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 ~~September~~June 30, ~~2020~~2021

☐

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

For the transition period from

Commission File Number: 001-31648

EURONET WORLDWIDE, INC.

(Exact name of registrant as specified in its charter)

Delaware		74-2806888
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
11400 Tomahawk Creek Parkway, Suite 300
Leawood,	Kansas	66211
(Address of principal executive offices)		(Zip Code)

(913) 327-4200

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	EEFT	Nasdaq Global Select Market
1.375% Senior Notes due 2026	EEFT26	Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes 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
Non-accelerated filer	o	Smaller reporting company	☐
		Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

On ~~October 30, 2020,~~August 2, 2021, Euronet Worldwide, Inc. had ~~52,314,901~~52,824,377 shares of ~~Common Stock~~common stock outstanding.

EURONET WORLDWIDE, INC. AND SUBSIDIARIES

Table of Contents

		Page

PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	1
	Consolidated Balance Sheets as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020	1
	Consolidated Statements of Operations for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020	2
	Consolidated Statements of Comprehensive Income for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020	3
	Consolidated Statements of Changes in Equity for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020	4
	Consolidated Statements of Cash Flows for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020	6
	Notes to the Unaudited Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2322
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4238
Item 4.	Controls and Procedures	4339
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	4339
Item 1A.	Risk Factors	4440
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4440
Item 6.	Exhibits	4541
	Signatures	#42

Table of Contents

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

EURONET WORLDWIDE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	As of						As of
	September 30, 2020			December 31, 2019			June 30, 2021			December 31, 2020
	(unaudited)						(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	1,008,183		$	786,081		$	994,488		$	1,420,255
ATM cash	409,683			665,641			565,084			411,054
Restricted cash	14,204			34,301			3,328			3,334
Settlement assets	875,783			1,013,067			929,722			1,140,875
Trade accounts receivable, net of credit losses of $4,364 at September 30, 2020 and $3,892 at December 31, 2019	119,725			201,935
Trade accounts receivable, net of credit losses of $4,604 and $5,926							138,563			117,517
Prepaid expenses and other current assets	227,155			217,707			270,503			272,900
Total current assets	2,654,733			2,918,732			2,901,688			3,365,935
Operating right of use lease assets	161,629			377,543			173,611			162,074
Property and equipment, net of accumulated depreciation of $460,963 at September 30, 2020 and $410,243 at December 31, 2019	366,276			359,980
Property and equipment, net of accumulated depreciation of $512,831 and $490,429							362,946			378,441
Goodwill	641,886			743,823			657,327			665,821
Acquired intangible assets, net of accumulated amortization of $161,371 at September 30, 2020 and $204,853 at December 31, 2019	123,577			141,847
Other assets, net of accumulated amortization of $52,458 at September 30, 2020 and $46,788 at December 31, 2019	147,255			115,741
Acquired intangible assets, net of accumulated amortization of $177,693 and $175,210							109,320			121,883
Other assets, net of accumulated amortization of $59,408 and $55,710							234,191			232,557
Total assets	$	4,095,356		$	4,657,666		$	4,439,083		$	4,926,711
LIABILITIES AND EQUITY
Current liabilities:
Settlement obligations	$	875,783		$	1,013,067		$	929,722		$	1,140,875
Trade accounts payable	115,498			81,743			141,018			147,593
Accrued expenses and other current liabilities	312,604			294,557			388,833			404,021
Current portion of operating lease liabilities	52,120			127,353			53,659			52,436
Short-term debt obligations and current maturities of long-term debt obligations	884			6,089			746			797
Income taxes payable	25,231			52,583			35,814			36,359
Deferred revenue	55,779			58,588			71,667			73,360
Total current liabilities	1,437,899			1,633,980			1,621,459			1,855,441
Debt obligations, net of current portion	1,132,626			1,090,939			1,176,441			1,437,589
Operating lease obligations, net of current portion	106,475			241,977			122,043			106,502
Deferred income taxes	54,868			56,067			39,114			37,875
Other long-term liabilities	57,730			55,361			40,530			43,401
Total liabilities	2,789,598			3,078,324			2,999,587			3,480,808
Equity:
Euronet Worldwide, Inc. stockholders’ equity:
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; 62,955,214 issued at September 30, 2020 and 62,775,762 issued at December 31, 2019	1,259			1,256
Common Stock, $0.02 par value. 90,000,000 shares authorized; shares issued 63,451,545 and 63,366,010							1,269			1,267
Additional paid-in-capital	1,210,709			1,190,058			1,252,456			1,228,446
Treasury stock, at cost, 10,645,079 shares at September 30, 2020 and 8,554,908 shares at December 31, 2019	(703,604		)	(463,704		)
Treasury stock, at cost, shares issued 10,629,291 and 10,631,961							(703,247		)	(703,032		)
Retained earnings	942,920			1,016,554			1,013,125			1,013,155
Accumulated other comprehensive loss	(145,583		)	(164,890		)	(124,384		)	(94,214		)
Total Euronet Worldwide, Inc. stockholders’ equity	1,305,701			1,579,274			1,439,219			1,445,622
Noncontrolling interests	57			68			277			281
Total equity	1,305,758			1,579,342			1,439,496			1,445,903
Total liabilities and equity	$	4,095,356		$	4,657,666		$	4,439,083		$	4,926,711

See accompanying notes to the unaudited consolidated financial statements.

Table of Contents

EURONET WORLDWIDE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

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


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019				2020			2019		2021			2020			2021			2020
Revenues	$	664,351		$	786,986		$	1,776,061		$	2,056,362		$	714,686		$	527,803		$	1,367,356		$	1,111,710
Operating expenses:
Direct operating costs	407,598			405,081				1,117,065			1,152,725		470,816			350,011				905,332			709,467
Salaries and benefits	101,577			101,354				293,769			292,699		121,071			90,952				236,739			192,192
Selling, general and administrative	55,225			58,715				169,333			160,704		59,119			53,315				117,895			114,108
Goodwill and acquired intangible assets impairment	1,467			—				106,021			—
Goodwill impairment													0—			104,554				0—			104,554
Depreciation and amortization	32,412			27,846				93,470			82,253		33,559			30,242				66,820			61,058
Total operating expenses	598,279			592,996				1,779,658			1,688,381		684,565			629,074				1,326,786			1,181,379
Operating income (loss)	66,072			193,990				(3,597)			367,981		30,121			(101,271		)		40,570			(69,669	)
Other income (expense):
Interest income	139			568				867			1,424		204			161				386			728
Interest expense	(9,477		)	(9,093		)		(27,594	)		(27,321	)	(9,457		)	(8,884		)		(18,646	)		(18,117	)
Loss on early retirement of debt	—			—				—			(9,831	)
Foreign currency exchange loss, net	(1,368		)	(10,967		)		(17,679	)		(7,880	)
Other gain (loss)	—			—				728			(4	)
Foreign currency exchange gain (loss), net													116			2,495				(3,916	)		(16,311	)
Other gains, net													0—			697				31			728
Other expense, net	(10,706		)	(19,492		)		(43,678	)		(43,612	)	(9,137		)	(5,531		)		(22,145	)		(32,972	)
Income (loss) before income taxes	55,366			174,498				(47,275	)		324,369		20,984			(106,802		)		18,425			(102,641	)
Income tax expense	(15,051		)	(36,957		)		(26,423	)		(84,244	)	(12,352		)	(8,931		)		(18,414	)		(11,372	)
Net income (loss)	40,315			137,541				(73,698	)		240,125		8,632			(115,733		)		11			(114,013	)
Net (income) loss attributable to noncontrolling interests	(66		)	66				64			178
Net loss (income) attributable to noncontrolling interests													3			(71		)		(41	)		130
Net income (loss) attributable to Euronet Worldwide, Inc.	$	40,249		$	137,607		$	(73,634	)	$	240,303		$	8,635		$	(115,804	)	$	(30	)	$	(113,883	)

Earnings (loss) per share attributable to Euronet Worldwide, Inc. stockholders:
Basic	$	0.77		$	2.53		$	(1.40	)	$	4.52		$	0.16		$	(2.22	)	$	(0.00	)	$	(2.15	)
Diluted	$	0.76		$	2.46		$	(1.40	)	$	4.40		$	0.16		$	(2.22	)	$	(0.00	)	$	(2.15	)

Weighted average shares outstanding:
Basic	52,294,522			54,449,256				52,712,030			53,180,850		52,805,367			52,234,465				52,784,106			52,920,784
Diluted	53,201,971			55,972,061				52,712,030			54,622,219		54,008,839			52,234,465				52,784,106			52,920,784

EURONET WORLDWIDE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited, in thousands)


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019				2020			2019		2021				2020		2021			2020
Net income (loss)	$	40,315		$	137,541		$	(73,698	)	$	240,125		$	8,632		$	(115,733	)	$	11		$	(114,013	)
Translation adjustment	47,006			(56,863		)		19,360			(60,887	)	12,686			32,172			(30,215		)	(27,646		)
Comprehensive income (loss)	87,321			80,678				(54,338	)		179,238		21,318			(83,561		)	(30,204		)	(141,659		)
Comprehensive (income) loss attributable to noncontrolling interests	(133		)	126				11			255		(8		)	(98		)	4			144
Comprehensive income (loss) attributable to Euronet Worldwide, Inc.	$	87,188		$	80,804		$	(54,327	)	$	179,493		$	21,310		$	(83,659	)	$	(30,200	)	$	(141,515	)

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	)
Net (loss) income
Other comprehensive income
Stock issued under employee stock plans	82,841			2		3,763		59
Share-based compensation						3,125
Balance as of June 30, 2020	52,288,531		$	1,259	$	1,204,985	$	(703,657	)

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 )
Net income (loss)

Other comprehensive income

Stock issued under employee stock plans
41,856

1,740

(46
)
Share-based compensation

6,003

Redemptions and conversions of convertible notes, net of tax
2,488,243

50

22,400

Balance as of June 30, 2019

54,480,239

$ 1,251

$ 1,172,834

$
(393,353
)
Net income (loss)

Other comprehensive income

Stock issued under employee stock plans

35,437

1

1,131

(178
)
Share-based compensation

5,456

Repurchase of shares

(275,181
)

(39,751
)
Other

(8
)

Balance as of September 30, 2019
54,240,495

1,252

1,179,413

(433,282
)

	Number of Shares Outstanding		Common Stock		Additional Paid-in Capital		Treasury Stock			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)
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	80,519			1		1,701		(249	)	62,436		1		3,335		(482	)
Share-based compensation						6,338								8,492
Repurchase of shares	(2,095,683	)						(239,763	)
Balance as of March 31, 2020	52,205,690			1,257		1,198,097		(703,716	)
Net (loss) income
Balance as of March 31, 2021										52,796,485		1,268		1,240,273		(703,514	)
Net income (loss)
Other comprehensive income
Stock issued under employee stock plans	82,841			2		3,763		59		25,769		1		1,199		267
Share-based compensation						3,125								10,984
Balance as of June 30, 2020	52,288,531		$	1,259	$	1,204,985	$	(703,657	)
Net income
Other comprehensive income
Stock issued under employee stock plans	21,604					687		53
Share-based compensation						5,037
Balance as of September 30, 2020	52,310,135			1,259		1,210,709		(703,604)
Balance as of June 30, 2021										52,822,254	$	1,269	$	1,252,456	$	(703,247	)

See accompanying notes to the unaudited consolidated financial statements.

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
Net (loss) income		(115,804	)					71			(115,733	)
Other comprehensive income					32,145			27			32,172
Stock issued under employee stock plans											3,824
Share-based compensation											3,125
Balance as of June 30, 2020	$	902,671		$	(192,522	)	$	(76	)	$	1,212,660

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
Net income (loss)

68,153

(148
)

68,005
Other comprehensive income

12,149

12

12,161
Stock issued under employee stock plans

1,694
Share-based compensation

6,003
Redemptions and conversions of convertible notes

22,450
Balance as of June 30, 2019

772,501

(155,050
)

40

1,398,223
Net income (loss)

137,607

(66)

137,541
Other comprehensive loss

(56,803)

(60)

(56,863)

Stock issued under employee stock plans

954
Share-based compensation

5,456
Repurchase of shares

(39,751)

Other

(8)

Balance as of September 30, 2019
$
910,108

$
(211,853)

$
(86)

$ 1,445,552

	Retained Earnings		Accumulated Other Comprehensive Loss			Noncontrolling Interests			Total			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
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				(59,777	)		(41	)	(59,818		)					(42,845	)		(56	)	(42,901		)
Stock issued under employee stock plans									1,453												2,854
Share-based compensation									6,338												8,492
Repurchase of shares									(239,763		)
Balance as of March 31, 2020		1,018,475		(224,667	)		(174	)		1,289,272
Net (loss) income		(115,804)					71			(115,733)
Balance as of March 31, 2021													1,004,490			(137,059)			269		1,405,727
Net income (loss)													8,635						(3	)	8,632
Other comprehensive income				32,145			27			32,172						12,675			11		12,686
Stock issued under employee stock plans										3,824											1,467
Share-based compensation										3,125											10,984
Balance as of June 30, 2020		902,671		(192,522	)		(76	)		1,212,660
Net income		40,249					66			40,315
Other comprehensive income				46,939			67			47,006
Stock issued under employee stock plans										740
Share-based compensation										5,037
Balance as of September 30, 2020	$	942,920	$	(145,583)		$	57		$	1,305,758
Balance as of June 30, 2021												$	1,013,125		$	(124,384	)	$	277		$	1,439,496

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)


	Nine Months Ended September 30,						Six Months Ended June 30,
	2020			2019			2021			2020
Net (loss) income	$	(73,698	)	$	240,125
Adjustments to reconcile net income to net cash provided by operating activities:
Net income (loss)							$	11		$	(114,013	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	93,470			82,253			66,820			61,058
Share-based compensation	14,500			15,949			19,476			9,463
Unrealized foreign exchange loss, net	17,679			7,880			3,916			16,311
Deferred income taxes	(5,011		)	13,313			1,271			(1,427		)
Goodwill and acquired intangible assets impairment	106,021			—
Loss on early retirement of debt	—			9,831
Goodwill impairment							0—			104,554
Accretion of convertible debt discount and amortization of debt issuance costs	13,996			13,385			10,012			9,281
Changes in working capital, net of amounts acquired:
Income taxes payable, net	(26,625		)	15,363			(785		)	(16,433		)
Trade accounts receivable	232,380			4,719			136,121			229,597
Prepaid expenses and other current assets	(25,917		)	(26,292		)	136,331			(16,999		)
Trade accounts payable	(127,291		)	(62,078		)	(213,158		)	(135,121		)
Deferred revenue	(4,540		)	5			(30		)	26
Accrued expenses and other current liabilities	25,110			58,559			17,340			57,281
Changes in noncurrent assets and liabilities	(19,658		)	(8,633		)	(4,018		)	(25,021		)
Net cash provided by operating activities	220,416			364,379			173,307			178,557
Cash flows from investing activities:
Acquisitions, net of cash acquired	(451		)	1			0—			475
Purchases of property and equipment	(71,396		)	(100,443		)	(45,076		)	(45,500		)
Purchases of other long-term assets	(5,968		)	(7,276		)	(4,273		)	(4,085		)
Other, net	742			3,317			1,017			486
Net cash used in investing activities	(77,073		)	(104,401		)	(48,332		)	(48,624		)
Cash flows from financing activities:
Proceeds from issuance of shares	6,564			8,297			5,271			5,668
Repurchase of shares	(240,838		)	(37,260		)	(943		)	(240,684		)
Borrowings from revolving credit agreements	2,018,600			2,365,698			1,606,100			1,425,100
Repayments of revolving credit agreements	(2,018,600		)	(2,580,871		)	(1,855,700		)	(1,425,100		)
Proceeds from long-term debt obligations	—			1,194,900
Repayments of long-term debt obligations	—			(446,702		)
Net repayments from short-term debt obligations	(5,032		)	(18,793		)	(45		)	(4,974		)
Debt issuance costs	—			(18,810		)
Other, net	(4,763		)	(4,827		)	(3,236		)	(984		)
Net cash (used in) provided by financing activities	(244,069		)	461,632
Net cash used in financing activities							(248,553		)	(240,974		)
Effect of exchange rate changes on cash and cash equivalents and restricted cash	32,042			(57,807		)	(43,278		)	(27,787		)
(Decrease) increase in cash and cash equivalents and restricted cash	(68,684		)	663,803
Decrease in cash and cash equivalents and restricted cash							(166,856		)	(138,828		)
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	$	1,748,695		$	1,794,755		$	1,932,652		$	1,678,551

Supplemental disclosure of cash flow information:
Interest paid during the period	$	16,653		$	10,614		$	13,688		$	13,359
Income taxes paid during the period	$	50,300		$	55,025		$	18,886		$	29,695

See accompanying notes to the unaudited consolidated financial statements.

EURONET WORLDWIDE, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(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 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 varying degrees of travel restrictions and shelter-in-place and other social distancing orders in most of the countries where the Company operates during the three and nine months ended September 30, 2020. Although the majority of these orders went into effect in late February 2020 or early March 2020, new orders are being implemented, or reinstated, as the pandemic spreads around the globe and there is a resurgence of infections. 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 the Company has a higher mix of digital distribution or a higher concentration of retailers that are deemed essential and have remained open during the pandemic.

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

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(2) RECENTLY ISSUED AND ADOPTED ACCOUNTING PRONOUNCEMENTS

In August 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-06, "Accounting for Convertible Instruments and Contracts in an Entity's Own Equity" which simplifies the accounting for convertible instruments by eliminating certain accounting models when the conversion features are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in-capital. Under this ASU, certain debt instruments with embedded conversion features will be accounted for as a single liability measured at its amortized cost. Additionally, this ASU eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments. 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.

(3) PENDING ACQUISITION

In March ~~2020,~~2021, the ~~FASB issued ASU 2020-04,~~ ~~Reference Rate Reform~~ ~~(Topic 848), which provides optional expedients~~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 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 incustomer referrals. The acquisition will expand the Company’s ~~unsecured credit agreement.~~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 ~~does not expect that~~expects to finance the ~~adoption of this guidance will have a significant impact~~purchase price using cash on ~~its consolidated financial statements.~~hand.

~~The Company adopted ASU 2016-13,~~ ~~Financial Instruments - Credit Losses~~ (Topic 326), as of January 1, 2020, which requires entities to measure all expected credit losses for financial assets held at the reporting date based 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.

~~(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~~accounts 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 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)
September 30,
2020

December 31,
2019
Settlement assets:
Settlement cash and cash equivalents $ 272,467
$ 282,188
Settlement restricted cash 44,158
49,168
Accounts receivable, net of credit losses 434,828
574,410
Prepaid expenses and other current assets 124,330
107,301
Total settlement assets $ 875,783
$ 1,013,067
Settlement obligations:
Trade account payables $ 346,391
$ 504,667
Accrued expenses and other current liabilities 529,392
508,400
Total settlement obligations $ 875,783
$ 1,013,067

~~A portion 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 $29.9~~ ~~million and $24.0~~ ~~million as of September 30, 2020 and December 31, 2019, respectively.~~

	As of
(in thousands)	June 30, 2021		December 31, 2020
Settlement assets:
Settlement cash and cash equivalents	$	311,131	$	188,191
Settlement restricted cash	58,621		76,674
Accounts receivable, net of credit losses of $30,582 and $35,800	467,293		641,955
Prepaid expenses and other current assets	92,677		234,055
Total settlement assets	$	929,722	$	1,140,875
Settlement obligations:
Trade account payables	$	353,502	$	571,175
Accrued expenses and other current liabilities	576,220		569,700
Total settlement obligations	$	929,722	$	1,140,875

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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								As of
(in thousands)	September 30, 2020		December 31, 2019		September 30, 2019		December 31, 2018		June 30, 2021		December 31, 2020		June 30, 2020		December 31, 2019
Cash and cash equivalents	$	1,008,183	$	786,081	$	878,492	$	385,031	$	994,488	$	1,420,255	$	864,871	$	786,081
Restricted cash	14,204		34,301		21,844		31,237		3,328		3,334		28,050		34,301
ATM cash	409,683		665,641		603,176		395,378		565,084		411,054		410,459		665,641
Settlement cash and cash equivalents	272,467		282,188		249,181		273,948		311,131		188,191		340,915		282,188
Settlement restricted cash	44,158		49,168		42,062		45,358		58,621		76,674		34,256		49,168
Cash and cash equivalents and restricted cash at end of period	$	1,748,695	$	1,817,379	$	1,794,755	$	1,130,952	$	1,932,652	$	2,099,508	$	1,678,551	$	1,817,379

~~(4)~~(5) STOCKHOLDERS' EQUITY

Earnings (Loss) Per Share

Basic earnings (loss) per share has been computed by dividing earnings (loss) available to common stockholders by the weighted average number of common shares outstanding during the respective period. Diluted earnings (loss) per share has been computed by dividing earnings (loss) available to common stockholders by the weighted average shares outstanding during the respective period, after adjusting for the potential dilution of options to purchase the Company's ~~Common Stock,~~common stock, assumed vesting of restricted stock and the assumed conversion of the Company's convertible 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 September 30,		Nine Months Ended September 30,		Three Months Ended June 30,		Six Months Ended June 30,
	2020	2019	2020	2019	2021	2020	2021	2020
Computation of diluted weighted average shares outstanding:
Basic weighted average shares outstanding	52,294,522	54,449,256	52,712,030	53,180,850	52,805,367	52,234,465	52,784,106	52,920,784
Incremental shares from assumed exercise of stock options and vesting of restricted stock	907,449	1,522,805	—	1,441,369	1,203,472	0—	0—	0—
Diluted weighted average shares outstanding	53,201,971	55,972,061	52,712,030	54,622,219	54,008,839	52,234,465	52,784,106	52,920,784

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 earnings (loss) 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 ~~1,122,000~~1,239,000 and ~~1,887,000~~ 2,429,000 for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~,2021, respectively, and approximately ~~751,000~~ 2,533,000 and ~~841,000~~1,608,000 for the three and ~~nine~~six months ended June 30, 2020, respectively~~September 30, 2019, respectively.~~.

The Company issued Convertible Senior Notes ("Convertible Notes") due March 2049 on March 18, 2019. The Company's Convertible Notes currently have 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 were included in the calculation of diluted earnings (loss) per share if their inclusion was dilutive. The dilutive effect increases the more the market price exceeds the conversion price. 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 ~~$91.10~~$135.35 on ~~September~~June 30, ~~2020~~2021 and ~~$146.30~~$95.82 on ~~September~~June 30, ~~2019~~2020, therefore, according to ASC Topic 260, Earnings per Share (“ASC 260”), there was 0no dilutive effect of the assumed conversion of the debentures for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019.~~2020. See Note 8,9, Debt Obligations, to the consolidated financial statements for more information about the Convertible Notes.

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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 three and six months ended ~~September~~June 30, ~~2020,~~2021, there were no repurchases of stock under the repurchase programs ~~and for the nine months ended September 30, 2020, the Company repurchased $239.8 million~~ ~~in value of Euronet common stock~~. Repurchases under the ~~repurchase programs. Repurchases under either~~ 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~~

Income (Loss)

Accumulated other comprehensive ~~loss~~income (loss) consists entirely of foreign currency translation adjustments. The Company recorded a foreign currency translation gain of ~~$47.0~~$12.7 million and ~~$19.4~~ a loss of $30.2 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~,2021, respectively, and a gain of $32.2 million and a loss of ~~$56.9~~$27.6 million ~~and~~ ~~$60.9 million~~ for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, respectively. There were no reclassifications of foreign currency translation into the consolidated statements of income for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019.~~2020.

(56) GOODWILL AND ACQUIRED INTANGIBLE ASSETS, NET

A summary of acquired intangible assets and goodwill activity for the ~~nine~~six months ended ~~September~~June 30, ~~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
Increases (decreases):
Acquisition 926
(474 ) 452
Amortization (17,020 ) —
(17,020 )
Impairment
(1,467 )
(104,554 )
(106,021 )
Other (primarily changes in foreign currency exchange rates) (709 ) 3,091
2,382
Balance as of September 30, 2020 $ 123,577
$ 641,886
$ 765,463


(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	(11,600		)	0—			(11,600		)
Foreign currency exchange rate changes	(963		)	(8,494		)	(9,457		)
Balance as of June 30, 2021	$	109,320		$	657,327		$	766,647

Of the total goodwill balance of ~~$641.9~~ $657.3 million as of June~~September~~ 30, ~~2020~~2021, ~~$388.5~~$400.6 million relates to the Money Transfer Segment, $~~131.9~~133.3 million relates to the epay Segment and the remaining ~~$121.5~~$123.4 million relates to the EFT Processing Segment. Estimated amortization expense on acquired intangible assets with finite lives as of ~~September~~June 30, ~~2020,~~2021, is expected to total ~~$5.6~~$11.4 million for the remainder of ~~2020, $22.0 million for~~ 2021, ~~$20.9~~$21.7 million for 2022, ~~$16.1~~$16.7 million for 2023, ~~$9.6~~$9.8 million for 2024, ~~and $6.5~~$6.4 million for ~~2025.~~

~~2020 Impairment Charges~~

~~The COVID-~~19 ~~pandemic~~2025 and subsequent mitigation efforts, which include global business shutdowns, the closing of borders and the implementation of mandatory social distancing requirements, has created an unprecedented disruption to our business that began in March 2020~~. These mitigation efforts coupled with the negative economic impacts to the tourism industry caused a decline in revenues and changes to our forecasts.The Company tests~~$6.3 million for goodwill impairment on an annual basis in the fourth quarter each year and whenever events or circumstances dictate an interim impairment test is required. The Company determined the totality of these events constituted a triggering event that required us to perform an interim goodwill impairment assessment as of June 1, 2020. The Company concluded a triggering event had occurred for ~~six~~ ~~reporting units, resulting in quantitative impairment tests.~~ ~~Three~~ ~~reporting units are within the EFT segment,~~ ~~two~~ ~~reporting units are within the Money Transfer segment, and~~ ~~one~~ ~~reporting unit is within the epay segment.~~

Under the quantitative impairment test, the evaluation of impairment involves comparing the current fair value of each reporting unit to its carrying value, including goodwill. The Company uses weighted results from the discounted cash flow model ("DCF model") and guideline public company method ("Market Approach model") to estimate the current fair value of its reporting units when testing for impairment, as management believes forecasted cash flows and EBITDA are the best indicators of such fair value. A number of significant assumptions and estimates are involved in the application of the DCF model to forecast operating cash flows, including sales volumes and gross margins, tax rates, capital spending, discount rates and working capital changes. Most of these assumptions vary significantly among the reporting units. Significant assumptions in the Market Approach model are actual and projected EBITDA, selected market multiple, and the estimated control premium. If the carrying value of the reporting unit exceeds its fair value, a goodwill impairment loss equal to such excess would be recognized. ~~The DCF Model and Market Approach Model utilize Level 3 inputs in the fair value hierarchy as they include unobservable inputs that require significant management assumptions.~~

2026.

~~Table of Contents~~

The Company completed an interim goodwill impairment test during the second quarter of 2020. It determined, after performing a quantitative review of six reporting units, that the fair value of three of the reporting units exceeded the respective carrying amounts. For the remaining three reporting units, the quantitative test indicated that the fair value of each of the reporting units was less than the respective carrying amounts. As a result, the Company recorded a non-cash goodwill impairment charge of ~~$104.6 million~~ ~~with respect to the xe, Innova and Pure Commerce reporting units.~~ ~~$21.9~~ ~~million of the impairment charge was included within the EFT Segment, and~~ ~~$82.7~~ ~~million of the impairment charge was included in the Money Transfer Segment.~~ ~~We have and will continue to evaluate our goodwill and long-lived assets for potential triggering events as conditions warrant.~~

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 and 2020 interim 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. As additional 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.

~~During the third quarter of 2020, the Company recorded a~~ $~~1.5 million~~ ~~non-cash impairment charge for acquired intangible assets, specifically related to customer lists in the xe reporting unit.~~

(67) ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of the following:


	As of				As of
(in thousands)	September 30, 2020		December 31, 2019		June 30, 2021		December 31, 2020
Accrued expenses	$	264,575	$	246,699	$	357,308	$	331,713
Derivative liabilities	41,563		41,935		26,224		65,905
Current portion of capital lease obligations	6,466		5,919
Deferred income taxes	—		4
Current portion of finance lease obligations					5,301		6,403
Total	$	312,604	$	294,557	$	388,833	$	404,021

~~(7)~~(8) UNEARNED REVENUES

The Company records deferred revenues when cash payments are received or due in advance of its performance. The ~~decrease~~increase in the deferred revenue balance for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 is primarily driven by ~~$31.5~~$33.4 million of cash payments received in the current year for which the Company has not yet satisfied the performance obligations, offset by ~~$34.3~~$35.1 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						As of
(in thousands)	September 30, 2020			December 31, 2019			June 30, 2021			December 31, 2020
Credit Facility:
Revolving credit agreement	$	—		$	—		$	20,800		$	270,400
Convertible Debt:
0.75% convertible notes, unsecured, due 2049	448,344			436,965			460,136			452,228

1.375% Senior Notes, due 2026	703,200			673,440			711,300			732,840

Other obligations	942			6,215			808			850

Total debt obligations	1,152,486			1,116,620			1,193,044			1,456,318
Unamortized debt issuance costs	(18,976		)	(19,592		)	(15,857		)	(17,932		)
Carrying value of debt	1,133,510			1,097,028			1,177,187			1,438,386
Short-term debt obligations and current maturities of long-term debt obligations	(884		)	(6,089		)	(746		)	(797		)
Long-term debt obligations	$	1,132,626		$	1,090,939		$	1,176,441		$	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. In May 2021, an additional lender joined the Credit Facility which increased the revolving commitment by $30 million. 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, British pounds sterling, Canadian dollars, Czech koruna, Danish krone, euro, Hungarian forints, Japanese yen, New Zealand dollars, Norwegian krone, Polish zlotys, Swedish krona, Swiss francs and U.S. dollars. The ~~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 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 ~~September~~June 30, ~~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% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the relevant repurchase date.

1211

Table of Contents

On May 28, 2019, the Company redeemed all of the remaining principal amount outstanding of the Company's 1.5% Convertible Senior Notes due 2044 (the "Retired Convertible Notes") 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, May 28, 2020.

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~~$99.7 million~~ for the Convertible Notes.

Contractual interest expense for the Convertible Notes was $1.0 ~~million~~ ~~and $3.0 million~~ ~~for the three and~~ ~~nine months ended~~ ~~September 30, 2020, respectively~~ ~~and $1.0~~ million and ~~$2.1~~$2.0 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2021, respectively, and $1.0 million and $2.0 million for the three and six months ended June 30, 2020, respectively. Accretion expense for the Convertible Notes was ~~$3.8 million~~ ~~and $11.4 million~~ ~~for the three and~~ ~~nine months ended~~ ~~September 30, 2020, respectively and~~ ~~$3.7~~$4.0 million and $7.9 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2021, respectively,~~. Contractual interest expense~~ and $3.8 million and $7.5 million for the ~~Retired Convertible Notes~~ ~~was $1.5 million for~~ ~~the nine~~three and six months ended ~~September~~June 30, ~~2019. Accretion expense for the Retired Convertible Notes was~~ ~~$4.6 million~~ ~~for the~~ ~~nine months ended~~ ~~September 30, 2019~~2020, respectively.The effective interest rate was 4.4% for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021. As of ~~September~~June 30, ~~2020,~~2021, the unamortized discount was ~~$76.7~~$64.9 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 ($669.9 million) aggregate principal amount of Senior Notes that expire in May 2026 (the “Senior Notes”). The Senior Notes accrue interest at a rate of 1.375% per year, payable annually in arrears commencing May 22, 2020, until maturity or earlier redemption. As of ~~September~~June 30, ~~2020,~~2021, the Company has outstanding €600 million ($~~703.2 million)~~711.3 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 ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, borrowings under these arrangements were ~~$0.9~~$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 provided Euronet up to~~ ~~$100.0 million~~ ~~under an uncommitted line of credit. Interest on borrowings was equal to~~ ~~LIBOR~~ ~~plus~~ ~~0.65%~~ ~~and the agreement was set to expire September 4, 202~~0. ~~During the three months ended June 30, 2020, the Company and Bank of America mutually agreed to terminate the Uncommitted Loan Agreement.~~

(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, (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 September 30, 2020, the~~The Company had foreign currency forward contracts outstanding in the U.S. with a notional value of $~~180~~220 million and $246 million as of June 30, 2021 and December 31, 2020, respectively. The foreign currency forward contracts consist primarily in Australian dollars, Canadian dollars, British pounds sterling, euro and Mexican pesos.

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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 September 30, 2020, the~~The Company had foreign currency forward contracts outstanding with a notional value of $~~213~~99 million and $454 million as of June 30, 2021 and December 31, 2020, respectively, primarily in euro.

Foreign currency exchange contracts - xe Operations

xe writes derivative instruments, primarily foreign currency forward contracts and cross-currency swaps, mostly with counterparties comprised of individuals and small-to-medium size businesses and derives a currency margin from this activity as part of its operations. xe aggregates its foreign currency exposures arising from customer contracts and hedges the resulting net currency risks by entering into offsetting contracts with established financial institution counterparties. Foreign exchange revenues from xe's total portfolio of positions were ~~$14.4~~$19.9 million and ~~$45.7~~$38.4 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021, respectively, and $~~17.5~~13.2 million and ~~$52.2~~$31.3 million for ~~the~~the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~,2020, respectively. All of the derivative contracts used in the ~~Company' s~~Company's xe operations are economic hedges and are not designated as hedges under ASC 815. The duration of these derivative contracts is generally less than one year.

The fair value of xe's total portfolio of positions can change significantly from period to period based on, among other factors, market movements and changes in customer contract positions. xe manages counterparty credit risk (the risk that counterparties will default and not make payments according to the terms of the agreements) on an individual counterparty basis. It mitigates this risk by entering into contracts with collateral posting requirements and/or by performing financial assessments prior to contract execution, conducting periodic evaluations of counterparty performance and maintaining a diverse portfolio of qualified counterparties. xe does not expect any significant losses from counterparty defaults.

The aggregate equivalent U.S. dollar notional amount of foreign currency derivative customer contracts held by the Company in its xe operations as of ~~September~~June 30, 2021 and December 31, 2020 was approximately $1.1 billion and $1.3 ~~billion.~~billion, respectively. The significant majority of customer contracts are written in major currencies such as the euro, U.S. dollar, British pounds sterling, Australian dollar and New Zealand dollar.

Balance Sheet Presentation

The following table summarizes the fair value of the derivative instruments as recorded in the Consolidated Balance Sheets as of the dates below:


	Asset Derivatives					Liability Derivatives							Asset Derivatives					Liability Derivatives
		Fair Value					Fair Value							Fair Value					Fair Value
(in thousands)	Balance Sheet Location	September 30, 2020		December 31, 2019		Balance Sheet Location	September 30, 2020			December 31, 2019			Balance Sheet Location	June 30, 2021		December 31, 2020		Balance Sheet Location	June 30, 2021			December 31, 2020
Derivatives not designated as hedging instruments
Foreign currency exchange contracts	Prepaid expenses and other current assets	$	49,574	$	54,765	Accrued expenses and other current liabilities	$	(41,563	)	$	(41,935	)	Other current assets	$	36,488	$	80,879	Other current liabilities	$	(26,224	)	$	(65,905	)

The following tables summarize the gross and net fair value of derivative assets and liabilities as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 (in thousands):

Offsetting of Derivative Assets

																					Gross Amounts Not Offset in the Consolidated Balance Sheet
							Gross Amounts Not Offset in the Consolidated Balance Sheet
As of September 30, 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
As of June 30, 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	$	49,574	$	—	$	49,574	$	(29,488	)	$	(894	)	$	19,192	$	36,488	$	0—	$	36,488	$	(16,497	)	$	(3,631	)	$	16,360

As of December 31, 2019
As of December 31, 2020
Derivatives subject to a master netting arrangement or similar agreement	$	54,765	$	—	$	54,765	$	(34,935	)	$	(7,362	)	$	12,468	$	80,879	$	0—	$	80,879	$	(44,893	)	$	(2,778	)	$	33,208

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Offsetting of Derivative Liabilities

									Gross Amounts Not Offset in the Consolidated Balance Sheet
As of June 30, 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	$	(26,224	)	$	0—	$	(26,224	)	$	16,497	$	644	$	(9,083	)

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	)

Gross Amounts Not Offset in the Consolidated Balance Sheet
As of September 30, 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 $ (41,563 ) $ —
$ (41,563 ) $ 29,488
$ 2,321
$ (9,754 )

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

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 and ~~nine~~six months ended ~~September~~June 30, ~~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
September 30,

Nine Months Ended
September 30,
(in thousands) 2020 2019

2020

2019
Foreign currency exchange contracts - Ria Operations Foreign currency exchange (loss) gain, net $ (4,060 ) $ 285
$
(4,283
)
$ 619

		Amount of Gain (Loss) Recognized in Income on Derivative Contracts (a)
	Location of Gain (Loss) Recognized in Income on Derivative Contracts	Three Months Ended June 30,					Six Months Ended June 30,
(in thousands)		2021		2020			2021		2020
Foreign currency exchange contracts - Ria Operations	Foreign currency exchange gain (loss), net	$	3,915	$	(460	)	$	1,447	$	(223	)

(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.

(1011) 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 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.

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The following table details financial assets and liabilities measured and recorded at fair value on a recurring basis:


		As of September 30, 2020									As of June 30, 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	$	—	$	49,574	$	—	$	49,574	Other current assets	$	0—	$	36,488		$	0—	$	36,488
Liabilities
Foreign currency exchange contracts	Other current liabilities	$	—	$	(41,563)	$	—	$	(41,563)	Other current liabilities	$	0—	$	(26,224	)	$	0—	$	(26,224	)


		As of December 31, 2019											As of December 31, 2020
(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	$	—	$	54,765		$	—	$	54,765		Other current assets	$	0—	$	80,879		$	0—	$	80,879
Liabilities
Foreign currency exchange contracts	Other current liabilities	$	—	$	(41,935	)	$	—	$	(41,935	)	Other current liabilities	$	0—	$	(65,905	)	$	0—	$	(65,905	)

~~(11)~~(12) 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 and the United States. 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 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.


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.

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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 and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019:~~2020:

For the Three Months Ended September 30, 2020
(in thousands)
EFT
Processing
epay
Money
Transfer

Corporate
Services,
Eliminations
and Other
Consolidated
Total revenues $ 144,062
$ 198,939
$ 323,092
$ (1,742)
$ 664,351
Operating expenses:
Direct operating costs 82,626
149,993
176,718
(1,739)
407,598
Salaries and benefits 25,182
16,108
52,035
8,252
101,577
Selling, general and administrative 8,577
8,455
36,601
1,592
55,225
Goodwill and acquired intangible assets impairment
—

—

1,467

—

1,467
Depreciation and amortization 21,516
2,134
8,645
117
32,412
Total operating expenses 137,901
176,690
275,466
8,222
598,279
Operating income (expense) $ 6,161
$ 22,249
$ 47,626
$ (9,964)
$ 66,072

	For the Three Months Ended June 30, 2021
(in thousands)	EFT Processing			epay		Money Transfer		Corporate Services, Eliminations and Other			Consolidated
Total revenues	$	113,482		$	243,918	$	359,308	$	(2,022	)	$	714,686
Operating expenses:
Direct operating costs	82,681			184,989		205,164		(2,018		)	470,816
Salaries and benefits	24,098			19,775		62,710		14,488			121,071
Selling, general and administrative	9,799			9,772		38,326		1,222			59,119
Depreciation and amortization	22,240			2,147		9,026		146			33,559
Total operating expenses	138,818			216,683		315,226		13,838			684,565
Operating (loss) income	$	(25,336	)	$	27,235	$	44,082	$	(15,860	)	$	30,121

	For the Three Months Ended June 30, 2020
(in thousands)	EFT Processing			epay		Money Transfer			Corporate Services, Eliminations and Other			Consolidated
Total revenues	$	78,488		$	187,563	$	262,863		$	(1,111	)	$	527,803
Operating expenses:
Direct operating costs	62,465			144,056		144,589			(1,099		)	350,011
Salaries and benefits	21,289			15,191		49,059			5,413			90,952
Selling, general and administrative	9,515			8,635		33,172			1,993			53,315
Goodwill impairment	21,861			0—		82,693			0—			104,554
Depreciation and amortization	19,934			1,651		8,577			80			30,242
Total operating expenses	135,064			169,533		318,090			6,387			629,074
Operating (loss) income	$	(56,576	)	$	18,030	$	(55,227	)	$	(7,498	)	$	(101,271	)

For the Three Months Ended September 30, 2019
(in thousands)
EFT
Processing
epay
Money
Transfer

Corporate
Services,
Eliminations
and Other
Consolidated
Total revenues $ 316,188
$ 191,071
$ 280,837
$ (1,110 ) $ 786,986
Operating expenses:
Direct operating costs 111,116
145,410
149,663
(1,108 ) 405,081
Salaries and benefits 23,936
15,188
51,555
10,675
101,354
Selling, general and administrative 12,191
8,838
35,820
1,866
58,715
Depreciation and amortization 18,044
1,572
8,151
79
27,846
Total operating expenses 165,287
171,008
245,189
11,512
592,996
Operating income (expense) $ 150,901
$ 20,063
$ 35,648
$ (12,622 ) $ 193,990

	For the Six Months Ended June 30, 2021
(in thousands)	EFT Processing			epay		Money Transfer		Corporate Services, Eliminations and Other			Consolidated
Total revenues	$	200,558		$	486,221	$	684,208	$	(3,631	)	$	1,367,356
Operating expenses:
Direct operating costs	152,293			367,622		389,042		(3,625		)	905,332
Salaries and benefits	47,669			39,144		123,250		26,676			236,739
Selling, general and administrative	21,761			18,792		74,442		2,900			117,895
Depreciation and amortization	44,267			4,271		17,989		293			66,820
Total operating expenses	265,990			429,829		604,723		26,244			1,326,786
Operating (loss) income	$	(65,432	)	$	56,392	$	79,485	$	(29,875	)	$	40,570

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For the Nine Months Ended September 30, 2020
(in thousands) EFT Processing epay Money Transfer
Corporate Services,
Eliminations and Other
Consolidated
Total revenues $ 368,375
$ 559,413
$ 852,189
$ (3,916) $ 1,776,061
Operating expenses:
Direct operating costs 232,627
424,123
464,216
(3,901) 1,117,065
Salaries and benefits 68,562
46,996
154,958
23,253
293,769
Selling, general and administrative 29,033
25,928
108,355
6,017
169,333
Goodwill and acquired intangible assets impairment

21,861

—

84,160

—

106,021
Depreciation and amortization 61,772
5,629
25,793
276
93,470
Total operating expenses 413,855
502,676
837,482
25,645
1,779,658
Operating income (expense) $ (45,480)
$ 56,737
$ 14,707
$ (29,561) $ (3,597)


	For the Nine Months Ended September 30, 2019											For the Six Months Ended June 30, 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	$	693,837	$	551,345	$	814,201	$	(3,021	)	$	2,056,362	$	224,313		$	360,474	$	529,097		$	(2,174	)	$	1,111,710
Operating expenses:
Direct operating costs	300,460		419,362		435,901		(2,998		)	1,152,725		150,001			274,130		287,498			(2,162		)	709,467
Salaries and benefits	64,706		44,939		155,424		27,630			292,699		43,380			30,888		102,923			15,001			192,192
Selling, general and administrative	32,022		26,314		96,660		5,708			160,704		20,456			17,473		71,754			4,425			114,108
Goodwill impairment												21,861			0—		82,693			0—			104,554
Depreciation and amortization	52,464		5,113		24,448		228			82,253		40,256			3,495		17,148			159			61,058
Total operating expenses	449,652		495,728		712,433		30,568			1,688,381		275,954			325,986		562,016			17,423			1,181,379
Operating income (expense)	$	244,185	$	55,617	$	101,768	$	(33,589	)	$	367,981
Operating (loss) income												$	(51,641	)	$	34,488	$	(32,919	)	$	(19,597	)	$	(69,669	)

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

Total Assets as of
(in thousands) September 30, 2020 December 31, 2019
EFT Processing $ 1,503,385
$ 1,914,144
epay 812,444
962,671
Money Transfer 1,480,624
1,560,136
Corporate Services, Eliminations and Other 298,903
220,715
Total $ 4,095,356
$ 4,657,666

	Total Assets as of
(in thousands)	June 30, 2021		December 31, 2020
EFT Processing	$	1,683,806	$	1,541,610
epay	921,115		1,135,204
Money Transfer	1,677,741		1,755,651
Corporate Services, Eliminations and Other	156,421		494,246
Total	$	4,439,083	$	4,926,711

~~Table of Contents~~

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 June 30, 2021									For the Six Months Ended June 30, 2021
(in thousands)	EFT Processing		epay		Money Transfer		Total				EFT Processing		epay		Money Transfer		Total
Europe	$	73,109	$	160,560	$	149,606	$	383,275		$	119,971	$	325,468	$	282,445	$	727,884
North America	15,203		34,601		170,324		220,128				29,669		68,442		322,626		420,737
Asia Pacific	25,035		38,377		26,524		89,936				50,729		72,695		54,993		178,417
Other	135		10,380		12,854		23,369				189		19,616		24,144		43,949
Eliminations	0—		0—		0—		(2,022		)		0—		0—		0—		(3,631	)
Total	$	113,482	$	243,918	$	359,308	$	714,686		$	200,558	$	486,221	$	684,208	$	1,367,356

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	For the Three Months Ended June 30, 2020									For the Six Months Ended June 30, 2020
(in thousands)	EFT Processing		epay		Money Transfer		Total				EFT Processing	epay		Money Transfer		Total
Europe	$	44,927	$	122,675	$	98,730	$	266,332		$	144,401	$	237,952	$	189,788	$	572,141
North America	13,123		36,106		132,891		182,120				28,142		69,958		270,786		368,886
Asia Pacific	20,438		22,782		26,232		69,452				51,766		42,056		57,080		150,902
Other	0—		6,000		5,010		11,010				4		10,508		11,443		21,955
Eliminations	0—		0—		0—		(1,111		)		0—		0—		0—		(2,174	)
Total	$	78,488	$	187,563	$	262,863	$	527,803		$	224,313	$	360,474	$	529,097	$	1,111,710

For the Three Months Ended September 30, 2020

For the Nine Months Ended September 30, 2020
(in thousands)
EFT
Processing
epay
Money
Transfer
Total

EFT
Processing

epay

Money
Transfer

Total
Europe $ 107,182
$ 131,330
$ 127,399
$ 365,911

$ 251,583

$ 368,101

$ 317,187

$ 936,871
North America 14,318
32,645
152,195
199,158

42,461

102,603

422,980

568,044
Asia Pacific 22,562
26,679
34,036
83,277

74,327

69,916

91,116

235,359
Other —
8,285
9,462
17,747

4

18,793

20,906

39,703
Eliminations —
—
—
(1,742)

—

—

—

(3,916)
Total $ 144,062
$ 198,939
$ 323,092
$ 664,351

$ 368,375

$ 559,413

$ 852,189

$ 1,776,061

For the Three Months Ended September 30, 2019
For the Nine Months Ended September 30, 2019
(in thousands)
EFT
Processing
epay
Money
Transfer
Total

EFT
Processing

epay

Money
Transfer

Total
Europe $ 274,313
$ 130,602
$ 94,625
$ 499,540

$ 574,620

$ 368,830

$ 273,760

$ 1,217,210
North America 8,717
37,218
147,989
193,924

24,880

114,614

428,349

567,843
Asia Pacific 33,153
19,039
31,575
83,767

94,317

55,333

93,865

243,515
Other 5
4,212
6,648
10,865

20

12,568

18,227

30,815
Eliminations
—

—

—

(1,110 )

—

—

—

(3,021
)
Total $ 316,188
$ 191,071
$ 280,837
$ 786,986

$ 693,837

$ 551,345

$ 814,201

$ 2,056,362

(1213) INCOME TAXES

~~The Company's~~Our effective income tax rate was ~~27.2~~58.9% and ~~(55.9)~~99.9% for the three and ~~nine~~six months ended June 30, 2021,~~September 30, 2020~~, respectively, compared to ~~21.2%~~(8.4)% and ~~26.0%~~(11.1)% for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019, respectively~~2020, respectively.~~. The Company's~~ Our effective income tax rate for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 was higher than the applicable statutory income tax rate of 21% ~~primarily due~~as a result of certain foreign earnings being subject to higher local statutory tax rates, the ~~non-deductible goodwill impairment charge during the second quarter~~non-recognition of ~~2020~~tax benefits from losses in certain foreign countries where we have a limited history of profitable earnings and as a result of an increase in the valuation allowance in certain jurisdictions relating to the reversal of tax benefits recognized in the first quarter of 2021 for continuing net operating losses. Our effective income tax rate for the three and six months ended June 30, 2020 was different than the applicable statutory income tax rate of 21% primarily due to the non-deductible goodwill impairment charge during the second quarter of 2020 and as a result of an increase in the valuation allowance in certain jurisdictions relating to the reversal of tax benefits recognized in the first quarter of 2020 for net operating losses in those jurisdictions which have a limited history of profitable earnings. ~~The Company's effective income tax rate for the three and nine months ended September 30, 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 ~~September~~June 30, ~~2020,~~2021, the Company had ~~$71.7~~$89.6 million of stand-by letters of credit/bank guarantees issued on its behalf, of which ~~$46.9~~$59.5 million are outstanding under the Credit Facility. The remaining stand-by letters of credit/bank guarantees are collateralized by ~~$4.1~~$3.8 million of cash deposits held by the respective issuing banks.

Under certain circumstances, Euronet grants guarantees in support of obligations of subsidiaries. As of ~~September~~June 30, ~~2020,~~2021, the Company had granted off balance sheet guarantees for cash in various ATM networks amounting to ~~$12.1~~$11.7 million over the terms of the cash supply agreements and performance guarantees amounting to approximately ~~$36.3~~$37.6 million over the terms of agreements with the customers.

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From time to time, the Company enters into agreements with commercial counterparties that contain indemnification provisions, the terms of which may vary depending on the negotiated terms of each respective agreement. The amount of such potential obligations is generally not stated in the agreements. Euronet's liability under such indemnification provisions may be mitigated by relevant insurance coverage and may be subject to time and materiality limitations, monetary caps and other conditions and defenses. Such indemnification obligations include the following:

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 ~~September~~June 30, ~~2020,~~2021, the balance of such cash used in the Company's ATM networks for which the Company was responsible was approximately ~~$506~~$702 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.

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.

To date, the Company is not aware of any significant claims made by the indemnified parties or third parties to guarantee agreements with the Company and, accordingly, no liabilities were recorded as of ~~September~~June 30, ~~2020~~2021 or December 31, ~~2019.~~2020.

(1415) 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.

2019

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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. 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. ~~The~~Since the Company ~~evaluated the likelihood of exercising the renewal and termination options beginning with the adoption of the new accounting lease standard on January 1, 2019, concluding 1) the options were~~is not ~~reasonably certain to be exercised and thus were not considered in determining the lease terms, and associated payment impacts were excluded from lease payments and 2) termination options were~~ reasonably certain not to ~~be exercised and therefore the stated lease payment schedule of the lease was used to determine the lease term.~~

During the second quarter of 2020, the impact of the COVID-19 pandemic was a significant event that caused a significant change in circumstances and business plans to manage our portfolio of ATM leases. Specifically we downsized, through the exercise of termination clauses and the reduction of monthly costs by renegotiating payment terms of our ATM leases. The Company's execution of the business plan to renegotiate terms and downsize the portfolio of ATM leases constituted a reassessment event during the second quarter of 2020. The reassessment event required the Company to reevaluate the accounting for the portfolio of ATM leases, including lease terms. Due to the recent increased frequency of ATM site lease terminations, modifications, and greater unpredictability whether or not future lease terminations will be exercised, the Company is no longer able to conclude that termination options, are reasonably certain not to be exercised. This reassessment conclusion impacts the lease term evaluation, instead of determining the lease term based on the stated lease payment schedule of the lease, now the lease term will be evaluated when the Company has the contractual ability to terminate the lease (most leases allow for a termination upon advance notice of between 30 and 90 days). As a result of the lease term reassessment,p~~$211.9~~ ~~million of right of use assets and~~ ~~$211.9~~ ~~million l~~ease liabilities were reassessed to have a term shorter than 12 months, thus were subject to the short-term lease exemption and removed from the balance sheet beginning June 30, 2020. New, amended, and modified ATM site leases with termination options exercisable within 12 months will be excluded from the right of use lease asset and lease liability balances in the future.

~~Payments~~ayments for ATM site leases with termination options subject to the short-term lease exemption are expensed in the period ~~incurred. The short-term~~incurred and corresponding leases are excluded from the right of use lease ~~expense for the three months ended September 30, 2020 reasonably reflects the Company’s short-term~~asset and lease ~~commitments.~~ 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 ~~September~~June 30, ~~2020~~2021 are:

	As of September 30, 2020			As of June 30, 2021
Maturity of Lease Liabilities (in thousands)	Operating Leases (1)			Operating Leases (1)
Remainder of 2020	$	12,782
2021	43,626
Remainder of 2021				$	24,415
2022	32,544			43,882
2023	22,780			33,890
2024	15,136			25,040
2025				17,766
Thereafter	35,185			35,016
Total lease payments	$	162,053		$	180,009
Less: imputed interest	(3,458		)	(4,307		)
Present value of lease liabilities	$	158,595		$	175,702

(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
September 30, 2020

Three Months Ended
September 30, 2019

Nine Months Ended September 30, 2020

Nine Months Ended September 30, 2019

Operating lease expense Selling, general and administrative and Direct operating costs
$
14,694

$
35,068

$ 68,927
$ 98,641
Short-term and variable lease expense Selling, general and administrative and Direct operating costs
26,429

12,653

47,390

31,541
Total lease expense
$
41,123

$
47,721

$ 116,317
$ 130,182

Lease Expense (in thousands)	Income Statement Classification	Three Months Ended June 30, 2021		Three Months Ended June 30, 2020		Six Months Ended June 30, 2021		Six Months Ended June 30, 2020
Operating lease expense	Selling, general and administrative and Direct operating costs	$	14,146	$	21,045	$	28,004	$	54,233
Short-term and variable lease expense	Selling, general and administrative and Direct operating costs		26,921		12,281		49,471		20,961
Total lease expense		$	41,067	$	33,326	$	77,475	$	75,194

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 ~~September~~June 30, ~~2020~~2021
Weighted- average remaining lease term (years)	5.2
Weighted- average discount rate	~~2.2~~2.3	%

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


Other Information (in thousands)	Nine Months Ended September 30, 2020		Nine Months Ended September 30, 2019		Six Months Ended June 30, 2021		Six Months Ended June 30, 2020
Cash paid for amounts included in the measurement of lease liabilities (a)	$	66,402	$	97,209	$	26,321	$	53,869
Supplemental non-cash information on lease liabilities arising from obtaining ROU assets:
ROU assets obtained in exchange for new operating lease liabilities	$	64,149	$	176,104	$	49,270	$	52,764

(a) Included in Net cash provided by operating activities on the Company's Consolidated Statements of Cash Flows.

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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;


•	~~our business plans and financing plans and requirements;~~


•	~~trends affecting our business plans and financing plans and requirements;~~

•

trends affecting our business plans and financing plans and requirements;

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.

~~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;~~


•	~~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")~~ 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~~2020 ~~and Part II, Item 1A of our Quarterly Report on Form 10-Q for the period ended June 30, 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.

COMPANY OVERVIEW, GEOGRAPHIC LOCATIONS AND PRINCIPAL PRODUCTS AND SERVICES

•

~~The EFT Processing Segment, which processes transactions for a network of~~ ~~43,956~~ ~~ATMs and approximately~~ ~~324,000~~ POS terminals across Europe, the Middle East, Asia Pacific, and the United States. 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, 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~~ ~~717,000~~ 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 447,000 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

Money Transfer Segment — Revenues in the Money Transfer Segment, which represented approximately ~~49% and 48%~~50% of total consolidated revenues for both the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, respectively, a~~are~~re 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~~We offer 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.

~~Our expansion plans~~The global product markets in which we operate are large and fragmented, which poses both opportunities ~~are focused~~and challenges for our technology to disrupt new and existing competition. As an organization, our focus is 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.~~


•	~~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;~~


•	~~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;~~


•	~~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 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 travel habits and reduce high margin cross-border transactions.

~~We consistently evaluate and add prospects to our list of potential ATM outsource customers. However, we cannot predict the~~channels, which may in turn drive an increase ~~or decrease~~ in the number of ~~ATMs~~transactions on our networks. Each of these opportunities also presents us with challenges, including differentiating our portfolio of products and services in highly competitive markets, the successful development and implementation of our software products and access to financing for expansion.

The EFT Processing Segment opportunities include physical expansion into target markets, developing value added products or services, increasing high value DCC and surcharge transactions and efficiently leveraging our portfolio of software solutions. Our opportunities are dependent on renewing and expanding our card acceptance, ATM and POS management and outsourcing, cash supply and other commercial agreements with customers and financial institutions. Operational challenges in the EFT Processing Segment include obtaining and maintaining the required licenses and sponsorship agreements in markets in which we ~~manage under outsourcing agreements because this depends largely~~operate and navigating frequently changing rules imposed by international card organizations, such as Visa^® and Mastercard^®, that govern ATM interchange fees, direct access fees and other restrictions. Our profitability is dependent on the ~~willingness~~laws and regulations that govern DCC transactions, specifically in the E.U., as well as the laws and regulations of ~~banks~~each country that we operate in that may impact the volume of cross-border and cross-currency transactions. The timing and amount of revenues in the EFT Processing Segment is uncertain and unpredictable due to ~~enter into outsourcing~~inherent limitations in managing our estate of ATMs, which is dependent on 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~~that cover large numbers of ~~entering into or renewing outsourcing agreements can take several months. The process is further~~ATMs, which are complicated by ~~the~~ legal and regulatory considerations of local ~~countries. These agreements tend~~countries, as well as our customers' decisions whether 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.outsource ATMs.

~~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.~~


•	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 of the COVID-19 pandemic may limit access to POS merchant locations, our ability to maintain and grow our relationships 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 may be closed from time to time as nonessential services.

~~In all of the~~

The epay Segment opportunities include renewing existing and negotiating new agreements in target markets in which we operate, ~~we are experiencing~~primarily with mobile operators, digital content providers, financial institutions and retailers. The overall growth rate in the prepaid mobile phone and digital media content markets, shifts between prepaid and postpaid services, and our market share in those respective markets will have a significant impact on our ability to maintain and grow the epay Segment revenues. There is significant competition ~~which will~~in these markets that may impact ~~the rate at which we may be able~~our ability to grow ~~organically. Competition among~~organically and increase the margin we earn and the margin that we pay to retailers. The profitability of the epay Segment is dependent on our ability to adapt to new technologies that may compete with POS distribution of digital content and prepaid mobile airtime, as well as our ability to leverage cross-selling opportunities with our EFT and ~~electronic~~Money Transfer Segments. The epay Segment opportunities may be impacted by government-imposed restrictions on retailers and/or content ~~distributors results~~providerswith whom we partner 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 marketscountries in which we have a presence, and corresponding licensure requirements mandated upon such parties to legally operate ~~many~~in such countries.

The Money Transfer Segment opportunities include expanding our portfolio of products and services to new and existing customers around the ~~factors that~~globe, which in turn may ~~contribute~~lead to ~~rapid growth (growth~~an increase in ~~electronic content, expansion of~~transaction volumes. The opportunities to expand are contingent on our ability to effectively leverage our network of ~~retailers~~bank accounts for digital money transfer delivery, maintaining our physical agent network, cross selling opportunities with our EFT and ~~access~~epay segments and our penetration into high growth money transfer corridors. The challenges inherit in these opportunities include maintaining compliance with all regulatory requirements, maintaining all requiredlicenses, ensuring the recoverability of funds advanced to ~~products~~agents and the continued reliance on the technologies required to operate our business. The volume of ~~mobile operators~~transactions processed on our network is impacted by shifts in our customer base, which can change rapidly with worker migration patterns and ~~other content providers) remain present.~~


•	~~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 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.

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 three and six months ended June 30, 2021 and 2020. 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 that 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 increasing the number of seasonal ATM deactivations (placing them in dormancy status, terminating, or re-negotiating) in more sites and more markets.

SEGMENT SUMMARY RESULTS OF OPERATIONS

	Revenues for the Three Months Ended June 30,						Year-over-Year Change					Revenues for the Six Months Ended June 30,						Year-over-Year Change
(dollar amounts in thousands)	2021			2020			Increase (Decrease) Amount			Increase (Decrease) Percent		2021			2020				Increase (Decrease) Amount		Increase (Decrease) Percent
EFT Processing	$	113,482		$	78,488		$	34,994		45	%	$	200,558		$	224,313		$	(23,755	)	(11)	%
epay	243,918			187,563			56,355			30	%		486,221			360,474			125,747		35	%
Money Transfer	359,308			262,863			96,445			37	%		684,208			529,097			155,111		29	%
Total	716,708			528,914			187,794			36	%		1,370,987			1,113,884			257,103		23	%
Corporate services, eliminations and other	(2,022		)	(1,111		)	(911		)	82	%		(3,631	)		(2,174	)		(1,457	)	67	%
Total	$	714,686		$	527,803		$	186,883		35	%	$	1,367,356		$	1,111,710		$	255,646		23	%

	Operating (Loss) Income for the Three Months Ended June 30,						Year-over-Year Change					Operating (Loss) Income for the Six Months Ended June 30,						Year-over-Year Change
(dollar amounts in thousands)	2021			2020			Increase (Decrease) Amount			Increase (Decrease) Percent		2021			2020				Increase (Decrease) Amount		Increase (Decrease) Percent
EFT Processing	$	(25,336	)	$	(56,576	)	$	31,240		(55)	%	$	(65,432	)	$	(51,641	)	$	(13,791	)	27	%
epay	27,235			18,030			9,205			51	%		56,392			34,488			21,904		64	%
Money Transfer	44,082			(55,227		)	99,309			(180)	%		79,485			(32,919	)		112,404		(341)	%
Total	45,981			(93,773		)	139,754			(149)	%		70,445			(50,072	)		120,517		(241)	%
Corporate services, eliminations and other	(15,860		)	(7,498		)	(8,362		)	112	%		(29,875	)		(19,597	)		(10,278	)	52	%
Total	$	30,121		$	(101,271	)	$	131,392		(130)	%	$	40,570		$	(69,669	)	$	110,239		(158)	%

Revenues for the Three Months Ended September 30,
Year-over-Year Change
Revenues for the Nine Months Ended September 30,

Year-over-Year Change
(dollar amounts in thousands)
2020

2019

Increase
(Decrease)
Amount

Increase
(Decrease)
Percent

2020

2019

Increase
(Decrease)
Amount

Increase
(Decrease)
Percent

EFT Processing $
144,062

$
316,188

$
(172,126)

(54)
%
$ 368,375

$ 693,837

$ (325,462)

(47) %
epay
198,939

191,071

7,868

4
%

559,413

551,345

8,068

1 %
Money Transfer
323,092

280,837

42,255

15
%

852,189

814,201

37,988

5 %
Total
666,093

788,096

(122,003)

(15)
%

1,779,977

2,059,383

(279,406)

(14)
%
Corporate services, eliminations and other
(1,742)

(1,110)

(632)

57
%

(3,916)

(3,021)

(895)

30
%
Total $
664,351

$
786,986

$
(122,635)

(16)
%
$ 1,776,061

$ 2,056,362

$ (280,301)

(14) %

Operating Income (Expense) for the Three Months Ended September 30,
Year-over-Year Change
Operating Income (Expense) for the Nine Months Ended September 30,

Year-over-Year Change
(dollar amounts in thousands)
2020

2019

Increase
(Decrease)
Amount

Increase
(Decrease)
Percent

2020

2019

Increase
(Decrease)
Amount

Increase
(Decrease)
Percent

EFT Processing $
6,161

$
150,901

$
(144,740)

(96)
%
$ (45,480)

$ 244,185

$ (289,665)

(119) %
epay
22,249

20,063

2,186

11
%

56,737

55,617

1,120

2 %
Money Transfer
47,626

35,648

11,978

34
%

14,707

101,768

(87,061)

(86) %
Total
76,036

206,612

(130,576)

(63)
%

25,964

401,570

(375,606)

(94)
%
Corporate services, eliminations and other
(9,964)

(12,622)

2,658

(21)
%

(29,561)

(33,589)

4,028

(12)
%
Total $
66,072

$
193,990

$
(127,918)

(66)
%
$ (3,597)

$ 367,981

$ (371,578)

(101) %

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.

Table of Contents

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 June 30,						Average Translation Rate Six Months Ended June 30,
Currency (dollars per foreign currency)	2021		2020		Increase Percent		2021		2020		Increase Percent
Australian dollar	$	0.7695	$	0.6570	17	%	$	0.7710	$	0.6577	17	%
British pounds sterling	$	1.3971	$	1.2406	13	%	$	1.3880	$	1.2606	10	%
euro	$	1.2045	$	1.1010	9	%	$	1.2049	$	1.1017	9	%
Hungarian forint	$	0.0034	$	0.0031	10	%	$	0.0034	$	0.0032	6	%
Indian rupee	$	0.0136	$	0.0132	3	%	$	0.0136	$	0.0135	1	%
Malaysian ringgit	$	0.2424	$	0.2316	5	%	$	0.2443	$	0.2356	4	%
New Zealand dollar	$	0.7146	$	0.6180	16	%	$	0.7167	$	0.6266	14	%
Polish zloty	$	0.2662	$	0.2446	9	%	$	0.2659	$	0.2499	6	%

Average Translation Rate
Three Months Ended September 30,

Average Translation Rate
Nine Months Ended September 30,

Currency (dollars per foreign currency) 2020 2019
Increase
(Decrease) Percent

2020

2019

Increase
(Decrease) Percent
Australian dollar $ 0.7149
$ 0.6852
4 %
$ 0.6768

$ 0.6993

(3) %
British pounds sterling $ 1.2916
$ 1.2326
5 %
$ 1.2709

$ 1.2734

(0) %
euro $ 1.1689
$ 1.1114
5 %
$ 1.1241

$ 1.1235

0 %
Hungarian forint $ 0.0033
$ 0.0034
(3) %
$ 0.0032

$ 0.0035

(9) %
Indian rupee $ 0.0135
$ 0.0142
(5) %
$
0.0135

$
0.0143

(6) %
Malaysian ringgit $ 0.2382
$ 0.2403
(1) %
$ 0.2364

$ 0.2420

(2) %
New Zealand dollar $ 0.6619
$ 0.6483
2 %
$ 0.6383

$
0.6640

(4) %
Polish zloty $ 0.2633
$ 0.2573
2 %
$
0.2544

$ 0.2613

(3) %

COMPARISON OF OPERATING RESULTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30~~THREE~~, 2021 AND ~~NINE MONTHS ENDED SEPTEMBER~~ ~~30,~~ 2020 ~~AND 2019~~

EFT PROCESSING SEGMENT

	Three Months Ended June 30,						Year-over-Year Change					Six Months Ended June 30,						Year-over-Year Change
(dollar amounts in thousands)	2021			2020			Increase (Decrease) Amount			Increase (Decrease) Percent		2021			2020			Increase (Decrease) Amount			Increase (Decrease) Percent
Total revenues	$	113,482		$	78,488		$	34,994		45	%	$	200,558		$	224,313		$	(23,755)		(11)	%
Operating expenses:
Direct operating costs	82,681			62,465			20,216			32	%		152,293			150,001			2,292		2	%
Salaries and benefits	24,098			21,289			2,809			13	%		47,669			43,380			4,289		10	%
Selling, general and administrative	9,799			9,515			284			3	%		21,761			20,456			1,305		6	%
Goodwill impairment	—			21,861			(21,861		)	(100)	%		—			21,861			(21,861	)	(100)	%
Depreciation and amortization	22,240			19,934			2,306			12	%		44,267			40,256			4,011		10	%
Total operating expenses	138,818			135,064			3,754			3	%		265,990			275,954			(9,964	)	(4)	%
Operating (loss)	$	(25,336	)	$	(56,576	)	$	31,240		(55)	%	$	(65,432	)	$	(51,641	)	$	(13,791	)	27	%
Transactions processed (millions)	988			679			309			46	%		1,913			1,463			450		31	%
Active ATMs as of June 30,	43,559			41,648			1,911			5	%		43,559			41,648			1,911		5	%
Average active ATMs	40,521			40,358			163			0	%		38,573			42,586			(4,013	)	(9)	%

Three Months Ended
September 30,
Year-over-Year Change
Nine Months Ended
September 30,

Year-over-Year Change
(dollar amounts in thousands)
2020

2019
Increase (Decrease) Amount
Increase
(Decrease) Percent

2020

2019

Increase (Decrease) Amount
Increase
(Decrease) Percent
Total revenues $
144,062

$
316,188

$
(172,126)

(54)
%
$ 368,375

$ 693,837

$ (325,462)

(47) %
Operating expenses:

Direct operating costs
82,626

111,116

(28,490)

(26)
%

232,627

300,460

(67,833)

(23) %
Salaries and benefits
25,182

23,936

1,246

5
%

68,562

64,706

3,856

6 %
Selling, general and administrative
8,577

12,191

(3,614)

(30)
%

29,033

32,022

(2,989)

(9)
%
Goodwill and acquired intangible assets impairment
—

—

—

N/A

21,861

—

21,861

N/A

Depreciation and amortization
21,516

18,044

3,472

19
%

61,772

52,464

9,308

18 %
Total operating expenses
137,901

165,287

(27,386)

(17)
%

413,855

449,652

(35,797)

(8)
%
Operating income (loss) $
6,161

$
150,901

$
(144,740)

(96)
%
$ (45,480)

$ 244,185

$ (289,665)

(119) %
Transactions processed (millions)
910

800

110

14
%

2,374

2,244

130

6 %
ATMs as of September 30,
43,956

47,209

(3,253)

(7)
%

43,956

47,209

(3,253)

(7) %
Average ATMs
44,259

47,086

(2,827)

(6)
%

43,143

44,574

(1,431)

(3)
%

Revenues

~~Revenues~~

EFT Processing Segment total revenues were $113.5 million for the three ~~and nine~~ months ended ~~September~~June 30, ~~2020~~ ~~were~~ $~~144.1~~2021, an increase of $35.0 million ~~and $368.4million, respectively, a decrease of~~ ~~$172.1 million~~ or ~~54%~~ ~~and~~ ~~$325.5 million~~ or ~~47%~~45% compared to the same ~~periods~~period in ~~2019, respectively.~~ ~~Total~~2020. EFT Processing Segment total revenues were $200.6 million for the ~~three and nine~~six months ended ~~September~~June 30, ~~2020~~ ~~decreased due~~2021, a decrease of $23.8 million or 11% compared to the ~~impact~~same period in 2020. Beginning in the late first quarter of ~~fewer active ATMs and fewer high-margin cross-border transactions (DCC),~~2020, the COVID-19 related ~~to COVID-19 pandemic-driven~~ government-imposed border and business closures, travel restrictions and ~~shelter-in-place orders. The government imposed border~~other orders significantly reduced tourism throughout Europe, which led to a significant decrease in high-margin cross-border transactions (DCC) and ~~business closures~~surcharge transactions from March through June of 2020. During 2021, we began increasing our estate of active ATMs as certain countries began easing COVID-19 restrictions; however, many countries continue to have restrictions that prevented our volume of DCC and ~~shelter-in-place orders were in effect~~surcharge transactions from returning to pre-COVID-19 levels. Revenues increased for the ~~majority of the~~ three ~~and nine~~ months ended ~~September~~June 30, ~~2020. These closures~~2021 compared to the same period in 2020 primarily due to the reactivation of ATMs and ~~orders resulted~~gradual increase in ~~a decrease~~high-margin cross-border transaction volumes during 2021. Revenues decreased for the six months ended June 30, 2021 compared to the same period in 2020 primarily because the six months ended June 30, 2020 included two months of pre-COVID-19 level DCC and surcharge transaction volumes compared to the six months ended June 30, 2021 which had various levels of restrictions throughout the entire six month period. Foreign currency movements increased revenues by approximately $7.1 million and $10.3 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020 compared to the three and nine months ended September 30, 2019. Foreign currency movements increased total revenues by approximately~~ $~~3.2~~ ~~million and~~ $~~1.6~~ ~~million~~ ~~for the~~ ~~three and nine~~ ~~months ended~~ ~~September 30, 2020~~,2021, respectively, compared to the same periods in ~~2019.~~2020

.

Average monthly revenues per ATM ~~were~~ $~~1,085~~ ~~and~~ $~~949~~ increased to $934 for the three ~~and nine~~ months ended ~~September~~June 30, ~~2020, respectively,~~2021 compared to $648 for the same period in 2020. Average monthly revenues per ATM decreased to $867 for the six months ended June 30, 2021 compared to $878 for the same period in 2020. Revenues per transaction decreased to $0.11~~$2,238~~ ~~and~~ ~~$1,730~~ for the three ~~and nine months~~months ended June 30, 2021 compared to $0.12 for the same period in 2020.~~September 30, 2019, respectively.~~ Revenues per transaction ~~were~~ decreased to $~~0.16~~0.10 for ~~both~~ the six months ended June 30, 2021 compared to $0.15 for the same period in 2020. For the three ~~and nine~~ months ended ~~September~~June 30, ~~2020, compared to~~ ~~$0.40~~ ~~and~~ ~~$0.31for~~2021, the~~three and ninemonths ended~~ ~~September 30, 2019, respectively~~. ~~The decreases~~ increase in average monthly revenues per ATM were attributable to the ~~decreases~~limited easing of COVID-19 restrictions throughout Europe and corresponding increase in Dcross-border DCC and surcharge transactions and the decrease in revenue per transaction was CCattributable to a shift in the mix of our transaction volume as we experienced a significant increase in the volume of lower revenue transactions ~~which earn higher~~(processing bank wallet transactions and payments for e-commerce sites) primarily in our Asia Pacific region. For the six months ended June 30, 2021, the average monthly revenues per ATM and revenues per transaction ~~than other ATM or card-based services, and surcharges. The decrease in DCC transactions was~~decreased due to the ~~decline in tourism throughout Europe driven by the border~~effect of lower DCC and ~~business closures~~surcharge revenues during ~~the three~~January and ~~nine months ended September 30, 2020.~~February of 2021 compared to January and February 2020 prior to COVID-19's initial emergence.

Table of Contents

Direct operating costs

EFT Processing Segment direct operating costs were $82.7 million ~~$82.6 million~~ ~~and~~ ~~$232.6 million~~for the three ~~and nine~~ months ended ~~September~~June 30, ~~2020, respectively, a decrease~~2021, an increase of ~~$28.5~~$20.2 million or ~~26%~~ ~~and~~ ~~$67.8 million~~ or 23%32% compared to the same ~~periods~~period in ~~2019, respectively.~~2020. EFT Processing Segment direct operating costs were $152.3 million for the six months ended June 30, 2021, an increase of $2.3 million or 2% compared to the same period in 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 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.

~~Table of Contents~~

~~The decrease~~For the three months ended June 30, 2021, the increase in direct operating costs was primarily due to the ~~decrease~~increase in the number of ATMs under management ~~renegotiated~~in Europe and ~~reduced site rental fees, and reduced~~the increase in transaction volumes. For the six months ended June 30, 2021, the increase in direct operating costs ~~for ATM's winterized during COVID-19 imposed restrictions.~~was primarily due to the weakening of the U.S. dollar and increase in transaction volumes, partially offset by the decrease in number of ATMs under management. Foreign currency movements increased direct operating costs by approximately $5.5 million and $8.7 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~ ~~by approximately~~ ~~$2.1 million~~ ~~and~~ ~~$0.5 million,~~2021, respectively, compared to the same periods in 2020~~2019.~~.

Gross profit

~~Gross profit~~

Gross profit, which is calculated as revenues less direct operating costs, was ~~$61.4~~$30.8 million ~~and~~ ~~$135.7 million~~ ~~for the~~ ~~three and nine~~ ~~months ended~~ ~~September 30, 2020, respectively, compared to~~ ~~$205.1 million~~ ~~and~~ ~~$393.4 million~~ for the three ~~and nine~~ months ended ~~September~~June 30, ~~2019~~2021, an increase of $14.8~~, respectively.~~ million or 93% compared to $16.0 million for the same period in 2020.Gross profit was $48.3 million for the six months ended June 30, 2021, a decrease of $26.0 million or 35% compared to $74.3 million for the same period in 2020. Gross profit as a percentage of revenues (“gross margin”) ~~was~~ ~~42.6%~~increased to 27.1% and ~~36.9%~~decreased to 24.1% for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~,2021, respectively, compared to ~~64.9%~~20.4% and ~~56.7%~~33.1% for the same periods in 2020, respectively. For the three ~~and nine~~ months ended ~~September~~June 30, ~~2019, respectively. The~~2021, the increase in gross profit and gross margin was primarily driven by the increase in cross-border transactions and the reactivation of ATMs. For the six months ended June 30, 2021, the decrease in gross profit and gross margin was primarily attributable to the ~~decrease in~~lower DCC transactions and domestic and international ~~surcharge.~~surcharge transactions during the months of January and February 2021 compared to January and February 2020, as these months in the prior period were before the emergence of COVID-19.

Salaries and benefits

Salaries and benefits ~~expense increased~~ ~~$1.2~~expenses were $24.1 million or 5% ~~and $3.9 million or 6%~~ for the three ~~and~~ ~~nine~~ months ended June 30, 2021, an increase of $2.8 million or 13% compared to the same period in 2020. Salaries and benefits expenses were $47.7 million for the six months ended June 30, 2021, an increase of $4.3 million or 10% compared to the same period in 2020. The increase in salaries and benefits was primarily driven by an increase in foreign currency movements and an increase in bonus expense. Foreign currency movements in the countries where we employ our workforce increased these expenses by $1.8 million and $3.1 million for the three and six months ended ~~September~~June 30, ~~2020~~,2021, respectively, compared to the same periods in ~~2019~~. The increase for the three and nine months ended September 30, 2020 was primarily due to additional headcount to support expansion in the United States and long-term growth strategy, partially offset by a decrease in bonus expense. The border and business closures and shelter-in-place orders that took effect in late February 2020 and March 2020 in response to the COVID-19 pandemic reduced transaction volumes and revenues through the end of the third quarter of 2020, 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 ~~high-margin cross-border transactions~~ ~~and revenues for the three and nine months ended September 30,~~ 2020. As a percentage of revenues, these ~~costs~~expenses decreased to 21.2% and increased to ~~17.5%~~ ~~and~~ ~~18.6%~~23.8% for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, respectively, compared to 27.1% and 19.3% ~~7.6%~~ ~~and~~ ~~9.3%~~ ~~and~~ for the ~~three and nine months ended September 30, 2019~~same periods in 2020, respectively~~, respectively. The Company made a decision to retain its employees during the pandemic.~~.

Selling, general and administrative

Selling, general and administrative expenses ~~for the three and nine months ended~~ ~~September 30, 2020~~were ~~$8.6~~$9.8 million ~~and~~ ~~$29.0 million, respectively, a decrease of~~ ~~$3.6 million~~ ~~and $3.0 million compared to the~~ ~~three and nine~~ ~~months ended~~ ~~September 30, 2019, respectively. The decrease~~ for the three months ended ~~September~~June 30, ~~2020~~2021, an increase of $0.3 million or 3% compared to the same period in ~~2019 was primarily due to a decrease in travel related~~2020. Selling, general and administrative expenses ~~and a decrease in bad debt expense. The decrease~~were $21.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021, an increase of $1.3 million or 6% compared to the same period in ~~2019 was primarily due to a decrease in travel related expenses, partially offset by an increase in bad debt expense.~~ 2020. As a percentage of revenues, ~~selling, general~~these expenses decreased to 8.6% and ~~administrative expenses were~~ increased to 10.9~~6.0%~~ ~~and~~ ~~7.9%~~% for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~,2021, respectively, compared to ~~3.9%~~12.1% and ~~4.6%~~9.1% for the ~~three and nine months ended~~ same periods in 2020, respectively~~September 30, 2019, respectively.~~

.

Goodwill ~~and acquired intangible assets~~ impairment

Due to the economic impacts of the COVID-19 pandemic, the Company recorded a $21.9 million non-cash goodwill impairment charge related to two reporting units during the second quarter of 2020. A ~~$14.0~~$14.0 million non-cash goodwill impairment charge was recorded for Innova as a result of the decline in value added tax, or VAT, refund activity directly related to the decline in international tourism within the European Union, and a $7.9 million non-cash goodwill impairment charge was recorded for Pure Commerce related to the decline in international tourism in Asia Pacific.

Table of Contents

Depreciation and amortization

Depreciation and amortization ~~expense~~expenses were $22.2 million for the three months ended June 30, 2021, an increase of $2.3 million or 12% compared to the same period in 2020.Depreciation and amortization expenses were $44.3 million for the six months ended June 30, 2021, an increase of $4.0 million or 10% compared to the same period in 2020. Foreign currency movements increased ~~$3.5~~these expenses by $1.6 million and ~~$9.3~~$2.8 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~,2021, respectively, compared to the same periods in ~~2019~~. ~~The~~2020, with the remainder of the increase ~~was primarily due to~~driven by the ~~deployment~~acquisition of additional ATMs and software assets. As a percentage of revenues, ~~depreciation~~these expenses decreased to 19.6% and ~~amortization expense was~~ ~~14.9%~~ ~~and~~ ~~16.8%~~increased to 22.1% for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, respectively, compared to ~~5.7%~~25.4% and ~~7.6%~~17.9% for the same periods in ~~2019,~~2020, respectively.

Operating income (loss)

EFT Processing Segment had an operating ~~income~~loss of ($25.3 million) for the three months ended ~~September~~June 30, ~~2020~~2021, a decrease of $31.2 million or (55%) compared to the same period in 2020. ~~$6.2 million~~ ~~and~~EFT Processing Segment had an operating loss of ($65.4 million) for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021, an increase of ~~$45.5 million, a decrease of~~ ~~$144.7 million~~($13.8 million) or ~~96%~~ ~~and~~ ~~$289.7 million or 119~~%27% compared to the ~~operating income~~same period in ~~the same periods in~~ 2020~~2019~~. Operating income (loss) as a percentage of revenues (“operating margin”) ~~was~~ ~~4.3%~~decreased to (22.3%) and increased to (32.6%) for the three and six months ended ~~September~~June 30, ~~2020 and operating loss as a percentage of revenues was (12.3)%~~ ~~for the nine months ended September 30, 2020,~~2021, respectively, compared to ~~operating margin of~~ ~~47.7%~~(72.1%) and ~~35.2%~~(23.0%) for the same periods in ~~2019~~2020, respectively.Operating loss per transaction was ($0.03) for both the three and six months ended June 30, 2021, compared to ($0.08) and ($0.04) for the same periods in 2020, respectively. For the three months ended ~~September~~June 30, ~~2020,~~2021, the decreases in operating ~~income~~loss, operating margin and operating loss per transaction were primarily driven by the $21.9 million decrease in non-cash goodwill impairment charges and the easing of COVID-19 restrictions in limited regions where we operate. For the six months ended June 30, 2021, the increases in operating loss and operating margin were primarily ~~due to~~driven by the decrease in ~~revenues~~tourism in the months of January and February 2021 compared to the same periods in the prior period, ~~in 2019, and for~~partially offset by the ~~nine months ended September 30, 2020, the decreases~~$21.9 million decrease in ~~operating income and operating margin were primarily due to the~~ non-cash goodwill impairment and decrease in revenues compared to the same period in 2019. Beginning in late February 2020 and throughout September 2020, high margin cross-border transactions (DCC) decreased throughout Europe due to the COVID-19 pandemic driven government imposed border and business closures and shelter-in-place orders. charges.~~Operating income per transaction was~~ ~~$0.01~~ ~~and operating loss per transaction was~~ ~~$0.02~~ ~~for the three and nine months ended September 30, 2020, respectively, compared to operating income per transaction of~~ ~~$0.19~~ ~~and~~ ~~$0.11~~ ~~for the same periods in~~ ~~2019, respectively~~.

~~Table of Contents~~

EPAY SEGMENT

The following table presents the results of operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 for our epay Segment:

Three Months Ended
September 30,
Year-over-Year Change
Nine Months Ended
September 30,

Year-over-Year Change
(dollar amounts in thousands)
2020

2019
Increase (Decrease) Amount
Increase
(Decrease) Percent

2020

2019

Increase (Decrease) Amount
Increase
(Decrease) Percent
Total revenues $
198,939

$
191,071

$
7,868

4
%
$ 559,413

$ 551,345

$ 8,068

1 %
Operating expenses:

Direct operating costs
149,993

145,410

4,583

3
%

424,123

419,362

4,761

1 %
Salaries and benefits
16,108

15,188

920

6
%

46,996

44,939

2,057

5 %
Selling, general and administrative
8,455

8,838

(383)

(4)
%

25,928

26,314

(386)

(1)
%
Depreciation and amortization
2,134

1,572

562

36
%

5,629

5,113

516

10 %
Total operating expenses
176,690

171,008

5,682

3
%

502,676

495,728

6,948

1
%
Operating income $
22,249

$
20,063

$
2,186

11
%
$ 56,737

$ 55,617

$ 1,120

2 %
Transactions processed (millions)
661

398

263

66
%

1,692

1,105

587

53 %

~~Revenues~~

	Three Months Ended June 30,				Year-over-Year Change				Six Months Ended June 30,				Year-over-Year Change
(dollar amounts in thousands)	2021		2020		Increase Amount		Increase Percent		2021		2020		Increase Amount		Increase Percent
Total revenues	$	243,918	$	187,563	$	56,355	30	%	$	486,221	$	360,474	$	125,747	35	%
Operating expenses:
Direct operating costs	184,989		144,056		40,933		28	%		367,622		274,130		93,492	34	%
Salaries and benefits	19,775		15,191		4,584		30	%		39,144		30,888		8,256	27	%
Selling, general and administrative	9,772		8,635		1,137		13	%		18,792		17,473		1,319	8	%
Depreciation and amortization	2,147		1,651		496		30	%		4,271		3,495		776	22	%
Total operating expenses	216,683		169,533		47,150		28	%		429,829		325,986		103,843	32	%
Operating income	$	27,235	$	18,030	$	9,205	51	%	$	56,392	$	34,488	$	21,904	64	%
Transactions processed (millions)	788		585		203		35	%		1,455		1,032		423	41	%

Revenues

epay Segment total revenues were $243.9 million for the three ~~and nine~~ months ended ~~September~~June 30, ~~2020~~ ~~were~~ ~~$198.9 million~~ ~~and~~ ~~$559.4 million, respectively,~~2021, an increase of ~~$7.9 million~~ ~~or 4% and~~ ~~$8.1~~$56.4 million or 1%30% compared to the same ~~periods~~period in ~~2019, respectively~~.2020. epay Segment total revenues were $486.2 million for the six months ended June 30, 2021, an increase of $125.7 million or 35% compared to the same period in 2020. The increase in ~~total~~ revenues was primarily due to an increase in the number of transactions processed driven by continued digital media growth and the U.S. dollar weakening against key foreign currencies during ~~the third quarter of 2020.~~2021. Foreign currency movements increased ~~total~~ revenues by approximately ~~$2.8~~$16.0 million and ~~decreased total revenues by approximately~~ ~~$0.4~~$28.9 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, respectively, compared to the same periods in ~~2019~~2020. The epay segment was impacted by COVID-19 pandemic-driven government-imposed ~~shelter-in-place orders~~lockdowns and business closures, primarily at retail outlets, which were ~~partially~~ offset by increases in digital media offerings in ~~Asia.~~Asia and revenues derived from businesses that were classified as essential and remained open during the pandemic.

Table of Contents

Revenues per transaction ~~were~~ ~~$0.30~~decreased to $0.31 and ~~$0.33~~$0.33 for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, respectively, compared to ~~$0.48~~$0.32 and ~~$0.50~~$0.35 for the same periods in ~~2019~~,2020, respectively. The ~~decrease~~decreases in revenues per transaction ~~was~~were 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 ~~$150.0~~$185.0 million ~~and~~ ~~$424.1 million~~ for the three ~~and nine~~ months ended ~~September~~June 30, ~~2020, respectively,~~2021, an increase of ~~$4.6~~$40.9 million or ~~3% and~~ ~~$4.8 million~~ ~~or 1%~~28% compared to the same ~~periods~~period in 2020. epay~~2019~~ Segment direct operating costs were $367.6 million for the six months ended June 30, 2021, an increase of $93.5 million or 34% compared to the same period in 2020.~~, respectively~~. Direct operating costs ~~in the 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 ~~increase~~increases in direct operating costs ~~was~~were primarily due to the ~~increases~~increase in transaction volumes ~~for the large volume~~ of low-value mobile top-up transactions and by the U.S. dollar weakening against key foreign currencies ~~in the third quarter of 2020.~~during 2021. Foreign currency movements increased direct operating costs by approximately $~~1.9~~11.9 million and ~~decreased direct operating costs by approximately~~ $~~0.3~~$21.3 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, respectively, compared to the same periods in 2020~~2019~~.

.

Gross profit

Gross profit was $58.9 million for the three months ended June 30, 2021, an increase of $15.4~~$48.9~~ million or 35% compared to $43.5 million for the same period in 2020.Gross profit was $118.6 million for the six months ended June 30, 2021, an increase of $32.3 million or 37% compared to $86.3 million for the same period in 2020. Gross margin increased to 24.2% and ~~$135.3 million~~24.4% for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~,2021, respectively, compared to ~~$45.7 million~~23.2% and ~~$132.0 million~~ ~~for the three and nine months ended~~ ~~September 30, 2019, respectively.~~ ~~Gross margin increased to~~ ~~24.6% and 24.2% for the three and nine months ended September 30, 2020, respectively, compared to 23.9% for~~ ~~both the three and nine~~ ~~months ended~~ ~~September 30, 2019.~~

~~Table of Contents~~

~~Salaries and benefits~~

~~Salaries and benefits expense increased~~ ~~$0.9 million~~ or 6~~% and~~ ~~$2.1 million~~ or 5~~% for the three and nine months ended~~ ~~September 30, 2020, respectively, compared to the same periods in~~ ~~2019. As a percentage of revenues, salaries and benefits were 8.1% and 8.4% for the three and nine months ended September 30, 2020, respectively, compared to 7.9% and 8.2%~~24.0% for the same periods in ~~2019, respectively.~~2020, respectively. The ~~increases~~increase in gross profit and gross margin is driven by the increase in transaction volumes.

Salaries and benefits

Salaries and benefits expenses were $19.8 million for the three months ended June 30, 2021, an increase of $4.6 million or 30% compared to the same period in 2020. Salaries and benefits expenses were $39.1 million for the six months ended June 30, 2021, an increase of $8.3 million or 27% compared to the same period in 2020. The increase in salaries and benefits ~~were~~was primarily driven by an increase in headcount to support the growth of the ~~business.~~business and an increase in bonus expense. Foreign currency movements in the countries where we employ our workforce increased these expenses by $1.5 million and $2.7 million for the three and six months ended June 30, 2021, respectively, compared to the same periods in 2020. As a percentage of revenues, these expenses were 8.1% for both the three and six months ended June 30, 2021, compared to 8.1% and 8.6% for the same periods in 2020, respectively.

Selling, general and administrative

Selling, general and administrative expenses were $9.8 million for the three months ended June 30, 2021, an increase of $~~8.5~~1.1 million or 13% compared to the same period in 2020. Selling, general and administrative expenses were $18.8 million for the six months ended June 30, 2021, an increase of $~~25.9~~1.3 million or 8% compared to the same period in 2020. Foreign currency movements increased these expenses by $0.9 million and $1.5 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~,2021, respectively, ~~a decrease of~~ ~~4% and~~ 1% compared to the same periods in 2020~~2019~~. ~~, respectively.~~ As a percentage of revenues, ~~selling, general~~these expenses decreased to 4.0% and ~~administrative expenses were~~ ~~4.3%~~ ~~and~~ ~~4.6%~~3.9% for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~,2021, respectively, compared to 4.6% and 4.8% for the same periods in 2020, respectively.

~~2019, respectively.~~

Depreciation and amortization

Depreciation and amortization expenses were $2.1 million for the three months ended June 30, 2021, an increase of $0.5 million or 30% compared to the same period in 2020.Depreciation and amortization expenses were $4.3 million for the six months ended June 30, 2021, an increase of $0.8 million or 22% compared to the same period in 2020. Depreciation and amortization expense primarily represents depreciation of POS terminals we install in retail stores and amortization of acquired intangible assets. ~~Depreciation and amortization expense was~~ ~~$2.1 million~~ ~~and~~ ~~$5.6 million~~ ~~for the three and nine months ended~~ ~~September 30, 2020, respectively, an increase of~~ 36% ~~and~~ 10~~% compared to the same periods in~~ ~~2019, respectively.~~ As a percentage of revenues, ~~depreciation and amortization expense was~~ 1~~.1%~~ ~~and 1.0%~~ these expenses were 0.9% for both the three and ~~nine~~six months ended ~~September~~June 30, ~~2020, respectively,~~2021, compared to ~~0.8%~~0.9% and ~~0.9%~~1.0% for the ~~three and nine months ended September 30, 2019,~~same periods in 2020, respectively.

Operating income

epay Segment operating income was $27.2 million for the three months ended June 30, 2021, an increase of $9.2 million or 51% compared to the same period in 2020. epay Segment operating income was $56.4 million for the six months ended June 30, 2021, an increase of $21.9 million or 64% compared to the same period in 2020. Operating margin increased to 11.2% and 11.6% for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~ ~~was~~ ~~$22.2 million~~ ~~and~~ ~~$56.7 million~~2021, respectively, ~~an increase of~~ ~~$2.2 million~~ ~~or 11% and~~ ~~$1.1 million or 2%~~compared to 9.6% for both of the same periods in ~~2019, respectively~~. ~~Operating margin was~~ ~~11.2% and 10.1% for the three and nine months ended September 30,~~ 2020 ~~respectively, compared to~~ ~~10.5%~~ ~~and~~ ~~10.1%~~ ~~for the same periods in~~ ~~2019, respectively~~. Operating income per transaction ~~decreased to~~ ~~$0.03~~was $0.03 and $0.04 for ~~both~~ the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~ ~~from~~ ~~$0.05~~2021, respectively, compared to $0.03 for both of the same periods in 2020. ~~2019,driven by transactions processed in a region where we generally earn lower revenues per transaction.~~ The increases in operating income and operating margin for the three and six months ended ~~September~~June 30, ~~2020~~2021 compared to the same ~~period~~periods in ~~2019~~2020 were primarily due to an increase in the ~~portion~~number of higher-margin digital media transactions. ~~The increase in operating income for the nine months ended September 30, 2020 compared to the same period in 2019 was primarily due to the increase in transaction volume.~~

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Table of Contents

MONEY TRANSFER SEGMENT

The following table presents the results of operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 for the Money Transfer Segment:

Three Months Ended
September 30,
Year-over-Year Change
Nine Months Ended
September 30,

Year-over-Year Change
(dollar amounts in thousands)
2020

2019
Increase (Decrease) Amount
Increase
(Decrease) Percent

2020

2019

Increase (Decrease) Amount
Increase
(Decrease) Percent
Total revenues $
323,092

$
280,837

$
42,255

15
%
$ 852,189

$ 814,201

$ 37,988

5 %
Operating expenses:

Direct operating costs
176,718

149,663

27,055

18
%

464,216

435,901

28,315

6 %
Salaries and benefits
52,035

51,555

480

1
%

154,958

155,424

(466)

(0) %
Selling, general and administrative
36,601

35,820

781

2
%

108,355

96,660

11,695

12
%
Goodwill and acquired intangible assets impairment
1,467

—

1,467

N/A

84,160

—

84,160

N/A

Depreciation and amortization
8,645

8,151

494

6 %

25,793

24,448

1,345

6 %
Total operating expenses
275,466

245,189

30,277

12
%

837,482

712,433

125,049

18
%
Operating income $
47,626

$
35,648

$
11,978

34
%
$ 14,707

$ 101,768

$ (87,061)

(86) %
Transactions processed (millions)
30.9

29.3

1.6

5
%

84.1

84.8

(0.7)

(1) %

~~Revenues~~

	Three Months Ended June 30,					Year-over-Year Change					Six Months Ended June 30,					Year-over-Year Change
(dollar amounts in thousands)	2021		2020			Increase (Decrease) Amount			Increase (Decrease) Percent		2021		2020			Increase (Decrease) Amount			Increase (Decrease) Percent
Total revenues	$	359,308	$	262,863		$	96,445		37	%	$	684,208	$	529,097		$	155,111		29	%
Operating expenses:
Direct operating costs	205,164		144,589			60,575			42	%		389,042		287,498			101,544		35	%
Salaries and benefits	62,710		49,059			13,651			28	%		123,250		102,923			20,327		20	%
Selling, general and administrative	38,326		33,172			5,154			16	%		74,442		71,754			2,688		4	%
Goodwill impairment	—		82,693			(82,693		)	(100)	%		—		82,693			(82,693	)	(100)	%
Depreciation and amortization	9,026		8,577			449			5	%		17,989		17,148			841		5	%
Total operating expenses	315,226		318,090			(2,864		)	(1)	%		604,723		562,016			42,707		8	%
Operating income (loss)	$	44,082	$	(55,227	)	$	99,309		(180)	%	$	79,485	$	(32,919	)	$	112,404		(341)	%
Transactions processed (millions)	34.2		25.8			8.4			33	%		65.3		53.2			12.1		23	%

Revenues

Money Transfer Segment total revenues were $359.3 million for the three ~~and nine~~ months ended ~~September~~June 30, ~~2020~~ ~~were~~ ~~$323.1 million~~ ~~and~~ ~~$852.2 million, respectively,~~2021, an increase of ~~$42.3~~$96.4 million or 15~~% and~~ ~~$38.0 million~~ or 5% 37% compared to the same ~~periods~~period in ~~2019, respectively.~~2020. Money Transfer Segment total revenues were $684.2 million for the six months ended June 30, 2021, an increase of $155.1 million or 29% compared to the same period in 2020. The increase in revenues ~~for the three and nine months ended September 30, 2020 compared to the same periods in 2019~~ was primarily due to increases in U.S. outbound and international-originated money transfers, partially offset by decreases in the U.S. domestic business. Revenues per transaction increased to ~~$10.46~~$10.51 and ~~$10.13~~$10.48 for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~,2021, respectively, ~~from~~ ~~$9.58~~compared to $10.19 and ~~$9.60~~$9.95 for the same periods in ~~2019,~~2020, respectively. Foreign currency movements increased ~~total~~ revenues by approximately $~~5.7~~$17.9 million and $32.2 million ~~and~~ $~~1.2~~ ~~million~~ for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~,2021, respectively, compared to the same periods in ~~2019.~~2020

.

Direct operating costs

Money Transfer Segment direct operating costs were $~~176.7~~205.2 million ~~and~~ ~~$464.2 million~~ for the three ~~and nine~~ months ended ~~September~~June 30, ~~2020, respectively,~~2021, an increase of $~~27.1~~60.6 million or 18 42% ~~and~~ ~~$28.3 million~~ ~~or 6%~~ compared to the same ~~periods~~period in ~~2019~~2020. Money Transfer~~, respectively.~~ Segment direct operating costs were $389.0 million for the six months ended June 30, 2021, an increase of $101.5 million or 35% compared to the same period in 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 ~~for the three and nine months ended September 30, 2020~~ was primarily due to the increase in the number of U.S. outbound and international-originated money transfer transactions and the impact of the U.S. dollar weakening against key foreign currencies. Foreign currency movements increased direct operating costs ~~for the~~ ~~three and nine~~ ~~months ended~~ ~~September 30, 2020~~ by approximately $~~3.1~~$9.2 million and $~~0.7~~$16.3 million ~~respectively,~~ ~~compared to the same periods in~~ ~~2019.~~

~~Gross profit~~

~~Gross profit was~~ ~~$146.4 million~~ ~~and~~ ~~$388.0 million~~ for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020, respectively, compared to~~ ~~$131.2 million~~ ~~and~~ ~~$378.3 million~~ ~~for the three and nine months ended~~ ~~September 30, 2019, respectively. The increase in gross profit for the three and nine months ended September 30, 2020 compared to the same periods in 2019 was primarily due to increases in U.S. outbound and international-originated money transfers. Gross margin decreased to 45.3% and 45.5% for the three and nine months ended September 30, 2020, respectively, compared to 46.7% and~~ ~~46.5%~~ ~~for the same periods in 2019, respectively.~~

~~Table of Contents~~

~~Salaries and benefits~~

~~Salaries and benefits expense increased~~ ~~$0.5 million~~ or 1% ~~and decreased~~ ~~$0.5 million~~ ~~for the three and nine months ended~~ ~~September 30, 2020~~,2021, respectively, compared to the same periods in ~~2019~~2020.
~~As a percentage~~
Gross profit

Gross profit was $154.1 million for the three months ended June 30, 2021, an increase of ~~revenues, salaries~~$35.8 million or 30% compared to $118.3 million for the same period in 2020.Gross profit was $295.2 million for the six months ended June 30, 2021, an increase of $53.6 million or 22% compared to $241.6 million for the same period in 2020. Gross margin decreased to 42.9% and ~~benefits were~~ ~~16.1%~~ ~~and~~ ~~18.2%~~43.1% for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~,2021, respectively, compared to ~~18.4%~~45.0% and ~~19.1%~~45.7% for the same periods in 2020, respectively~~2019, respectively~~. The decrease in gross margin is primarily attributable to the increase in ~~salaries~~direct operating costs driven by increased agent commissions in three and six months ended June 30, 2021 compared to the same periods in 2020.

Table of Contents

Salaries and benefits

Salaries and benefits expenses were $62.7 million for the three months ended ~~September~~June 30, ~~2020~~2021, an increase of $13.7 million or 28% compared to the same period in ~~2019~~2020. Salaries and benefits expenses were $123.3 million for the six months ended June 30, 2021, an increase of $20.3 million or 20% compared to the same period in 2020. The increase in salaries and benefits was primarily driven by an increase in headcount to support the growth of the business ~~partially offset by a decrease~~and an increase in bonus expense. ~~The decrease~~Foreign currency movements in ~~salaries~~the countries where we employ our workforce increased these expenses by $3.2 million and ~~benefits~~$5.8 million for the ~~nine~~three and six months ended ~~September~~June 30, ~~2020~~2021, respectively, compared to the same ~~period~~periods in ~~2019 was primarily driven by~~2020. As a ~~decrease~~percentage of revenues, these expenses decreased to 17.5% and 18.0% for the three and six months ended June 30, 2021, respectively, compared to 18.7% and 19.5% for the same periods in ~~bonus expense, partially offset by an increase in headcount to support the growth of the business.~~ 2020, respectively.

Selling, general and administrative

Selling, general and administrative expenses were $38.3 million for the three months ended June 30, 2021, an increase of $~~36.6~~5.2 million or 16% compared to the same period in 2020. Selling, general and administrative expenses were $74.4 million for the six months ended June 30, 2021, an increase of $~~108.4~~2.7 million or 4% compared to the same period in 2020. Foreign currency movements increased these expenses by $2.4 million and $5.0 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~,2021, respectively, ~~an increase of~~ 2% ~~and~~ ~~12%~~ compared to the same periods in ~~2019, respectively.~~2020 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. . As a percentage of revenues, ~~selling, general~~these expenses decreased to 10.7% and ~~administrative expenses were~~ ~~11.3%~~ ~~and~~ ~~12.7%~~10.9% for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~,2021, respectively, compared to ~~12.8%~~12.6% and 11~~.9%~~ 13.6% for the same periods in ~~2019,~~2020, respectively.

Goodwill ~~and acquired intangible assets~~ impairment

Due to the economic impacts of the COVID-19 pandemic, the Company recorded an $82.7 million non-cash goodwill impairment charge related to the xe reporting unit during the second quarter of 2020. The non-cash goodwill impairment charge was recorded for xe as a result of declines in the international payments business stemming from economic uncertainty. During the third quarter of 2020, a $1.5 million non-cash acquired intangible asset impairment charge was recorded for xe on previously acquired customer relationship intangible assets due to the discontinuation of trading with certain customers during the quarter.

Depreciation and amortization

Depreciation and amortization ~~expense increased~~ ~~$0.5~~expenses were $9.0 million or 6% ~~and~~ ~~$1.3 million~~ or 6% for the three ~~and nine~~ months ended ~~September~~June 30, ~~2020, respectively,~~2021, an increase of $0.4 million or 5% compared to the same ~~periods~~period in ~~2019~~2020.Depreciation and amortization expenses were $18.0 million for the six months ended June 30, 2021, an increase of $0.8 million or 5% compared to the same period in 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~~these expenses decreased to 2.5% and ~~amortization expense was~~ ~~2.7%~~ ~~and~~ ~~3.0%~~2.6% for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, respectively, compared to ~~2.9%~~3.3% and ~~3.0%~~3.2% for the same periods in ~~2019, respectively.~~2020, respectively.

Operating income (loss)

~~Operating income~~

Money Transfer Segment operating income was $44.1 million for the three months ended June 30, 2021, an increase of $99.3 million or 180% compared to an operating loss in the same period in 2020. Money Transfer Segment operating income was $79.5 million for the six months ended June 30, 2021, an increase of $112.4 million or 341% compared to an operating loss in the same period in 2020. Operating margin increased to 12.3% and 11.6% for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021, ~~was~~ ~~$47.6 million~~ ~~and~~ ~~$14.7 million, respectively, an increase of~~ ~~$12.0 million~~ or 34~~% and a decrease of~~ ~~$87.1 million~~ or ~~86%~~ ~~compared to the operating income in the same periods of 2019, respectively. As a percentage of revenues, operating income was~~ ~~14.7%~~ ~~and~~ ~~1.7%~~ ~~for the three and nine months ended~~ ~~September 30, 2020~~, respectively, compared to ~~12.7%~~(21.0%) and ~~12.5%~~(6.2%) for the same periods in ~~2019,~~2020, respectively. The increases in operating income and operating margin ~~for the three months ended September 30, 2020 compared to the same period in 2019~~ were primarily driven by the decrease in goodwill impairment charges, and an increase in transaction volume, specifically the higher margin transactions for U.S. outbound and international-originated money transfers, partially offset by a non-cash acquired intangible asset impairment charge. The decreases in operating income and operating margin for the nine months ended September 30, 2020 compared to the same period in 2019 were primarily driven bytransfers. the non-cash goodwill impairment charge and the increase in selling, general and administrative expenses incurred to support the expansion of new products and markets and COVID-19 pandemic related anticipated agent receivables default charges, partially offset by increases in higher margin transactions for U.S. outbound and international-originated money transfers during the third quarter of 2020. Operating income (loss) per transaction ~~was~~ ~~$1.54~~increased to $1.29 and ~~$0.17~~$1.22 for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~,2021, respectively, compared to ~~$1.22~~($2.14) and ($0.62)~~$1.20~~ for the same periods in ~~2019,~~2020, respectively.

3533

Table of Contents

CORPORATE SERVICES

The following table presents the operating expenses for the three and ~~nine~~six months ended ~~September~~June 30, 2021 and 2020 ~~and~~ ~~2019~~ for Corporate Services:

	Three Months Ended June 30,				Year-over-Year Change					Six Months Ended June 30,				Year-over-Year Change
(dollar amounts in thousands)	2021		2020		Increase (Decrease) Amount			Increase (Decrease) Percent		2021		2020		Increase (Decrease) Amount			Increase (Decrease) Percent
Salaries and benefits	$	14,488	$	5,413	$	9,075		168	%	$	26,676	$	15,001	$	11,675		78	%
Selling, general and administrative		1,226		2,005		(779	)	(39)	%		2,906		4,437		(1,531	)	(35)	%
Depreciation and amortization		146		80		66		83	%		293		159		134		84	%
Total operating expenses	$	15,860	$	7,498	$	8,362		112	%	$	29,875	$	19,597	$	10,278		52	%

Corporate operating expenses

~~Overall,~~Total Corporate operating expenses ~~for Corporate Services decreased~~ 21% ~~and 12%~~ ~~for the~~ ~~three and nine~~ ~~months ended~~ ~~September 30, 2020~~ ~~compared to the same periods in 2019, respectively. The decrease is primarily due to the decrease in salaries and benefits driven by decreases in bonus expense and share based compensation.~~

~~Table of Contents~~

~~OTHER INCOME (EXPENSE), NET~~

~~________________~~

~~n/m — Not meaningful~~

~~Interest income~~

~~Interest income decreased $0.4~~were $15.9 million and ~~$0.6~~$29.9 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021, respectively, an increase of $8.4 million or 112% and $10.3 million or 52%, respectively, compared to the same periods in ~~2019.~~

~~Interest expense~~

~~Interest expense increased $0.4~~2020. The increase is primarily due to a $7.8 million and ~~$0.3~~$10.0 million increase in share based compensation for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~,2021, respectively, compared to the same periods in ~~2019~~2020.

OTHER EXPENSE, NET

	Three Months Ended June 30,						Year-over-Year Change					Six Months Ended June 30,						Year-over-Year Change
(dollar amounts in thousands)	2021			2020			Increase (Decrease) Amount			Increase (Decrease) Percent		2021			2020			Increase (Decrease) Amount			Increase (Decrease) Percent
Interest income	$	204		$	161		$	43		27	%	$	386		$	728		$	(342	)	(47)	%
Interest expense	(9,457		)	(8,884		)	(573		)	6	%		(18,646	)		(18,117	)		(529	)	3	%
Foreign currency exchange gain (loss), net	116			2,495			(2,379		)	(95)	%		(3,916	)		(16,311	)		12,395		(76)	%
Other gains (losses)	—			697			(697		)	(100)	%		31			728			(697	)	(96)	%
Other expense, net	$	(9,137	)	$	(5,531	)	$	(3,606	)	65	%	$	(22,145	)	$	(32,972	)	$	10,827		(33)	%

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 a net foreign currency exchange gain of $0.1 million and a loss of $~~1.4~~$3.9 million ~~and~~ $~~17.7~~ ~~million~~ for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~,2021, respectively, compared to $~~11.0~~a net foreign currency exchange gain of $2.5 million and ~~$7.9~~a net foreign currency exchange loss of $16.3 millionfor the same periods in ~~2019,~~2020, respectively. These realized and unrealized foreign currency exchange gains and losses 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.

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INCOME TAX EXPENSE

~~The Company's~~Our effective income tax rate was ~~27.2%~~58.9% and 99.9% ~~(55.9)~~%for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~,2021, respectively, compared to ~~21.2~~(8.4)% and ~~26.0~~(11.1)% for the ~~three and nine~~ ~~months ended~~ ~~September 30, 2019, respectively~~same periods in 2020, respectively.~~. The Company's~~ Our effective income tax rate for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 was higher than the applicable statutory income tax rate of 21%21% ~~primarily~~ ~~due~~as a result of certain foreign earnings being subject to higher local statutory tax rates, the ~~non-deductible goodwill impairment charge during the second quarter~~non-recognition of ~~2020~~tax benefits from losses in certain foreign countries where we have a limited history of profitable earnings and as a result of an increase in the valuation allowance in certain jurisdictions relating to the reversal of tax benefits recognized in the first quarter of 2021 for continuing net operating losses. Our effective income tax rate for the three and six months ended June 30, 2020 was different than the applicable statutory income tax rate of 21% primarily due to the non-deductible goodwill impairment charge during the second quarter of 2020 and as a result of an increase in the valuation allowance in certain jurisdictions relating to the reversal of tax benefits recognized in the first quarter of 2020 for net operating losses in those jurisdictions which have a limited history of profitable earnings. ~~The~~ ~~Company's effective income tax rate for the~~ ~~three and nine~~ ~~months ended September 30, 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.

~~Table of Contents~~

NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS

Noncontrolling interests represent the elimination of net income or loss attributable to the minority shareholders’ portion of the following consolidated subsidiaries that are not wholly owned:


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

NET INCOME (LOSS) ATTRIBUTABLE TO EURONET

Net income attributable to Euronet was $~~40.2~~8.6 millionfor the three months ended ~~September~~June 30, ~~2020 and the net loss attributable to Euronet was~~ ~~$73.6~~2021, an increase of $124.4 million ~~for the nine months ended~~ ~~September 30, 2020, a decrease of~~ ~~$97.4 million~~ ~~and~~ ~~$313.9 million, respectively,~~ or 107% compared to the net ~~income~~loss in ~~the same periods in 2019. The decrease in net income for~~ ~~the~~ ~~three months ended September 30, 2020 compared to~~ the same period in ~~2019~~ 2020. For the three months ended June 30, 2021, the increase in net income was primarily attributable to the ~~$122.6~~$104.6 million decrease in ~~revenues,~~non-cash goodwill impairment charges and a $66.1 million increase in gross profit, partially offset by a $30.1 million increase in salaries and benefits, a $5.8 million increase in selling, general and administrative expenses, a $2.4 million decrease in net foreign currency exchange ~~losses of $9.6 million~~gains, and ~~a decrease in income tax expense of $21.9 million. The~~an increase in ~~net~~other expenses aggregating $8.0 million.

Net loss attributable to Euronet��was ($0.03 million) for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021, an increase of $113.9 million or 100% compared to the net ~~income for~~loss in the same period in ~~2019~~ 2020. For the six months ended June 30, 2021, the increase in net income was primarily attributable to the ~~$280.3~~$104.6 million decrease in ~~revenues, $106.0 million~~ non-cash goodwill ~~and acquired intangible assets~~ impairment charges, ~~and $9.8~~a $59.8 million increase in gross profit and a $12.4 million decrease in net foreign currency exchange losses, partially offset by a ~~$9.8~~$44.5 million ~~decrease~~increase in ~~loss on early retirement of debt~~salaries and benefits, a ~~decrease~~$7.0 million increase in income tax expense, ~~of $57.8~~and an increase in other expenses aggregating $11.4 million.

LIQUIDITY AND CAPITAL RESOURCES

Working capital

As of ~~September~~June 30, ~~2020,~~2021, we had working capital of ~~$1,216.8~~$1,280.2 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 $249.6 million ~~of share repurchases~~ decrease in the outstanding balance on the Credit Facility during the ~~first quarter of 2020, partially offset by operating results for the nine~~six months ended ~~September~~June 30, ~~2020.~~2021. Our ratio of current assets to current liabilities was ~~1.85~~ 1.79 and ~~1.79~~1.81 at ~~September~~June 30, ~~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, some of which 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 ~~September~~June 30, ~~2020~~,2021, we had ~~$409.7~~$565.1 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 $256.0~~increased $154.0 million from ~~$665.6~~$411.1 million as of December 31, ~~2019~~2020 to ~~$409.7~~$565.1 million as of ~~September~~June 30, ~~2020~~2021 as a result of the ~~reduction~~increase in number of active ATMs as of ~~September~~June 30, ~~2020~~2021 compared to December 31, ~~2019.~~2020.

Table of Contents

The Company has ~~$1,008.2~~$994.5 million of unrestricted cash as of ~~September~~June 30, ~~2020~~2021 compared to ~~$786.1~~$1,420.3 million as of December 31, ~~2019.~~2020. The ~~increase~~decrease in unrestricted cash iswas primarily due to the ~~transfer~~$249.6 million net repayment of the outstanding balance on the Credit Facility during the six months ended June 30, 2021 and the $154.0 million increase in ATM cash toas unrestricted cash ~~and cash generated from operations, partially offset by $239.8 million in share repurchases during~~was utilized to fill the ~~first quarter of 2020.~~additional active ATMs. Including the ~~$409.7~~$565.1 million of cash in ATMs at ~~September~~June 30, ~~2020,~~2021, the Company has access to ~~$1,417.9~~$1,559.6 million in available cash, and ~~$953.1~~$949.7 million available under the ~~credit facility~~Credit Facility with no significant long-term debt principal payments until March 2025.

~~Table of Contents~~

The following table identifies cash and cash equivalents provided by/(used in) our operating, investing and financing activities for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 (in thousands):


	Nine Months Ended September 30,					Six Months Ended June 30,
Liquidity	2020		2019			2021			2020
Cash and cash equivalents and restricted cash provided by (used in):
Operating activities	$	220,416	$	364,379		$	173,307		$	178,557
Investing activities	(77,073)		(104,401		)	(48,332		)	(48,624		)
Financing activities	(244,069)		461,632			(248,553		)	(240,974		)
Effect of foreign currency exchange rate changes on cash and cash equivalents and restricted cash	32,042		(57,807)			(43,278		)	(27,787		)
(Decrease) increase in cash and cash equivalents and restricted cash	$	(68,684)	$	663,803
Decrease in cash and cash equivalents and restricted cash						$	(166,856	)	$	(138,828	)

Operating activity cash flow

Cash flows provided by operating activities were ~~$220.4~~$173.3 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 compared to ~~$364.4~~$178.6 million for the same period in ~~2019.~~2020. The decrease in operating cash flows was primarily due to ~~the decrease in net income, partially offset by~~ 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.

Investing activity cash flow

Cash flows used in investing activities were ~~$77.1~~$48.3 million for ~~nine~~the six months ended ~~September~~June 30, ~~2020~~2021 compared to ~~$104.4~~$48.6 million for the same period in ~~2019~~.2020. We used ~~$71.4~~$45.1 million for purchases of property and equipment for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~ 2021 compared to ~~$100.4~~$45.5 million for the same period in ~~2019~~2020.~~. The decrease in purchases of 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 ~~$5.7~~$3.3 million and ~~$4.0~~$3.6 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020, respectively.

Financing activity cash flow

Cash flows used in financing activities were ~~$244.1~~$248.6 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 compared to ~~cash flows provided by financing activities of $461.6~~$241.0 million for the same period in ~~2019.~~2020. Our borrowing activities for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 consisted of net cash outflows of ~~$5.0~~$249.6 million compared to no net borrowings ~~of $514.2 million~~ for the same period in 2020 ~~2019.~~. The decrease in net borrowings for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 compared to the same period in ~~2019~~2020 was the result of the ~~issuance~~net repayment of ~~$1,194.9~~$249.6 million of ~~Convertible Notes and Senior Notes during~~ the ~~nine months ended September 30, 2019 which were 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 ~~$240.8~~$0.9 million ~~and $37.3 million~~ of ~~our~~ common stock during the ~~nine~~six months ended ~~September~~June 30, ~~2020 and 2019~~2021 compared to repurchases of~~, respectively. Of~~ $240.7 million for the ~~$240.8 million repurchased shares, $239.8~~same period in 2020. The $0.9 million of ~~Euronet Common Stock was repurchased under our repurchase program.~~ share repurchases during the six months ended June 30, 2021 were in connection with the settlement of RSU awards and the exercise of option awards in certain countries in which we operate. We received proceeds of ~~$6.6~~$5.3 million and ~~$8.3~~$5.7 million during the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~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.In May 2021, an additional lender joined the Credit Facility which increased the revolving commitment by $30 million. The Credit Facility allows for borrowings in Australian dollars, British pounds sterling, Canadian dollars, Czech koruna, Danish krone, euro, Hungarian forints, Japanese yen, New Zealand dollars, Norwegian krone, Polish zlotys, Swedish krona, Swiss francs, and U.S. dollars. The Credit Facility contains a $200 million sublimit for the issuance of letters of credit, a $50 million sublimit for U.S. Dollar swingline loans, and a $90 million sublimit for certain foreign currencies swingline loans.

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As of ~~September~~June 30, ~~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 ~~September~~June 30, ~~2020,~~2021, we had no$20.8 million of borrowings and ~~$46.9~~ $59.5 million of stand-by letters of credit outstanding under the Credit Facility. The remaining ~~$953.1~~ $949.7 million under the Credit Facility was available for borrowing.

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~~Uncommitted Line of Credit~~ - ~~On September 4, 2019, the Company entered into an Uncommitted Loan Agreement with Bank of America which provided Euronet up to~~ $~~100.0~~ ~~million~~ ~~under an uncommitted line of credit. Interest on borrowings was equal to~~ ~~LIBOR~~ ~~plus~~ ~~0.65~~% ~~and the agreement was set to expire September 4, 2020.~~ ~~During the three months ended June 30, 2020, the Company and Bank of America mutually agreed to terminate the Uncommitted Loan Agreement.~~

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.

For the Retired Convertible Notes, in accordance with ASC 470, the Company recognized a loss of $9.8 million on the conversion and redemption of the debt during the first half of 2019, representing the difference between the fair value of the Retired Convertible Notes converted and the carrying value of the bonds at the time of conversion.

Senior Notes - On May 22, 2019, ~~the Company~~we completed the sale of €600 million ($669.9 million) aggregate principal amount of Senior Notes that expire on May 2026 (the “Senior Notes”). The Senior Notes accrue interest at a rate of 1.375% per year, payable annually in arrears ~~commencing~~on May 22 ~~2020,~~of each year, until maturity or earlier redemption. As of ~~September~~June 30, ~~2020, the Company has~~2021, we have outstanding €600 million ($~~703.2~~711.3 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 ~~$0.9~~ $0.8 million and ~~$6.2~~$0.9 million outstanding under these other obligation arrangements as of June 30, 2021~~September 30, 2020~~ and December 31, ~~2019,~~2020, respectively.

Other uses of capital

Capital expenditures and needs - Total capital expenditures for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 were $~~71.4~~ ~~million~~.$45.1 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 ~~$100~~$100 million to $105 million to .

~~$105 million. The Company has reduced estimated capital expenditures for 2020 due to the COVID-19 pandemic.~~

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~~

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 $110.6 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. For the ~~nine months ended September 30, 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 of the current programs 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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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 ~~September~~June 30, ~~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 ~~September~~June 30, ~~2020~~2021. See also Note ~~13,~~14, Commitments, to the unaudited consolidated financial statements included elsewhere in this report.

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CONTRACTUAL OBLIGATIONS

As of ~~September~~June 30, ~~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 of debt outstanding discussed in the Liquidity and Capital Resources section.~~ 2020.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest rate risk

As of ~~September~~June 30, ~~2020~~2021, our total debt outstanding, excluding unamortized debt issuance costs, was ~~$1,152.5 million~~.$1,193.0 million. Of this amount, ~~$448.3~~$460.1 million,, net of debt discounts, or ~~39%~~38% of our total debt obligations, relates to our contingent Convertible Notes that have a fixed coupon rate. Our $525.0 million outstanding principal amount of Convertible Notes accrue cash interest at a rate of 0.75% of the principal amount per annum. Based on quoted market prices, as of ~~September~~June 30, ~~2020,~~2021, the fair value of our fixed rate Convertible Notes was ~~$642.6~~$633.3 million,, compared to a carrying value of ~~$448.3 million~~.$460.1 million. Interest expense for 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 ~~September~~June 30, ~~2020~~2021 we had no$20.8 million of borrowings, or 2% of our total debt obligations, under our Credit Facility. Additionally, ~~$703.2~~$711.3 million,, or ~~61%~~60% 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 ~~September~~June 30, ~~2020,~~2021, the fair value of our fixed rate Senior Notes was ~~$687.8~~$721.7 million,, compared to a carrying value of ~~$703.2 million~~.$711.3 million. The remaining $0.8 million, or less than 1%~~$0.9 million, or~~ ~~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 ~~nine~~six months ended ~~September~~June 30, ~~2020,~~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 ~~September~~June 30, ~~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 ~~$95~~$100 million to $105 million to ~~$100 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 ~~$105~~$125 million to ~~$110~~$130 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 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.

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A majority of our consumer-to-consumer money transfer operations involve receiving and disbursing different currencies, in which we earn a foreign currency spread based on the difference between buying currency at wholesale exchange rates and selling the currency to consumers at retail exchange rates. We enter into foreign currency forward and cross-currency swap contracts to minimize exposure related to fluctuations in foreign currency exchange rates. The changes in fair value related to these contracts are recorded in Foreign currency exchange (loss) gain, net on the Consolidated Statements of Income. As of ~~September~~June 30, ~~2020,~~2021, we had foreign currency derivative contracts outstanding with a notional value of ~~$180~~$220 million, primarily in Australian dollars, British pounds, Canadian dollars, euros and Mexican pesos, that were not designated as hedges and mature within a few days.

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 ~~September~~June 30, ~~2020,~~2021, we held foreign currency derivative contracts outstanding with a notional value of $1.1 billion~~$1.3 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 ~~September~~June 30, ~~2020,~~2021, the Company had foreign currency forward contracts outstanding with a notional value of ~~$213~~$99 million, primarily in euros.

See Note 9,10, Derivative Instruments and Hedging Activities, to our 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 June 30, 2021~~September 30, 2020.~~. 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

There has been no change in our internal control over financial reporting during the ~~third~~second quarter of ~~2020~~2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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

~~There~~
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 and our Quarterly Report on Form 10-Q for the quarters ended March 31,~~ 2020, ~~and June 30, 2020~~as filed with the SEC.

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 ~~September~~June 30, ~~2020.~~2021. There were no repurchases of common stock during the three months ended June 30, 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)
July 1 - July 31, 2020 —
$ —
—
$ 259,362
August 1 - August 31, 2020 —
—
—
$ 259,362
September 1 - September 30, 2020 —
—
—
$ 259,362
Total —
$ —
—


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)
April 1 - April 30, 2021	—	$	—	—	$	250,000
May 1 - May 31, 2021	—	—		—		250,000
June 1 - June 30, 2021	—	—		—	$	250,000
Total	—	$	—	—

(1) On March 11, 2019, in connection with the issuance of the Convertible Notes, the Board of Directors authorized a repurchase program of $120 million in value of Euronet’s common stock through March 11, 2021. Euronet has repurchased $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 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

10.1		Euronet Worldwide, Inc. 2006 Stock Incentive Plan, as amended and restated (filed as Appendix B to the Company's Definitive Proxy Statement filed on April 4, 2021, and incorporated by reference herein)
10.2		Credit agreement dated as of October 17, 2018 among Euronet Worldwide, Inc. and certain subsidiaries, as borrowers, certain subsidiaries, as guarantors, the lenders party thereto, Bank of America, N.A., as administrative agent, Wells Fargo Bank, National Association and U.S. Bank National Association, as co-syndication agents, et al. (filed as exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed on November 2, 2018 and incorporated by reference herein)
10.3*		Letter Amendment No. 21 dated as of ~~September 17, 2020~~August 26, 2019 to the Credit Agreement dated as of October 17, 2018 ~~as amended by Letter Amendment No. 1 dated as of August 26, 2019 (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on September 18, 2020 and incorporated herein by reference).~~
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 ~~September~~June 30, ~~2020,~~2021, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at ~~September~~June 30, ~~2020~~2021 (unaudited) and December 31, ~~2019~~2020, (ii) Consolidated Statements of ~~Income~~Operations (unaudited) for the three and six months ended June 30~~three~~, 2021 and ~~nine months ended~~ ~~September 30,~~ 2020, ~~and~~ ~~2019~~, (iii) Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~,2020, (iv) Consolidated Statements of Changes in Equity (unaudited) for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 (v) Consolidated Statements of Cash Flows (unaudited) for the ~~nine~~six months ended ~~September~~June 30, ~~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)

_________________________

* 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.

~~November 2, 2020~~August 3, 2021

Euronet Worldwide, Inc.



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


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


		Amount of Gain Recognized in Income on Derivative Contracts (a)
	Location of Gain Recognized in Income on Derivative Contracts	Three Months Ended September 30,					Nine Months Ended September 30,
(in thousands)		2020			2019			2020			2019
Foreign currency exchange contracts - Ria Operations	Foreign currency exchange (loss) gain, net	$	(4,060	)	$	285	$	(4,283	)	$	619


Lease Expense (in thousands)	Income Statement Classification	Three Months Ended September 30, 2020		Three Months Ended September 30, 2019		Nine Months Ended September 30, 2020			Nine Months Ended September 30, 2019
Operating lease expense	Selling, general and administrative and Direct operating costs	$	14,694	$	35,068	$	68,927	$	98,641
Short-term and variable lease expense	Selling, general and administrative and Direct operating costs		26,429		12,653	47,390			31,541
Total lease expense		$	41,123	$	47,721	$	116,317	$	130,182

	Revenues for the Three Months Ended September 30,				Year-over-Year Change				Revenues for the Nine Months Ended September 30,				Year-over-Year Change
(dollar amounts in thousands)	2020		2019		Increase (Decrease) Amount		Increase (Decrease) Percent			2020		2019		Increase (Decrease) Amount	Increase (Decrease) Percent
EFT Processing	$	144,062	$	316,188	$	(172,126)	(54)	%	$	368,375	$	693,837	$	(325,462)	(47)	%
epay	198,939		191,071		7,868		4	%		559,413		551,345		8,068	1	%
Money Transfer	323,092		280,837		42,255		15	%		852,189		814,201		37,988	5	%
Total	666,093		788,096		(122,003)		(15)	%		1,779,977		2,059,383		(279,406)	(14)	%
Corporate services, eliminations and other	(1,742)		(1,110)		(632)		57	%		(3,916)		(3,021)		(895)	30	%
Total	$	664,351	$	786,986	$	(122,635)	(16)	%	$	1,776,061	$	2,056,362	$	(280,301)	(14)	%

	Operating Income (Expense) for the Three Months Ended September 30,				Year-over-Year Change				Operating Income (Expense) for the Nine Months Ended September 30,				Year-over-Year Change
(dollar amounts in thousands)	2020		2019		Increase (Decrease) Amount		Increase (Decrease) Percent			2020		2019		Increase (Decrease) Amount	Increase (Decrease) Percent
EFT Processing	$	6,161	$	150,901	$	(144,740)	(96)	%	$	(45,480)	$	244,185	$	(289,665)	(119)	%
epay	22,249		20,063		2,186		11	%		56,737		55,617		1,120	2	%
Money Transfer	47,626		35,648		11,978		34	%		14,707		101,768		(87,061)	(86)	%
Total	76,036		206,612		(130,576)		(63)	%		25,964		401,570		(375,606)	(94)	%
Corporate services, eliminations and other	(9,964)		(12,622)		2,658		(21)	%		(29,561)		(33,589)		4,028	(12)	%
Total	$	66,072	$	193,990	$	(127,918)	(66)	%	$	(3,597)	$	367,981	$	(371,578)	(101)	%

	Average Translation Rate Three Months Ended September 30,						Average Translation Rate Nine Months Ended September 30,
Currency (dollars per foreign currency)	2020		2019		Increase (Decrease) Percent			2020		2019	Increase (Decrease) Percent
Australian dollar	$	0.7149	$	0.6852	4	%	$	0.6768	$	0.6993	(3)	%
British pounds sterling	$	1.2916	$	1.2326	5	%	$	1.2709	$	1.2734	(0)	%
euro	$	1.1689	$	1.1114	5	%	$	1.1241	$	1.1235	0	%
Hungarian forint	$	0.0033	$	0.0034	(3)	%	$	0.0032	$	0.0035	(9)	%
Indian rupee	$	0.0135	$	0.0142	(5)	%	$	0.0135	$	0.0143	(6)	%
Malaysian ringgit	$	0.2382	$	0.2403	(1)	%	$	0.2364	$	0.2420	(2)	%
New Zealand dollar	$	0.6619	$	0.6483	2	%	$	0.6383	$	0.6640	(4)	%
Polish zloty	$	0.2633	$	0.2573	2	%	$	0.2544	$	0.2613	(3)	%