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 ~~June 30, 2021~~March 31, 2022

☐

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 þ No 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 ~~August 2, 2021,~~May 3, 2022, Euronet Worldwide, Inc. had ~~52,824,377~~50,550,498 shares of 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 ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021	1
	Consolidated Statements of Operations for the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~	2
	Consolidated Statements of Comprehensive ~~Income~~Loss for the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~	3
	Consolidated Statements of Changes in Equity for the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~	4
	Consolidated Statements of Cash Flows for the ~~Six~~Three Months Ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~	6
	Notes to the Unaudited Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2223
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	39
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 6.	Exhibits	41
	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
	June 30, 2021			December 31, 2020			March 31, 2022			December 31, 2021
	(unaudited)						(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	994,488		$	1,420,255		$	986,534		$	1,260,466
ATM cash	565,084			411,054			644,436			543,422
Restricted cash	3,328			3,334			5,884			3,693
Settlement assets	929,722			1,140,875			1,037,367			1,102,389
Trade accounts receivable, net of credit losses of $4,604 and $5,926	138,563			117,517
Trade accounts receivable, net of credit losses of $4,274 and $4,469							180,070			203,010
Prepaid expenses and other current assets	270,503			272,900			271,538			195,443
Total current assets	2,901,688			3,365,935			3,125,829			3,308,423
Operating right of use lease assets	173,611			162,074			161,407			161,494
Property and equipment, net of accumulated depreciation of $512,831 and $490,429	362,946			378,441
Property and equipment, net of accumulated depreciation of $536,675 and $532,631							344,429			345,381
Goodwill	657,327			665,821			846,241			641,605
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
Acquired intangible assets, net of accumulated amortization of $187,609 and $185,054							214,490			97,793
Other assets, net of accumulated amortization of $63,858 and $62,349							205,917			189,580
Total assets	$	4,439,083		$	4,926,711		$	4,898,313		$	4,744,276
LIABILITIES AND EQUITY
Current liabilities:
Settlement obligations	$	929,722		$	1,140,875		$	1,037,367		$	1,102,389
Trade accounts payable	141,018			147,593			157,738			193,529
Accrued expenses and other current liabilities	388,833			404,021			404,096			367,692
Current portion of operating lease liabilities	53,659			52,436			51,795			52,136
Short-term debt obligations and current maturities of long-term debt obligations	746			797			298			821
Income taxes payable	35,814			36,359			48,054			59,037
Deferred revenue	71,667			73,360			71,606			77,037
Total current liabilities	1,621,459			1,855,441			1,770,954			1,852,641
Debt obligations, net of current portion	1,176,441			1,437,589			1,762,278			1,420,085
Operating lease obligations, net of current portion	122,043			106,502			110,848			111,355
Deferred income taxes	39,114			37,875			37,136			46,505
Other long-term liabilities	40,530			43,401			73,503			58,166
Total liabilities	2,999,587			3,480,808			3,754,719			3,488,752
Equity:
Euronet Worldwide, Inc. stockholders’ equity:
Preferred Stock, $0.02 par value. 10,000,000 shares authorized; NaN issued	0—			0—			0—			0—
Common Stock, $0.02 par value. 90,000,000 shares authorized; shares issued 63,451,545 and 63,366,010	1,269			1,267
Common Stock, $0.02 par value. 90,000,000 shares authorized; shares issued 63,818,035 and 63,779,009							1,276			1,275
Additional paid-in-capital	1,252,456			1,228,446			1,211,830			1,274,118
Treasury stock, at cost, shares issued 10,629,291 and 10,631,961	(703,247		)	(703,032		)
Treasury stock, at cost, shares issued 13,269,513 and 12,631,125							(1,001,421		)	(931,212		)
Retained earnings	1,013,125			1,013,155			1,125,569			1,083,882
Accumulated other comprehensive loss	(124,384		)	(94,214		)	(193,659		)	(172,582		)
Total Euronet Worldwide, Inc. stockholders’ equity	1,439,219			1,445,622			1,143,595			1,255,481
Noncontrolling interests	277			281			(1		)	43
Total equity	1,439,496			1,445,903			1,143,594			1,255,524
Total liabilities and equity	$	4,439,083		$	4,926,711		$	4,898,313		$	4,744,276

See accompanying notes to the unaudited consolidated financial statements.

Table of Contents

(3) ~~PENDING ACQUISITION~~ACQUISITIONS

InOn March ~~2021,~~15, 2022 we completed the ~~Company entered into an agreement to purchase~~acquisition of the ~~Piraeus Bank~~ Merchant Acquiring ~~business~~Business of Piraeus Bank ~~for €300 million, or approximately $360 million.~~("PBMA"). The ~~proposed arrangement will include separate commercial agreements for~~acquisition includes 205,000 POS terminals at 170,000 merchants throughout Greece, as well as Piraeus Bank’s online merchant acquiring business and expands our omnichannel payments strategy where we use our proprietary technology to provide cash, card-based acquiring solutions, alternative payment acquiring, online acquiring, tokenized payment services and other payment products. Additionally, the acquisition includes a long-term ~~strategic partnership with~~commercial framework agreement between Piraeus Bank ~~for~~and Euronet which includes collaborative product distribution, processing and customer referrals.

The ~~acquisition will expand~~purchase price was €313.8 million, or approximately $346.2 million, which includes $331.0 million cash paid at closing plus $15.2 million of estimated contingent consideration for a ten-year earnout contingent on performance targets outlined in the ~~Company’s omnichannel payments strategy and position~~commercial framework agreement. The contingent consideration is related to a percentage of 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~~net fee income received during the ten-year period of the commercial ~~agreements,~~framework agreement and ~~customary closing conditions.~~ there is no contractual maximum amount of consideration under this agreement.

The ~~Company expects to finance the~~initial accounting for this acquisition is not complete as of March 31, 2022. The purchase price ~~using~~was preliminarily allocated to the assets acquired and liabilities assumed, including identifiable intangible assets, based on their respective provisional fair values at the date of acquisition. Additional time is needed particularly to refine and review the results of the valuation of assets and liabilities. The acquisition has been accounted for as a business combination in accordance with U.S. GAAP and the results of operations have been included from the date of acquisition in the EFT Processing Segment.

The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed as of the acquisition date.


(in thousands)	As of March 15, 2022
Other current assets	$	1,707
Settlement assets		78,718
Property and equipment		6,095
Acquired intangible assets		122,455
Total assets acquired	$	208,975

Trade accounts payable	$	1,499
Settlement liabilities		66,925
Accrued expenses and other current liabilities		5,929
Deferred revenue		500
Other long-term liabilities		99
Total liabilities assumed	$	74,952

Goodwill		212,183

Net assets acquired	$	346,206

Assets acquired, liabilities assumed, and consideration transferred were recorded at their estimated fair values on the acquisition date. The fair value measurements of intangible assets were based on significant inputs not observable in the market and represent Level 3 measurements within the fair value hierarchy. Level 3 inputs include discount rates that would be used by a market participant in valuing these assets, projections of revenues and cash flows, and customer attrition rates, among others.

We acquired a customer relationship intangible asset with a preliminary fair value of $112.2 million that is being amortized on ~~hand.~~a straight-line basis over 15 years and a contract related intangible asset of $10.3 million that is being amortized on a straight-line basis over 10 years.

Goodwill, with a preliminary value of $212.2 million, arising from the acquisition was included in the EFT Processing Segment. The factors that make up goodwill include synergies from combining PBMA operations and intangible assets that do not qualify for separate recognition. Goodwill and intangible assets associated with this acquisition are deductible for tax purposes.

Revenues and expenses related to the acquisition and pro forma results of operations have not been presented for the three months ended March 31, 2022 as the results were not material to our overall operations.

(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~~our common stock, assumed vesting of restricted stock and the assumed conversion of ~~the Company's~~our convertible debt, if such conversion would be dilutive.

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

	Three Months Ended June 30,		Six Months Ended June 30,		Three Months Ended March 31,
	2021	2020	2021	2020	2022	2021
Computation of diluted weighted average shares outstanding:
Basic weighted average shares outstanding	52,805,367	52,234,465	52,784,106	52,920,784	51,057,951	52,762,845
Incremental shares from assumed exercise of stock options and vesting of restricted stock	1,203,472	0—	0—	0—	658,094	0—
Diluted weighted average shares outstanding	54,008,839	52,234,465	52,784,106	52,920,784	51,716,045	52,762,845

The table includes all stock options and restricted stock that are dilutive to ~~the Company's~~our 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~~our weighted average common shares outstanding of approximately ~~1,239,000~~2,237,000 and ~~2,429,000 for the~~ ~~three and~~ ~~six months ended June 30, 2021, respectively, and approximately 2,533,000 and 1,608,000~~2,437,000 for the three ~~and six~~ months ended ~~June 30, 2020, respectively~~March 31, 2022 and 2021. , respectively.

~~The Company~~We issued Convertible Senior Notes ("Convertible Notes") due March 2049 on March 18, 2019. ~~The Company's~~Our Convertible Notes currently have a settlement feature requiring ~~the Company~~us 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~~our common stock or a combination thereof, at ~~the Company's~~our option. ~~The Company has~~We have stated ~~its~~our intent to settle any conversion of these notes by paying cash for the principal value and issuing common stock for any conversion ~~premium. Accordingly,~~premium; however, after adopting ASU 2020-06, 2.8 million incremental shares assumed for conversion of convertible notes shall be included in the dilutive earnings per share calculation, if dilutive, regardless of whether the market price trigger has been met. For the three months ended March 31, 2022, the assumed conversion resulted in an anti-dilutive impact, therefore our Convertible Notes were not included in the calculation of diluted earnings (loss) per ~~share if their inclusion was dilutive.~~share. 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 of common stock was $135.35 on June 30, 2021 and $95.82 on June 30, 2020, therefore,~~ ~~according to ASC Topic 260,~~ ~~Earnings per Share~~ ~~(“ASC 260”)~~, ~~there was no dilutive effect of the assumed conversion of the debentures for the three and six months ended June 30, 2021~~ ~~and 2020.~~ See Note 9, Debt Obligations, to the consolidated financial statements for more information about the Convertible Notes.

~~Table of Contents~~

Share repurchases

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 the Company's common stock through March 11, 2021. On February 26, 2020, ~~the Company~~we 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. On December 8, 2021, we put a repurchase program in place to repurchase up to $300 million in value, but not more than 5.0 million shares of common stock through December 8, 2023. For the three ~~and six~~ months ended ~~June 30, 2021, there were no repurchases~~March 31, 2022, we repurchased $70.4 million of stock under the repurchase programs. Repurchases under the current program may take place in the open market or in privately negotiated transactions, including derivative transactions, and may be made under a Rule 10b5-1 plan.

Accumulated Other Comprehensive ~~Income (Loss)~~Loss

Accumulated other comprehensive ~~income (loss)~~loss consists entirely of foreign currency translation adjustments. ~~The Company~~We recorded a foreign currency translation ~~gain~~losses of ~~$12.7~~$21.1 million and ~~a loss of $30.2~~ $42.9 million for the three ~~and six months ended June~~ ~~30, 2021, respectively, and a gain of $32.2 million and a loss of~~ ~~$27.6 million~~ ~~for the three and six~~ months ended March 31, 2022~~June 30, 2020,~~ and 2021, respectively. There were no reclassifications of foreign currency translation into the consolidated statements of income for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020.~~2021.

(9) DEBT OBLIGATIONS

Debt obligations consist of the following:

	As of						As of
(in thousands)	June 30, 2021			December 31, 2020			March 31, 2022			December 31, 2021
Credit Facility:
Revolving credit agreement	$	20,800		$	270,400		$	586,900		$	283,400
Convertible Debt:
0.75% convertible notes, unsecured, due 2049	460,136			452,228			525,000			468,235

1.375% Senior Notes, due 2026	711,300			732,840			663,900			682,080

Other obligations	808			850			386			920

Total debt obligations	1,193,044			1,456,318			1,776,186			1,434,635
Unamortized debt issuance costs	(15,857		)	(17,932		)	(13,610		)	(13,729		)
Carrying value of debt	1,177,187			1,438,386			1,762,576			1,420,906
Short-term debt obligations and current maturities of long-term debt obligations	(746		)	(797		)	(298		)	(821		)
Long-term debt obligations	$	1,176,441		$	1,437,589		$	1,762,278		$	1,420,085

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 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. The 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 ~~June 30, 2021~~March 31, 2022.

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 at a conversion price of approximately $188.73 per share if certain conditions are met (relating to the closing price of Euronet 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.

1113

~~Table of Contents~~

InPrior to the adoption of ASU 2020-06 as of January 1, 2022, in accordance with ASC 470-20-30-27, proceeds from the issuance of convertible debt iswas allocated between debt and equity components so that debt iswas discounted to reflect ~~the Company's~~our nonconvertible debt borrowing rate. ASC 470-20-35-13 ~~requires~~required the debt discount to be amortized over the period the convertible debt iswas expected to be outstanding as additional non-cash interest expense. The allocation resulted in an increase to additional paid-in capital of ~~$99.7~~$99.7 million for the Convertible Notes.

Contractual interest expense for the Convertible Notes was ~~$1.0~~ ~~million and $2.0 million for the~~ ~~three and six months ended June 30, 2021, respectively, and $1.0 million and $2.0~~$1.0 million for the three ~~and six~~ months ended ~~June 30, 2020, respectively~~March 31, 2021. Accretion expense for the Convertible Notes was ~~$4.0 million and $7.9~~$3.9 million for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2021. See Footnote 2, ~~, respectively,~~Recently Issued and ~~$3.8 million and $7.5 million~~ Adopted Accounting Pronouncements, for ~~the three and six months ended June 30, 2020, respectively~~more information regarding this adoption.. ~~The effective interest rate was~~

~~4.4% for the three and six months ended June 30, 2021. As of June 30, 2021, the unamortized discount was $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 ($669.9 million) aggregate principal amount of Senior Notes that expire in May 2026 (the “Senior Notes”). The Senior Notes accrue interest at a rate of 1.375% per year, payable annually in arrears commencing May 22, 2020, until maturity or earlier redemption. As of ~~June 30, 2021,~~March 31, 2022, the Company has outstanding €600 million ($~~711.3~~663.9 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 ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, borrowings under these arrangements were ~~$0.8~~$0.4 million and $0.9 million, respectively.

Debt Issuance Costs

As of March 31, 2022, we had unamortized debt issuance costs of $2.1 million for the Credit Facility, $6.4 million for the Convertible Notes and $5.1 million for the Senior Notes that will be amortized through October 2023, March 2025 and May 2026, respectively.

(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. The Company had foreign currency forward contracts outstanding in the U.S. with a notional value of $~~220~~231.1 million and $~~246~~$222.1 million as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. The foreign currency forward contracts consist primarily in Australian dollars, Canadian dollars, British pounds sterling, euro and Mexican pesos.

~~Table of Contents~~

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. The Company had foreign currency forward contracts outstanding with a notional value of $9916.2 million and ~~$454~~$216.1 million as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, 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 ~~$19.9~~$22.5 million and $~~38.4~~18.5 million for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021, ~~respectively, and~~ ~~$13.2 million and $31.3 million~~ ~~for the three and six months ended June 30, 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 ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 was approximately $1.1 billion and ~~$1.3~~$1.0 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	June 30, 2021		December 31, 2020		Balance Sheet Location	June 30, 2021			December 31, 2020			Balance Sheet Location	March 31, 2022		December 31, 2021		Balance Sheet Location	March 31, 2022			December 31, 2021
Derivatives not designated as hedging instruments
Foreign currency exchange contracts	Other current assets	$	36,488	$	80,879	Other current liabilities	$	(26,224	)	$	(65,905	)	Other current assets	$	36,997	$	27,582	Other current liabilities	$	(28,741	)	$	(23,285	)

The following tables summarize the gross and net fair value of derivative assets and liabilities as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 (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 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
As of March 31, 2022															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	$	36,488	$	0—	$	36,488	$	(16,497	)	$	(3,631	)	$	16,360	$	36,997	$	0—	$	36,997	$	(17,631	)	$	(3,052	)	$	16,314

As of December 31, 2020
As of December 31, 2021
Derivatives subject to a master netting arrangement or similar agreement	$	80,879	$	0—	$	80,879	$	(44,893	)	$	(2,778	)	$	33,208	$	27,582	$	0—	$	27,582	$	(14,875	)	$	(2,284	)	$	10,423

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~~Table of Contents~~

Offsetting of Derivative Liabilities

									Gross Amounts Not Offset in the Consolidated Balance Sheet															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
As of March 31, 2022																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	)	$	(28,741)		$	0—	$	(28,741)		$	17,631	$	1,834	$	(9,276)

As of December 31, 2020
As of December 31, 2021
Derivatives subject to a master netting arrangement or similar agreement	$	(65,905	)	$	0—	$	(65,905	)	$	44,893	$	12,272	$	(8,740	)	$	(23,285	)	$	0—	$	(23,285	)	$	14,875	$	640	$	(7,770	)

(12) SEGMENT INFORMATION

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

1) Through the EFT Processing Segment, ~~the Company processes~~we process transactions for a network of ATMs and POS terminals across Europe, the Middle East, Africa, Asia Pacific and the United ~~States and Africa. The Company provides~~States. We provide comprehensive electronic payment solutions consisting of ATM cash withdrawal services, ATM network participation, outsourced ATM and POS management solutions, credit, debit and ~~debit~~prepaid card outsourcing, dynamic currency conversion, domestic and international surcharges and other value added services. Through this segment, ~~the Company~~we also ~~offers~~offer a suite of integrated electronic financial transaction software solutions for electronic payment and transaction delivery systems.
17

2) Through the
epay
~~Through the epay~~ Segment, ~~the Company provides~~we provide 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.
3) Through the Money Transfer Segment, ~~the Company provides~~we provide 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~~We also ~~offers~~offer 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.

~~Table of Contents~~

In addition, ~~the Company accounts~~we account for non-operating activity, share-based compensation expense, certain intersegment eliminations and the costs of providing corporate and other administrative services in ~~its~~our administrative division, ~~“Corporate~~"Corporate Services, Eliminations and Other.”" These services are not directly identifiable with ~~the Company’s~~our reportable operating segments.

The following tables present ~~the Company’s~~our reportable segment results for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020:~~2021:

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 March 31, 2022
(in thousands)	EFT Processing			epay		Money Transfer		Corporate Services, Eliminations and Other			Consolidated
Total revenues	$	145,571		$	235,838	$	338,966	$	(1,908	)	$	718,467
Operating expenses:
Direct operating costs, exclusive of depreciation	93,337			178,320		188,397		(1,901		)	458,153
Salaries and benefits	25,244			20,177		67,225		14,119			126,765
Selling, general and administrative	11,114			9,440		41,037		2,265			63,856
Depreciation and amortization	22,343			1,696		8,842		109			32,990
Total operating expenses	152,038			209,633		305,501		14,592			681,764
Operating (loss) income	$	(6,467	)	$	26,205	$	33,465	$	(16,500	)	$	36,703

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

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

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For the Six Months Ended June 30, 2020
(in thousands)

EFT
Processing

epay

Money
Transfer

Corporate Services,
Eliminations
and Other

Consolidated
Total revenues

$
224,313

$
360,474

$
529,097

$
(2,174 )

$
1,111,710
Operating expenses:

Direct operating costs

150,001

274,130

287,498

(2,162 )

709,467
Salaries and benefits

43,380

30,888

102,923

15,001

192,192
Selling, general and administrative

20,456

17,473

71,754

4,425

114,108
Goodwill impairment
21,861

0—

82,693

0—

104,554
Depreciation and amortization

40,256

3,495

17,148

159

61,058
Total operating expenses

275,954

325,986

562,016

17,423

1,181,379
Operating (loss) income

$
(51,641 )

$
34,488

$
(32,919 )

$
(19,597 )

$
(69,669 )

(15) LITIGATION AND CONTINGENCIES

From time to time, ~~the Company is~~we are a party to legal or regulatory proceedings arising in the ordinary course of ~~its~~our 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~~our consolidated financial condition or results of operations. In accordance with U.S. GAAP, ~~the Company records~~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 provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case.

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(16) LEASES

~~The Company enters~~We enter into operating leases for ATM sites, office spaces, retail stores and equipment. ~~The Company's~~Our 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~~We recognize 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~~our sole discretion. The depreciable life of assets and leasehold improvements are limited by the expected lease terms. ~~The Company~~We also ~~has~~have a unilateral termination right for most of the ATM site leases. Since ~~the Company is~~we are not reasonably certain not to exercise termination options, payments for ATM site leases with termination options subject to the short-term lease exemption are expensed in the period incurred and corresponding leases are excluded from the right of use lease asset and lease liability balances. Certain of ~~the Company's~~our 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 ~~June 30, 2021~~March 31, 2022 are:

	As of June 30, 2021			As of March 31, 2022
Maturity of Lease Liabilities (in thousands)	Operating Leases (1)			Operating Leases (1)
Remainder of 2021	$	24,415
2022	43,882
Remainder of 2022				$	36,760
2023	33,890			40,223
2024	25,040			30,573
2025	17,766			21,766
2026				15,077
Thereafter	35,016			23,207
Total lease payments	$	180,009		$	167,606
Less: imputed interest	(4,307		)	(4,963		)
Present value of lease liabilities	$	175,702		$	162,643

(1) Operating lease payments reflect ~~the Company's~~our 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.

2021

~~Table of Contents~~

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

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

Lease Expense (in thousands)	Income Statement Classification	Three Months Ended March 31, 2022		Three Months Ended March 31, 2021
Operating lease expense	Selling, general and administrative and Direct operating costs	$	13,517	$	13,858
Short-term and variable lease expense	Selling, general and administrative and Direct operating costs		29,723		22,549
Total lease expense		$	43,240	$	36,407

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 ~~June 30, 2021~~March 31, 2022
Weighted- average remaining lease term (years)	~~5.2~~4.8
Weighted- average discount rate	2.3	%

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


Other Information (in thousands)	Six Months Ended June 30, 2021		Six Months Ended June 30, 2020		Three Months Ended March 31, 2022		Three Months Ended March 31, 2021
Cash paid for amounts included in the measurement of lease liabilities (a)	$	26,321	$	53,869	$	13,521	$	13,669
Supplemental non-cash information on lease liabilities arising from obtaining ROU assets:
ROU assets obtained in exchange for new operating lease liabilities	$	49,270	$	52,764	$	15,207	$	28,188

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

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The terms "Euronet," the "Company," "we" and "us" as used herein refer to Euronet Worldwide, Inc. and its subsidiaries.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This report contains statements that constitute forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and section 21E of the Securities Exchange Act of 1934 (“Exchange Act”). Generally, the words "believe," "expect," "anticipate," "intend," "estimate," "will" and similar expressions identify forward-looking statements. However, the absence of these words or similar expressions does not mean the statement is not forward-looking. All statements other than statements of historical facts included in this document are forward-looking statements, including, but not limited to, statements regarding the following:

our business plans and financing plans and requirements;
trends affecting our business plans and financing plans and requirements;
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;~~acquisitions;
business strategy;
government regulatory action;
the expected effects of changes in laws or accounting standards;
~~the impact of the COVID-19 pandemic on our results of operations and financial position;~~
technological advances; and
projected costs and revenues.

Although we believe that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these expectations will prove to be correct.

Investors are cautioned that any forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may materially differ from those in the forward-looking statements as a result of various factors, including, but not limited to, conditions in world financial markets and general economic conditions, including impacts from the COVID-19 pandemic; the ~~speed~~war in the Ukraine and ~~effectiveness~~related economic sanctions; our ability to successfully integrate the operations of ~~rollouts for vaccines and treatments for COVID-19; the effects in Europe of the U.K.'s departure from the E.U.~~Piraeus Merchant Services; 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; our ability to comply with increasingly stringent regulatory requirements, including anti-money laundering, anti-terrorism, anti-bribery, sanctions, consumer and data protection and privacy and the European Union's General Data Protection Regulation, and Second Revised Payment Service Directive requirements; changes in laws and regulations affecting our business, including tax and immigration laws and any laws regulating payments, including DCC 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; the cost of borrowing (including fluctuations in interest rates), 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 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, ~~2020~~2021. Our Annual Report on Form 10-K is available on the SEC's EDGAR website at www.sec.gov, and copies may also be obtained by contacting the Company. Any forward-looking statements made in this Form 10-Q speak only as of the date of this report. Except as required by law, we do not intend, and do not undertake any obligation, to update any forward-looking statements to reflect future events or circumstances after the date of such statements.

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OVERVIEW

COMPANY OVERVIEW, GEOGRAPHIC LOCATIONS AND PRINCIPAL PRODUCTS AND SERVICES

Euronet is a leading electronic payments provider. We offer payment and transaction processing and distribution solutions to financial institutions, retailers, service providers and individual consumers. Our primary product offerings include comprehensive ~~Automated Teller Machine ("ATM"), point-of-sale ("POS"),~~ATM, POS, card outsourcing, card issuing and merchant acquiring services, software solutions, electronic distribution of prepaid mobile airtime, managed services and other electronic payment products, foreign currency exchange services and global money transfer services. We operate in the following three segments:

1) TheThe EFT Processing Segment, which processes transactions for a network of ~~43,559 active~~ 44,353ATMsand approximately ~~375,000~~ 491,000POS terminals across Europe, the Middle East, Africa, Asia Pacific, and the United ~~States and Africa.~~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, debit and ~~debit~~prepaid card outsourcing, ~~dynamic currency conversion ("DCC"),~~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.
2) TheepaySegment, which provides distribution, processing and collection services for prepaid mobile airtime and other electronic content. We operate a network of approximately ~~748,000~~ 760,000 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.
3) The Money Transfer Segment, which provides global consumer-to-consumer money transfer services, primarily under the brand names Ria, IME, AFEX, ~~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~~ 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 ~~490,000~~ 495,000 locations. xe is a provider of foreign currency exchange information and ~~offers~~offers money transfer services on its currency data ~~websites~~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~~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 ~~72%~~ 73% 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~~(for a further discussion, see Item 1A1A - Risk Factors in our Annual Report on Form 10-K for the year ended December 31, ~~2020)~~2021).

SOURCES OF REVENUES AND CASH FLOW

Euronet~~Euronet~~ earns revenues and income primarily from ATM management fees, transaction fees, commissions and foreign currency exchange margin. Each operating segment’s sources of revenues are described below.

EFT Processing Segment — Revenues in the EFT Processing Segment, which represented approximately ~~16% and 15%~~20% of total consolidated revenues for the three ~~and six~~ months ended ~~June 30, 2021, respectively,~~ March 31, 2022, are derived from fees charged for transactions made by cardholders on our proprietary network of ATMs, fixed management fees and transaction fees we charge to customers for operating ATMs and processing debit and credit cards under outsourcing and cross-border acquiring agreements, foreign currency exchange margin on DCC transactions, domestic and international surcharge, foreign currency dispensing and other value added services such as advertising, prepaid telecommunication recharges, bill payment, and money transfers provided over ATMs. Revenues in this segment are also derived from cardless payment, banknote recycling, tax refund services, license fees, professional services and maintenance fees for proprietary application software and sales of related hardware.

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epay Segment — Revenues in the epay Segment, which represented approximately 3433%% ~~and 35%~~ of total consolidated revenues for the three ~~and six~~ months ended ~~June 30, 2021, respectively,~~March 31, 2022, are primarily derived from commissions earned from the distribution of electronic content, vouchers, and physical gifts and commissions or processing fees received from mobile phone operators for the processing and distribution of prepaid mobile ~~airtime and commissions earned from~~airtime. Branded payments, which includes the distribution of ~~other electronic~~digital media content, ~~vouchers, and physical gifts. The proportion~~were 66% of epay Segment revenues ~~earned from~~for the ~~distribution of prepaid mobile phone time compared with other electronic products has decreased over time, and digital media content now produces approximately 68%~~ ~~of epay Segment revenues. Other electronic content offered by this segment includes~~three months ended March 31, 2022. Branded payments include digital content such as music, games and software, as well as, other products including ~~mobile wallets,~~ prepaid long distance calling card plans, prepaid Internet plans, prepaid debit cards, gift cards, vouchers, transport payments, lottery payments, bill payment, and money transfer.

Money Transfer Segment — Revenues in the Money Transfer Segment, which represented approximately 50%47% of total consolidated revenues for ~~both~~ the three ~~and six~~ months ended ~~June 30, 2021, respectively,~~March 31, 2022 a, reare 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.

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.~~2026. Thereafter, it will automatically renew for subsequent one year terms unless either party provides notice to the contrary. The agreement imposes certain obligations on each party, the most significant being service level requirements by Ria and money transfer compliance requirements by Walmart. Any violation of these requirements by Ria could result in an obligation to indemnify Walmart or termination of the contract by Walmart. However, the agreement allows the parties to resolve disputes by mutual agreement without termination of the agreement.

Corporate Services, Eliminations and Other— In addition to operating in our principal operating segments described above, our “Corporate Services, Eliminations and Other” category includes non-operating activity, certain inter-segment eliminations and the cost of providing corporate and other administrative services to the operating segments, including most share-based compensation expense. These services are not directly identifiable with our reportable operating segments.

Opportunities and Challenges

The globalproduct markets in which we operate are large and fragmented, which poses both opportunities and challenges for our technology to disrupt new and existing competition. As an organization, our focus is on increasing our market presence through both physical (ATMs, POS terminals, company stores and agent correspondents) and digital assets and providing new and improved products and services for customers through all of our channels, which may in turn drive an increase in the number of 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.

1) 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 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 laws and regulations that govern DCC transactions, specifically in the E.U., as well as the laws and regulations of each country ~~that~~in which 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 inherent limitations in managing our estate of ATMs, which is dependent on contracts that cover large numbers of ATMs, which are complicated by legal and regulatory considerations of local countries, as well as our customers' decisions whether to outsource ATMs.

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2) The epay Segment opportunities include renewing existing and negotiating new agreements in target markets in which we operate, primarily with ~~mobile operators,~~ digital content providers, mobile operators, financial institutions and retailers. The overall growth rate in the digital media content andprepaid 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 in these markets that may impact our ability to grow 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 Money Transfer Segments. The epay Segment opportunities may be impacted by government-imposed restrictions on retailers and/or content providers with whom we partner in countries in which we have a presence, and corresponding licensure requirements mandated upon such parties to legally operate in such countries.

3) The Money Transfer Segment opportunities include expanding our portfolio of products and services to new and existing customers around the globe, which in turn may lead to an increase in transaction volumes. The opportunities to expand are contingent on our ability to effectively leverage our network of bank accounts for digital money transfer delivery, maintaining our physical agent network, cross selling opportunities with our EFT and 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 required licenses, ensuring the recoverability of funds advanced to agents and the continued reliance on the technologies required to operate our business. The volume of transactions processed on our network is impacted by shifts in our customer base, which can change rapidly with worker migration patterns and changes in unbanked populations across the globe. Foreign regulations that impact cross-border migration patterns and the money transfer markets can significantly impact our ability to grow the number of transactions on our network.

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,~~March 31, 2022 and 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~~a significant portion of the ~~world where we operate. In addition, the rate of acceptance~~population remains unvaccinated and long term effectiveness of the vaccines, especially against new variants, ~~are~~is 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.~~
agents as well as certain restrictions that may impact immigrant laborers.
~~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.

2526

~~Table of Contents~~

SEGMENT SUMMARY RESULTS OF OPERATIONS

Revenues and operating income by segment for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020~~2021 are summarized in the tables below:

	Revenues for the Three Months Ended March 31,						Year-over-Year Change
(dollar amounts in thousands)	2022			2021			Increase (Decrease) Amount			Increase (Decrease) Percent
EFT Processing	$	145,571		$	87,076		$	58,495		67	%
epay	235,838			242,303			(6,465		)	(3)	%
Money Transfer	338,966			324,900			14,066			4	%
Total	720,375			654,279			66,096			10	%
Corporate services, eliminations and other	(1,908		)	(1,609		)	(299		)	19	%
Total	$	718,467		$	652,670		$	65,797		10	%

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 %

EFT PROCESSING SEGMENT

The following table summarizes the results of operations for our EFT Processing Segment for the three months ended March 31, 2022 and ~~sixmonths ended~~ ~~June 30,~~ 2021~~and~~ ~~2020~~:

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 March 31,						Year-over-Year Change
(dollar amounts in thousands)	2022			2021			Increase (Decrease) Amount			Increase (Decrease) Percent
Total revenues	$	145,571		$	87,076		$	58,495		67	%
Operating expenses:
Direct operating costs, exclusive of depreciation	93,337			69,612			23,725			34	%
Salaries and benefits	25,244			23,571			1,673			7	%
Selling, general and administrative	11,114			11,962			(848		)	(7)	%
Depreciation and amortization	22,343			22,027			316			1	%
Total operating expenses	152,038			127,172			24,866			20	%
Operating loss	$	(6,467	)	$	(40,096	)	$	33,629		(84)	%
Transactions processed (millions)	1,328			925			403			44	%
Active ATMs as of March 31,	44,353			36,777			7,576			21	%
Average Active ATMs	43,394			36,624			6,770			18	%

Revenues

EFT Processing Segment total revenues were ~~$113.5~~$145.6 million for the three months ended ~~June 30, 2021,~~March 31, 2022, an increase of ~~$35.0~~$58.5 million or ~~45%~~67% compared to the same period in ~~2020. EFT Processing Segment total~~2021. The increase in revenues ~~were $200.6~~was primarily due to the increase in domestic and international withdrawal transactions resulting from continued lifting of travel restrictions across Europe and the increase in volume of transactions for low-value point-of-sale transactions in Europe and low-value payment processing transactions in Asia Pacific. Foreign currency movements decreased revenues by approximately $8.5 million for the ~~six~~three months ended ~~June 30, 2021, a decrease of $23.8 million or 11%~~March 31, 2022 compared to the same period in 2020. Beginning in the late first quarter of 2020, the COVID-19 related government-imposed border and business closures, travel restrictions and other orders significantly reduced tourism throughout Europe, which led to a significant decrease in high-margin cross-border transactions (DCC) and 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 surcharge transactions from returning to pre-COVID-19 levels. Revenues increased for the three months ended June 30, 2021 compared to the same period in 2020 primarily due to the reactivation of ATMs and gradual increase in 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 six months ended June 30, 2021, respectively, compared to the same periods in 2020.

Average monthly revenues per ATM increased to ~~$934~~$1,118 for the three months ended March 31, 2022 compared to $793 for the same period in 2021. Revenues per transaction increased to $0.11 for the three months ended ~~June 30, 2021~~March 31, 2022 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$0.09 ~~for the three~~ m~~onths ended June 30, 2021~~ ~~compared to $0.12~~ for the same period in ~~2020.~~2021. ~~Revenues per transaction decreased to~~ ~~$0.10~~ ~~for the six~~ m~~onths ended June 30, 2021~~ ~~compared to $0.15~~ ~~for the same period~~The increases in 2020. For the three months ended June 30, 2021, the increase in average monthly revenues per ATM were attributable to the limited easing of COVID-19 restrictions throughout Europe and corresponding increase in cross-border DCC and surcharge transactions and the decrease in revenue per transaction was attributable to a shift in the mix of our transaction volume as we experienced a significant increase in the volume of lower revenue transactions (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 ~~decreased~~were primarily due to the ~~effect~~increase in domestic and international withdrawal transactions resulting from continued lifting of ~~lower DCC~~travel restrictions across Europe, partially offset by the increase in volume of low-value point-of-sale transactions in Europe and ~~surcharge revenues during January and February of 2021 compared to January and February 2020 prior to COVID-19's initial emergence.~~low-value payment processing transactions in Asia Pacific.

~~Table of Contents~~

Direct operating costs, exclusive of depreciation

EFT Processing Segment direct operating costs were ~~$82.7~~$93.3 millionfor the three months ended ~~June 30, 2021,~~March 31, 2022, an increase of ~~$20.2~~$23.7 million or ~~32%~~34% compared to the same period in ~~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.~~2021. Direct operating costs primarily consist 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.~~ processors.

~~For the three months ended June 30, 2021, the~~The increase in direct operating costs was primarily due to the increase in the number of ATMs under management as there were fewer deactivated ATMs during the three months ended March 31, 2022 compared to the same period in ~~Europe and the~~2021 resulting in an increase in ~~transaction volumes. For the six months ended June 30, 2021, the increase in direct operating costs was primarily due to the weakening of the U.S. dollar~~ATM site rental fees and ~~increase in transaction volumes, partially offset by the decrease in number of ATMs under management~~.cash delivery costs. Foreign currency movements ~~increased~~decreased direct operating costs by approximately ~~$5.5 million and $8.7~~$5.6 million for the three ~~and six~~ months ended ~~June 30, 2021, respectively,~~March 31, 2022 compared to the same ~~periods~~period in ~~2020~~2021.

Gross profit

Gross profit, which is calculated as revenues less direct operating costs, was ~~$30.8~~$52.2 million for the three months ended ~~June 30, 2021,~~March 31, 2022, an increase of ~~$14.8~~$34.7 million or ~~93%~~198% compared to ~~$16.0~~$17.5 million for the same period in ~~2020.~~2021~~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”) increased to ~~27.1% and decreased to 24.1%~~35.9% for ~~the three and six months ended June 30, 2021, respectively, compared to 20.4% and 33.1% for the same periods in 2020, respectively. For~~ the three months ended ~~June 30,~~March 31, 2022, compared to 20.1% for the same period in 2021 ~~the~~. The increase in gross profit and gross margin was primarily ~~driven by~~due to the ~~increase in cross-border~~incremental volume of transactions that were processed on our network relative to the fixed costs incurred, and the ~~reactivation~~higher proportion of ~~ATMs. For the six months ended June 30, 2021, the decrease in gross profit~~high value and ~~gross~~high margin ~~was primarily attributable~~DCC transactions due to the ~~lower DCC transactions and domestic and international surcharge transactions during the months~~lifting 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.~~

travel restrictions.

Salaries and benefits

Salaries and benefits expenses were ~~$24.1~~$25.2 million for the three months ended ~~June 30, 2021,~~March 31, 2022, an increase of ~~$2.8~~$1.7 million or ~~13%~~7% compared to the same period in ~~2020~~2021. ~~Salaries and benefits~~The increase is primarily due to an increase in headcount to support the growth of the business. Foreign currency movements in the countries in which we employ our workforce decreased these expenses ~~were $47.7~~by $1.6 million for the ~~six~~three months ended ~~June 30, 2021, an increase of $4.3 million or 10%~~March 31, 2022 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 June 30, 2021, respectively, compared to the same periods in 2020.2021. As a percentage of revenues, these expenses decreased to ~~21.2% and increased to 23.8%~~17.3% for the three ~~and six~~ months ended ~~June 30, 2021, respectively,~~March 31, 2022, compared to 27.1% ~~and 19.3%~~ for the same ~~periods~~period in ~~2020, respectively~~2021.

Selling, general and administrative

Selling, general and administrative expenses were ~~$9.8~~$11.1 million for the three months ended ~~June 30, 2021, an increase~~March 31, 2022, a decrease of ~~$0.3 million~~($0.8 million) or 3%(7%) compared to the same period in ~~2020~~2021. ~~Selling, general and administrative expenses were $21.8 million for the six months ended June 30, 2021, an increase of $1.3 million or 6% compared to the same period in 2020~~. As a percentage of revenues, these expenses decreased to ~~8.6% and increased to 10.9~~7.6%% for the three ~~and six~~ months ended ~~June 30, 2021, respectively,~~March 31, 2022, compared to ~~12.1% and 9.1%~~13.7% for the same ~~periods~~period in ~~2020, respectively~~2021.

~~Goodwill 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 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 expenses were ~~$22.2~~$22.3 million for the three months ended ~~June 30, 2021,~~March 31, 2022, an increase of ~~$2.3~~$0.3 million or ~~12%~~ 1% compared to the same period in ~~2020.~~2021. ~~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 these expenses by $1.6 million and $2.8 million for the three and six months ended June 30, 2021, respectively, compared to the same periods in 2020, with the remainder of the increase ~~driven by the acquisition of additional~~ ~~ATMs~~ ~~and software assets.~~ As a percentage of revenues, these expenses decreased to ~~19.6% and increased to 22.1%~~15.3% for the three ~~and six~~ months ended ~~June 30, 2021, respectively,~~March 31, 2022, compared to ~~25.4% and 17.9%~~25.3% for the same ~~periods~~period in ~~2020, respectively~~2021.

Operating ~~income (loss)~~loss

EFT Processing Segment had an operating loss of ~~($25.3~~($6.5 million) for the three months ended ~~June 30, 2021,~~March 31, 2022, a ~~decrease~~reduction of ~~$31.2 million or (55%)~~ 84% compared to the same period in ~~2020~~2021. ~~EFT Processing Segment had an operating~~Operating loss ~~of ($65.4 million) for the six months ended June 30, 2021, an increase of ($13.8 million) or 27% compared to the same period in 2020~~. O~~perating income (loss)~~ as a percentage of revenues (“operating margin”) decreased to ~~(22.3%) and increased to (32.6%~~(4.4%) for the three ~~and six~~ months ended ~~June 30, 2021, respectively,~~March 31, 2022, compared to ~~(72.1%) and (23.0%~~(46.0%) for the same ~~periods~~period in ~~2020, respectively~~2021. Operating loss per transaction was ~~($0.03)~~less than ($0.01) 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 ~~June 30, 2021,~~March 31, 2022, compared to ($0.04) for the ~~decreases~~same period in 2021. The decrease in operating loss, improved operating margin and decrease in operating loss per transaction were primarily ~~driven by the $21.9 million decrease in non-cash goodwill impairment charges~~due to increased volumes processed on our network, 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 driven by the decrease in tourism in the months of January and February 2021associated revenues, compared to the same ~~periods~~period in ~~the prior period, partially offset by the $21.9 million decrease in non-cash goodwill impairment charges.~~2021.

EPAY SEGMENT

The following table presents the results of operations for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020~~2021 for our epay Segment:


	Three Months Ended June 30,				Year-over-Year Change				Six Months Ended June 30,				Year-over-Year Change				Three Months Ended March 31,				Year-over-Year Change
(dollar amounts in thousands)	2021		2020		Increase Amount		Increase Percent		2021		2020		Increase Amount		Increase Percent		2022		2021		Increase (Decrease) Amount			Increase (Decrease) Percent
Total revenues	$	243,918	$	187,563	$	56,355	30	%	$	486,221	$	360,474	$	125,747	35	%	$	235,838	$	242,303	$	(6,465	)	(3)	%
Operating expenses:
Direct operating costs	184,989		144,056		40,933		28	%		367,622		274,130		93,492	34	%
Direct operating costs, exclusive of depreciation																	178,320		182,633		(4,313		)	(2)	%
Salaries and benefits	19,775		15,191		4,584		30	%		39,144		30,888		8,256	27	%	20,177		19,369		808			4	%
Selling, general and administrative	9,772		8,635		1,137		13	%		18,792		17,473		1,319	8	%	9,440		9,020		420			5	%
Depreciation and amortization	2,147		1,651		496		30	%		4,271		3,495		776	22	%	1,696		2,124		(428)			(20)	%
Total operating expenses	216,683		169,533		47,150		28	%		429,829		325,986		103,843	32	%	209,633		213,146		(3,513		)	(2)	%
Operating income	$	27,235	$	18,030	$	9,205	51	%	$	56,392	$	34,488	$	21,904	64	%	$	26,205	$	29,157	$	(2,952	)	(10)	%
Transactions processed (millions)	788		585		203		35	%		1,455		1,032		423	41	%	852		667		185			28	%

Revenues

epay Segment total revenues were ~~$243.9~~$235.8 million for the three months ended ~~June 30, 2021, an increase~~March 31, 2022, a decrease of ~~$56.4 million~~($6.5 million) or ~~30%~~(3%) compared to the same period in ~~2020. epay Segment total~~2021. The decrease in revenues ~~were $486.2~~was primarily due to the $13.2 million decrease caused by foreign currency movements for the ~~six~~three months ended ~~June 30, 2021, an increase of $125.7 million or 35%~~March 31, 2022 compared to the same period in ~~2020. The~~2021 as well as a decrease in branded payments in India, partially offset by the increase in ~~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 2021. Foreign currency movements increased revenues by approximately $16.0 million and $28.9 million for the three and six months ended June 30, 2021, respectively, compared to the same periods in 2020~~. The epay segment was impacted by COVID-19 pandemic-driven government-imposed lockdowns and business closures, primarily at retail outlets, which were offset by increases in digital media offerings in Asia ~~and revenues derived from businesses that were classified as essential and remained open during the pandemic~~.processed.

~~Table of Contents~~

Revenues per transaction decreased to ~~$0.31 and $0.33~~$0.28 for the three ~~and six~~ months ended ~~June 30, 2021, respectively,~~March 31, 2022, compared to ~~$0.32 and $0.35~~$0.36 for the same ~~periods~~period in ~~2020, respectively~~2021. The ~~decreases~~decrease in revenues per transaction ~~were~~was primarily ~~driven by~~due to the increase in the number of ~~mobile~~ transactions processed in a region where we generally earn lower revenues per transaction.

Direct operating costs, exclusive of depreciation

epay Segment direct operating costs were ~~$185.0~~$178.3 million for the three months ended ~~June 30, 2021, an increase~~March 31, 2022, a decrease of ~~$40.9 million~~($4.3 million) or ~~28%~~(2%) compared to the same period in ~~2020.~~2021 ~~epay~~ ~~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.~~. Direct operating costs 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 ~~increases~~decrease in direct operating costs ~~were~~was primarily due to the ~~increase in transaction volumes of low-value mobile top-up transactions and~~$9.5 million decrease caused by ~~the U.S. dollar weakening against key~~ foreign ~~currencies during 2021. Foreign~~ currency movements ~~increased direct operating costs~~ ~~by approximately~~ ~~$11.9 million and $21.3 million for the three and six months ended June 30, 2021, respectively,~~ ~~compared to the same periods in 2020~~.

~~Gross profit~~

~~Gross profit was $58.9 million~~ for the three months ended ~~June 30, 2021, an increase of $15.4~~March 31, 2022 ~~million or 35%~~ compared to ~~$43.5~~the same period in 2021.

Gross profit

Gross profit was $57.5 million for the three months ended March 31, 2022, a decrease of ($2.2 million) or (4%) compared to $59.7 million for the same period in ~~2020.~~2021. Gross ~~profit was $118.6 million~~margin decreased to 24.4% for the ~~six~~three months ended ~~June 30, 2021, an increase of $32.3~~ ~~million or 37%~~March 31, 2022, compared to ~~$86.3 million~~24.6% for the same period in ~~2020.~~ ~~Gross margin increased to 24.2% and 24.4% for the three and six months ended June 30,~~ 2021 ~~respectively, compared to 23.2% and 24.0% for the same periods in 2020, respectively~~. The ~~increase~~decrease in gross profit and gross margin is ~~driven by~~primarily due to decrease in revenues associated with the ~~increase~~shift in ~~transaction volumes.~~

mix of transactions processed.

Salaries and benefits

Salaries and benefits expenses were ~~$19.8~~$20.2 million for the three months ended ~~June 30, 2021,~~March 31, 2022, an increase of ~~$4.6~~$0.8 million or ~~30%~~4% 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 was ~~primarily~~ driven by an increase in headcount to support the growth of the business, ~~and an increase in bonus expense.~~ ~~Foreign~~partially offset by a $1.1 million decrease from 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,~~March 31, 2022 compared to the same ~~periods~~period in ~~2020.~~ 2021. As a percentage of revenues, these expenses ~~were 8.1%~~increased to 8.6% for ~~both~~ the three ~~and six~~ months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~8.1% and 8.6%~~8.0% for the same ~~periods~~period in ~~2020, respectively~~.2021.

Selling, general and administrative

Selling, general and administrative expenses were ~~$9.8~~$9.4 million for the three months ended ~~June 30, 2021,~~March 31, 2022, an increase of ~~$1.1~~$0.4 million or ~~13%~~5% compared to the same period in ~~2020~~2021. ~~Selling, general and administrative expenses were $18.8 million for the six months ended June 30, 2021, an increase of~~ ~~$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 six months ended June 30, 2021, respectively, compared to the same periods in 2020~~. As a percentage of revenues, these expenses ~~decreased~~increased to ~~4.0% and 3.9%~~4.0% for the three ~~and six~~ months ended ~~June 30, 2021, respectively,~~March 31, 2022, compared to ~~4.6% and 4.8%~~3.7% for the same ~~periods~~period in ~~2020, respectively.~~2021.

Depreciation and amortization

Depreciation and amortization expenses were ~~$2.1~~$1.7 million for the three months ended ~~June 30, 2021, an increase~~March 31, 2022, a decrease of ~~$0.5 million~~($0.4 million) or ~~30%~~(20%) 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. As a percentage of revenues, these expenses ~~were 0.9%~~decreased to 0.7% for ~~both~~ the three ~~and six~~ months ended ~~June 30, 2021,~~March 31, 2022, compared to 0.9% ~~and 1.0%~~ for ~~the~~ same ~~periods~~period in ~~2020, respectively.~~2021.

Operating income

epay Segment operating income was ~~$27.2~~$26.2 million for the three months ended ~~June 30, 2021, an increase~~March 31, 2022, a decrease of ~~$9.2 million~~($3.0 million) or ~~51%~~(10%) compared to the same period in ~~2020~~2021. ~~epay Segment operating income was $56.4 million~~Operating margin decreased to 11.1% for the ~~six~~three months ended ~~June 30, 2021, an increase of $21.9 million or 64%~~March 31, 2022, compared to 12.0% for the same period in ~~2020~~. ~~Operating margin increased to 11.2% and 11.6% for the three and six~~ ~~months ended June 30,~~ 2021~~, respectively, compared to 9.6% for both of the same periods in 2020~~. Operating income per transaction ~~was $0.03 and $0.04~~decreased to $0.03 for the three ~~and six~~ months ended ~~June 30, 2021, respectively,~~March 31, 2022 compared to ~~$0.03~~$0.04 for ~~both of the~~ same ~~periods~~period in 2021~~2020.~~. The ~~increases~~decreases in operating income, operating margin and operating ~~margin~~income per transaction for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 compared to the same ~~periods~~period in ~~2020~~2021 were primarily due to ~~an increase~~the shift in ~~the number~~mix of ~~higher-margin digital media transactions.~~transactions processed.

~~Table of Contents~~

MONEY TRANSFER SEGMENT

The following table presents the results of operations for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020~~2021 for the Money Transfer Segment:

	Three Months Ended June 30,					Year-over-Year Change					Six Months Ended June 30,					Year-over-Year Change					Three Months Ended March 31,				Year-over-Year Change
(dollar amounts in thousands)	2021		2020			Increase (Decrease) Amount			Increase (Decrease) Percent		2021		2020			Increase (Decrease) Amount			Increase (Decrease) Percent		2022		2021		Increase (Decrease) Amount			Increase (Decrease) Percent
Total revenues	$	359,308	$	262,863		$	96,445		37	%	$	684,208	$	529,097		$	155,111		29	%	$	338,966	$	324,900	$	14,066		4	%
Operating expenses:
Direct operating costs	205,164		144,589			60,575			42	%		389,042		287,498			101,544		35	%
Direct operating costs, exclusive of depreciation																					188,397		183,878		4,519			2	%
Salaries and benefits	62,710		49,059			13,651			28	%		123,250		102,923			20,327		20	%	67,225		60,540		6,685			11	%
Selling, general and administrative	38,326		33,172			5,154			16	%		74,442		71,754			2,688		4	%	41,037		36,116		4,921			14	%
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	%	8,842		8,963		(121		)	(1)	%
Total operating expenses	315,226		318,090			(2,864		)	(1)	%		604,723		562,016			42,707		8	%	305,501		289,497		16,004			6	%
Operating income (loss)	$	44,082	$	(55,227	)	$	99,309		(180)	%	$	79,485	$	(32,919	)	$	112,404		(341)	%
Operating income																					$	33,465	$	35,403	$	(1,938	)	(5)	%
Transactions processed (millions)	34.2		25.8			8.4			33	%		65.3		53.2			12.1		23	%	33.5		31.2		2.3			7	%

Interest expense

Interest expense was $6.1 million for the three ~~and six~~ months ended ~~June 30, 2021, respectively,~~March 31, 2022, a decrease of ($3.1 million) or (33%) compared to the same ~~periods~~period in ~~2020.~~

Interest rate risk

As of~~June 30, 2021~~March 31, 2022, our total debt outstanding, excluding unamortized debt issuance costs, was ~~$1,193.0 million.~~$1,776.2 million. Of this amount, ~~$460.1~~$525.0 million, net of debt discounts, or ~~38%~~30% 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 ~~June 30, 2021,~~March 31, 2022, the fair value of our fixed rate Convertible Notes was ~~$633.3~~$563.4 million, compared to a carrying value of ~~$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.~~$525.0 million. Further, as of ~~June 30, 2021~~March 31, 2022 we had ~~$20.8~~$586.9 million of borrowings under our Credit Facility, or 2%33% of our total debt ~~obligations, under our~~obligations. The carrying values of the Credit ~~Facility.~~Facility approximates fair value because interest is based on LIBOR that resets at various intervals of less than one year. Additionally, ~~$711.3~~$663.9 million, or ~~60%~~37% 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 ~~June 30, 2021,~~March 31, 2022, the fair value of our fixed rate Senior Notes was ~~$721.7~~$628.6 million, compared to a carrying value of ~~$711.3 million.~~$663.9 million. The remaining ~~$0.8~~$0.4 million, or less than 1%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. Based on the outstanding borrowings accruing interest at variable rates, a 1% increase in the interest rate would result in a $5.9 million increase or decrease, as applicable, in our annual interest expense.

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 ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, approximately ~~72%~~73% ~~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 ~~June 30, 2021,~~March 31, 2022, 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 ~~$100~~$130 million to ~~$105~~$135 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 ~~$125~~$160 million to ~~$130~~$165 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.

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 ~~June 30, 2021,~~March 31, 2022, we had foreign currency derivative contracts outstanding with a notional value of ~~$220~~$231.1 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 ~~June 30, 2021,~~March 31, 2022, we held foreign currency derivative contracts outstanding with a notional value of ~~$1.1~~$1.1 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 ~~June 30, 2021,~~March 31, 2022, the Company had foreign currency forward contracts outstanding with a notional value of ~~$99~~$16.2 million, primarily in euros.

See Note 10, Derivative Instruments and Hedging Activities, to our unaudited consolidated financial statements for additional information.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is, from time to time, a party to legal or regulatory proceedings arising in the ordinary course of its business.

The discussion regarding contingencies in Part I, Item 1 — Financial Statements (unaudited), Note 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.

~~Table of Contents~~

ITEM 1A. RISK FACTORS

Except as otherwise described herein, there were no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, 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 that were purchased by the Company during the three months ended ~~June 30, 2021. There were no repurchases of common stock during the three months ended June 30, 2021.~~March 31, 2022.

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 —
$ —
—


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Programs (in thousands) (1)
January 1 - January 31, 2022	—	$	—	—	$	322,236
February 1 - February 28, 2022	—	—		—		300,000
March 1 - March 31, 2022	639,535	110.00		639,535	$	229,649
Total	639,535	$	110.00	639,535

(1) 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. On December 8, 2021, the Company put a repurchase program in place to repurchase up to $300 million in value, but not more than 5.0 million shares of common stock through December 8, 2023. Repurchases 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.

~~Table of Contents~~

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. 1 dated as of August 26, 2019 to the Credit Agreement dated as of October 17, 2018~~
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 ~~June 30, 2021,~~March 31, 2022, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at ~~June 30, 2021~~March 31, 2022 (unaudited) and December 31, ~~2020~~2021, (ii) Consolidated Statements of Operations (unaudited) for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020,~~2021, (iii) Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020,~~2021, (iv) Consolidated Statements of Changes in Equity (unaudited) for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020~~2021 (v) Consolidated Statements of Cash Flows (unaudited) for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 and ~~2020,~~2021, 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 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 us or our business or operations on the date hereof.

~~Table of Contents~~

	Three Months Ended June 30,						Six Months Ended June 30,
	2021				2020		2021			2020
Net income (loss)	$	8,632		$	(115,733	)	$	11		$	(114,013	)
Translation adjustment	12,686			32,172			(30,215		)	(27,646		)
Comprehensive income (loss)	21,318			(83,561		)	(30,204		)	(141,659		)
Comprehensive (income) loss attributable to noncontrolling interests	(8		)	(98		)	4			144
Comprehensive income (loss) attributable to Euronet Worldwide, Inc.	$	21,310		$	(83,659	)	$	(30,200	)	$	(141,515	)


	Three Months Ended March 31,
	2022			2021
Net income (loss)	$	8,290		$	(8,621	)
Translation adjustment	(21,114		)	(42,901		)
Comprehensive loss	(12,824		)	(51,522		)
Comprehensive loss attributable to noncontrolling interests	44			12
Comprehensive loss attributable to Euronet Worldwide, Inc.	$	(12,780	)	$	(51,510	)

	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
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	)
Balance as of March 31, 2021										52,796,485		1,268		1,240,273		(703,514	)

	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, 2020	52,734,049	$	1,267	$	1,228,446	$	(703,032	)
Net (loss) income
Balance as of December 31, 2021									51,147,884	$	1,275	$	1,274,118	$	(931,212	)
Net income (loss)
Other comprehensive loss
Stock issued under employee stock plans	62,436		1		3,335		(482	)	40,173		1		1,989		142
Share-based compensation					8,492								9,803
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	25,769		1		1,199		267
Share-based compensation					10,984
Balance as of June 30, 2021	52,822,254	$	1,269	$	1,252,456	$	(703,247	)
Repurchase of shares									(639,535)						(70,351	)
Adoption of ASU 2020-06													(74,080)
Balance as of March 31, 2022									50,548,522		1,276		1,211,830		(1,001,421	)

	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	)
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
Balance as of March 31, 2021														1,004,490		(137,059	)		269			1,405,727


(in thousands)	Acquired Intangible Assets			Goodwill			Total Intangible Assets			Acquired Intangible Assets			Goodwill			Total Intangible Assets
Balance as of December 31, 2020	$	121,883		$	665,821		$	787,704
Decreases:
Balance as of December 31, 2021										$	97,793		$	641,605		$	739,398
Increases (decreases):
Acquisition	0—			0—			0—			122,455			212,183			334,638
Amortization	(11,600		)	0—			(11,600		)	(5,617		)	0—			(5,617		)
Foreign currency exchange rate changes	(963		)	(8,494		)	(9,457		)	(141)			(7,547		)	(7,688		)
Balance as of June 30, 2021	$	109,320		$	657,327		$	766,647
Balance as of March 31, 2022										$	214,490		$	846,241		$	1,060,731

		Amount of Gain (Loss) Recognized in Income on Derivative Contracts (a)												Amount of 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,					Location of Loss Recognized in Income on Derivative Contracts		Three Months Ended March 31,
(in thousands)		2021		2020			2021		2020				2022				2021
Foreign currency exchange contracts - Ria Operations	Foreign currency exchange gain (loss), net	$	3,915	$	(460	)	$	1,447	$	(223	)		Foreign currency exchange loss, net		$	(110	)	$	(2,468)

	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

	For the Six Months Ended June 30, 2020
(in thousands)	EFT Processing			epay		Money Transfer			Corporate Services, Eliminations and Other			Consolidated
Total revenues	$	224,313		$	360,474	$	529,097		$	(2,174	)	$	1,111,710
Operating expenses:
Direct operating costs	150,001			274,130		287,498			(2,162		)	709,467
Salaries and benefits	43,380			30,888		102,923			15,001			192,192
Selling, general and administrative	20,456			17,473		71,754			4,425			114,108
Goodwill impairment	21,861			0—		82,693			0—			104,554
Depreciation and amortization	40,256			3,495		17,148			159			61,058
Total operating expenses	275,954			325,986		562,016			17,423			1,181,379
Operating (loss) income	$	(51,641	)	$	34,488	$	(32,919	)	$	(19,597	)	$	(69,669	)


	Total Assets as of
(in thousands)	March 31, 2022		December 31, 2021
EFT Processing	$	2,167,634	$	1,682,680
epay	773,056		1,234,074
Money Transfer	1,670,666		1,621,726
Corporate Services, Eliminations and Other	286,957		205,796
Total	$	4,898,313	$	4,744,276

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

	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					Operating Income (Loss) for the Three Months Ended March 31,						Year-over-Year Change
(dollar amounts in thousands)	2021			2020			Increase (Decrease) Amount			Increase (Decrease) Percent		2021			2020				Increase (Decrease) Amount		Increase (Decrease) Percent		2022			2021			Increase (Decrease) Amount			Increase (Decrease) Percent
EFT Processing	$	(25,336	)	$	(56,576	)	$	31,240		(55)	%	$	(65,432	)	$	(51,641	)	$	(13,791	)	27	%	$	(6,467	)	$	(40,096	)	$	33,629		(84)	%
epay	27,235			18,030			9,205			51	%		56,392			34,488			21,904		64	%	26,205			29,157			(2,952		)	(10)	%
Money Transfer	44,082			(55,227		)	99,309			(180)	%		79,485			(32,919	)		112,404		(341)	%	33,465			35,403			(1,938)			(5)	%
Total	45,981			(93,773		)	139,754			(149)	%		70,445			(50,072	)		120,517		(241)	%	53,203			24,464			28,739			117	%
Corporate services, eliminations and other	(15,860		)	(7,498		)	(8,362		)	112	%		(29,875	)		(19,597	)		(10,278	)	52	%	(16,500		)	(14,015		)	(2,485		)	18	%
Total	$	30,121		$	(101,271	)	$	131,392		(130)	%	$	40,570		$	(69,669	)	$	110,239		(158)	%	$	36,703		$	10,449		$	26,254		251	%

	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	%


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


	Six Months Ended June 30,						Three Months Ended March 31,
Liquidity	2021			2020			2022			2021
Cash and cash equivalents and restricted cash provided by (used in):
Operating activities	$	173,307		$	178,557		$	5,671		$	(2,645	)
Investing activities	(48,332		)	(48,624		)	(356,848		)	(18,225		)
Financing activities	(248,553		)	(240,974		)	235,312			(269,211		)
Effect of foreign currency exchange rate changes on cash and cash equivalents and restricted cash	(43,278		)	(27,787		)	(37,542		)	(53,188		)
Decrease in cash and cash equivalents and restricted cash	$	(166,856	)	$	(138,828	)	$	(153,407	)	$	(343,269	)



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


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