional
Paid-in
Capital

Treasury
Stock
Balance as of December 31, 2019 54,220,854
$ 1,256
$ 1,190,058
$ (463,704 )
Net income (loss)
Other comprehensive loss
Stock issued under employee stock plans 80,519
1
1,701
(249 )
Share-based compensation 6,338

Repurchase of shares (2,095,683 ) (239,763 )
Balance as of March 31, 2020 52,205,690
$ 1,257
$ 1,198,097
$ (703,716 )

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 March 31,
	2021			2020
Net (loss) income	$	(8,621	)	$	1,720
Translation adjustment	(42,901		)	(59,818		)
Comprehensive loss	(51,522		)	(58,098		)
Comprehensive loss attributable to noncontrolling interests	12			242
Comprehensive loss attributable to Euronet Worldwide, Inc.	$	(51,510	)	$	(57,856	)

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, 2019	54,220,854		$	1,256	$	1,190,058	$	(463,704	)
Net income (loss)
Other comprehensive loss
Stock issued under employee stock plans	80,519			1		1,701		(249	)
Share-based compensation						6,338
Repurchase of shares	(2,095,683	)						(239,763	)
Balance as of March 31, 2020	52,205,690			1,257		1,198,097		(703,716	)

	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	)

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, 2019	$	1,016,554	$	(164,890	)	$	68		$	1,579,342
Net income (loss)		1,921					(201	)		1,720
Other comprehensive loss				(59,777	)		(41	)		(59,818	)
Stock issued under employee stock plans										1,453
Share-based compensation										6,338
Repurchase of shares										(239,763	)
Balance as of March 31, 2020		1,018,475		(224,667	)		(174	)		1,289,272

Retained Earnings
Accumulated Other
Comprehensive Loss

Noncontrolling
Interests
Total
Balance as of December 31, 2018 $ 669,805
$ (151,043 ) $ 169
$ 1,232,842
Net income 34,543
36
34,579
Other comprehensive loss (16,156 ) (29 ) (16,185 )
Stock issued under employee stock plans 3,441
Share-based compensation 4,490
Issuance of convertible notes, net of tax 71,660
Repurchases and conversions of convertible notes (42,917 )
Balance as of March 31, 2019 $ 704,348
$ (167,199 ) $ 176
$ 1,287,910

	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

Retained Earnings
Accumulated Other
Comprehensive Loss

Noncontrolling
Interests
Total
Balance as of December 31, 2019 $ 1,016,554
$ (164,890 ) $ 68
$ 1,579,342
Net income (loss) 1,921
(201 ) 1,720
Other comprehensive loss (59,777 ) (41 ) (59,818 )
Stock issued under employee stock plans 1,453
Share-based compensation 6,338
Repurchase of shares (239,763 )
Balance as of March 31, 2020 $ 1,018,475
$ (224,667 ) $ (174 ) $ 1,289,272

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)


							Three Months Ended March 31,
	Three Months Ended March 31,						2021			2020
	2020			2019
Net income	$	1,720		$	34,579
Adjustments to reconcile net income to net cash provided by operating activities:
Net (loss) income							$	(8,621	)	$	1,720
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization	30,816			26,640			33,261			30,816
Share-based compensation	6,338			4,490			8,492			6,338
Unrealized foreign exchange loss (gain), net	18,806			(3,208		)
Unrealized foreign exchange loss, net							4,032			18,806
Deferred income taxes	(2,043		)	3,468			2,374			(2,043		)
Accretion of convertible debt discount and amortization of debt issuance costs	4,616			4,071			4,979			4,616
Changes in working capital, net of amounts acquired:
Income taxes payable, net	(10,454		)	635			(5,534		)	(10,454		)
Trade accounts receivable	300,063			(31,456		)	148,697			300,063
Prepaid expenses and other current assets	(119,648		)	33,787			29,551			(119,648		)
Trade accounts payable	(126,242		)	(115,380		)	(220,439		)	(126,242		)
Deferred revenue	4,119			3,005			3,738			4,119
Accrued expenses and other current liabilities	14,811			51,377			11,234			14,811
Changes in noncurrent assets and liabilities	(17,018		)	953			(14,409)			(17,018		)
Net cash provided by operating activities	105,884			12,961
Net cash (used in) provided by operating activities							(2,645		)	105,884
Cash flows from investing activities:
Acquisitions, net of cash acquired	475			—			0—			475
Purchases of property and equipment	(30,392		)	(31,390		)	(16,393		)	(30,392		)
Purchases of other long-term assets	(2,046		)	(1,783		)	(2,212		)	(2,046		)
Other, net	357			187			380			357
Net cash used in investing activities	(31,606		)	(32,986		)	(18,225		)	(31,606		)
Cash flows from financing activities:
Proceeds from issuance of shares	1,700			5,171			3,670			1,700
Repurchase of shares	(240,530		)	(2,275		)	(808		)	(240,530		)
Borrowings from revolving credit agreements	805,500			1,209,446			707,100			805,500
Repayments of revolving credit agreements	(805,500		)	(1,425,398		)	(977,500		)	(805,500		)
Proceeds from long-term debt obligations	—			525,000
Repayments of long-term debt obligations	—			(94,199		)
Net borrowing from short-term debt obligations	(2,163		)	(11,779		)
Debt issuance costs	—			(11,812		)
Net repayments from short-term debt obligations							(32		)	(2,163		)
Other, net	(1,651		)	(1,452		)	(1,641		)	(1,651		)
Net cash (used in) provided by financing activities	(242,644		)	192,702
Net cash used in financing activities							(269,211		)	(242,644		)
Effect of exchange rate changes on cash and cash equivalents and restricted cash	(59,260		)	(12,387		)	(53,188		)	(59,260		)
(Decrease) increase in cash and cash equivalents and restricted cash	(227,626		)	160,290
Decrease in cash and cash equivalents and restricted cash							(343,269		)	(227,626		)
Cash and cash equivalents and restricted cash at beginning of period	1,817,379			1,130,952			2,099,508			1,817,379

Cash and cash equivalents and restricted cash at end of period	$	1,589,753		$	1,291,242		$	1,756,239		$	1,589,753

Supplemental disclosure of cash flow information:
Interest paid during the period	$	3,678		$	5,491		$	2,703		$	3,678
Income taxes paid during the period	$	16,064		$	12,074		$	11,160		$	16,064

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

~~(1) GENERAL~~

Organization

Euronet Worldwide, Inc. (the “Company” or “Euronet”) was established as a Delaware corporation on December 13, 1997 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 automated teller machine (“ATM”), point-of-sale (“POS”), card outsourcing, card issuing and merchant acquiring services, electronic distribution of prepaid mobile airtime and other electronic payment products, and global money transfer 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 the audited consolidated financial statements of the Company for the year ended December 31, ~~2019~~2020, including the notes thereto, set forth in the Company’s ~~2019~~2020 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, ~~2020.~~

2021.

Seasonality

Euronet’s Electronic Funds Transfer ("EFT") Processing Segment normally experiences its heaviest demand for dynamic currency conversion ("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~~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.

~~COVID-19 (coronavirus)~~

The outbreak of the COVID-19 (coronavirus) pandemic has resulted in travel restrictions across borders, and shelter-in-place orders in most of the countries where the Company operates. The majority of these orders went into effect in late February 2020 or early March 2020. These orders have negatively impacted all of our three operating segments. The EFT Segment has experienced declines in transaction volumes due to these restrictions, especially high-margin cross-border transactions. Although the epay Segment has experienced revenue growth from increased digital content purchases which can be completed remotely, many of its POS retail locations have been closed, reducing in person transactions. Our Money Transfer Segment has experienced declines in transaction volumes due to the restrictions noted above, which have also led to the temporary closure of many of our company owned stores and agents. The Money Transfer Segment has experienced an increase in receivable delinquencies as our agents have been temporarily closed as nonessential services.

In response to the COVID-19 driven impacts, the Company has implemented several key measures to offset the impact across the business, including negotiating certain third party contracts, reducing travel, decreasing planned 2020 capital expenditures, and expanding ATM winterizations (placing them in dormancy status) in more sites and more markets.

(2) RECENTLY ISSUED AND ADOPTED ACCOUNTING PRONOUNCEMENTS

In ~~March~~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. The new guidance is effective for annual periods beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact the adoption of ASU 2020-06 will have on the consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848), which provides optional expedients and exceptions for contracts, hedging relationships, and other transactions affected by reference rate reform due to the anticipated cessation of LIBOR on or before December 31, 2021. This guidance is effective from March 12, 2020 through December 31, 2022 and could impact the accounting for LIBOR provisions in the Company’s unsecured credit agreement. The Company does not expect that the adoption of this guidance will have a significant impact on its consolidated financial statements.

(3) PENDING ACQUISITION

In March 2021, the Company entered into an agreement to purchase the Piraeus Bank Merchant Acquiring business of Piraeus Bank for €300 million, or approximately $360 million. The proposed arrangement will include separate commercial agreements for a long-term strategic partnership with Piraeus Bank for collaborative product distribution, processing and customer referrals. The acquisition will expand the Company’s omnichannel payments strategy and position the Company in Greece’s growing market for merchant acquiring services. The closing is targeted for late 2021 and is subject to regulatory approvals, finalization of the commercial agreements, and customary closing conditions. The Company ~~adopted ASU 2016-13,~~ ~~Financial Instruments - Credit Losses~~ ~~(Topic 326), as of January 1, 2020, which requires entities~~expects to ~~measure all expected credit losses for financial assets held at~~finance the ~~reporting date based~~purchase price using cash on historical experience, current conditions, and reasonable and supportable forecasts. This replaced the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. The adoption of this standard did not have a significant impact on the Company's consolidated financial statements and related disclosures.hand.

~~(3)~~

(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. The Company records corresponding settlement obligations relating to amounts payable. Settlement assets consist of cash and cash equivalents, restricted cash, accounts receivable and prepaid expenses and other current assets. Cash received by Euronet agents and merchants generally ~~become~~becomes available to the Company 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 the Company.

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

As of
(in thousands)
March 31,
2020

December 31,
2019
Settlement assets:
Settlement cash and cash equivalents $ 256,456
$ 282,188
Settlement restricted cash 36,243
49,168
Accounts receivable 364,148
574,410
Prepaid expenses and other current assets 116,489
107,301
Total settlement assets $ 773,336
$ 1,013,067
Settlement obligations:
Trade account payables $ 353,498
$ 504,667
Accrued expenses and other current liabilities 419,838
508,400
Total settlement obligations $ 773,336
$ 1,013,067

	As of
(in thousands)	March 31, 2021		December 31, 2020
Settlement assets:
Settlement cash and cash equivalents	$	209,853	$	188,191
Settlement restricted cash	58,200		76,674
Accounts receivable, net of credit allowance of $33,980 and $35,800	478,209		641,955
Prepaid expenses and other current assets	214,051		234,055
Total settlement assets	$	960,313	$	1,140,875
Settlement obligations:
Trade account payables	$	356,612	$	571,175
Accrued expenses and other current liabilities	603,701		569,700
Total settlement obligations	$	960,313	$	1,140,875

~~A portion~~

Table of the Company's credit losses are recorded in the accounts receivable within settlement assets. The balance of credit losses related to accounts receivable within settlement assets was $28.3 million and $24.0 million as of March 31, 2020 and December 31, 2019, respectively.Contents

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)
March 31,
2020

December 31,
2019

March 31,
2019

December 31,
2018
Cash and cash equivalents $ 709,521
$ 786,081
$ 558,454
$ 385,031
Restricted cash 28,953
34,301
34,398
31,237
ATM cash 558,580
665,641
421,897
395,378
Settlement cash and cash equivalents 256,456
282,188
235,946
273,948
Settlement restricted cash 36,243
49,168
40,547
45,358
Cash and cash equivalents and restricted cash at end of period $ 1,589,753
$ 1,817,379
$ 1,291,242
$ 1,130,952

	As of
(in thousands)	March 31, 2021		December 31, 2020		March 31, 2020		December 31, 2019
Cash and cash equivalents	$	1,145,406	$	1,420,255	$	709,521	$	786,081
Restricted cash	2,897		3,334		28,953		34,301
ATM cash	339,883		411,054		558,580		665,641
Settlement cash and cash equivalents	209,853		188,191		256,456		282,188
Settlement restricted cash	58,200		76,674		36,243		49,168
Cash and cash equivalents and restricted cash at end of period	$	1,756,239	$	2,099,508	$	1,589,753	$	1,817,379

~~(4)~~

(5) STOCKHOLDERS' EQUITY

(Loss) Earnings Per Share

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

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

Three Months Ended
March 31,
2020 2019
Computation of diluted weighted average shares outstanding:
Basic weighted average shares outstanding 53,607,104
51,880,534
Incremental shares from assumed exercise of stock options and vesting of restricted stock 1,172,217
1,285,139
Incremental shares from assumed conversion of convertible debentures —
2,411,194
Diluted weighted average shares outstanding 54,779,321
55,576,867

	Three Months Ended March 31,
	2021	2020
Computation of diluted weighted average shares outstanding:
Basic weighted average shares outstanding	52,762,845	53,607,104
Incremental shares from assumed exercise of stock options and vesting of restricted stock	0—	1,172,217
Diluted weighted average shares outstanding	52,762,845	54,779,321

The table includes all stock options and restricted stock that are dilutive to the Company's weighted average common shares outstanding during the period. The calculation of diluted (loss) earnings per share excludes stock options or shares of restricted stock that are anti-dilutive to the Company’s weighted average common shares outstanding of approximately 2,437,000 and 886,000 for the three months ended March 31, ~~2020~~2021 and ~~2019 of approximately 886,000 and 402,000,~~2020, respectively.

The Company issued ~~new~~ Convertible Senior Notes ("Convertible Notes") due March 2049 on March 18, ~~2019 and retired the existing convertible notes ("Retired Convertible Notes") that would have matured in 2044 on May 28,~~ 2019. The Company's Convertible Notes currently have ~~and the Retired Convertible Notes had,~~ a settlement feature requiring the Company 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 the Company's common stock or a combination thereof, at the Company's option. The Company has stated its intent to settle any conversion of these notes by paying cash for the principal value and issuing common stock for any conversion premium. Accordingly, the Convertible Notes ~~and the Retired Convertible Notes~~ were included in the calculation of diluted (loss) earnings per share if their inclusion was dilutive. The dilutive effect increases the more the market price exceeds the conversion price. ~~The Retired Convertible Notes had a dilutive effect for thethree months ended March 31, 2019 as the $142.59 market price per share of common stock as of March 31, 2019 exceeded the $72.18 conversion price per share.~~ The Convertible Notes would only have a dilutive effect if the market price per share of common stock exceeds the conversion price of $188.73 per share. The market price per share ~~per share~~ of common stock was $138.30 on March 31, 2021 and $85.72 on March 31, 2020, therefore, according to ASC Topic 260, Earnings per Share (“ASC 260”), there was 0no dilutive effect of the assumed conversion of the debentures ~~as of March 31, 2020, whereas the dilutive effect was 2,411,194shares~~ for the three months ended March 31, ~~2019.~~2021 and 2020. See Note 8,9, Debt Obligations, to the ~~Consolidated Financial Statements~~consolidated financial statements for more information about the ~~convertible notes.~~Convertible Notes.

Share repurchases

~~The Company's Board of Directors had authorized a stock repurchase program allowing Euronet to repurchase up to $375 million in value or 10.0 million shares of stock through March 31, 2020.~~

On March 11, 2019, in connection with the issuance of the Convertible Notes, the Board of Directors authorized ~~an additional~~a repurchase program of $120 million in value of the Company's common stock through March 11, 2021. 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. For the ~~first quarter~~three months ended March 31, 2021, there were 0 repurchases of ~~2020, the Company repurchased $239.8 million in value of Euronet common~~ stock under the repurchase ~~programs.~~programs. Repurchases under ~~either~~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. The Company recorded foreign currency translation losses of $42.9 million and $59.8 million for the three months ended March 31, 2021 and 2020, ~~and $16.2 million for the three months ended March 31, 2019.~~respectively. There were no reclassifications of foreign currency translation into the consolidated statements of income for the three months ended March 31, ~~2020~~2021 and ~~2019.~~2020.

~~(5)~~

(6) GOODWILL AND ACQUIRED INTANGIBLE ASSETS, NET

A summary of acquired intangible assets and goodwill activity for the three months ended March 31, ~~2020~~2021 is presented below:

(in thousands)
Acquired
Intangible
Assets
Goodwill
Total
Intangible
Assets
Balance as of December 31, 2019 $ 141,847
$ 743,823
$ 885,670
Decreases:
Acquisition —
(474 ) (474 )
Amortization (5,726 ) —
(5,726 )
Other (primarily changes in foreign currency exchange rates) (5,944 ) (28,850 ) (34,794 )
Balance as of March 31, 2020 $ 130,177
$ 714,499
$ 844,676


(in thousands)	Acquired Intangible Assets			Goodwill			Total Intangible Assets
Balance as of December 31, 2020	$	121,883		$	665,821		$	787,704
Decreases:
Acquisition	0—			0—			0—
Amortization	(5,789		)	0—			(5,789		)
Foreign currency exchange rate changes	(1,326		)	(12,693		)	(14,019		)
Balance as of March 31, 2021	$	114,768		$	653,128		$	767,896

Of the total goodwill balance of $653.1

million as of March 31, 2021, $398.0 million relates to the Money Transfer Segment, $132.3 million relates to the epay Segment and the remaining $122.8 million relates to the EFT Processing Segment. Estimated amortization expense on acquired intangible assets with finite lives as of March 31, ~~2020,~~2021, is expected to total ~~$16.1~~$17.0 million for the remainder of ~~2020, $20.8 million for~~ 2021, ~~$19.8~~$21.5 million for 2022, ~~$15.3~~$16.6 million for 2023, ~~$9.3~~$9.8 million for 2024, ~~and $6.3~~$6.4 million for ~~2025.~~

~~The Company’s annual goodwill impairment test is performed during the fourth quarter of its fiscal year. The annual impairment test~~2025 and $6.2 million for the year ended December 31, 2019 resulted in no impairment charge. The Company considered the impact of COVID-19 on its operations at the reporting unit level and determined that there was no impairment as of March 31, 2020. 2026.

Determining the fair value of reporting units requires significant management judgment in estimating future cash flows and assessing potential market and economic conditions. It is reasonably possible that the Company’s operations will not perform as expected, or that the estimates or assumptions included in the 2019 annual impairment test could change, which may result in the Company recording material non-cash impairment charges during the year in which these changes take place. In response to the COVID-19 pandemic, we will continue to monitor the evaluation of global medical experts and scientists. As information regarding the impact of the COVID-19 pandemic on the Company's business, including intangible assets, becomes available, the impacts to cash flows and the related impact on recovery of intangible assets will be evaluated.

~~(6)~~

(7) ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of the following:


	As of				As of
(in thousands)	March 31, 2020		December 31, 2019		March 31, 2021		December 31, 2020
Accrued expenses	$	228,724	$	246,699	$	314,103	$	331,713
Derivative liabilities	130,555		41,935		41,219		65,905
Current portion of capital lease obligations	6,047		5,919
Deferred income taxes	—		4
Current portion of finance lease obligations					5,817		6,403
Total	$	365,326	$	294,557	$	361,139	$	404,021

(8) UNEARNED REVENUES

~~(7) UNEARNED REVENUES~~

~~Accounting Standards Codification ("ASC") Topic 606,~~ ~~“Revenue from Contracts with Customers”~~ (“Topic 606”) requires the deferral of incremental costs to obtain customer contracts, known as contract assets, which are then amortized to expense as part of selling, general and administrative expense over the respective periods of expected benefit. Such costs are not material; however, the Company has implemented processes and controls to record such costs on an ongoing basis and will disclose them if they become material.

The Company records deferred revenues when cash payments are received or due in advance of its performance. The increase in the deferred revenue balance for the ~~first quarter of 2020~~three months ended March 31, 2021 is primarily driven by ~~$19.0~~$22.9 million of cash payments received in the current year for which the Company has not yet satisfied the performance obligations, ~~largely~~ offset by ~~$15.7~~$21.6 million of revenues recognized that were included in the deferred revenue balance as of December 31, ~~2019.~~2020.

~~(8)~~

(9) DEBT OBLIGATIONS

Debt obligations consist of the following:

As of
(in thousands) March 31, 2020 December 31, 2019
Credit Facility:
Revolving credit agreement $ —
$ —
Convertible Debt:
0.75% convertible notes, unsecured, due 2049 440,713
436,965

1.375% Senior Notes, due 2026 661,560
673,440

Other obligations 3,598
6,215

Total debt obligations 1,105,871
1,116,620
Unamortized debt issuance costs (18,725 ) (19,592 )
Carrying value of debt 1,087,146
1,097,028
Short-term debt obligations and current maturities of long-term debt obligations (3,528 ) (6,089 )
Long-term debt obligations $ 1,083,618
$ 1,090,939

	As of
(in thousands)	March 31, 2021			December 31, 2020
Credit Facility:
Revolving credit agreement	$	0—		$	270,400
Convertible Debt:
0.75% convertible notes, unsecured, due 2049	456,159			452,228

1.375% Senior Notes, due 2026	703,680			732,840

Other obligations	813			850

Total debt obligations	1,160,652			1,456,318
Unamortized debt issuance costs	(16,883		)	(17,932		)
Carrying value of debt	1,143,769			1,438,386
Short-term debt obligations and current maturities of long-term debt obligations	(743		)	(797		)
Long-term debt obligations	$	1,143,026		$	1,437,589

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 ~~unsecured revolving credit agreement~~Credit Facility allows for borrowings in Australian ~~Dollars,~~dollars, British ~~Pounds Sterling,~~pounds sterling, Canadian ~~Dollars,~~dollars, Czech ~~Koruna,~~koruna, Danish ~~Krone, euros,~~krone, euro, Hungarian ~~Forints,~~forints, Japanese ~~Yen,~~yen, New Zealand ~~Dollars,~~dollars, Norwegian ~~Krone,~~krone, Polish ~~Zlotys,~~zlotys, Swedish ~~Krona,~~krona, Swiss ~~Francs,~~francs and U.S. ~~Dollars.~~dollars. The ~~revolving credit facility~~Credit Facility contains a $200 million sublimit for the issuance of letters of credit, a $50 million sublimit for U.S. ~~Dollar~~dollar swingline loans, and a $90 million sublimit for certain foreign currencies swingline loans.

The ~~unsecured revolving credit agreement~~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 March 31, ~~2020.~~

2021.

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~~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~~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%~~100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the relevant repurchase date.

Table of Contents

On March 18, 2019, the Company provided a notice of redemption to the trustee of the indenture governing the Company's 1.5% Convertible Senior Notes due 2044 (the "Retired Convertible Notes"), pursuant to which the Company would redeem all of the remaining principal amount outstanding of the Retired Convertible Notes on May 28, 2019 (the "Redemption Date") for cash at a redemption price equal to 100% of the principal amount of the Retired Convertible Notes redeemed plus accrued and unpaid interest, if any, to, but excluding, the Redemption Date.

In accordance with ASC 470-20-30-27, proceeds from the issuance of convertible debt is allocated between debt and equity components so that debt is discounted to reflect the Company's nonconvertible debt borrowing rate. ASC 470-20-35-13 requires the debt discount to be amortized over the period the convertible debt is 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~~$1.0 million for the three months ended March 31, ~~2020.~~2021 and 2020. Accretion expense for the Convertible Notes was ~~$3.7~~$3.9 million and $3.7 million for the three months ended March 31, ~~2020. Contractual interest expense for the Convertible Notes~~2021 and ~~Retired Convertible Notes was $0.2 million and $1.5 million,~~2020, respectively for the three months ended March 31, 2019. Accretion expense for the Convertible Notes and Retired Convertible Notes was $0.6 million and $2.9 million, respectively for the three months ended March 31, 2019.. The effective interest rate was 4.4% for the three months ended March 31, ~~2020.~~2021. As of March 31, ~~2020,~~2021, the unamortized discount was ~~$84.3~~$68.8 million and will be amortized through March 2025.

1.375% Senior Notes due 2026

On May 22, 2019, the Company completed the sale of €600 million ($669.9 million) aggregate principal amount of Senior Notes that expire onin May 2026 (the “Senior Notes”). The Senior Notes accrue interest at a rate of 1.375% per year, payable annually in arrears commencing May 22, 2020, until maturity or earlier redemption. As of March 31, ~~2020,~~2021, the Company has outstanding €600 million ($~~661.6 million)~~703.7 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 March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, borrowings under these arrangements were ~~$3.6~~$0.8 million and ~~$6.2~~$0.9 million, respectively.

~~Uncommitted Line of Credit~~

On September 4, 2019, the Company entered into an Uncommitted Loan Agreement with Bank of America which may provide Euronet up to $100.0 million under an uncommitted line of credit. Interest on borrowings is equal to LIBOR plus 0.65% and the agreement expires September 4, 2020. As of March 31, 2020, 0 amounts were outstanding under the line of credit.

~~(9)~~

(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,~~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. ~~As of March 31, 2020, the~~The Company had

foreign currency forward contracts outstanding in the U.S. with a notional value of ~~$213 million.~~$120 million and $246 million as of March 31, 2021 and December 31, 2020, respectively. The foreign currency forward contracts consist primarily in Australian dollars, Canadian dollars, British pounds ~~euros~~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. ~~As of March 31, 2020, the~~The Company had foreign currency forward contracts outstanding with a notional value of ~~$193~~$593 million and $454 million as of March 31, 2021 and December 31, 2020, respectively, primarily in ~~euros.~~

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 ~~$18.1~~$18.5 million and ~~$18.6~~$18.1 million for the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, 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 ~~amounts~~amount of foreign currency derivative customer contracts held by the Company in its xe operations as of March 31, 2021 and December 31, 2020 was approximately ~~$1.5 billion.~~$1.4 billion and $1.3 billion, respectively. The significant majority of customer contracts are written in major currencies such as the euro, U.S. dollar, British ~~pound,~~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 March 31, 2020 December 31, 2019 Balance Sheet Location March 31, 2020 December 31, 2019
Derivatives not designated as hedging instruments
Foreign currency exchange contracts Prepaid expenses and other current assets $ 142,148
$ 54,765
Accrued expenses and other current liabilities $ (130,555 ) $ (41,935 )

	Asset Derivatives					Liability Derivatives
		Fair Value					Fair Value
(in thousands)	Balance Sheet Location	March 31, 2021		December 31, 2020		Balance Sheet Location	March 31, 2021			December 31, 2020
Derivatives not designated as hedging instruments
Foreign currency exchange contracts	Other current assets	$	49,390	$	80,879	Other current liabilities	$	(41,219	)	$	(65,905	)

The following tables summarize the gross and net fair value of derivative assets and liabilities as of March 31, ~~2020~~2021 and December 31, ~~2019~~2020 (in thousands):

Offsetting of Derivative Assets

							Gross Amounts Not Offset in the Consolidated Balance Sheet
As of March 31, 2021	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	$	49,390	$	0—	$	49,390	$	(26,069	)	$	(4,243	)	$	19,078

As of December 31, 2020
Derivatives subject to a master netting arrangement or similar agreement	$	80,879	$	0—	$	80,879	$	(44,893	)	$	(2,778	)	$	33,208

Gross Amounts Not Offset in the Consolidated Balance Sheet
As of March 31, 2020 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 $ 142,148
$ —
$ 142,148
$ (105,671 ) $ (14,633 ) $ 21,844

As of December 31, 2019
Derivatives subject to a master netting arrangement or similar agreement $ 54,765
$ —
$ 54,765
$ (34,935 ) $ (7,362 ) $ 12,468

Offsetting of Derivative Liabilities

Gross Amounts Not Offset in the Consolidated Balance Sheet
As of March 31, 2020 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 $ (130,555 ) $ —
$ (130,555 ) $ 105,671
$ 1,760
$ (23,124 )

As of December 31, 2019
Derivatives subject to a master netting arrangement or similar agreement $ (41,935 ) $ —
$ (41,935 ) $ 34,935
$ 827
$ (6,173 )

									Gross Amounts Not Offset in the Consolidated Balance Sheet
As of March 31, 2021	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	$	(41,219	)	$	0—	$	(41,219	)	$	26,069	$	2,307	$	(12,843	)

As of December 31, 2020
Derivatives subject to a master netting arrangement or similar agreement	$	(65,905	)	$	0—	$	(65,905	)	$	44,893	$	12,272	$	(8,740	)

See Note ~~10,~~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 gains and losses on derivatives in the Consolidated Statements of Income for the three months ended March 31, ~~2020~~2021 and ~~2019:~~2020:

Amount of Gain Recognized in Income on Derivative Contracts (a)
Location of Gain Recognized in Income on Derivative Contracts Three Months Ended
March 31,
(in thousands) 2020 2019
Foreign currency exchange contracts - Ria Operations Foreign currency exchange gain, net $ 1,019
$ 2,459

		Amount of (Loss) Gain Recognized in Income on Derivative Contracts (a)
	Location of (Loss) Gain Recognized in Income on Derivative Contracts	Three Months Ended March 31,
(in thousands)		2021			2020
Foreign currency exchange contracts - Ria Operations	Foreign currency exchange (loss) gain, net	$	(2,468	)	$	1,019

(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 ~~10,~~11, Fair Value Measurements, for the determination of the fair values of derivatives.

~~(10)~~

(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 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 March 31, 2020											As of March 31, 2021
(in thousands)	Balance Sheet Classification	Level 1		Level 2			Level 3		Total			Balance Sheet Classification	Level 1		Level 2			Level 3		Total
Assets
Foreign currency exchange contracts	Other current assets	$	—	$	142,148		$	—	$	142,148		Other current assets	$	0—	$	49,390		$	0—	$	49,390
Liabilities
Foreign currency exchange contracts	Other current liabilities	$	—	$	(130,555	)	$	—	$	(130,555	)	Other current liabilities	$	0—	$	(41,219	)	$	0—	$	(41,219	)

		As of December 31, 2020
(in thousands)	Balance Sheet Classification	Level 1		Level 2			Level 3		Total
Assets
Foreign currency exchange contracts	Other current assets	$	0—	$	80,879		$	0—	$	80,879
Liabilities
Foreign currency exchange contracts	Other current liabilities	$	0—	$	(65,905	)	$	0—	$	(65,905	)

As of December 31, 2019
(in thousands) Balance Sheet Classification Level 1 Level 2 Level 3 Total
Assets
Foreign currency exchange contracts Other current assets $ —
$ 54,765
$ —
$ 54,765
Liabilities
Foreign currency exchange contracts Other current liabilities $ —
$ (41,935 ) $ —
$ (41,935 )

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 is based on LIBOR that resets 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 March 31, ~~2020,~~2021, the fair values of the Convertible Notes and Senior Notes were ~~$597.0~~$631.4 million and ~~$615.7~~$712.0 million, respectively, with carrying values of ~~$440.7~~$456.2 million and ~~$661.6~~$703.7 million, respectively.

(12) SEGMENT INFORMATION

~~(11) SEGMENT INFORMATION~~

Euronet’s reportable operating segments have been determined in accordance with ASC Topic 280, Segment Reporting (“ASC 280”). The Company currently operates in the following 3 reportable operating segments:

Through the EFT Processing Segment, the Company processes transactions for a network of ATMs and POS terminals across Europe, the Middle East, Asia Pacific, the United States and Africa. The Company provides comprehensive electronic payment solutions consisting of ATM cash withdrawal services, ATM network participation, outsourced ATM and POS management solutions, credit and debit card outsourcing, dynamic currency conversion, domestic and international surcharges and other value added services. Through this segment, the Company also offers a suite of integrated electronic financial transaction software solutions for electronic payment and transaction delivery systems.
Through the epay Segment, the Company provides distribution, processing and collection services for prepaid mobile airtime and other electronic payment products in Europe, the Middle East, Asia Pacific, the U.S. and South America.
Through the Money Transfer Segment, the Company provides 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. The Company also offers 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.

Through the EFT Processing Segment, the Company processes transactions for a network of ATMs and POS terminals across Europe, the Middle East and Asia Pacific. The Company provides comprehensive electronic payment solutions consisting of ATM cash withdrawal services, ATM network participation, outsourced ATM and POS management solutions, credit and debit card outsourcing, dynamic currency conversion, domestic and international surcharge and other value added services. Through this segment, the Company also offers a suite of integrated electronic financial transaction software solutions for electronic payment and transaction delivery systems.


2)	Through the epay Segment, the Company provides distribution, processing and collection services for prepaid mobile airtime and other electronic payment products in Europe, the Middle East, Asia Pacific, the U.S. and South America.

Through the Money Transfer Segment, the Company provides global money transfer services under the brand names, Ria, AFEX Money Express, IME, and xe. Ria, AFEX Money Express 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. The Company also offers 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, the Company accounts for non-operating activity, share-based compensation expense, certain intersegment eliminations and the costs of providing corporate and other administrative services in its administrative division, “Corporate Services, Eliminations and Other.” These services are not directly identifiable with the Company’s reportable operating segments.

The following tables present the Company’s reportable segment results for the three months ended March 31, ~~2020~~2021 and ~~2019:~~2020:

	For the Three Months Ended March 31, 2021
(in thousands)	EFT Processing			epay		Money Transfer		Corporate Services, Eliminations and Other			Consolidated
Total revenues	$	87,076		$	242,303	$	324,900	$	(1,609	)	$	652,670
Operating expenses:
Direct operating costs	69,612			182,633		183,878		(1,607		)	434,516
Salaries and benefits	23,571			19,369		60,540		12,188			115,668
Selling, general and administrative	11,962			9,020		36,116		1,678			58,776
Depreciation and amortization	22,027			2,124		8,963		147			33,261
Total operating expenses	127,172			213,146		289,497		12,406			642,221
Operating (loss) income	$	(40,096	)	$	29,157	$	35,403	$	(14,015	)	$	10,449

For the Three Months Ended March 31, 2020
(in thousands)
EFT
Processing
epay
Money
Transfer

Corporate
Services,
Eliminations
and Other
Consolidated
Total revenues $ 145,825
$ 172,911
$ 266,234
$ (1,063 ) $ 583,907
Operating expenses:
Direct operating costs 87,536
130,074
142,909
(1,063 ) 359,456
Salaries and benefits 22,091
15,697
53,864
9,588
101,240
Selling, general and administrative 10,941
8,838
38,582
2,432
60,793
Depreciation and amortization 20,322
1,844
8,571
79
30,816
Total operating expenses 140,890
156,453
243,926
11,036
552,305
Operating income (expense) $ 4,935
$ 16,458
$ 22,308
$ (12,099 ) $ 31,602


	For the Three Months Ended March 31, 2019											For the Three Months Ended March 31, 2020
(in thousands)	EFT Processing		epay		Money Transfer		Corporate Services, Eliminations and Other			Consolidated		EFT Processing		epay		Money Transfer		Corporate Services, Eliminations and Other			Consolidated
Total revenues	$	145,703	$	176,114	$	256,581	$	(889	)	$	577,509	$	145,825	$	172,911	$	266,234	$	(1,063	)	$	583,907
Operating expenses:
Direct operating costs	83,776		133,525		137,404		(872		)	353,833		87,536		130,074		142,909		(1,063		)	359,456
Salaries and benefits	19,431		14,753		51,156		7,455			92,795		22,091		15,697		53,864		9,588			101,240
Selling, general and administrative	9,086		8,052		29,109		1,900			48,147		10,941		8,838		38,582		2,432			60,793
Depreciation and amortization	16,642		1,785		8,138		75			26,640		20,322		1,844		8,571		79			30,816
Total operating expenses	128,935		158,115		225,807		8,558			521,415		140,890		156,453		243,926		11,036			552,305
Operating income (expense)	$	16,768	$	17,999	$	30,774	$	(9,447	)	$	56,094	$	4,935	$	16,458	$	22,308	$	(12,099	)	$	31,602

The following table presents the Company’s total assets by reportable segment:


	Total Assets as of				Total Assets as of
(in thousands)	March 31, 2020		December 31, 2019		March 31, 2021		December 31, 2020
EFT Processing	$	1,755,395	$	1,914,144	$	1,400,396	$	1,541,610
epay	763,636		962,671		915,875		1,135,204
Money Transfer	1,406,116		1,560,136		1,764,127		1,755,651
Corporate Services, Eliminations and Other	259,238		220,715		270,436		494,246
Total	$	4,184,385	$	4,657,666	$	4,350,834	$	4,926,711

The following table presents the Company's revenues disaggregated by segment and region. Sales and usage-based taxes are excluded from revenues. The Company believes 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 March 31, 2021									For the Three Months Ended March 31, 2020
(in thousands)	EFT Processing		epay		Money Transfer		Total				EFT Processing		epay		Money Transfer		Total
Europe	$	46,862	$	164,908	$	132,839	$	344,609		$	99,474	$	115,277	$	91,058	$	305,809
North America	14,466		33,841		152,302		200,609				15,019		33,852		137,895		186,766
Asia Pacific	25,694		34,318		28,469		88,481				31,328		19,274		30,848		81,450
Other	54		9,236		11,290		20,580				4		4,508		6,433		10,945
Eliminations	0—		0—		0—		(1,609		)		0—		0—		0—		(1,063)
Total	$	87,076	$	242,303	$	324,900	$	652,670		$	145,825	$	172,911	$	266,234	$	583,907

For the Three Months Ended March 31, 2020
(in thousands)
EFT
Processing
epay
Money
Transfer
Total
Europe $ 99,474
$ 115,277
$ 91,058
$ 305,809
North America 15,019
33,852
137,895
186,766
Asia Pacific 31,328
19,274
30,848
81,450
Other 4
4,508
6,433
10,945
Eliminations —
—
—
(1,063 )
Total $ 145,825
$ 172,911
$ 266,234
$ 583,907

For the Three Months Ended March 31, 2019
(in thousands)
EFT
Processing
epay
Money
Transfer
Total
Europe $ 107,611
$ 114,906
$ 85,559
$ 308,076
North America 8,205
39,664
134,832
182,701
Asia Pacific 29,877
17,374
30,713
77,964
Other 10
4,170
5,477
9,657
Eliminations —
—
—
(889 )
Total $ 145,703
$ 176,114
$ 256,581
$ 577,509

(13

~~(12)~~) INCOME TAXES

The Company's effective income tax rate was ~~58.7%~~(236.9%) and ~~31.6%~~58.7% for the three months ended March 31, ~~2020~~2021 and ~~2019, respectively.~~2020, respectively. The Company's effective income tax rate for the three months ended March 31, ~~2020~~2021 was lower than the applicable statutory income tax rate of 21%as a result of the non-recognition of tax benefits from losses in certain foreign countries where we have a limited history of profitable earnings, certain foreign earnings of the Company being subject to higher local 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 months ended March 31, 2020 was higher than the applicable statutory income tax rate of 21% primarily as a result of certain foreign earnings of the Company being subject to higher local statutory income tax rates. The Company's effective income tax rate for the three months ended March 31, 2019 was higher than the applicable statutory income tax rate of 21% largely because of the application to the Company of the global intangible low-taxed income ("GILTI") tax provision and certain foreign earnings of the Company being subject to higher local statutory income tax rates.

~~(13)~~

(14) COMMITMENTS

As of March 31, ~~2020,~~2021, the Company had ~~$73.0~~$87.4 million of stand-by letters of credit/bank guarantees issued on its behalf, of which ~~$49.7~~$58.9 million are outstanding under the Credit Facility. The remaining stand-by letters of credit/bank guarantees are collateralized by ~~$3.9~~$3.8 million byof cash deposits held by the respective issuing banks.

Under certain circumstances, Euronet grants guarantees in support of obligations of subsidiaries. As of March 31, ~~2020,~~2021, the Company had granted off balance sheet guarantees for cash in various ATM networks amounting to ~~$11.4~~$11.2 million over the terms of the cash supply agreements and performance guarantees amounting to approximately ~~$37.5~~$45.4 million over the terms of agreements with the customers.

Table of Contents

In connection with contracts with financial institutions in the EFT Processing Segment, the Company is responsible for damage to ATMs and theft of ATM network cash. As of March 31, 2020, the balance of such cash used in the Company's ATM networks for which the Company was responsible was approximately $509 million.

In connection with contracts with financial institutions in the EFT Processing Segment, the Company is responsible for damage to ATMs and theft of ATM network cash. As of March 31, 2021, the balance of such cash used in the Company's ATM networks for which the Company was responsible was approximately $486 million. The Company maintains insurance policies to mitigate this exposure;
In connection with contracts with financial institutions in the EFT Processing Segment, the Company is responsible for losses suffered by its customers and other parties as a result of the breach of its computer systems, including in particular, losses arising from fraudulent transactions made using information stolen through its processing systems. The Company maintains insurance policies to mitigate this exposure;
In connection with the license of proprietary systems to customers, the Company provides 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;
Euronet has entered into purchase and service agreements with vendors and consulting agreements with providers of consulting services, pursuant to which the Company has agreed to indemnify certain of such vendors and consultants, respectively, against third-party claims arising from the Company’s 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, the Company has 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 Euronet, the Company has 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 Euronet, Euronet has 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
Euronet has entered into agreements with certain third parties, including banks that provide fiduciary and other services to Euronet or to the Company’s benefit plans. Under such agreements, the Company has agreed to indemnify such service providers for third-party claims relating to carrying out their respective duties under such agreements.

In connection with contracts with financial institutions in the EFT Processing Segment, the Company is responsible for losses suffered by its customers and other parties as a result of the breach of its computer systems, including in particular, losses arising from fraudulent transactions made using information stolen through its processing systems. The Company maintains insurance policies to mitigate this exposure;

The Company is also required to meet minimum capitalization and cash requirements of various regulatory authorities in the jurisdictions in which the Company has money transfer operations. The Company has obtained surety bonds in compliance with money transfer licensing requirements of the applicable governmental authorities.

~~(14)~~

(15) LITIGATION AND CONTINGENCIES

From time to time, the Company is a party to legal or regulatory proceedings arising in the ordinary course of its 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 the Company's consolidated financial condition or results of operations. In accordance with U.S. GAAP, the Company records 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.

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~~(15)~~(16) LEASES

The Company enters into operating leases for ATM sites, office spaces, retail stores and equipment. The Company's 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. ~~All leases with fixed payments, including leases with an initial term of 12 months or less, are recorded on the balance sheet.~~ The Company recognizes 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 the Company’s sole discretion. The depreciable life of assets and leasehold improvements are limited by the expected lease terms. The Company also has a unilateral termination right for most of the ATM site leases. Since the Company is not reasonably certain not to exercise ~~the renewal or~~ termination options, payments for ATM site leases with termination options subject to the ~~options~~short-term lease exemption are ~~not considered~~expensed in ~~determining~~ the ~~lease terms,~~period incurred and ~~associated payment impacts~~corresponding leases are excluded from the right of use lease ~~payments.~~

asset and lease liability balances. Certain of the Company's 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 March 31, ~~2020~~2021 are:

As of March 31, 2020
Maturity of Lease Liabilities (in thousands)
Operating Leases
Remainder of 2020 $ 98,827
2021 99,540
2022 70,832
2023 49,670
2024 30,813
Thereafter 46,573
Total lease payments $ 396,255
Less: imputed interest (23,465 )
Present value of lease liabilities $ 372,790

	As of March 31, 2021
Maturity of Lease Liabilities (in thousands)	Operating Leases (1)
Remainder of 2021	$	35,443
2022	40,777
2023	30,483
2024	21,829
2025	15,220
Thereafter	33,594
Total lease payments	$	177,346
Less: imputed interest	(5,625		)
Present value of lease liabilities	$	171,721

(1)Operating lease payments reflect the Company's current fixed obligations under the operating lease agreements. Certain ATM site leases contain termination options that grant the Company the option to terminate the lease prior to the stated term of the agreement. The Company includes the future minimum lease payments for these ATM site leases only to the extent that the termination option is not reasonably certain to be exercised.

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

Lease Expense (in thousands)
Income Statement Classification Three Months Ended March 31, 2020
Operating lease expense Selling, general and administrative and Direct operating costs $ 33,188
Variable lease expense
Selling, general and administrative and Direct operating costs

8,680
Total lease expense $ 41,868

Lease Expense (in thousands)	Income Statement Classification	Three Months Ended March 31, 2021		Three Months Ended March 31, 2020
Operating lease expense	Selling, general and administrative and Direct operating costs	$	13,858	$	33,188
Short-term and variable lease expense	Selling, general and administrative and Direct operating costs		22,549		8,680
Total lease expense		$	36,407	$	41,868

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 March 31, ~~2020~~2021
Weighted- average remaining lease term (years)	~~4.4~~5.3
Weighted- average discount rate	~~3.0~~2.2	%

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

Other Information (in thousands)
Three Months Ended March 31, 2020
Cash paid for amounts included in the measurement of lease liabilities (a)
$ 32,792
Supplemental non-cash information on lease liabilities arising from obtaining ROU assets
ROU assets obtained in exchange for new operating lease liabilities $ 50,525


Other Information (in thousands)	Three Months Ended March 31, 2021		Three Months Ended March 31, 2020
Cash paid for amounts included in the measurement of lease liabilities (a)	$	13,669	$	32,792
Supplemental non-cash information on lease liabilities arising from obtaining ROU assets:
ROU assets obtained in exchange for new operating lease liabilities	$	28,188	$	50,525

(a) Included in Net cash provided by operating activities on the Company's 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;

~~the effect of the COVID-19 pandemic on our business;~~

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 acquisitions;

business strategy;

government regulatory action;

the expected effects of changes in laws or accounting standards;

the impact of the COVID-19 pandemic on our results of operations and financial position;

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, ~~the effect of the COVID-19 pandemic on our business;~~ conditions in world financial markets and general economic conditions, including impacts from the COVID-19 pandemic; the speed and effectiveness of rollouts for vaccines and treatments for COVID-19; the effects in Europe of the ~~negotiations related to the United Kingdom's~~U.K.'s departure from the ~~European Union (E.U.),~~E.U. and 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; the impact of changes in rules imposed by international card organizations such as Visa and Mastercard on card transactions on ATMs, including reductions in ATM interchange fees, restrictions on the ability to apply direct access fees, the ability to offer DCC transactions on ATMs, and increases in fees charged on DCC transactions; the impact of changes in laws and regulations affecting the profitability of our services, including regulation of DCC transactions or ATM access fees by the E.U.; our ability to comply with increasingly stringent regulatory requirements, including anti-money laundering, anti-terrorism, anti-bribery, sanctions, consumer and data protection and the ~~E.U.'s~~European Union's General Data ~~Privacy~~Protection Regulation and ~~the Services~~Second Revised Payment Service Directive ~~("PSD2") and Part II, Item 1A of this Quarterly Report on Form 10-Q,~~ requirements; changes in laws and regulations affecting our business, including tax and immigration laws and any laws regulating payments, including DCC ~~transactions;~~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; ~~general economic, financial and market conditions and the duration and extent of any economic downturns related to the COVID-19 pandemic or future events;~~ the cost of borrowing, availability of credit and terms of and compliance with debt covenants; and renewal of sources of funding as they expire and the availability of replacement ~~funding; the outlook for markets we serve;~~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, ~~2019 and Part II, Item 1A of this Quarterly Report on Form 10-Q.~~2020. Our Annual Report on Form 10-K is 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.

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OVERVIEW

~~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,~~Automated Teller Machine ("ATM"), point-of-sale ("POS"), card outsourcing, card issuing and merchant acquiring services, software solutions, electronic distribution of prepaid mobile airtime and other electronic payment products, foreign currency exchange services and global money transfer services. We operate in the following three segments:

~~The~~

The EFT Processing Segment, which processes transactions for a network of ~~42,176~~36,777 active ATMs and approximately ~~329,000~~349,000 POS terminals across Europe, the Middle East, Asia Pacific, ~~and~~ the United ~~States.~~States and Africa. We provide comprehensive electronic payment solutions consisting of ATM cash withdrawal and deposit services, ATM network participation, outsourced ATM and POS management solutions, credit and debit card outsourcing, ~~DCC,~~dynamic currency conversion ("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.

The epay Segment, which provides distribution, processing and collection services for prepaid mobile airtime and other electronic content. We operate a network of approximately ~~732,000~~736,000 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.

The Money Transfer Segment, which provides global consumer-to-consumer money transfer services, primarily under the brand names Ria, AFEX, ~~Money Express,~~ IME and xe and global account-to-account money transfer services under the brand name xe. We offer services under the brand names Ria, AFEX ~~Money Express~~ 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 ~~402,000~~475,000 locations. xe is a provider of foreign currency exchange information and offers money transfer services on its currency data websites (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 ~~70%~~72% 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 1A - Risk Factors in our Annual Report on Form 10-K for the year ended December 31, ~~2019)~~2020).

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 ~~25%~~13% of total consolidated revenues for thefirst quarter of ~~2020,~~ 2021, 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 application software and sales of related hardware.

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epay Segment — Revenues in the epay Segment, which represented approximately ~~30%~~37% of total consolidated revenues for thefirst quarter of ~~2020,~~ 2021, are primarily derived from commissions or processing fees received from mobile phone operators for the processing and distribution of prepaid mobile airtime and commissions earned from the distribution of other electronic content, vouchers, and physical gifts. The proportion of epay Segment revenues earned from the distribution of prepaid mobile phone time compared with other electronic products has decreased over time, and digital media content now produces approximately ~~40%~~69% of epay Segment revenues. Other electronic content offered by this segment includes digital content such as music, games and software, as well as other products, including mobile wallets, 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 ~~45%~~50% of total consolidated revenuesfor thefirst quarter of ~~2020, are~~2021, 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, IME 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.

The Company offers 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 2023. 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

Our expansion plans and opportunities are focused on eight primary areas:

increasing the number of ATMs and cash deposit terminals in our independent ATM networks;

increasing transactions processed on our network of owned and operated ATMs and POS devices;

signing new outsourced ATM and POS terminal management contracts;

expanding value added services and other products offered by our EFT Processing Segment, including the sale of DCC, acquiring and other prepaid card services to banks and retailers;

expanding our epay processing network and portfolio of digital content;

expanding our money transfer services, cross-currency payments products and bill payment network;

expanding our cash management solutions and foreign currency risk management services; and

developing our credit and debit card outsourcing business.

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EFT Processing Segment — The continued expansion and development of our EFT Processing Segment business will depend on various factors including, but not necessarily limited to, the following:

the impact of competition by banks and other ATM operators and service providers in our current target markets;

the demand for our ATM outsourcing services in our current target markets;

our ability to develop products or services, including value added services, to drive increases in transactions and revenues;

the expansion of our various business lines in markets where we operate and in new markets;

our entry into additional card acceptance and ATM management agreements with ~~banks;~~

financial institutions;

our ability to obtain required licenses in markets we intend to enter or expand services;

our ability to enter into sponsorship agreements where our licenses are not applicable;

our ability to enter into and renew ATM network cash supply agreements with financial institutions;

the availability of financing for expansion;

our ability to efficiently install ATMs contracted under newly awarded outsourcing agreements;

our ability to renew existing contracts at profitable rates;

our ability to maintain pricing at current levels or mitigate price reductions in certain markets;

the impact of changes in rules imposed by international card organizations such as Visa^® and Mastercard^® on card transactions on ATMs, including reductions in ATM interchange fees, restrictions on the ability to apply direct access fees, the ability to offer DCC transactions on ATMs, and increases in fees charged on DCC transactions;

the impact of changes in laws and regulations affecting the profitability of our services, including regulation of DCC transactions by the E.U.;

the impact of overall market trends on ATM transactions in our current target ~~markets:~~

markets;

our ability to expand and sign additional customers for the cross-border merchant processing and acquiring business;

the continued development and implementation of our software products and their ability to interact with other leading products; and

the ~~duration and severity~~impact of ~~the COVID-19 pandemic may limit access to ATM locations, create consumer fear regarding contracting the virus by touching ATM screens, keyboards or cash, impact consumer cross-border~~government imposed restrictions on travel ~~habits and reduce high margin cross-border transactions.~~

into countries where we operate ATMs.

We consistently evaluate and add prospects to our list of potential ATM outsource customers. However, we cannot predict the increase or decrease in the number of ATMs we manage under outsourcing agreements because this depends largely on the willingness of banks to enter into outsourcing contracts with us. Due to the thorough internal reviews and extensive negotiations conducted by existing and prospective banking customers in choosing outsource vendors, the process of entering into or renewing outsourcing agreements can take several months. The process is further complicated by the legal and regulatory considerations of local countries. These agreements tend to cover large numbers of ATMs, so significant increases and decreases in our pool of managed ATMs could result from the acquisition or termination of one or more of these management contracts. Therefore, the timing of both current and new contract revenues is uncertain and unpredictable.

Software products are an integral part of our product lines, and our investment in research, development, delivery and customer support reflects our ongoing commitment to an expanded customer base.

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epay Segment — The continued expansion and development of the epay Segment business will depend on various factors, including, but not necessarily limited to, the following:

our ability to maintain and renew existing agreements, and to negotiate new agreements in additional markets with mobile operators, digital content providers, agent financial institutions and retailers;

our ability to use existing expertise and relationships with mobile operators, digital content providers and retailers to our advantage;

the continued use of third-party providers such as ourselves to supply electronic processing solutions for existing and additional digital content;

~~the development of mobile phone networks in the markets in which we do business and the increase in the number of mobile phone users;~~

the overall pace of growth in the prepaid mobile phone and digital content market, including consumer shifts between prepaid and postpaid services;

our market share of the retail distribution capacity;

the development of new technologies that may compete with POS distribution of prepaid mobile airtime and other products;

the level of commission that is paid to the various intermediaries in the electronic payment distribution chain;

our ability to fully recover monies collected by retailers;

our ability to add new and differentiated products in addition to those offered by mobile operators;

our ability to develop and effectively market additional value added services;

our ability to take advantage of cross-selling opportunities with our EFT Processing and Money Transfer Segments, including providing money transfer services through our distribution network;

the availability of financing for further expansion; and

the ~~duration and severity~~impact of ~~the COVID-19 pandemic may limit access to POS merchant locations, our ability to maintain and grow our relationships~~government imposed restrictions on retailers with ~~digital content providers that are experiencing increased demand due to the COVID-19 pandemic, and increase our credit risk as many of our merchants are temporarily closed as nonessential services.~~

whom we partner.

In all of the markets in which we operate, we are experiencing significant competition which will impact the rate at which we may be able to grow organically. Competition among prepaid mobile airtime and electronic content distributors results in the increase of commissions paid to retailers and increases in retailer attrition rates. To grow, we must capture market share from other prepaid mobile airtime and electronic content distributors, offer a superior product offering and demonstrate the value of a global network. In certain markets in which we operate, many of the factors that may contribute to rapid growth (growth in electronic content, expansion of our network of retailers and access to products of mobile operators and other content providers) remain present.

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Money Transfer Segment — The continued expansion and development of our Money Transfer Segment business will depend on various factors, including, but not necessarily limited to, the following:

the continued growth in worker migration and employment opportunities;

the mitigation of economic and political factors that have had an adverse impact on money transfer volumes, such as changes in the economic sectors in which immigrants work and the developments in immigration policies in the countries in which we operate;

the continuation of the trend of increased use of electronic money transfer and bill payment services among high-income individuals, immigrant workers and the unbanked population in our markets;

our ability to maintain our agent and correspondent networks;

our ability to offer our products and services or develop new products and services at competitive prices to drive increases in transactions;

the development of new technologies that may compete with our money transfer network, and our ability to acquire, develop and implement new technologies;

the expansion of our services in markets where we operate and in new markets;

our ability to strengthen our brands;

our ability to fund working capital requirements;

our ability to recover from agents funds collected from customers and our ability to recover advances made to correspondents;

our ability to maintain compliance with the regulatory requirements of the jurisdictions in which we operate or plan to operate;

our ability to take advantage of cross-selling opportunities with our epay Segment, including providing prepaid services through our stores and agents worldwide;

our ability to leverage our banking and merchant/retailer relationships to expand money transfer corridors to Europe, Asia and Africa, including high growth corridors to Central and Eastern European countries;

the availability of financing for further expansion;

the ability to maintain banking relationships necessary for us to service our customers;

our ability to successfully expand our agent network in Europe using our payment institution licenses under the Second Payment Services Directive ("PSD2") and using our various licenses in the United States;

our ability to provide additional value-added products under the xe brand; and

the ~~duration~~impact of government imposed restrictions on our network of agents and severity of the COVID-19 pandemic impact on worker migration and employment opportunities, the ability of our customers to access agent network locations due to government ordered business closures, and the potential for an increase in credit risk and customer agent receivable defaults.

correspondents.

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 first quarter of 2021. These types of orders were first put into effect in late February 2020 or early March 2020. As the number and rate of new cases has fluctuated in various locations around the global, the closures, restrictions and other social distancing orders have been modified, rescinded and/or re-imposed. Some version of these orders remains in almost every location in which we operate. Although vaccines for COVID-19 are becoming widely available in the U.S. and parts of Europe, their availability is still limited in many parts of the world where we operate. In addition, the rate of acceptance and long term effectiveness of the vaccines, especially against new variants, are 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 Transfer Segment continues to be impacted by the pandemic related restrictions in certain markets hat limit customers' ability to access our network of company owned stores and agents.

In response to the COVID-19 pandemic driven impacts, we implemented several key measures to offset the impact across the business, including renegotiating certain third party contracts, reducing travel, decreasing capital expenditures, and expanding ATM seasonal deactivations (placing them in dormancy status, terminating, or re-negotiating) in more sites and more markets.

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SEGMENT SUMMARY RESULTS OF OPERATIONS

Revenues and operating income by segment for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 are summarized in the tables below:

	Revenues for the Three Months Ended March 31,						Year-over-Year Change
(dollar amounts in thousands)	2021			2020			Increase (Decrease) Amount			Increase (Decrease) Percent
EFT Processing	$	87,076		$	145,825		$	(58,749	)	(40)	%
epay	242,303			172,911			69,392			40	%
Money Transfer	324,900			266,234			58,666			22	%
Total	654,279			584,970			69,309			12	%
Corporate services, eliminations and other	(1,609		)	(1,063		)	(546		)	51	%
Total	$	652,670		$	583,907		$	68,763		12	%

Revenues for the Three Months Ended March 31, Year-over-Year Change
(dollar amounts in thousands) 2020 2019
Increase
(Decrease)
Amount

Increase
(Decrease)
Percent
EFT Processing $ 145,825
$ 145,703
$ 122
— %
epay 172,911
176,114
(3,203 ) (2 )%
Money Transfer 266,234
256,581
9,653
4 %
Total 584,970
578,398
6,572
1 %
Corporate services, eliminations and other (1,063 ) (889 ) (174 ) 20 %
Total $ 583,907
$ 577,509
$ 6,398
1 %

Operating Income (Expense) for the Three Months Ended March 31, Year-over-Year Change
(dollar amounts in thousands) 2020 2019 Increase (Decrease)
Amount
Increase
(Decrease)
Percent
EFT Processing $ 4,935
$ 16,768
$ (11,833 ) (71 )%
epay 16,458
17,999
(1,541 ) (9 )%
Money Transfer 22,308
30,774
(8,466 ) (28 )%
Total 43,701
65,541
(21,840 ) (33 )%
Corporate services, eliminations and other (12,099 ) (9,447 ) (2,652 ) 28 %
Total $ 31,602
$ 56,094
$ (24,492 ) (44 )%

	Operating Income (Loss) for the Three Months Ended March 31,						Year-over-Year Change
(dollar amounts in thousands)	2021			2020			Increase (Decrease) Amount			Increase (Decrease) Percent
EFT Processing	$	(40,096	)	$	4,935		$	(45,031	)	(912)	%
epay	29,157			16,458			12,699			77	%
Money Transfer	35,403			22,308			13,095			59	%
Total	24,464			43,701			(19,237		)	(44)	%
Corporate services, eliminations and other	(14,015		)	(12,099		)	(1,916		)	16	%
Total	$	10,449		$	31,602		$	(21,153	)	(67)	%

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 March 31,				Decrease Percent		Average Translation Rate Three Months Ended March 31,
Currency (dollars per foreign currency)	2020		2019		Decrease Percent		2021		2020		Increase Percent
Australian dollar	$	0.6144	$	0.7125	(14	)%	$	0.7725	$	0.6144	26	%
British pound	$	1.2405	$	1.3024	(5	)%
British pounds sterling							$	1.3790	$	1.2405	11	%
euro	$	1.1026	$	1.1354	(3	)%	$	1.2052	$	1.1026	9	%
Hungarian forint	$	0.0031	$	0.0036	(14	)%	$	0.0033	$	0.0031	6	%
Indian rupee	$	0.0133	$	0.0142	(6	)%	$	0.0137	$	0.0133	3	%
Malaysian ringgit	$	0.2319	$	0.2445	(5	)%	$	0.2461	$	0.2319	6	%
New Zealand dollar	$	0.5966	$	0.6813	(12	)%	$	0.7188	$	0.5966	20	%
Polish zloty	$	0.2418	$	0.2639	(8	)%	$	0.2655	$	0.2418	10	%

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COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED MARCH~~MARCH~~ 31, ~~2020~~2021 AND ~~2019~~2020

EFT PROCESSING SEGMENT

The following table summarizes the results of operations for our EFT Processing Segment for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020:


	Three Months Ended March 31,				Year-over-Year Change					Three Months Ended March 31,					Year-over-Year Change
(dollar amounts in thousands)	2020		2019		Increase (Decrease) Amount			Increase (Decrease) Percent		2021			2020		Increase (Decrease) Amount			Increase (Decrease) Percent
Total revenues	$	145,825	$	145,703	$	122		—	%	$	87,076		$	145,825	$	(58,749	)	(40)	%
Operating expenses:
Direct operating costs	87,536		83,776		3,760			4	%	69,612			87,536		(17,924		)	(20)	%
Salaries and benefits	22,091		19,431		2,660			14	%	23,571			22,091		1,480			7	%
Selling, general and administrative	10,941		9,086		1,855			20	%	11,962			10,941		1,021			9	%
Depreciation and amortization	20,322		16,642		3,680			22	%	22,027			20,322		1,705			8	%
Total operating expenses	140,890		128,935		11,955			9	%	127,172			140,890		(13,718		)	(10)	%
Operating income	$	4,935	$	16,768	$	(11,833	)	(71	)%
Operating (loss) income										$	(40,096	)	$	4,935	$	(45,031	)	(912)	%
Transactions processed (millions)	785		691		94			14	%	925			785		140			18	%
ATMs as of March 31,	42,176		42,034		142			—	%	36,777			42,176		(5,399		)	(13)	%
Average ATMs	44,813		40,918		3,895			10	%
Average Active ATMs										36,624			44,813		(8,189		)	(18)	%

Revenues

EFT Processing Segment total revenues were $87.1 million for the three months ended March 31, 2021, a decrease of $58.7 million or 40% compared to the same period in 2020. The decrease in revenues was primarily due to the impact of fewer active ATMs and fewer high-margin cross-border transactions (DCC), related to COVID-19 pandemic-driven government imposed border and business closures, travel restrictions and lockdowns. The government imposed border and business closures, travel restrictions and lockdowns were in effect to varying degrees for all of the first quarter of 2021 compared to similar restrictions that were primarily limited to the month of March in 2020. These closures, restrictions and other orders resulted in a significant decline in tourism throughout Europe which led to a decrease in DCC and surcharge revenues for the three months ended March 31, 2020 were $145.8 million and $145.7 million for the same period in 2019. Total revenues for the three months ended March 31, 2020 slightly increased due to growth in the Asia Pacific and United States markets, offset by the impact of fewer European ATM transactions, especially high-margin cross-border transactions (DCC), related to the COVID-19 pandemic driven government imposed border closures and shelter-in-place orders. The government imposed border closures went into place throughout Europe in late February 2020 and early March 2020. These closures resulted in a decrease in revenues in the month of March 2020 compared to March 2019. While the EFT Segment had an overall slight increase in revenues for the quarter ended March 31, 2020, the growth rate was reduced by the decrease in revenues in March 2020 compared to March 2019. Foreign currency movements decreased total revenues by approximately $3.8 million for the three months ended March 31, 20202021 compared to the same period in ~~2019.~~

2020. Foreign currency movements increased revenues by approximately $3.2 million for the three months ended March 31, 2021 compared to the same period in 2020.

Average monthly revenues per ATM ~~were $1,085~~decreased to $793 for the three months ended March 31, ~~2020 and $1,187 for the three months ended March 31, 2019. Revenues per transaction were $0.19 for the three months ended March 31, 2020~~2021 compared to ~~$0.21~~$1,085 for the same period in ~~2019.~~2020. Revenues per transaction decreased to $0.09 for the three months ended March 31, 2021 compared to $0.19 for the same period in 2020. The decreases in average monthly revenues per ATM and revenues per transaction were attributable to a shift in the mix in our transaction volume as COVID-19 restrictions significantly reduced the volume of higher revenue ~~decrease from DCC, which earns higher revenues per transaction than other ATM or card-based services, surcharges~~transactions (DCC and surcharge) throughout Europe while we experienced a significant increase in the ~~U.S. dollar strengthening against key foreign currencies.~~

volume of lower revenue transactions (processing bank wallet transactions and payments for e-commerce sites) primarily in our Asia Pacific region.

Direct operating costs

EFT Processing Segment direct operating costs were ~~$87.5~~$69.6 million for the three months ended March 31, ~~2020, an increase~~2021, a decrease of ~~$3.8~~$17.9 million or 4%20% compared to the same period in ~~2019.~~2020. Direct operating costs ~~in the EFT Processing Segment~~primarily consist ~~primarily~~ of site rental fees, cash delivery costs, cash supply costs, maintenance, insurance, telecommunications, payment ~~schemes~~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 involved with POS DCC transactions.

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The ~~increase~~decrease in direct operating costs was primarily due to the ~~increase~~decrease in the number of ATMs under ~~management.~~management, renegotiated and reduced site rental fees, and reduced operating costs for ATM's seasonally deactivated during COVID-19 pandemic imposed restrictions. Foreign currency movements ~~decreased~~increased direct operating costs by approximately $3.2 million for the three months ended March 31, ~~2020 by approximately $2.7 million~~2021 compared to the same period in ~~2019.~~

2020.

Gross profit

Gross profit, which is calculated as revenues less direct operating costs, was ~~$58.3~~$17.5 million for the three months ended March 31, ~~2020 and $61.9~~2021, a decrease of $40.8 million or 70% compared to $58.3 million for the ~~three months ended March 31, 2019. The decrease~~same period in ~~gross profit was primarily due to increases in direct operating costs related to an increase in ATM's under management.~~2020. Gross profit as a percentage of revenues (“gross margin”) decreased to ~~40.0%~~20.1% for the three months ended March 31, ~~2020,~~2021, compared to ~~42.5%~~40.0% for the same period in ~~2019.~~2020. The decrease in gross profit and gross margin was attributable to the decrease in DCC transactions and domestic and international ~~surcharge.~~

surcharges.

Salaries and benefits

Salaries and benefits ~~expense increased $2.7~~expenses were $23.6 million ~~or 14%~~ for the three months ended March 31, ~~2020,~~2021, an increase of $1.5 million or 7% compared to the same period in ~~2019. The increase was primarily due to additional headcount to support an increase~~2020. Foreign currency movements in the number of ATMs and POS devices under management. The shelter-in-place orders that went into place in late February 2020 and March 2020 in response to the COVID-19 pandemic reduced transaction volumes and revenues during that time period, but human resources to support actual and planned growth were added throughout 2019 as well as the early part of the first quarter of 2020 before the COVID-19 pandemic took effect, which led to lower transactions and revenues in the quarter, especially high-margin cross-border transactions. As a percentage of revenues,countries we employ our workforce increased these ~~costs increased to 15.1%~~expenses by $1.3 million for the three months ended March 31, ~~2020,~~2021 compared to ~~13.3% for~~ the same period in ~~2019.~~

~~Selling, general and administrative~~

~~Selling, general and administrative~~2020. As a percentage of revenues, these expenses increased ~~$1.9 million or 20%~~to 27.1% for the three months ended March 31, 2021, compared to 15.1% for the same period in 2020. We made a decision to retain our employees during the pandemic.

Selling, general and administrative

Selling, general and administrative expenses were $12.0 million for the three months ended March 31, 2021, an increase of $1.0 million or 9% compared to the same period in ~~2019. The increase was primarily due to increases in professional fees. As a percentage of revenues, selling, general and administrative~~2020. Foreign currency movements increased these expenses ~~increased to 7.5%~~by $1.2 million for the three months ended March 31, ~~2020,~~2021 compared to ~~6.2%~~the same period in 2020, which were partially offset by decreases in travel related expenses and bad debt expense. As a percentage of revenues, these expenses increased to 13.7% for the three months ended March 31, 2021, compared to 7.5% for the same period in ~~2019.~~

2020.

Depreciation and amortization

Depreciation and amortization ~~expense increased $3.7~~expenses were $22.0 million ~~or 22%~~ for the three months ended March 31, ~~2020,~~2021, an increase of $1.7 million or 8% compared to the same period in ~~2019. The increase was primarily due to the deployment of additional ATMs and software assets. As a percentage of revenues, depreciation and amortization~~2020.Foreign currency movements increased these expenses ~~increased to 13.9%~~by $1.2 million for the three months ended March 31, ~~2020,~~2021 compared to ~~11.4%~~the same period in 2020, with the remainder of the increase driven by the acquisition of additional ATMs and software assets. As a percentage of revenues, these expenses increased to 25.3% for three months ended March 31, 2021, compared to 13.9% for the same period in ~~2019.~~

2020.

Operating (loss) income

EFT Processing Segment had an operating ~~income~~loss of ($40.1 million) for the three months ended March 31, ~~2020 was $4.9 million,~~2021, a decrease of ~~$11.8~~$45.0 million or ~~71%~~(912%) compared to the operating income for the same period in ~~2019. Operating~~2020. Operating (loss) income as a percentage of revenues (“operating margin”) decreased to ~~3.4%~~(46.0%) for the three months ended March 31, ~~2020 from 11.5%~~2021, compared to 3.4% for the same period in 2019. The decreases in operating income and operating margin were primarily due to an increase in direct operating costs to support the additional ATMs under management and a change in product mix. During late February 2020 ~~and throughout March 2020, high margin cross-border transactions (DCC) decreased throughout Europe due to the COVID-19 pandemic driven government imposed border closures and shelter-in-place orders.~~ . Operating (loss) income per transaction ~~decreased to $0.01~~was ($0.04) for the three months ended March 31, ~~2020~~2021, compared to ~~$0.02~~$0.01 for the same period in ~~2019.~~

2020. The decreases in operating income, operating margin and operating income per transaction were primarily driven by the decrease in travel throughout Europe that led to the significant decrease in DCC and surcharge revenues compared to the same period in 2020.

Table of Contents

EPAY SEGMENT

The following table presents the results of operations for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 for our epay Segment:


	Three Months Ended March 31,				Year-over-Year Change					Three Months Ended March 31,				Year-over-Year Change
(dollar amounts in thousands)	2020		2019		Increase (Decrease) Amount			Increase (Decrease) Percent		2021		2020		Increase (Decrease) Amount		Increase (Decrease) Percent
Total revenues	$	172,911	$	176,114	$	(3,203	)	(2	)%	$	242,303	$	172,911	$	69,392	40	%
Operating expenses:
Direct operating costs	130,074		133,525		(3,451		)	(3	)%	182,633		130,074		52,559		40	%
Salaries and benefits	15,697		14,753		944			6	%	19,369		15,697		3,672		23	%
Selling, general and administrative	8,838		8,052		786			10	%	9,020		8,838		182		2	%
Depreciation and amortization	1,844		1,785		59			3	%	2,124		1,844		280		15	%
Total operating expenses	156,453		158,115		(1,662		)	(1	)%	213,146		156,453		56,693		36	%
Operating income	$	16,458	$	17,999	$	(1,541	)	(9	)%	$	29,157	$	16,458	$	12,699	77	%
Transactions processed (millions)	447		338		109			32	%	667		447		220		49	%

epay Segment total revenues were $242.3 million for the three months ended March 31, ~~2020 were $172.9~~2021, an increase of $69.4 million ~~a decrease of $3.2 million~~or 40% compared to the same period in ~~2019.~~2020. The ~~decrease~~increase in ~~total~~ revenues was primarily due to ~~the U.S. dollar strengthening against key foreign currencies, partially offset by~~ an increase in the number of transactions processed driven by continued digital media ~~growth.~~growth and the U.S. dollar weakening against key foreign currencies during the first quarter of 2021. Foreign currency movements ~~decreased total~~increased revenues by approximately ~~$5.3~~$12.9 million for the three months ended March 31, ~~2020,~~2021 compared to the same period in ~~2019.~~2020. The epay segment was impacted by ~~the~~ COVID-19 ~~pandemic~~pandemic-driven government imposed ~~shelter-in-place orders,~~lockdowns and business closures, primarily at retail outlets, which ~~was partially~~were offset by increases in digital ~~product~~media offerings in ~~Asia. Overall,~~Asia and revenues ~~decreased in March 2020 compared to March 2019 due to consumer movement restrictions~~derived from businesses that were classified as essential and ~~temporary retail outlet closures as a result of~~remained open during the ~~COVID-19 pandemic.~~

pandemic.

Revenues per transaction decreased to ~~$0.39~~$0.36 for the three months ended March 31, ~~2020~~2021, compared to ~~$0.52~~$0.39 for the same period in 2020~~2019~~. The decrease in revenues per transaction was primarily driven by 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 ~~$130.1~~$182.6 million for the three months ended March 31, ~~2020, a decrease~~2021, an increase of ~~$3.5~~$52.6 million or 40% compared to the same period in ~~2019.~~2020. Direct operating costs ~~in our epay Segment include~~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 ~~decrease~~increase in direct operating costs was primarily due to the increase in transaction volumes of low-value mobile top-up transactions and by the U.S. dollar ~~strengthening~~weakening against key foreign ~~currencies.~~currencies in the first quarter of 2021. Foreign currency movements ~~decreased~~increased direct operating costs ~~for the three months ended March 31, 2020~~ by approximately ~~$3.9 million compared to the same period in 2019.~~

~~Gross profit was $42.8~~$9.4 million for the three months ended March 31, ~~2020~~ 2021 compared to ~~$42.6~~the same period in 2020.

Gross profit

Gross profit was $59.7 million for the three months ended March 31, 2021, an increase of $16.9 million or 39% compared to $42.8 million for the same period in 2020. Gross margin decreased to 24.6% for the three months ended March 31, ~~2019. Gross~~2021, compared to 24.8% for the same period in 2020. The increase in gross profit and decrease in gross margin ~~increased~~is driven by the increase in transaction volumes processed in regions where we generally earn lower revenues per transaction.

~~Salaries and benefits~~

~~Salaries and benefits increased $0.9 million or 6%~~8.0% for the three months ended March 31, ~~2020,~~2021, compared to 9.1% for the same period in 2020.

Selling, general and administrative

Selling, general and administrative expenses were $9.0 million for the three months ended March 31, 2021, an increase of $0.2 million or 2% compared to the same period in ~~2019 to support continued growth of the business.~~2020. As a percentage of revenues, ~~salaries and benefits increased~~these expenses decreased to ~~9.1%~~3.7% for the three months ended March 31, ~~2020,~~2021, compared to ~~8.4%~~5.1% for the same period in ~~2019.~~

~~Selling, general~~2020.

Depreciation and ~~administrative~~

~~Selling, general~~amortization

Depreciation and ~~administrative~~amortization expenses were ~~$8.8~~$2.1 million for the three months ended March 31, ~~2020,~~2021, an increase of ~~$0.8~~$0.3 million or ~~10%~~15% compared to the same period in ~~2019. As a percentage of revenues, selling, general and administrative expenses increased to 5.1% for the three months ended March 31,~~ 2020 ~~compared to 4.6% for the same period in 2019.~~

~~Depreciation and amortization~~

. Depreciation and amortization expense primarily represents depreciation of POS terminals we install in retail stores and amortization of acquired intangible assets. ~~Depreciation and amortization~~As a percentage of revenues, these expenses ~~increased $0.1 million or 3%~~decreased to 0.9% for the three months ended March 31, ~~2020,~~2021, compared to 1.1% for same period in 2020.

Operating income

epay Segment operating income was $29.2 million for the three months ended March 31, 2021, an increase of $12.7 million or 77% compared to the same period in ~~2019. As a percentage of revenues, depreciation and amortization expense~~2020. Operating margin increased to ~~1.1%~~12.0% for the three months ended March 31, 2021, compared to 9.5% for the same period in 2020. Operating income per transaction was $0.04 for both the three months ended March 31, 2021 and 2020. The increases in operating income and operating margin for the three months ended March 31, ~~2020 compared to 1.0% for the same period in 2019.~~

~~Operating income~~

~~epay Segment operating income for the three months ended March 31, 2020 was $16.5 million, a decrease of $1.5 million or 9%~~2021 compared to the same period in ~~2019. Operating margin decreased to 9.5% for the three months ended March 31,~~ 2020 from 10.2% for the same period in 2019. Operating income per transaction decreased to $0.04 for the three months ended March 31, 2020 compared to $0.05 in the same period in 2019. The decreases in operating income and operating margin were primarily due to ~~the U.S. dollar strengthening against key foreign currencies,~~ an increase in ~~headcount to support~~ the ~~growth~~number of the business, and decreased revenue growth in certain markets that were negatively impacted by the COVID-19 pandemic. Foreign currency movements decreased operating income for the three months ended March 31, 2020 by approximately $0.4 million compared to the same period in 2019.higher-margin digital media transactions.

MONEY TRANSFER SEGMENT

Three Months Ended
March 31,

Money Transfer Segment total revenues were $324.9 million for the three months ended March 31, ~~2020 were $266.2 million,~~2021, an increase of ~~$9.7~~$58.7 million or 4%22% compared to the same period in ~~2019.~~2020. The increase in revenues was primarily due to increases in ~~the number of international~~U.S. outbound and international-originated money transfers, ~~processed, driven~~partially offset by ~~growth~~decreases in ~~our~~the U.S. ~~and foreign agent and correspondent payout networks, and growth in xe, driven by recent currency volatility.~~ domestic business. Revenues per transaction increased to ~~$9.72~~$10.41 for the three months ended March 31, ~~2020~~2021, compared to ~~$9.65~~$9.72 for the same period in 2019. The overall growth rate in revenues was negatively impacted by the COVID-19 pandemic due to the temporary closure of Company owned stores and retail agents due to government imposed shelter-in-place orders. Revenues decreased for the month of March 2020 compared to March 2019. 2020. Foreign currency movements ~~decreased total~~increased revenues by approximately ~~$4.5~~$14.3 millionfor the three months ended March 31, ~~2020~~2021 compared to the same period in ~~2019.~~

2020.

Direct operating costs

Money Transfer Segment direct operating costs were ~~$142.9~~$183.9 million for the three months ended March 31, ~~2020,~~2021, an increase of ~~$5.5~~$41.0 million or 4%29% compared to the same period in ~~2019.~~2020. Direct operating costs ~~in the Money Transfer Segment~~ 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 ~~growth~~the increase in the number of U.S. outbound and international-originated money transfer transactions ~~processed in both the U.S.~~ and ~~foreign markets, partially offset by~~ the impact of the U.S. dollar ~~strengthening~~weakening against key foreign currencies. Foreign currency movements ~~decreased~~increased direct operating costs ~~for the three months ended March 31, 2020~~ by approximately ~~$1.9 million compared to the same period in 2019.~~

~~Gross profit was $123.3~~$7.1 million for the three months ended March 31, ~~2020~~2021 compared to ~~$119.2~~the same period in 2020.

Gross profit

Gross profit was $141.0 million for the three months ended March 31, 2021, an increase of $17.7 million or 14% compared to $123.3 million for the same period in 2020. The increase in gross profit was primarily due to increases in U.S. outbound and international-originated money transfers. Gross margin decreased to 43.4% for the three months ended March 31, 2021, compared to 46.3% for the same period in 2020. The decrease in gross margin is primarily attributable to the increase in direct operating costs driven by increased agent commissions in the first quarter of 2021 compared to the same period in 2020.

~~Salaries and benefits~~

~~Salaries and benefits expense increased $2.7~~$6.7 million or ~~5% for the three months ended March 31, 2020,~~12% compared to the same period in ~~2019.~~ 2020. The increase in salaries and benefits was primarily ~~due~~driven by an increase in headcount to support the ~~expansion~~growth of ~~our operations. As a percentage~~the business, an increase in bonus expense and an increase of ~~revenues, salaries and benefits increased to 20.2%~~$2.6 million from foreign currency movements for the three months ended March 31, ~~2020,~~2021 compared to ~~19.9%~~the same period in 2020. As a percentage of revenues, these expenses decreased to 18.6% for the three months ended March 31, 2021, compared to 20.2% for the same period in ~~2019~~2020. ~~The increase in salaries and benefits was the result of headcount increases in place to support the growth of the business in advance of the COVID-19 pandemic.~~

Selling, general and administrative

Selling, general and administrative expenses were $36.1 million for the three months ended March 31, 2021, a decrease of $2.5 million or 6% compared to the same period in 2020. The decrease was primarily due to a $3.7 million decrease in bad debt expense and a $1.6 million decrease in travel related expenses, partially offset by a $2.6 million increase from foreign currency movements for the three months ended March 31, ~~2020 were $38.6 million, an increase of $9.5 million or 33%~~2021 compared to the same period in 2019. The increase was primarily due to expenses incurred to support the growth of our money transfer services, the expansion of new products in both the U.S. and foreign markets, and an increase in additional charges taken to cover anticipated agent receivable defaults as a result of government ordered business closures required to manage the COVID-19 pandemic. 2020. As a percentage of revenues, ~~selling, general~~these expenses decreased to 11.1% for the three months ended March 31, 2021, compared to 14.5% for the same period in 2020.

Depreciation and ~~administrative~~amortization

Depreciation and amortization expenses ~~increased to 14.5%~~were $9.0 million for the three months ended March 31, ~~2020, compared to 11.3% for the same period in 2019.~~

~~Depreciation and amortization~~

~~Depreciation and amortization expense increased~~2021, an increase of $0.4 million or 5% ~~for the three months ended March 31, 2020,~~ compared to the same period in ~~2019.~~2020. Depreciation and amortization primarily ~~represent~~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, ~~depreciation and amortization~~these expenses ~~were flat at 3.2%~~decreased to 2.8% for the three months ended March 31, 2021, compared to 3.2% for the same period in 2020 ~~and 2019.~~

Three Months Ended
March 31,

Corporate operating expenses

~~Overall,~~

Total Corporate operating expenses ~~for Corporate Services increased 28%~~were $14.0 million for the three months ended March 31, ~~2020~~2021, an increase of $1.9 million or 16% compared to the same period in ~~2019.~~2020. The increase is primarily due to ana $2.2 million increase in ~~stock compensation driven by the issuance of a special retention stock incentive award granted to key executives in April of 2019. These awards vest~~share based ~~on the Company’s achievement of certain long-term performance targets over the next three to four years.~~compensation.

OTHER ~~INCOME (EXPENSE),~~EXPENSE, NET

Three Months Ended
March 31,

~~n/m — Not meaningful~~

~~The increase in interest income for the three months ended March 31, 2020 compared to the same period in 2019 is primarily due to an increase in interest rates on cash balances held at banks.~~

~~Interest expense~~

The increase in interest expense for the three months ended March 31, 2020 compared to the same period in 2019 was primarily related to the issuance of the Senior Notes partially offset by a decrease in Convertible Notes outstanding in the period.

Foreign currency exchange ~~(loss) gain,~~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 $4.0 million and $18.8 million for the three months ended March 31, 2021 and 2020, ~~compared to net foreign currency exchange gains of $3.2 million for the same period in 2019.~~respectively. These realized and unrealized foreign currency exchange losses ~~and gains~~ 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.

~~The Company's~~Our effective income tax rate was (236.9%) and 58.7% ~~and 31.6%~~ for the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, respectively. ~~The Company's~~ Our effective income tax rate for the three months ended March 31, 2021 was lower than the applicable statutory income tax rate of 21%as a result of the non-recognition of tax benefits from losses in certain foreign countries where we have a limited history of profitable earnings, certain foreign earnings being subject to higher local statutory tax rates, and our U.S. deferred tax activity on foreign exchange positions. Our effective income tax rate for the three months ended March 31, 2020 was higher than the applicable statutory income tax rate of 21% primarily as a result of certain foreign earnings ~~of the Company~~ being subject to higher local statutory income tax rates. ~~The Company’s effective income tax rate for the three months ended March 31, 2019 was higher than the applicable statutory income tax rate~~

NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS

NET INCOME (LOSS) ATTRIBUTABLE TO EURONET

Net ~~income~~loss attributable to Euronet was ~~$1.9 million and $34.5 million~~($8.7 million) for the three months ended March 31, ~~2020 and 2019, respectively. Net~~2021, a decrease of $10.6 million or 551% compared to the net income ~~attributable to Euronet decreased $32.6 million for the three months ended March 31, 2020 compared to~~in the same period in ~~2019.~~2020. The decrease in net income ~~for the three months ended March 31, 2020~~ was primarily ~~due~~attributable to athe $6.3 million decrease in ~~operating~~gross profit that was largely driven by the decrease in revenues in the EFT Segment, a $14.4 million increase in salaries and benefits expense and a $3.6 million increase in income ~~of $24.5 million, an increase of $22.0 million~~tax expense, partially offset by a decrease in net foreign currency exchange losses ~~an increase in interest expense~~ of $1.0 million, partially offset by a decrease in income tax expense of $13.5 million, a decrease in loss on early retirement of debt of $0.9 million, an increase in net income attributable to noncontrolling interests of $0.2 million, and an increase in interest income of $0.2$14.8 million.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, ~~2020,~~2021, we had working capital of ~~$1,011.0~~$1,210.5 million, which is calculated as the difference between total current assets and total current liabilities, compared to working capital of ~~$1,284.8~~$1,510.5 million as of December 31, ~~2019.~~2020. The decrease in working capital iswas primarily due to ~~$239.8~~the $270.4 million repayment of ~~share repurchases~~the outstanding balance on the Credit Facility during the first quarter of ~~2020.~~2021. Our ratio of current assets to current liabilities was ~~1.69~~1.76 and ~~1.79~~1.81 at March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, 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, ~~but much~~some of itwhich 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 the revolving credit facilities and cash flows from operations. As of March 31, ~~2020,~~2021, we had ~~approximately $558.6~~$339.9 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 decreased $71.2 million from $411.1 million as of December 31, 2020 to $339.9 million as of March 31, 2021 as a result of the reduction in number of active ATMs as of March 31, 2021 compared to December 31, 2020.

The Company has ~~$709.5~~$1,145.4 million of unrestricted cash as of March 31, ~~2020~~2021 compared to ~~$786.1~~$1,420.3 million as of December 31, ~~2019.~~2020. The decrease in unrestricted cash was primarily due to ~~$239.8~~the $270.4 million ~~in share repurchases~~repayment of the outstanding balance on the Credit Facility during the first quarter of ~~2020, partially offset by cash generated from operations. Additionally,~~2021. Including the ~~Company has $558.6~~$339.9 million of cash in ATMs at March 31, ~~2020, giving~~2021, the Company has access to ~~$1,268.1~~$1,485.3 million in available cash, and ~~$950.3~~$941.1 million available under the ~~credit facility~~Credit Facility with no significant long-term debt principal payments until March 2025. ~~This liquidity is available to fund operations through the pandemic crisis.~~

The following table identifies cash and cash equivalents provided by/(used in) our operating, investing and financing activities for the three ~~month periods~~months ended March 31, ~~2020~~2021 and ~~2019~~2020 (in thousands):

Cash flows (used in) provided by operating activities were ($2.6 million) for the three months ended March 31, 2021 compared to $105.9 million for the ~~first quarter of 2020 compared to $13.0 million for the first quarter of 2019.~~same period in 2020. The ~~increase~~decrease in operating cash flows was primarily due to 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.~~

Segment, and the decrease in net income.

Investing activity cash flow

Cash flows used in investing activities were ~~$31.6~~$18.2 million for the ~~first quarter of 2020~~three months ended March 31, 2021 compared to ~~$33.0~~$31.6 million for the same period in ~~2019.~~2020. We used ~~$30.4~~$16.4 million for purchases of property and equipment for the ~~first quarter of 2020~~ three months ended March 31, 2021 compared to ~~$31.4~~$30.4 million for the ~~first quarter~~same period in 2020. The decrease in purchases of ~~2019.~~property and equipment is primarily driven by the COVID-19 related impacts to the EFT segment. Cash used for software development and other investing activities totaled $1.8 million and $1.7 million ~~and $1.6 million~~ for the ~~first quarter of~~three months ended March 31, 2021 and 2020 ~~and 2019,~~, respectively.

Financing activity cash flow

Cash flows used in financing activities were ~~$242.6~~$269.2 million for the ~~first quarter of 2020~~three months ended March 31, 2021 compared to ~~cash flows provided by financing activities of $192.7~~$242.6 million for the same period in ~~2019.~~2020. Our ~~financing~~borrowing activities for the ~~first quarter of 2020~~three months ended March 31, 2021 consisted of cash outflows of ~~$2.2~~$270.4 million compared to no net borrowings ~~of $203.1 million~~ for the ~~first quarter of 2019.~~same period in 2020. The decrease in net borrowings for the ~~first quarter of 2020~~three months ended March 31, 2021 compared to the same period in ~~2019~~2020 was the result of the ~~issuance~~repayment of ~~$525.0 million of convertible notes in~~ the ~~first quarter of 2019 which was used to fund~~outstanding balance on the ~~operating cash of our IAD networks, repay revolving credit facility borrowings and repurchase a portion of existing convertible notes.~~Credit Facility. We repurchased ~~$240.5~~$0.8 million ~~and $2.3 million~~ of ~~our~~ common stock during the first quarter of ~~2020 and 2019, respectively. Of the~~2021 compared to repurchases of $240.5 ~~million repurchased shares, $239.8 million of Euronet Common Stock was repurchased under the Repurchase Program. We received proceeds of $1.7 million and $5.2~~ million during the first quarter of ~~2020~~2020. We received proceeds of $3.7 million and ~~2019,~~$1.7 million during the three months ended March 31, 2021 and 2020, respectively, for the issuance of stock in connection with our Stock Incentive Plan.

Other sources of capital

Credit Facility - On October 17, 2018, the Company entered into a $1.0 billion unsecured credit agreement (the "Credit Facility") that expires on October 17, 2023. The Credit Facility allows for borrowings in Australian ~~Dollars,~~dollars, British ~~Pounds Sterling,~~pounds sterling, Canadian ~~Dollars,~~dollars, Czech ~~Koruna,~~koruna, Danish ~~Krone, Euros,~~krone, euro, Hungarian ~~Forints,~~forints, Japanese ~~Yen,~~yen, New Zealand ~~Dollars,~~dollars, Norwegian ~~Krone,~~krone, Polish ~~Zlotys,~~zlotys, Swedish ~~Krona,~~krona, Swiss ~~Francs,~~francs, and U.S. ~~Dollars.~~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.

As of March 31, ~~2020,~~2021, fees and interest on borrowings are based upon ~~the Company's~~our corporate credit rating (as defined in the credit agreement) and are based, in the case of letter of credit fees, on a margin, and in the case of interest, on a margin over the London InterBank Offered Rate ("LIBOR") or a margin over the base rate, as selected by us, with the applicable margin ranging from 1.125% to 2.0% (or 0.175% to 1.0% for base rate loans).

As of March 31, ~~2020,~~2021, we had no borrowings and ~~$49.7~~$58.9 million of stand-by letters of credit outstanding under the Credit Facility. The remaining ~~$950.3~~$941.1 million under the Credit Facility was available for borrowing.

Convertible debt - On March 18, 2019, we completed the sale of ~~$525.0~~$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 ~~the Company~~us and U.S. Bank National Association, as trustee. The Convertible Notes have an interest rate of ~~0.75%~~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~~$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 ~~the Company~~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%~~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~~$12.8 million in debt issuance costs, which are being amortized through March 1, 2025.

Senior Notes - On May 22, 2019, ~~the Company~~we completed the sale of €600 million ($669.9 million) aggregate principal amount of Senior Notes that expire on May 2026 (the “Senior Notes”). The Senior Notes accrue interest at a rate of 1.375% per year, payable annually in arrears ~~commencing~~on May 22 ~~2020,~~of each year, until maturity or earlier redemption. As of March 31, ~~2020, the Company has~~2021, we have outstanding €600 million ($~~661.6 million)~~703.7 million) principal amount of the Senior Notes. In addition, ~~the Company~~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.

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~~$0.8 million and ~~$6.2~~$0.9 million outstanding under these other obligation arrangements as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively.

Other uses of capital

Capital expenditures and needs - Total capital expenditures for the ~~first quarter of 2020~~three months ended March 31, 2021 were ~~$30.4 million.~~$16.4 million. These capital expenditures were primarily for ~~the purchase of ATMs to expand our IAD network in Europe,~~ 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 ~~2020~~2021 are currently estimated to range from approximately ~~$65~~$105 million to ~~$70 million. The Company has reduced estimated capital expenditures for 2020 due to the COVID-19 pandemic.~~$110 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.

~~Share repurchase plan~~

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The Company's Board of Directors had authorized a stock repurchase program allowing Euronet to repurchase up to $375 million in value or 10.0 million shares of stock through March 31, 2020. The Company has repurchased all $375 million of stock under this program. On March 11, 2019, in connection with the issuance of the Convertible Notes, the Board of Directors authorized an additional repurchase program of $120 million in value of the Company's common stock through March 11, 2021. The Company has repurchased $110.4 million of stock under this program. 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. For the three months ended March 31, 2020, the Company repurchased 2.1 million shares under the repurchase programs at a weighted average purchase price of $114.41 for a total value of $239.8 million. Repurchases under either 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.

Inflation and functional currencies

Generally, the countries in which we operate have experienced low and stable inflation in recent years. Therefore, the local currency in each of these markets is the functional currency. Currently, we do not believe that inflation will have a significant effect on our results of operations or financial position. 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 March 31, ~~2020~~2021, there were no material changes from the disclosure in our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020. 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 March 31, ~~2020.~~2021. See also Note ~~13,~~14, Commitments, to the unaudited consolidated financial statements included elsewhere in this report.

CONTRACTUAL OBLIGATIONS

As of March 31, ~~2020,~~2021, 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, ~~2019, other than those resulting from changes in the amount~~2020.

As of March 31, ~~2020~~2021, our total debt outstanding, excluding unamortized debt issuance costs, was ~~$1,105.9~~$1,160.7 million. Of this amount, ~~$440.7~~$456.2 million, net of debt discounts, or ~~40%~~39% of our total debt obligations, relates to our contingent ~~convertible notes having~~Convertible Notes that have a fixed coupon rate. Our $525.0 million outstanding principal amount of ~~contingent convertible notes~~Convertible Notes accrue cash interest at a rate of 0.75% of the principal amount per annum. Based on quoted market prices, as of March 31, ~~2020,~~2021, the fair value of our fixed rate ~~convertible notes~~Convertible Notes was ~~$597.0~~$631.4 million, compared to a carrying value of ~~$440.7~~$456.2 million. Interest expense for ~~these notes,~~the Convertible Notes, including accretion and amortization of deferred debt issuance costs, has a weighted average interest rate of 4.4% annually. Further, as of March 31, ~~2020~~2021 we had no borrowings under our Credit Facility. Additionally, ~~$661.6~~$703.7 million, or ~~60%~~61% 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 March 31, ~~2020,~~2021, the fair value of our fixed rate Senior Notes was ~~$615.7~~$712.0 million, compared to a carrying value of ~~$661.6~~$703.7 million. The remaining ~~$3.6~~$0.8 million, or ~~0.3%~~0.1% 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.

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 ~~first quarter of 2020,~~three months ended March 31, 2021, approximately ~~70%~~72% and 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 March 31, ~~2020,~~2021, we estimate that a 10% fluctuation in these foreign currency exchange rates would have the combined annualized effect on reported net income and working capital of approximately ~~$38.0~~$45 million to ~~$43.0 million.~~$50 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 ~~$138.0~~$152 million to ~~$143.0~~$157 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 ~~primarily~~ 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.

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 March 31, ~~2020,~~2021, we held foreign currency derivative contracts outstanding with a notional value of ~~$1.5~~$1.4 billion, 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 March 31, ~~2020,~~2021, the Company had foreign currency forward contracts outstanding with a notional value of ~~$193~~$593 million, primarily in euros.

See Note 9,10, Derivative Instruments and Hedging Activities, to our ~~Consolidated Financial Statements~~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 March 31, ~~2020.~~2021. 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.

Change in Internal Controls

PART II—OTHER INFORMATION

~~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 ~~14,~~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.

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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, ~~2019,~~ 2020, as filed with the SEC.

The outbreak of COVID-19 (coronavirus) has negatively impacted and could continue to negatively impact the global economy. In addition, the COVID-19 pandemic could disrupt or otherwise negatively impact global credit markets and our operations, including the demand for our products and services.

The significant outbreak of COVID-19 has resulted in a widespread health crisis, which has negatively impacted and could continue to negatively impact the global economy. In addition, the global and regional impact of the outbreak, including official or unofficial quarantines and governmental restrictions on activities taken in response to such event, could have a negative impact on our operations, including voluntary or mandatory temporary closures of our facilities or offices; interruptions in our supply chain, which could impact the cost or availability of raw materials; disruptions or restrictions on our ability to travel or to market and distribute our products and services; reduced consumer demand for our products and services due to reduced consumer traffic in, or closure of, retail and other locations where our products and services are offered; and labor shortages.

For example, the COVID-19 pandemic has resulted in travel restrictions within and between countries, and sheltering in place orders in most of the countries where we do business. The majority of these orders went into effect at the end of February and throughout various times in March. These orders have negatively impacted all of our three operating segments. The EFT operating segment has experienced declines in transaction volumes as the restrictions noted above have reduced transactions on our network of ATMs. The epay Segment has experienced the closure of many of its POS retail locations. Finally, our money transfer segment has experienced declines in transaction volumes. Our network of company owned stores, and agents have experienced closures as many of our agents and stores were deemed nonessential services and ordered to close.

More broadly, the outbreak could potentially lead to an economic downturn that could affect demand for our products and services. Furthermore, our offices and the retail and other locations where our products and services are offered and those of our suppliers and vendors must comply with new and additional regulations imposed by state and local governments in response to the recent coronavirus outbreak, including COVID-19 safety guidance for indoor facilities. The implementation of compliance measures may cause a reduction in the number of transactions that we process.

The COVID-19 outbreak could disrupt or otherwise negatively impact credit markets, which could adversely affect the availability and cost of capital. Such impacts could limit our ability to fund our operations and satisfy our obligations.

A pandemic typically results in social distancing, travel bans and quarantine, and this may limit access to the locations where our products and services are offered and to our customers, management, support staff, professional advisors and our independent auditors. These factors, in turn, may not only impact our operations, financial condition and demand for our products and services but our overall ability to react timely to mitigate the impact of this event. Also, it may hamper our efforts to comply with our filing obligations with the Securities and Exchange Commission.

The extent and potential impact of the COVID-19 outbreak on our operational and financial performance will depend on future developments, including the duration, severity and spread of the virus, actions that may be taken by governmental authorities and the impact on our supply chain, customers, operations, workforce and the financial markets, all of which are highly uncertain and cannot be predicted. These and other potential impacts of an epidemic, pandemic or other health crisis, such as COVID-19, could therefore materially and adversely affect our business, financial condition and results of operations.

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~~common stock that were purchased by the Company during the three months ended March 31, ~~2020.~~2021.

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)
January 1 - January 31, 2020 —
$ —
—
$ 249,124
February 1 - February 28, 2020 862,130
132.22
862,130
$ 385,133
March 1 - March 31, 2020 1,233,533
101.96
1,233,533
$ 259,362
Total 2,095,683
$ 114.41
2,095,663


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)
January 1 - January 31, 2021	—	$	—	—	$	259,362
February 1 - February 28, 2021	—	—		—		259,362
March 1 - March 31, 2021	—	—		—	$	250,000
Total	—	$	—	—

(1) Amount remaining to be repurchased at the end of the period. The Board of Directors had authorized a stock repurchase program allowing Euronet to repurchase up to $375 million in value or 10.0 million shares of stock through March 31, 2020. The Company has repurchased all $375 million of stock under this program. On March 11, 2019, in connection with the issuance of the Convertible Notes, the Board of Directors authorized ~~an additional~~a repurchase program of $120 million in value of Euronet’s common stock through March 11, 2021. Euronet ~~has~~ repurchased ~~$110.4~~$110.6 million of stock under this program. 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. Repurchases ~~under either remaining 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.

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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 March 31, ~~2020,~~2021, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at March 31, ~~2020~~2021 (unaudited) and December 31, ~~2019,~~2020, (ii) Consolidated Statements of Income (unaudited) for the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, (iii) Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, (iv) Consolidated Statements of Changes in Equity (unaudited) for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 (v) Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, and (vi) Notes to the Unaudited Consolidated Financial Statements.
104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
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 ~~the Company's~~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 ~~the Company~~us or ~~its~~our business or operations on the date hereof.

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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.

May ~~7, 2020~~4, 2021

Euronet Worldwide, Inc.



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



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



	Number of Shares Outstanding	Common Stock		Additional Paid-in Capital			Treasury Stock
Balance as of December 31, 2018	51,819,998	$	1,198	$	1,104,264		$	(391,551	)
Net income
Other comprehensive loss
Stock issued under employee stock plans	130,136	3		5,194			(1,756		)
Share-based compensation				4,490
Issuance of convertible notes, net of tax				71,660
Repurchase and conversions of convertible notes, net of tax	6			(42,917		)
Balance as of March 31, 2019	51,950,140	$	1,201	$	1,142,691		$	(393,307	)



		Amount of Gain Recognized in Income on Derivative Contracts (a)
	Location of Gain Recognized in Income on Derivative Contracts	Three Months Ended March 31,
(in thousands)		2020		2019
Foreign currency exchange contracts - Ria Operations	Foreign currency exchange gain, net	$	1,019	$	2,459



		As of December 31, 2019
(in thousands)	Balance Sheet Classification	Level 1		Level 2			Level 3		Total
Assets
Foreign currency exchange contracts	Other current assets	$	—	$	54,765		$	—	$	54,765
Liabilities
Foreign currency exchange contracts	Other current liabilities	$	—	$	(41,935	)	$	—	$	(41,935	)



	As of March 31, 2020
Maturity of Lease Liabilities (in thousands)	Operating Leases
Remainder of 2020	$	98,827
2021	99,540
2022	70,832
2023	49,670
2024	30,813
Thereafter	46,573
Total lease payments	$	396,255
Less: imputed interest	(23,465		)
Present value of lease liabilities	$	372,790



Lease Expense (in thousands)	Income Statement Classification	Three Months Ended March 31, 2020
Operating lease expense	Selling, general and administrative and Direct operating costs	$	33,188
Variable lease expense	Selling, general and administrative and Direct operating costs	8,680
Total lease expense		$	41,868



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


	Three Months Ended March 31,						Three Months Ended March 31,
Liquidity	2020			2019			2021			2020
Cash and cash equivalents and restricted cash provided by (used in):
Operating activities	$	105,884		$	12,961		$	(2,645	)	$	105,884
Investing activities	(31,606		)	(32,986		)	(18,225		)	(31,606		)
Financing activities	(242,644		)	192,702			(269,211		)	(242,644		)
Effect of foreign currency exchange rate changes on cash and cash equivalents and restricted cash	(59,260		)	(12,387		)	(53,188		)	(59,260		)
(Decrease) increase in cash and cash equivalents and restricted cash	$	(227,626	)	$	160,290
Decrease in cash and cash equivalents and restricted cash							$	(343,269	)	$	(227,626	)