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What changed in EURONET WORLDWIDE, INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of EURONET WORLDWIDE, INC.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+334 added−352 removedSource: 10-K (2024-02-22) vs 10-K (2023-02-22)

Top changes in EURONET WORLDWIDE, INC.'s 2023 10-K

334 paragraphs added · 352 removed · 264 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

73 edited+28 added−48 removed126 unchanged
Biggest changeRia money orders are widely recognized and exchanged throughout the United States. Our check cashing services cover payroll and personal checks, cashier checks, tax refund checks, government checks, insurance drafts and money orders. Our bill payment services offer timely posting of customer bills for over 7,800 companies, including electric and gas utilities and telephone/wireless companies.
Biggest changeOur bill payment services offer timely posting of customer bills for over 8,800 companies, including electric and gas utilities and telephone/wireless companies. These services are all offered through our Company-owned stores while select services are offered through our agents in certain markets. Under the brand "Dandelion", Ria offers payment processing services to third party partners.
Although mobile phone operators in the U.S. and certain European countries have provided service principally through postpaid accounts, the norm in many other countries in Europe and the rest of the world is to offer wire less service on a prepaid basis. Prepaid mobile phone credits are generally distributed using personal identification numbers ("PINs"). We distribute PINs in two ways.
Although mobile operators in the U.S. and certain European countries have provided service principally through postpaid accounts, the norm in many other countries in Europe and the rest of the world is to offer wire less service on a prepaid basis. Prepaid mobile phone credits are generally distributed using personal identification numbers ("PINs"). We distribute PINs in two ways.
Consumer perception of these brand names is i mportant to the growth prospects of our money transfer business. We also hold a U.S. patent on a card-based money transfer and bill payment system that allows transactions to be initiated primarily through POS terminals and integrated cash register systems.
Consumer perception of these brand names and logos is i mportant to the growth prospects of our money transfer business. We also hold a U.S. patent on a card-based money transfer and bill payment system that allows transactions to be initiated primarily through POS terminals and integrated cash register systems.
Open Loop Gift Cards Open loop (network-branded) gift cards are prepaid gift cards associated with an electronic payment network (such as Visa ® or Mastercard ® ) and are honored at multiple, unaffiliated locations (wherever cards from these networks are generally accepted). They are not merchant-specific.
Open Loop Gift Cards Open loop gift cards are prepaid gift cards associated with an electronic payment network (such as Visa ® or Mastercard ® ) and are honored at multiple, unaffiliated locations (wherever cards from these networks are generally accepted). They are not merchant-specific.
We are one of the largest worldwide multi-country operators, and believe we have a distinct competitive advantage from the existing relationships that we maintain with prepaid content providers and retailers.
We are one of the largest worldwide multi-country operators, and believe we have a distinct competitive advantage with the existing relationships that we maintain with prepaid content providers and retailers.
In addition to our core business, we offer a variety of value added services, including ATM and POS DCC, domestic and international surcharge, foreign currency dispensing, advertising, digital content sales at ATMs, CRM, prepaid mobile top-up, bill payment, money transfer, fraud management, foreign remittance payout, cardless payout, banknote recycling solutions and tax-refund services.
In addition to our core business, we offer a variety of value-added services, including ATM and POS DCC, domestic and international surcharge, foreign currency dispensing, advertising, digital content sales at ATMs, Customer Relationship Management ("CRM"), prepaid mobile top-up, bill payment, money transfer, fraud management, foreign remittance payout, cardless payout, banknote recycling solutions and tax-refund services.
These value added services include mobile top-up, fraud management, bill payment, domestic and international surcharge, CRM, foreign remittance payout, cardless payout, banknote recycling, electronic content, ticket and voucher, foreign currency withdrawal and advertising. We are committed to the ongoing development of innovative new products and services to offer our EFT processing customers.
These value-added services include mobile top-up, fraud management, bill payment, domestic and international surcharge, CRM, foreign remittance payout, cardless payout, banknote recycling, electronic content, ticket and voucher, foreign currency withdrawal, advertising and tax-refund services. We are committed to the ongoing development of innovative new products and services to offer our EFT processing customers.
Currently, no union represents any of our employees, except in one of our Spanish subsidiaries. We experienced no work stoppages or strikes by our workforce in 2022 and we consider relations with our employees to be good. 12 Government Regulation As discussed below, many of our business activities are subject to regulation in our current markets.
Currently, no union represents any of our employees, except in one of our Spanish subsidiaries. We experienced no work stoppages or strikes by our workforce in 2023 and we consider relations with our employees to be good. 12 Government Regulation As discussed below, many of our business activities are subject to regulation in our current markets.
Our processing centers run two types of proprietary transaction switching software: our legacy ITM software, which we have used and sold to financial institutions since 1998 through our Software Solutions unit, and an innovative switching software package named "REN", which is hosted in Germany and India, that was released in 2017.
Our processing centers run two types of proprietary transaction switching software: our legacy ITM software, which we have used and sold to financial institutions since 1998 through our Software Solutions unit, and an innovative switching software package named "Ren", which is hosted in Germany and India, that was released in 2019.
In the United States, we are subject to the Gramm-Leach-Bliley Act ("GLBA") and various state laws including California Consumer Privacy Act ("CCPA"), which requires that financial institutions have in place policies regarding the collection, processing, storage and disclosure of information considered nonpublic personal information.
In the United States, we are subject to the Gramm-Leach-Bliley Act ("GLBA") and various state laws including California Consumer Privacy Act ("CCPA"), which require that financial institutions have in place policies regarding the collection, processing, storage, and disclosure of information considered nonpublic personal information.
Noncompliance with these laws and requirements could result in the loss or suspension of licenses or registrations required to provide money transfer services through retail agents, Company owned stores or online. For more discussion, see Item 1A - Risk Factors.
Noncompliance with these laws and requirements could result in the loss or suspension of licenses or registrations required to provide money transfer services through retail agents, Company owned stores, mobile apps or online. For more discussion, see Item 1A - Risk Factors.
Software Solutions We also offer a suite of integrated software solutions for electronic payments and transaction delivery systems. We generate revenues for our software products from licensing, professional services and maintenance fees for software and sales of related hardware, primarily to financial institutions around the world.
S oftware Solutions We also offer a suite of integrated software solutions for electronic payments and transaction delivery systems. We generate revenues for our software products from licensing, professional services and maintenance fees for software and sales of related hardware, primarily to financial institutions around the world.
In addition to traditional money payment services, new technologies are emerging that compete with traditional money payment services, such as stored-value cards, debit networks, web-based services and digital currencies. Our continued growth also depends upon our ability to compete effectively with these alternative technologies.
In addition to traditional money payment services, new technologies are emerging that compete with traditional money payment services, such as stored-value cards, debit networks, web-based services, mobile apps, and digital currencies. Our continued growth also depends upon our ability to compete effectively with these alternative technologies.
The principal competitive factors in the epay Segment include price (that is, the level of commission paid to retailers for each transaction), breadth of products and up-time offered on the system. Major retailers with high volumes are able to demand a larger share of the commission, which increases the amount of competition among service providers.
The principal competitive factors in the epay Segment include price (that is, the level of commission paid to retailers for each transaction), breadth of products and up-time offered on the system. Major retailers with high volumes can demand a larger share of the commission, which increases the amount of competition among service providers.
We are seeing signs that some mobile operators are expanding their distribution networks to provide top-up services on-line or via mobile devices, which provides other alternatives for consumers to use. Money Transfer Segment Overview We provide global money transfer services primarily under the brand names Ria, IME , AFEX, and xe.
We are seeing signs that some mobile operators are expanding their distribution networks to provide top-up services on-line or via mobile devices, which provides other alternatives for consumers to use. Money Transfer Segment Overview We provide global money transfer services primarily under the brand names Ria, xe and dandelion.
We have payment institution licenses in the U.K., France, Germany, and Spain and are complying with these requirements. Traditionally, we passported our U.K., German and Spanish payment services authorizations to several Member States.
We have payment institution licenses in the U.K., France, Germany, and Spain and are complying with these requirements. We passported our U.K., German, and Spanish payment services authorizations to several EEA Member States.
We offer a wide range of products across our retail networks, including prepaid mobile airtime, prepaid debit cards, prepaid gift cards, prepaid electronic content such as music, games and software, prepaid vouchers, transport payments, lottery payments, prepaid long distance and bill payment processing assistance through partnerships with various licensed money transmitters.
We offer a wide range of products across our retail networks, including prepaid mobile airtime, prepaid debit cards, prepaid gift cards, other prepaid electronic content such as music, games and software, prepaid vouchers, transport payments and lottery, and bill payment processing assistance through partnerships with various licensed money transmitters.
Under our card acceptance agreements, the ATM transaction fees we charge vary depending on the type of transaction and the number of transactions attributable to a particular card issuer. Our agreements generally provide for payment in local currency, though transaction fees are sometimes denominated in euros or U.S. d ollars.
Under our card acceptance agreements, the ATM transaction fees we charge vary depending on the type of transaction and the number of transactions attributable to a particular card issuer. Our agreements generally provide for payment in local currency, though transaction fees are sometimes denominated in euros or U.S. dollars .
This single, c entralized acquiring platform enables merchants to benefit from cost savings and faster, more efficient payments transfer. Although many European countries are not members of the eurozone, our platform can serve merchants in these countries as well, through our multi-currency functionality.
This single, centralized acquiring platform enables merchants to benefit from cost savings and faster, more efficient payments transfer. Although many European countries are not members of the eurozone, our platform can serve merchants in these countries as well, through our multi-currency functionality.
We have leveraged our existing technology infrastructure to sell digital media products, which have been sold through our traditional retailer network and new retailer networks such as electronic channels.
We have leveraged our existing technology infrastructure to sell digital media products, which have been sold through our traditional retail network and new retailer networks such as digital channels.
(through a Community Trademark application, which provides enforceability of the epay trademark in all member states of the European Union), Brazil, Singapore, India, Australia and New Zealand. We have filed trademark applications for additional iterations of the "epay” brand in India, which are pending.
(through a Community Trademark application, which provides enforceability of the epay trademark in all member states of the EU), Brazil, Singapore, India, Australia, and New Zealand. We have filed trademark applications for additional iterations of the "epay” brand in India, which are pending.
Intellectual Property Each of our three operating segments utilizes intellectual property which is protected in varying degr ees by a combination of trademark, patent and copyright laws, as well as trade secret protection, license and confidentiality agreements.
Intellectual Property Each of our three operating segments utilizes intellectual property which is protected in varying degrees by a combination of trademark, patent, and copyright laws, as well as trade secret protection, license, and confidentiality agreements.
This could materially and adversely affect our business. Information about our Executive Officers The name, age, period of service and position held by each of our Executive Officers as of February 22, 2023 are as follows: Name Age Served Since Position Held Michael J. Brown 66 July 1994 Chairman, Chief Executive Officer and President Rick L.
This could materially and adversely affect our business. Information about our Executive Officers The name, age, period of service and position held by each of our Executive Officers as of February 22, 2024 are as follows: Name Age Served Since Position Held Michael J. Brown 67 July 1994 Chairman, Chief Executive Officer and President Rick L.
This seasonality is increased due to our practice of seasonally deactivating ATMs in tourist locations that experience significantly higher traffic during the summer. Seasonally deactivating involves shutting down the ATMs during the slower months and results in lower overall transaction volumes in the EFT Processing Segment during those months.
This seasonality is increased due to our practice of seasonally deactivating ATMs in tourist locations that experience significantly higher traffic during their peak tourist seasons. Seasonally deactivating involves shutting down the ATMs during the slower months and results in lower overall transaction volumes in the EFT Processing Segment during those months.
We comply with the GLBA and state privacy provisions.
We comply with the GLBA and applicable state privacy provisions.
With respect to our EFT Processing Segment, we have registered or applied for registration of our trademarks, including the names "Euronet" and "Bankomat" and/or our blue diamond logo, as well as other trade names in most markets in which these tra demarks are used.
With respect to our EFT Processing Segment, we have registered or applied for registration of our trademarks, including the names "Euronet" and/or our related logo, as well as other trade names in most markets in which these tra demarks are used.
Our processing centers for the epay Segment are located in the United Kingdom, Germany, Italy, and the United States. Since 2003, we have expanded our prepaid business in new and existing markets by drawing upon our depth of experience to build and expand relationships with content providers, mobile phone operators and retailers.
Our processing centers for the epay segment are located in the United Kingdom, Germany, Italy, and the United States. We have continued to expand our prepaid business in new and existing markets by drawing upon our depth of experience to build and expand relationships with content providers, mobile operators, and retailers.
Weller 65 November 2002 Executive Vice President - Chief Financial Officer Scott D. Claassen 56 May 2020 General Counsel and Secretary Kevin J. Caponecchi 56 July 2007 Executive Vice President - Chief Executive Officer, epay, Software and EFT Asia Pacific Division Juan C.
Weller 66 November 2002 Executive Vice President - Chief Financial Officer Scott D. Claassen 57 May 2020 General Counsel and Secretary Kevin J. Caponecchi 57 July 2007 Executive Vice President - Chief Executive Officer, epay, Software and EFT Asia Pacific Division Juan C.
The number of transactions processed on our network has increased over the last five years at a CAGR of approximately 8.3% as indicated in the following table: (in millions) 2018 2019 2020 2021 2022 Money transfer transactions per year 107.6 114.5 116.5 135.1 147.9 Our sending agent network includes a variety of agents, including Walmart, large/medium size regional retailers, convenience stores, bodegas, multi-service shops and phone centers, which are predominantly found in areas with a large immigrant population.
The number of transactions processed on our network has increased over the last five years at a CAGR of approximately 9.0% as indicated in the following table: (in millions) 2019 2020 2021 2022 2023 Money transfer transactions per year 114.5 116.5 135.1 147.9 161.7 Our sending agent network includes a variety of agents, including Walmart, large/medium size regional retailers, convenience stores, bodegas, multi-service shops and phone centers, which are predominantly found in areas with a large immigrant population.
C us tomers using mobile phones generally pay for usage in one of two ways: (1) t hrough "postpaid" accounts, where usage is billed at the end of each billing period, or (2) through "prepaid" accounts, where customers pay in advance by crediting their accounts prior to usage.
Customers using mobile phones generally pay for usage in one of two ways: (1) through "postpaid" accounts, where usage is billed at the end of each billing period, or (2) through "prepaid" accounts, where customers pay in advance by crediting their accounts prior to usage.
Open Loop Reloadable We distribute Visa ® and Mastercard ® issued debit cards provided by Green Dot, NetSpend and other card issuers. We also manage and distribute a proprietary debit card that allows a retailer to issue its own reloadable store-branded card.
Open Loop Reloadable We distribute Visa ® and Mastercard ® issued debit cards provided by card issuers. We also manage and distribute a proprietary debit card that allows a retailer to issue its own reloadable store-branded card.
Employees We had approximately 9,500 , 8,800 and 8,100 employees as of December 31, 2022 , 2021 , and 2020 , respectively. We believe our future success will depend in part on our ability to continue to recruit, retain and motivate qualified management, technical and administrative employees.
Employees We had approximately 10,000 , 9,500 and 8,800 employees as of December 31, 2023 , 2022 , and 2021 , respectively. We believe our future success will depend in part on our ability to continue to recruit, retain and motivate qualified management, technical and administrative employees.
As of December 31, 2022 , we operated 45,009 ATMs compared to 42,713 at December 31, 2021. 2 We monitor the number of transactions made by cardholders on our network. These include cash withdrawals, balance inquiries, deposits, prepaid mobile airtime recharge purchases, DCC transactions and certain denied (unauthorized) transactions.
As of December 31, 2023 , we operated 47,303 ATMs compared to 45,009 at December 31, 2022. 2 We monitor the number of transactions made by cardholders on our network. These include cash withdrawals, balance inquiries, deposits, prepaid mobile airtime recharge purchases, DCC transactions and certain denied (unauthorized) transactions.
The number of transactions processed over our netw orks has increased over the last five years at a compound annual growth rate ("CAGR") of approximately 24.1% as indicated in the following table: (in millions) 2018 2019 2020 2021 2022 EFT Processing Segment transactions per year 2,721 3,052 3,275 4,366 6,459 The increase in transactions for 2021 and 2022 is the result of a significant increase in the volume of lower value, digitally-initiated payment processing transactions for an Asia Pacific customer's bank wallet and e-commerce site.
The number of transactions processed over our netw orks has increased over the last five years at a compound annual growth rate ("CAGR") of approximately 29.1% as indicated in the following table: (in millions) 2019 2020 2021 2022 2023 EFT Processing Segment transactions per year 3,052 3,275 4,366 6,459 8,473 The increase in transactions for the past few years is the result of a significant increase in the volume of lower value, digitally initiated payment processing transactions for an Asia Pacific customer's bank wallet and e-commerce site.
Competitive advantages in our EFT Processing Segment include breadth of service offering, network availability and response time, price to both the financial institution and to its customers, ATM location and access to other networks. 6 epay Segment Overview We currently offer prepaid mobile airtime top-up services and other electronic content and payment processing services for various prepaid products, cards and services on a network of approximately 816,000 POS terminals across approximately 358,000 retailer locations in Europe, the Middle East, Asia Pacific, North America and South America.
Competitive advantages in our EFT Processing Segment include breadth of service offering, network availability and response time, price to both the financial institution and to its customers, ATM location and access to other networks. 6 epay Segment Overview We currently process and distribute prepaid mobile airtime and other electronic content and payment processing services for various prepaid products, cards, and services on a network of approximately 821,000 POS terminals across approximately 352,000 retailer locations in Europe, the Middle East and Africa, Asia Pacific, North America and South America.
The brand names of "Ria," "Ria Financial Services," "Ria Envia," "xe," "AFEX," "IME," derivations of those brand names and certain other brand names are material to our Money Transfer Segment and are registered trademarks and/or service marks in most of the markets in which our Money Transfer Segment operates.
The brand names of "Ria," "Ria Financial Services," "Ria Envia," "xe," "Dandelion," derivations of those brand names and certain other brand names, and related logs, are material to our Money Transfer Segment and are registered trademarks and/or service marks in most of the markets in which our Money Transfer Segment operates.
Bianchi 52 April 2007 Executive Vice President - Chief Executive Officer, Money Transfer Segment Nikos Fountas 59 September 2009 Executive Vice President - Chief Executive Officer, EFT Europe, Middle East and Africa Division Martin L. Bruckner 47 January 2014 Senior Vice President - Chief Technology Officer MICHAEL J. BROWN, Chairman, Chief Executive Officer and President. Mr.
Bianchi 53 April 2007 Executive Vice President - Chief Executive Officer, Money Transfer Segment Nikos Fountas 60 September 2009 Executive Vice President - Chief Executive Officer, EFT Europe, Middle East and Africa Division Martin L. Bruckner 48 January 2014 Senior Vice President - Chief Technology Officer MICHAEL J. BROWN, Chairman, Chief Executive Officer and President. Mr.
In addition, we follow a supporting strategy to increase the penetration of value added (or complementary) services across our existing customer base, including DCC, surcharge, cardless payment, banknote recycling solutions, tax refund services, advertising, fraud management, bill payment, mobile top-up, CRM and foreign remittance payout. 5 We continually strive to make our own ATM networks more efficient by eliminating underperforming ATMs and installing ATMs in more desirable locations.
In addition, we follow a supporting strategy to increase the penetration of value added (or complementary) services across our existing customer base, including DCC, transaction-based fees, surcharge, cardless payment, banknote recycling solutions, tax refund services, advertising, fraud management, bill payment, mobile top-up, CRM and foreign remittance payout. 5 We continually strive to make our own ATM networks more efficient by removing unprofitable ATMs and redeploying them to new profitable locations.
The operation of these devices requires expensive hardware and software and specialized personnel. These resources are available to us, and we offer them to our customers under outsourcing contracts. The expansion and enhancement of our outsourced management solutions in new and existing markets will remain an important business opportunity for Euronet.
These resources are available to us, and we offer them to our customers under outsourcing contracts. The expansion and enhancement of our outsourced management solutions in new and existing markets will remain an important business opportunity for Euronet.
Laws in other countries include the E.U.'s General Data Protection Regulation (2016/679) ("GDPR"), which became effective fr om May 25, 2018, as well as the laws of other countries. The GDPR establishes stringent requirements for the collection and processing of personal information of individuals within the E.U.
Laws in other countries include the E.U.'s General Data Protection Regulation (2016/679) ("GDPR"), as well as the laws of other countries. The GDPR establishes stringent requirements for the collection and processing of personal information of individuals within the E.U.
Seasonality As the product mix continues to change, the epay business is impacted by seasonality during the fourth quarter and first quarter of each year due to the higher transaction levels during the holiday season and lower levels following the holiday season. 9 Significant Customers and Government Contracts No individual customer of our epay Segment makes up greater than 10% of total consolidated revenues.
Seasonality As the product mix continues to change, the epay business is impacted by seasonality during the fourth quarter and first quarter of each year due to the higher transaction levels during the holiday season and lower levels following the holiday season. 9 Significant Customers and Government Contracts No individual customer of our epay Segment makes up greater than 10% of total consolidated revenues. epay maintains contract relationships with a number of companies, banks, post offices and telecommunications providers whose ownership includes the government.
The e-money institution will continue to operate in the U.K. unchanged. Money Transfer and Payment Instrument Licensing Licensing requirements in the U.S. are generally driven by the various state banking departments regulating the businesses of money transfers and issuances of payment instruments.
Money Transfer and Payment Instrument Licensing Licensing requirements in the U.S. are generally driven by the various state banking departments regulating the businesses of money transfers and issuances of payment instruments.
In China and Greece, we have contracts with clients and financial institutions that are partially owned by the government. Competition Our principal EFT Processing Segment competitors include ATM networks owned by financial institutions and national switches consisting of consortiums of local banks that provide outsourcing and transaction services to financial institutions and independent ATM deployers in a particular country.
Competition Our principal EFT Processing Segment competitors include ATM networks owned by financial institutions and national switches consisting of consortiums of local banks that provide outsourcing and transaction services to financial institutions and independent ATM deployers in a particular country.
Business Segment Overview For a discussion of operating results by segment, please see Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations, and Note 17, Business Segment Information, to the Consolidated Financial Statements.
Euronet serves clients from 67 offices worldwide. Business Segment Overview For a discussion of operating results by segment, please see Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations, and Note 18, Business Segment Information, to the Consolidated Financial Statements.
Item 1. Business References in this report to "we," "our," "us," the "Company" and "Euronet" refer to Euronet Worldwide, Inc. and its subsidiari es unless the context indicates otherwise. Business Overview General Overview Euronet is a leading electronic payments processing provider.
Item 1. Business References in this report to "we," "our," "us," the "Company" and "Euronet" refer to Euronet Worldwide, Inc. and its subsidiari es unless the context indicates otherwise.
In addition to money transfers, Ria also offers customers bill payment services, payment alternatives such as money orders, comprehensive check cashing services for a wide variety of issued checks, along with competitive foreign currency exchange services and mobile top-up. These services are all offered through our Company-owned stores while select services are offered through our agents in certain markets.
In addition to money transfers, Ria also offers customers bill payment services, payment alternatives such as money orders, comprehensive check cashing services for a wide variety of issued checks, along with competitive foreign currency exchange services and mobile top-up.
Content is generally purchased in two ways: (1) d irectly online from the content provider using an online payment method, or (2) through physical retail stores, online retailers or other electronic channels, including payment wallets, online banking, mobile applications and other sources.
Customers purchase digital media prepaid content as a gift or for self-use. Content is generally purchased in two ways: (1) directly online from the content provider using an online payment method, or (2) through physical retail stores, online retailers, or other electronic channels, including payment wallets, online banking, mobile applications, and other sources.
This strategy leverages the global scale of the epay business allowing global brands to be sold in many or all of the countries in which we have a presence. Examples of global brands we distribute include iTunes, Google Play, Sony, and Microsoft.
Strategic execution behind expansion of digital media electronic content includes the development of relationships with global consumer product brands. This strategy leverages the global scale of the epay business allowing global brands to be sold in many or all the countries in which we have a presence. Examples of global brands we distribute include iTunes, Google Play, Sony, and Microsoft.
Banks, particularly smaller banks, are increasingly looking for integrated ATM, POS and card issuing processing and management services. Euronet is well positioned for this opportunity as it can offer a full end-to-end solution to the potential partners. Additional growth opportunities are driven through financial institution s that are receptive to outsourcing the operation of their ATM, POS and card networks.
Euronet is well positioned for this opportunity as it can offer a full end-to-end solution to potential partners. Additional growth opportunities are driven through financial institution s that are receptive to outsourcing the operation of their ATM, POS and card networks. The operation of these devices requires expensive hardware and software and specialized personnel.
Many of these products are not offered by our competitors and in many countries, these are new products. We are capitalizing on being the first to market for these products.
We have introduced new digital products into the marketplace such as digital payment for online media subscriptions. Many of these products are not offered by our competitors and in many countries, these are new products. We are capitalizing on being the first to market for these products.
The number of transactions processed on our POS netw orks has increased over the last five years at a CAGR of approximately 35.2% as indicated in the following table: (in millions) 2018 2019 2020 2021 2022 epay processing transactions per year 1,149 1,542 2,395 3,120 3,836 Additional high-volume, low-margin digital media offerings in Asia contributed to an overall increase in processing transactions in 2021 and 2022. epay Segment Strategy Mobile top-up transactions are declining in many developed markets and transaction fees for mobile transactions are being compressed by the mobile operators. epay's strategy is to defend margins in developing markets by providing value added services to mobile operators and to decrease our reliance on mobile top-up by increasing distribution of other electronic content.
The number of transactions processed on our POS networks have increased over the last five years at a CAGR of approximately 25.2% as indicated in the following table: (in millions) 2019 2020 2021 2022 2023 epay processing transactions per year 1,542 2,395 3,120 3,836 3,789 epay Segment Strategy Mobile top-up transactions are declining in many developed markets and transaction fees for mobile transactions are being compressed by the mobile operators. epay's strategy is to defend margins in developing markets by providing value-added services to mobile operators and to decrease our reliance on mobile top-up by increasing distribution of other electronic content, expanding epay-own branded content, introducing new solutions to new and existing customers, and focusing on geographic expansion.
Bill payment services are offered primarily in the U.S. 11 xe offers account-to-account international payment service to high-income individuals and small-and-medium sized businesses, complementing our existing consumer-to-consumer money transfer business. xe has a multi-channel platform which allows customers to make transfers, track payments and manage their international payment activity online or through a customer service representative. xe offers cash management solutions and foreign currency risk management services to small-and-medium sized businesses. xe also offers foreign currency exchange subscriptions and advertising on its websites.
This enables these companies to build financial solutions with real-time payment capabilities to the more than 550,000 cash locations, and more than 6 billion bank and digital wallet accounts the Euronet money transfer network reaches. 11 xe offers an account-to-account international payment service to high-income individuals and small-and-medium sized businesses, complementing our existing consumer-to-consumer money transfer business. xe has a multi-channel platform which allows customers to make transfers, track payments and manage their international payment activity online or through a customer service representative. xe offers cash management solutions and foreign currency risk management services to small-and-medium sized businesses. xe also offers foreign currency exchange subscriptions and advertising on its websites.
We make selective additions to our own ATM network if we see market demand and profit opportunities. In tourist locations, we also shut down ATMs during the winter season when tourist activity is low. In recent years, the need for "all-in" services has increased.
We make selective additions to our own ATM network if we see market demand and profit opportunities. In tourist locations, we also seasonally deactivate ATMs when tourist activity is low. In recent years, the need for "all-in" services has increased. Banks, particularly smaller banks, are increasingly looking for integrated ATM, POS and card issuing processing and management services.
Ria and IME provide consumer-to-consumer money transfer services through a global network of more than 522,000 locations and our websites riamoneytransfer.com and online.imeremit.com. We sent money transfers from approximately 120 countries, with money transfer delivery completed in 158 countries.
Ria provides consumer-to-consumer money transfer services through a global network of more than 580,000 locations and via our website riamoneytransfer.com. We send money transfers from approximately 136 countries, with money transfer delivery completed in 175 countries .
Senders can track the progress of their transfers through Ria's customer service representatives, and funds are delivered quickly to their beneficiaries via our extensive payout network, which includes large banks and non-bank financial institutions, post offices and large retailers. Our processing centers for the Money Transfer Segment are located in the U.S., the U.K., New Zealand, and Malaysia.
Senders can track the progress of their transfers through Ria's customer service representatives, and funds are delivered quickly to their beneficiaries via our extensive payout network, which includes large banks and non-bank financial institutions, post offices and large retailers. We are one of the largest global money transfer companies measured by revenues and transaction volumes.
Card Acceptance or Sponsorship Agreements Our agreements with financial institutions and international card organizations generally provide that all credit and debit cards issued by the financial institution or organization may be used at all ATMs that we operate in a given market. In most markets, we operate under sponsorship by our own e-money or payment service licensed entities.
We generally receive fees or earn margin from our customers for all types of ATM transactions: Card Acceptance or Sponsorship Agreements Our agreements with financial institutions and international card organizations generally provide that all credit and debit cards issued by the financial institution or organization may be used at all ATMs that we operate in for a given market.
In addition, we provide global account-to-account money transfer services under the brand name xe. We offer money transfer services via our website (www.xe.com) and through customer service representatives. xe also provides foreign currency exchange information on its currency data websites (www.xe.com and www.x-rates.com).
We offer money transfer services via our website (www.xe.com) and xe app and through customer service representatives. xe also provides foreign currency exchange information on its currency data websites (www.xe.com and www.x-rates.com). Through xe, we offer cash management solutions and foreign currency risk management services to small-and-medium-sized businesses.
The initiation of a consumer money transfer occurs through retail agents, Company-owned stores or online, while the delivery of money transfers can occur with bank correspondents, retailer agents or from certain ATMs. Our websites allow consumers to send funds online, using a bank account or credit or debit card, for pay-out directly to a bank account or for cash pickup.
The initiation of a consumer money transfer occurs through retail agents, Company-owned stores or online, while the delivery of money transfers can occur with bank correspondents, retailer agents or from certain ATMs.
Our agreements with major retailers for the POS services typically have one to three-year terms. These agreements include terms regarding the connection of our networks to the respective retailer's registers or payment terminals or the maintenance of POS terminals, and obligations concerning settlement and liability for transactions processed.
These agreements include terms regarding the connection of our networks to the respective retailer's registers or payment terminals or the maintenance of POS terminals, and obligations concerning settlement and liability for transactions processed. Generally, our agreements with individual or small retailers have shorter terms and provide that either party can terminate the agreement upon three to six months' notice.
Certain of our European product offerings, including in particular, our money transfer services, merchant acquiring and bill payment products, are regulated payment services requiring a license under the Second Payment Services Directive, or PSD2 , which replaced the Payment Services Directive, or PSD, effective January 13, 2018.
We monitor our business for compliance with applicable laws or regulations regarding financial activities. Certain of our European product offerings, including in particular, our money transfer services, merchant acquiring and bill payment products, are regulated payment services requiring a license under the Second Payment Services Directive, or PSD2.
Sources of Revenues Revenues in the Money Transfer Segment are derived through the charging of a transaction fee, as well as a margin earned from purchasing foreign currency at wholesale exchange rates and selling the foreign currency to customers at retail exchange rates. Sending agents and receiving agents for consumer-to-consumer products each earn fees for cash collection and distribution services.
Our Money Transfer Segment processed approximately $ 64.9 billion in money transfers in 2023. Sources of Revenues Revenues in the Money Transfer Segment are primarily derived through the charging of a transaction fee, as well as a margin earned from purchasing foreign currency at wholesale exchange rates and selling the foreign currency to customers at retail exchange rates.
Euronet recognizes these fees as direct operating costs at the time of sale. Money Transfer Products and Services Money transfer products and services are sold primarily through three channels: at agent locations, Company-owned stores and on internet enabled devices at riamoneytransfer.com and xe.com.
Money Transfer Products and Services Money transfer products and services are sold primarily through the following channels: at agent locations, Company-owned stores, mobile apps, TeleRia phone, and on internet enabled devices at riamoneytransfer.com and xe.com.
Brown is one of the founders of Euronet and has served as our Chairman of the Board and Chief Executive Officer since 1996, and has served as President since December 2014. He also co-founded our predecessor company in 1994. Mr.
Brown co-founded Euronet in 1994 and has served as its chief executive officer ever since. He is chairman of Euronet’s board of directors and the Company’s President.
In 2022, approximately 67 % of total revenues and approximately 69 % of gross profit for the epay Segment was from electronic content other than prepaid mobile airtime (digital media products). Customers purchase digital media prepaid content as a gift or for self-use.
Sources of Revenues The epay Segment generates commissions and processing fees from the distribution of electronic content from mobile operators and other content providers. In 2023, approximately 67 % of total revenues and approximately 74 % of gross profit for the epay Segment was from electronic content other than prepaid mobile airtime (digital media products).
We operate a network that includes approximately 816,000 POS terminals that enable electronic processing of prepaid mobile airtime "top-up" services and other digital media content in Europe, the Middle East, Asia Pacific, the United States and South America.
We operate a network that includes approximately 821,000 POS terminals that enable electronic processing of prepaid mobile airtime "top-up" services and other digital media content. In 2023, the epay Segment accounted for approximat ely 29% of Euronet's consolidated revenues.
Complementary services offered by our epay Segment, where we provide prepaid mobile top-up services through POS terminals, strengthens the EFT Processing Segment's line of services. We plan to continue to expand our technology and business methods into other markets where we operate and further leverage our relationships with mobile phone operators and financial institutions to facilitate that expansion.
We plan to continue to expand our technology and business methods into other markets where we operate and further leverage our relationships with mobile operators, other content providers and financial institutions to facilitate that expansion.
We compete with a few multinational companies that operate in several of our markets. In other markets, our competition is from smaller, local companies. The mobile operators in all of our markets have retail distribution networks, and in some markets, on-line distribution of their own through which they offer top-up services for their own products.
The mobile operators in all of our markets have retail distribution networks, and in some markets, on-line distribution of their own through which they offer top-up services for their own products. We believe our size and market share are competitive advantages in many markets. In addition, we believe our processing platforms are a competitive advantage.
We believe our size and market share are competitive advantages in many markets. In addition, we believe our processing platforms are a competitive advantage. We have extremely flexible technical platforms that enable us to tailor POS solutions to individual retailers and mobile operator and digital media content provider requirements where appropriate.
We have extremely flexible technical platforms that enable us to tailor POS solutions to individual retailers and mobile operator and digital media content provider requirements where appropriate. Our platforms are also able to provide value added services other than processing, which makes us a more valuable partner to the content providers and retailers.
Other Products and Services Our POS network is used for the distribution of other products and services, including games and software, bill payment, lottery tickets and transportation products. Through our Cadooz subsidiary, we also distribute vouchers and physical gifts into the business-to-business ("B2B") channel principally for the purposes of employee and customer incentives and rewards.
Other Products and Services Our POS network is used for the distribution of other products and services, including games and software, bill payment, lottery tickets and transportation products.
In markets where we operate proprietary technology (the U.K., Germany, Australia, Poland, Ireland, New Zealand, Spain, Greece, India, Italy, Brazil and the U.S.), we generally own and maintain the POS terminals. In certain countries in Europe, the terminals are sold to the retailers or to distributors who service the retailer.
In markets where we operate proprietary technology, we generally own and maintain the POS terminals. In certain countries in Europe, the terminals are sold to the retailers or to distributors who service the retailer. Our agreements with major retailers for POS services typically have one to three-year terms.
Our processing centers for the EFT Processing Segment are located in Germany, Hungary, India, China, and Pakistan.
The associated revenue of these lower value, digitally initiated payment processing transactions is lower. As a result, our revenue growth will not correlate proportionately with the increase in our transaction volume growth. Our processing centers for the EFT Processing Segment are located in Germany, Hungary, India, China, and Pakistan.
Significant Customers and Government Contracts No individual customer of the EFT Processing Segment makes up greater than 10% of total consolidated revenues. In India, Pakistan and Indonesia we have contracts with banks and telecommunications companies that are majority-owned by the government to provide certain ATM driving and transaction switching services, digital content distribution and mobile airtime recharge services.
Significant Customers and Government Contracts No individual customer of the EFT Processing Segment makes up greater than 10% of total consolidated revenues. EFT maintains contract relationships with a number of banks, financial institutions, telecommunications companies, and clients whose ownership includes the government.
REN will be used as a platform to connect Euronet assets to offer digital payment solutions, and is currently utilized within the epay and Money Transfer Segments. EFT Processing Segment Strategy The EFT Processing Segment maintains a strategy to expand the network of ATMs and POS terminals into developed and developing markets that have the greatest potential for growth.
EFT Processing Segment Strategy The EFT Processing Segment maintains a strategy to expand the network of ATMs and POS terminals into new and existing markets that have the greatest potential for growth. We continue to focus on diversifying our business by expanding our market presence and product portfolio, as well as outsourcing opportunities.
Removed
We offer payment and transaction processing and distribution solutions to financial institutions, agents, retailers, merchants, content providers, and individual consumers. Our primary product offerings include comprehensive automated teller machine ("ATM"), point-of-sale ("POS"), card outsourcing, card issuing and merchant acquiring services; software solutions and cloud based payment solutions; electronic distribution of electronic payment products; foreign exchange services and international payment services.
Added
Business Overview General Overview Euronet is a leader in electronic payment and transaction processing solutions for Financial Institutions, Retailers, Service Providers, and Individual Consumers utilizing our global payments network, platforms, and technologies. Through a collection of diverse technologies and services, our business segments and solutions meet a wide variety of payments requirements and process transactions throughout the world.
Removed
Core Business Segments We operate in the following three segments as of December 31, 2022: The Electronic Fund Transfer ("EFT") Processing Segment processes transactions for a network of 45,009 ATMs and approximately 613,000 POS terminals across Europe, Africa, the Middle East, Asia Pacific, and the United States.
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We move money in all the ways the world depends on. With a global footprint we provide compliant solutions that make financial transactions easier, faster, and secure.
Removed
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 prepaid card outsourcing, and card issuing and merchant acquiring services.
Added
Core Business Segments We operate in the following three segments as of December 31, 2023: Electronic Funds Transfer ("EFT") Segment Our Electronic Funds Transfer ("EFT") segment meets the needs of financial institutions and consumers through Euronet-owned and outsourced Automated Teller Machines ("ATMs") and Point-of-Sale ("POS") terminals combined with value added and transaction processing services.
Removed
In addition to our core business, we offer a variety of value added services, including ATM and POS dynamic currency conversion ("DCC"), domestic and international ATM surcharge, advertising, delivery of non-cash products ("digital content") via ATMs, customer relationship management ("CRM"), mobile top-up, bill payment, fraud management, foreign remittance payout, cardless payout, banknote recycling solutions and tax-refund services.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

47 edited+25 added−11 removed154 unchanged
Biggest changeCOMPETITIVE LANDSCAPE Our competition in the EFT Processing Segment, epay Segment and Money Transfer Segment includes large, well-financed companies and financial institutions larger than us with earlier entry into the market. As a result, we may lack the financial resources and access to capital needed to capture increased market share.
Biggest changeWe could also experience a significant increase in payment card transaction costs or lose the ability to process payment cards if it fails we fail to follow payment card industry data security standards, which could materially adversely affect our business, reputation, results of operations and financial condition. 29 COMPETITIVE LANDSCAPE Our competition in the EFT Processing Segment, epay Segment and Money Transfer Segment includes large, well-financed companies and financial institutions larger than us with earlier entry into the market.
GOVERNMENT AND REGULATION Because we are a multinational company conducting a complex business in many markets worldwide, we are subject to legal and operational risks related to a broad array of local legal and regulatory requirements which could adversely affect our operations.
GOVERNMENT AND REGULATION Because we are a multinational company conducting complex business in many markets worldwide, we are subject to legal and operational risks related to a broad array of local legal and regulatory requirements which could adversely affect our operations.
These provisions include: preferred stock that could be issued by our board of directors to make it more difficult for a third party to acquire, or to discourage a third party from acquiring, a majority of our outstanding voting stock; classification of our directors into three classes with respect to the time for which they hold office; supermajority voting requirements to amend the provision in our certificate of incorporation providing for the classification of our directors into three such classes; non-cumulative voting for directors; control by our board of directors of the size of our board of directors; limitations on the ability of stockholders to call special meetings of stockholders; advance notice requirements for nominations of candidates for election to our board of directors or for proposing matters that can be acted upon by our stockholders at stockholder meetings; and an exclusive forum bylaw provision for all internal corporate claims. 30 Additionally, we are authorized to issue up to a total of 90 million shares of common stock, potentially diluting equity ownership of current holders and the share price of our common stock.
These provisions include: preferred stock that could be issued by our board of directors to make it more difficult for a third party to acquire, or to discourage a third party from acquiring, a majority of our outstanding voting stock; classification of our directors into three classes with respect to the time for which they hold office; supermajority voting requirements to amend the provision in our certificate of incorporation providing for the classification of our directors into three such classes; non-cumulative voting for directors; control by our board of directors of the size of our board of directors; limitations on the ability of stockholders to call special meetings of stockholders; advance notice requirements for nominations of candidates for election to our board of directors or for proposing matters that can be acted upon by our stockholders at stockholder meetings; and an exclusive forum bylaw provision for all internal corporate claims. 31 Additionally, we are authorized to issue up to a total of 90 million shares of common stock, potentially diluting equity ownership of current holders and the share price of our common stock.
As a result of these seasonal variations, our quarterly operating results may fluctuate materially and could lead to volatility in the price of our shares. 25 Additionally, economic or political instability, wars, civil unrest, terrorism, epidemics and natural disasters may make money transfers to, from or within a particular country more difficult.
As a result of these seasonal variations, our quarterly operating results may fluctuate materially and could lead to volatility in the price of our shares. 25 Additionally, economic, or political instability, wars, civil unrest, terrorism, epidemics, pandemics, and natural disasters may make money transfers to, from or within a particular country more difficult.
Any such breach may cause us to incur financial losses, liability, harm to our reputation, litigation, regulatory enforcement actions and limitations on our ability to conduct our businesses. We capture, transmit, handle and store sensitive information in conducting and managing electronic, financial and mobile transactions, such as card information, PIN numbers and personal information of various types.
Any such breach may cause us to incur financial losses, liability, harm to our reputation, litigation, regulatory enforcement actions and limitations on our ability to conduct our businesses. We and our partners capture, transmit, handle and store sensitive information in conducting and managing electronic, financial, and mobile transactions, such as card information, PIN numbers and personal information of various types.
Certain factors on which our ability to expand each of our divisions is dependent are set forth at Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations - Opportunities and Challenges. If any of such factors impede our ability to expand our businesses, our results of operations and financial condition could be materially and adversely affected.
Certain factors on which our ability to expand each of our divisions is dependent are set forth at Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations - Opportunities and Challenges. If any of such factors impede our ability to expand our businesses, the results of operations and financial condition could be materially and adversely affected.
We also rely on third party service providers to provide part or all of certain services we deliver to customers. While we have selected these third-party vendors carefully, we do not control their actions. A failure of these services by a third party could have a material impact upon our delivery of services to customers.
We also rely on third party service providers to provide part or all of certain services we deliver to customers. While we have selected these third-party vendors carefully, we do not control their actions. The failure of these services by a third-party could have a material impact upon our delivery of services to customers.
We may not have adequate financial and technological resources to expand our distribution channels and product applications to satisfy these demands, which may have an adverse impact on our ability to achieve expected growth in revenues and earnings.
We may not have adequate financial and technological resources to expand our distribution channels and product applications to satisfy these demands, which may have an adverse impact on our ability to achieve the expected growth in revenues and earnings.
Inability to continue to grow our suite of electronic content and electronic payment product offerings could have a material adverse effect on our business, financial condition and results of operations. 20 The stability and growth of our EFT Processing Segment may be adversely affected if we are unable to maintain our current card acceptance and ATM management agreements with banks and international card organizations, and to secure new arrangements for card acceptance and ATM management.
The inability to continue to grow our suite of electronic content and electronic payment product offerings could have a material adverse effect on our business, financial condition, and results of operations. 21 The stability and growth of our EFT Processing Segment may be adversely affected if we are unable to maintain our current card acceptance and ATM management agreements with banks and international card organizations, and to secure new arrangements for card acceptance and ATM management.
Failure by such organizations or switches to provide the required cooperation could result in our inability to obtain settlement of funds relating to transactions and adversely affect our business.
Failure by such organizations or switches to provide the required cooperation could result in our inability to obtain a settlement of funds relating to transactions and adversely affect our business.
In addition to traditional money payment services, new technologies are emerging that may effectively compete with traditional money payment services, such as stored-value cards, debit networks, web-based services and digital currencies. Our continued growth depends upon our ability to compete effectively with these alternative technologies. 29 Developments in payments could materially reduce our transaction levels and revenues.
In addition to traditional money payment services, new technologies are emerging that may effectively compete with traditional money payment services, such as stored-value cards, debit networks, web-based services, and digital currencies. Our continued growth depends upon our ability to compete effectively with these alternative technologies. 30 Developments in payments could materially reduce our transaction levels and revenues.
While our epay business is focused on expanding and differentiating its suite of prepaid product offerings on a global basis, there can be no assurance that we will be able to enter into relationships on favorable terms with additional content providers or renew or expand current relationships and contracts on favorable terms.
Our epay business is focused on expanding and differentiating its suite of prepaid digital product offerings on a global basis, there can be no assurance that we will be able to enter into relationships on favorable terms with additional content providers or renew or expand current relationships and contracts on favorable terms.
In particular: 22 The integration plans for our acquisitions are based on benefits that involve assumptions as to future events, including our ability to successfully achieve anticipated synergies, leveraging our existing relationships, as well as general business and industry conditions, many of which are beyond our control and may not materialize.
In particular: 23 The integration plans for our acquisitions are based on benefits that involve assumptions as to future events, including our ability to successfully achieve anticipated synergies, leveraging our existing relationships, as well as general business and industry conditions, many of which are beyond our control and may not materialize.
Future acquisitions may be effected through the issuance of our common stock or securities convertible into our common stock, which could substantially dilute the ownership percentage of our current stockholders. In addition, shares issued in connection with future acquisitions could be publicly tradable, which could result in a material decrease in the market price of our common stock.
Future acquisitions may be affected through the issuance of our common stock or securities convertible into our common stock, which could substantially dilute the ownership percentage of our current stockholders. In addition, shares issued in connection with future acquisitions could be publicly tradable, which could result in a material decrease in the market price of our common stock.
As a result, the operation of our ATM network in many of our markets depends on our ability to secure these sponsor arrangements with financial institutions. 21 To date, we have been successful in reaching contractual arrangements that have permitted us to operate in all of our target markets.
As a result, the operation of our ATM network in many of our markets depends on our ability to secure these sponsor arrangements with financial institutions. 22 To date, we have been successful in reaching contractual arrangements that have permitted us to operate in all of our target markets.
As previously disclosed in our SEC filings, we have been the subject of computer security breaches, and we cannot exclude the possibility of additional breaches in the future. Any breach in our security systems could result in the perpetration of fraudulent financial transactions for which we may bear the liability.
As previously disclosed, we have been the subject of computer security breaches, and we cannot exclude the possibility of additional breaches in the future. Any breach in our security systems could result in the perpetration of fraudulent financial transactions for which we may bear the liability.
Accordingly, based on current trading prices of our common stock, approximately 2.2 million shares could potentially be added to our total current common stock outstanding through the exercise of options and the vesting of restricted stock awards, which could adversely impact the trading price for our stock.
Accordingly, based on current trading prices of our common stock, approximately 3.3 million shares could potentially be added to our total current common stock outstanding through the exercise of options and the vesting of restricted stock awards, which could adversely impact the trading price for our stock.
Even with disaster recovery procedures in place, these risks cannot be eliminated entirely, and any technical failure that prevents operation of our systems for a significant period of time will prevent us from processing transactions during that period of time and will directly and adversely affect our revenues and financial results. 27 We are subject to security breaches of our systems.
Even with disaster recovery procedures in place, these risks cannot be eliminated entirely, and any technical failure that prevents operation of our systems for a significant period of time will prevent us from processing transactions during that period of time and will directly and adversely affect our revenues and financial results. 27 We are subject to security breaches of our systems or those of our partners.
We are insured against various risks, including theft and negligence, but such insurance coverage is subject to deductibles, exclusions and limits that may leave us bearing some or all of any losses arising from security breaches. We also collect, transfer and retain personal data as part of our businesses.
We are insured against various risks, including theft and negligence, but such insurance coverage is subject to deductibles, exclusions and limits that may leave us bearing some or all of any losses arising from security breaches. We and our partners also collect, transfer, and retain personal data as part of our business.
However, the fluidity and continuation of the conflict may result in additional economic sanctions and other impacts which could have a negative impact on the Company’s financial condition, results of operations and cash flows.
However, the fluidity and continuation of the conflict may result in additional economic sanctions and other impacts which could have a negative impact on our financial condition, results of operations and cash flows.
As exchange rates among the U.S. dollar, the euro, and other currencies fluctuate, the impact of these fluctuations may have a material adverse effect on our results of operations or financial condition as reported in U.S. dollars. A significant number of our ATMs are located in countries in the European Union that use the euro.
As exchange rates among the U.S. dollar, the euro, and other currencies fluctuate, the impact of these fluctuations may have a material adverse effect on our results of operations or financial condition as reported in U.S. dollars. A significant number of our ATMs are located in countries in the EU that use the euro.
We conduct business in many international markets with complex and evolving tax rules, including value added tax rules, which subjects us to international tax compliance risks which could adversely affect our operating results.
We conduct business in many international markets with complex and evolving tax rules, including value added tax rules, which subject us to international tax compliance risks which could adversely affect our operating results.
Thus, upon exercise of their options or sale of shares for which restrictions have lapsed, these affiliates' shares would be subject to the trading restrictions imposed by Rule 144. The remainder of the common shares issuable under option and restricted stock award arrangements would be freely tradable in the public market.
Thus , upon exercise of their options or sale of shares for which restrictions have lapsed, these affiliates' shares would be subject to the trading restrictions imposed by Rule 144. The remainder of the common shares i ssuable under option and restricted stock award arrangements would be freely tradable in the public market.
The loss of our key personnel could have a material adverse effect on our business, growth, financial condition or results of operations. 31 Item 1B. Unresolved Staff Comments None.
The loss of our key personnel could have a material adverse effect on our business, growth, financial condition, or results of operations. 32 Item 1B. Unresolved Staff Comments None.
Our officers and some of our key personnel have entered into service or employment agreements containing non-competition, non-disclosure and non-solicitation covenants, which grant incentive stock options and/or restricted stock with long-term vesting requirements. However, most of these contracts do not guarantee that these individuals will continue their employment with us.
Our officers a nd some of our key personnel have entered into service or employment agreements containing non-competition, non-disclosure, and non-solicitation covenants, which grant incentive stock options and/or restricted stock wi th long-term vesting requirements. However, most of these contracts do not guarantee that these individuals will continue their employment with us.
Our total assets include approximately $1,017 million, or 19% of total assets, in goodwill and acquired intangible assets recorded as a result of acquisitions. We assess our goodwill, intangible assets and other long-lived assets as and when required by accounting principles generally accepted in the U.S. to determine whether they are impaired.
Our total assets include approximately $ 1,015 million, or 17 % of total assets, in goodwill and acquired intangible assets recorded as a result of acquisitions. We assess our goodwill, intangible assets, and other long-lived assets as and when required by accounting principles generally accepted in the U.S. to determine whether they are impaired.
Approximately 4.9 million additional shares of our common stock may be issued in connection with our stock incentive and employee stock purchase plans.
Approximately 3.9 million additional shares of our common stock may be issued in connection with our stock incentive and employee stock purchase plans.
Recent changes to the political climate in certain Eastern European countries increases the risk that a potential military conflict may adversely impact our operations in that region and disrupt our ATM network.
Recent changes to the political climate in certain Eastern European and Middle Eastern countries increase the risk that a potential military conflict may adversely impact our operations in that region and disrupt our ATM network.
Of the 5.4 million total options and restricted stock awards outstanding, an aggregate of 2.2 million options and restricted stock awards are held by persons who may be deemed to be our affiliates and who would be subject to Rule 144.
Of the 5.9 million total options and restricted stock awards outstanding, an aggregate of $3.5 million options and restricted stock awards are held by persons who may be deemed to be our affiliates and who would be subject to Rule 144.
As of December 31, 2022, we had 4.7 million and 0.7 million options and restricted stock awards outstanding, respectively, held by our directors, officers and employees, which entitle these holders to acquire an equal number of shares of our common stock. Of this amount, 1.5 million options are vested and exercisable as of December 31, 2022.
As of December 31, 2023, we had 5.1 million and 0.8 million options and restricted stock awards outstanding, respectively, held by our directors, officers and employees, which entitle these holders to acquire an equal number of shares of our common stock. Of this amount, 2.2 million options are vested and exercisable as of December 31, 2023.
As of December 31, 2022, the amount of cash used in our ATM networks under these supply agreements was approximately $319.8 million. Before the cash is disbursed to ATM customers, beneficial ownership of the cash is generally retained by the cash providers, and we have no access or proprietary rights to the cash.
As of December 31, 2023 , the amount of cash used in our ATM networks under these supply agreements was approximately $ 576.2 million. Before the cash is disbursed to ATM customers, beneficial ownership of the cash is generally retained by the cash providers, and we have no access or proprietary rights to the cash.
These include decreased sales; potential disruptions in neighboring countries where Euronet has operations; volatility in foreign exchange rates and interest rates; inflationary pressures; and heightened cybersecurity threats. We are subject to business cycles, seasonality and other outside factors that may negatively affect our business.
These include decreased sales; potential disruptions in neighboring countries where we have operations; volatility in foreign exchange rates and interest rates; inflationary pressures; and heightened cyber security threats. We are subject to business cycles, seasonality and other outside factors that may negatively affect our business.
From time to time, some of these countries, have considered leaving the European Union and adopting another currency.
From time to time, some of these countries have considered leaving the EU and adopting another currency.
In February 2022, Russia invaded Ukraine resulting in the United States, Canada, the European Union and other countries imposing economic sanctions on Russia. Euronet suspended its operations and product offerings in Russia. This action has not had a material impact on the Company's financial condition or results of operations.
In February 2022, Russia invaded Ukraine resulting in the United States, Canada, the EU and other countries imposing economic sanctions on Russia. We suspended our operations and product offerings in Russia. This action has not had a material impact on our financial condition or results of operations.
An additional 13.1 million shares of common stock, representing approximately 26 % of the shares outstanding as of December 31, 2022, could be added to our total common stock outstanding through the exercise of options or the issuance of additional shares of our common stock pursuant to existing convertible debt and other agreements.
An additional 12.5 million shares of common stock, representing approximately 27% of the shares outstanding as of December 31, 2023 , could be added to our total common stock outstanding through the exercise of options or the issuance of additional shares of our common stock pursuant to existing convertible debt and other agreements.
As a result, market uncertainty or an economic downturn driven by inflationary pressures; political tensions; war, including the ongoing conflict between Russia and Ukraine and the related sanctions and export restrictions; terrorism; epidemics; pandemics; or political instability in the geographic regions or industries in which the Company provides services and products could reduce demand and result in decreased sales volume, which could have a negative impact on the Company’s results of operations.
As a result, market uncertainty or an economic downturn driven by inflationary pressures; political tensions; war and related sanctions and export restrictions; terrorism; epidemics; pandemics; or political instability in the geographic regions or industries in which we provide services and products could reduce demand and result in decreased sales volume, which could have a negative impact on our results of operations.
We may be required to prepay our obligations under the credit facility. As of December 31, 2022, total liabilities were $4,159 million, of which $1,805 million represents long-term liabilities, and total assets were $5,404 million.
We may be required to prepay our obligations under the credit facility. As of December 31, 2023 , total liabilities were $ 4,645 million, of which $ 1,944 million represents long-term liabilities, and total assets were $ 5,894 million.
If operating results in any of our key markets, including Australia, Germany, Greece, Malaysia, India, New Zealand, the U.S., U.K., Poland and Romania, deteriorate or our plans do not progress as expected when we acquired these entities, or if capital markets depress our value or that of similar companies, we may be required to record additional impairment write-downs of goodwill, intangible assets or other long-lived assets.
If operating results in any of our key markets deteriorate or our plans do not progress as expected when we acquired these entities, or if capital markets depress our value or that of similar companies, we may be required to record additional impairment write-downs of goodwill, intangible assets, or other long-lived assets.
In some cases, these companies also sell a broader range of card and processing services than we do, and are, in some cases, willing to discount ATM services to obtain large contracts covering a broad range of services.
Large, well-financed companies offer ATM network and outsourcing services that compete with us in various markets. In some cases, these companies also sell a broader range of card and processing services than we do, and are, in some cases, willing to discount ATM services to obtain large contracts covering a broad range of services.
Commission and margin revenue or fee reductions by any of the content providers could also have a material adverse effect on our business, financial condition or results of operations. The prepaid marketplace is currently experiencing high growth in the differentiation of product offerings.
Commission and margin revenue or fee reductions by any of the content providers could also have a material adverse effect on our business, financial condition, or results of operations.
For our Money Transfer division, a decline in customer confidence in our business or brands, or in traditional money transfer providers as a means to transfer money, may adversely impact transaction volumes which would, in turn, be expected to adversely impact our business and possibly result in recording charges for the impairment of goodwill and/or other long-lived assets.
For our Money Transfer division, a decline in customer confidence in our business or brands, or in traditional money transfer providers as a means to transfer money, may adversely impact transaction volumes which would, in turn, be expected to adversely impact our business and possibly result in recording charges for the impairment of goodwill and/or other long-lived assets. 24 CAPITAL MARKETS AND ECONOMIC CONDITIONS We are subject to political tension, the outbreak of wars, pandemics, and economic downturns all over the world.
There are operational risks inherent in this type of business that can result in the temporary shutdown of part or all of our processing systems, such as failure of electrical supply, failure of computer hardware, security breaches and software errors. Any operational problem in our processing centers may have a significant adverse impact on the operation of our networks.
There are operational risks inherent in this type of business that can result in the temporary shutdown of part or all of our processing systems, such as failure of electrical supply, failure of computer hardware, security breaches and software errors, computer viruses, ransomware and malware.
The development and implementation of our strategy has depended in large part on the co-founder of our company, Michael J. Brown. The retention of Mr. Brown is important to our continued success. In addition, the success of the expansion of businesses that we acquire may depend in large part upon the retention of the founders or leaders of those businesses.
The retention of Mr. Brown is important to our continued success. In addition, the success of the expansion of businesses that we acquire may depend in large part upon the retention of the founders or leaders of those businesses.
KEY PERSONNEL Retaining the founder and key executives of our company, and of companies that we acquire, and finding and retaining qualified personnel is important to our continued success, and any inability to attract and retain such personnel could harm our operations.
KEY PERSONNEL Retaining the founder and key executives of our Company, and of companies that we acquire, and finding and retaining qualified personnel is important to our continued success, and any inability to attract and retain such personnel could harm our operations. The development and implementation of our strategy has depended in large part on our co-founder, Michael J. Brown.
Governments may prohibit or restrict the use of certain legal structures designed to minimize taxes. Any such tax increases, whether borne by us or our customers, could negatively impact our operating results or the demand for our products and services. We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act or other similar anti-corruption laws.
Governments may prohibit or restrict the use of certain legal structures designed to minimize taxes. Any such tax increases, whether borne by us or our customers, could negatively impact our operating results or the demand for our products and services.
If we cannot continue to increase our transaction levels and per-transaction fees generally decline, our results would be adversely affected. 23 If consumer confidence in our business or brands declines, our business may be adversely affected.
If we cannot continue to increase our transaction levels and per-transaction fees generally decline, our results will be adversely affected. If consumer confidence in our business or brands declines, our business may be adversely affected. Our business relies on customer confidence in our brands and our ability to provide efficient and reliable products and services across each of our segments.
EFT Processing Segment - Our principal EFT Processing competitors include ATM networks owned by banks and national switches consisting of consortiums of local banks that provide outsourcing and transaction services only to banks and independent ATM deployers in that country. Large, well-financed companies offer ATM network and outsourcing services that compete with us in various markets.
As a result, we may lack the financial resources and access to capital needed to capture increased market share. EFT Processing Segment - Our principal EFT Processing competitors include ATM networks owned by banks and national switches consisting of consortiums of local banks that provide outsourcing and transaction services only to banks and independent ATM deployers in that country.
Removed
Our business relies on customer confidence in our brands and our ability to provide efficient and reliable products and services across each of our segments.
Added
The European Union ("EU") member states formally adopted the EU's Pillar Two Directive, which was established by the Organization for Economic Co-operation and Development, and which generally provides for a 15 percent minimum effective tax rate for multinational enterprises, in every jurisdiction in which they operate.
Removed
CAPITAL MARKETS AND ECONOMIC CONDITIONS The outbreak of COVID-19 (coronavirus) has negatively impacted and could continue to negatively impact the global economy. In addition, the COVID-19 pandemic could disrupt or otherwise negatively impact global credit markets and our operations, including the demand for our products and services.
Added
While we do not anticipate that the Pillar Two Directive will have a material impact on our tax provision or effective tax rate, we continue to monitor evolving tax legislation in the jurisdictions in which we operate. We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act or other similar anti-corruption laws.
Removed
The significant outbreak of COVID-19 has resulted in a widespread health crisis, which has negatively impacted and could continue to negatively impact the global economy.
Added
Expectations relating to environmental, social and governance considerations and related reporting obligations expose us to potential liabilities, increased costs, reputational harm, and other adverse effects on our business .
Removed
In addition, the global and regional impact of the outbreak, including official or unofficial quarantines and governmental restrictions on activities taken in response to such event, has had, and could continue to have a negative impact on our operations, reduced consumer demand for our products and services due to reduced consumer traffic in, or closure of, retail and other locations where our products and services are offered, including voluntary or mandatory temporary closures of our facilities or those of our agents or customers; interruptions in our supply chain, which could impact the cost or availability of equipment; disruptions or restrictions on our ability to travel or to market and distribute our products and services; and labor shortages.
Added
Many governments, regulators, investors, employees, customers, and other stakeholders are increasingly focused on environmental, social and governance considerations relating to businesses, including climate change and greenhouse gas emissions, human and civil rights, and diversity, equity and inclusion.
Removed
For example, the COVID-19 pandemic has resulted in travel restrictions within and between countries, including mandatory quarantine requirements for travelers from certain locations, and varying degrees of social distancing orders in most of the countries where we do business, beginning in early 2020.
Added
In addition, we make statements about our goals and initiatives through our various non-financial reports, information provided on our website, press statements and other communications. Responding to these environmental, social and governance considerations and implementation of these goals and initiatives involves risks and uncertainties, requires investments, and depends in part on third-party performance or data that is outside our control.
Removed
These travel restrictions and orders, as well as increased unemployment and general economic uncertainty caused by the pandemic, have negatively impacted our financial results. 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.
Added
We cannot guarantee that we will achieve our environmental, social and governance goals and initiatives. In addition, some stakeholders may disagree with our goals and initiatives.
Removed
The Money Transfer Segment has experienced the impacts by the pandemic-related restrictions in certain markets that limit customers' ability to access our network of company-owned stores and agents.
Added
Any failure, or perceived failure, by us to achieve our goals, further our initiatives, adhere to our public statements, comply with federal, state, or international environmental, social and governance laws and regulations, or meet evolving and varied stakeholder expectations and standards could result in legal and regulatory proceedings against us and materially adversely affect our business, reputation, results of operations, financial condition and stock price. 20 Our business, results of operations and financial condition could be adversely impacted by unfavorable results of legal proceedings or government investigations.
Removed
All of these factors, in turn, may not only impact our operations, financial condition and demand for our products and services but our overall ability to react timely to mitigate the impact of this event. The COVID-19 outbreak could disrupt or otherwise negatively impact credit markets, which could adversely affect the availability and cost of capital.
Added
We are subject to various claims, legal proceedings and government investigations that have arisen in the ordinary course of business and have not yet been fully resolved, and new matters may arise in the future.
Removed
Such impacts could limit our ability to fund our operations and satisfy our obligations.
Added
In addition, agreements entered into by us sometimes include indemnification provisions which can subject us to costs and damages in the event of a claim against an indemnified third party.
Removed
The extent and potential impact of the COVID-19 outbreak on our operational and financial performance will depend on future developments, including the duration, severity and spread of the virus, the effectiveness of vaccines and treatments against variants of the virus, actions that may be taken by governmental authorities and the impact on our supply chain, customers, operations, workforce and the financial markets, all of which are highly uncertain and cannot be predicted.
Added
The number of claims, legal proceedings and government investigations involving us, and the alleged magnitude of such claims, proceedings, and government investigations, has generally increased over time and may continue to increase. In recognition of these considerations, we may enter into agreements or other arrangements to settle litigation and resolve such challenges.
Removed
These and other potential impacts of an epidemic, pandemic or other health crisis, such as COVID-19, could therefore materially and adversely affect our business, financial condition and results of operations. 24 We are subject to political tension, the outbreak of wars, economic downturns all over the world Economic conditions around the world, and in certain markets in which the Company does business, could impact sales price and volume.
Added
There can be no assurance such agreements can be obtained on acceptable terms or that litigation will not occur. These agreements can also significantly increase our cost of sales and operating expenses and require us to change its business practices and limit our ability to offer certain products and services. The outcome of litigation or government investigations is inherently uncertain.
Added
If one or more legal matters were resolved against us or an indemnified third party in a reporting period for amounts above management’s expectations, our results of operations and financial condition for that reporting period could be materially adversely affected.
Added
Further, such an outcome can result in significant compensatory, punitive or trebled monetary damages, disgorgement of revenue or profits, remedial corporate measures or injunctive relief against us, and has from time to time required, and can in the future require, us to change our business practices and limit our ability to offer certain products and services, all of which could materially adversely affect the Company’s business, reputation, results of operations and financial condition.
Added
While we maintain insurance coverage for certain types of claims, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise.
Added
Economic conditions around the world, and in certain markets in which we do business, could impact sales price and volume.
Added
Any operational problem in our processing centers may have a significant adverse impact on the operation of our networks.
Added
Our business is subject to a variety of U.S. and international laws, rules, policies and other obligations regarding data protection. We are subject to an increasing number of federal, state, and international laws relating to the collection, use, retention, security and transfer of various types of personal information.
Added
In many cases, these laws apply not only to third-party transactions, but also restrict transfers of personal information among us and its our international subsidiaries. Several jurisdictions have passed laws in this area, and additional jurisdictions are considering imposing additional restrictions or have laws that are pending. These laws continue to develop and may be inconsistent from jurisdiction to jurisdiction.
Added
Complying with emerging and changing requirements causes us to incur substantial costs and has required and may in the future require us to change its our business practices. Noncompliance could result in significant penalties or legal liability.
Added
We make statements about its our use and disclosure of personal information through its our privacy policy, information provided on its our website, press statements and other privacy notices provided to customers.
Added
Any failure by us to comply with these public statements or with other federal, state or international privacy or data protection laws and regulations could result in inquiries or proceedings against us by governmental entities or others. In addition to reputational impacts, penalties could include ongoing audit requirements and significant legal liability.
Added
In addition to the risks generally relating to the collection, use, retention, security and transfer of personal information, we are also subject to specific obligations relating to information considered sensitive under applicable laws, such as health data, financial data and biometric data.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our executive offices are located in Leawood, Kansas. As of December 31, 2022 , we also 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 office leases generally provide for initial terms ranging from two to twelve years.
Biggest changeItem 2. Properties Our executive offices are located in Leawood, Kansas. As of December 31, 2023 , we also have 35 principal offices in Europe, 14 in Asia Pacific, 10 in North America, three in the Middle East, two in South America and three in Africa. Our office leases generally provide for initial terms ranging from two to twelve years.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe discussion regarding litigation in Part II, Item 8 - Financial Statements and Supplementary Data and Note 19, Litigation and Contingencies, to the Consolidated Financial Statements included elsewhere in this report is incorporated herein by reference.
Biggest changeThe discussion regarding litigation in Part II, Item 8 - Financial Statements and Supplementary Data and Note 20, Litigation and Contingencies, to the Consolidated Financial Statements included elsewhere in this report is incorporated herein by reference.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeTo provide further perspective on the impact of foreign currency exchange rates, the following table shows the changes in values relative to the U.S. dollar during 2022 and 2021 , of the currencies of the countries in which we have our most significant operations: Average Translation Rate Year Ended December 31, 2022 Increase (Decrease) Percent Currency 2022 2021 Australian dollar $ 0.6949 $ 0.7513 (8) % British pound $ 1.2374 $ 1.3755 (10) % Canadian dollar $ 0.7691 $ 0.7979 (4) % euro $ 1.0541 $ 1.1830 (11) % Hungarian forint $ 0.0027 $ 0.0033 (18) % Indian rupee $ 0.0127 $ 0.0135 (6) % Malaysian ringgit $ 0.2278 $ 0.2415 (6) % New Zealand dollar $ 0.6361 $ 0.7073 (10) % Polish zloty $ 0.2255 $ 0.2595 (13) % 38 Comparison of Operating Results For The Years Ended December 31, 2022 and 2021 - By Operating Segment EFT Processing Segment The following table summarizes the results of operations for our EFT Processing Segment for the years ended December 31, 2022 and 2021 : Year Ended December 31, Year-over-Year Change (dollar amounts in thousands) 2022 2021 Increase (Decrease) Amount Increase (Decrease) Percent Total revenues $ 924,208 $ 591,138 $ 333,070 56 % Operating expenses: Direct operating costs 475,785 354,254 121,531 34 % Salaries and benefits 111,997 98,584 13,413 14 % Selling, general and administrative 57,049 47,832 9,217 19 % Depreciation and amortization 95,486 90,969 4,517 5 % Total operating expenses 740,317 591,639 148,678 25 % Operating income / (loss) $ 183,891 $ (501 ) $ 184,392 n/m Transactions processed (millions) 6,459 4,366 2,093 48 % Active ATMs as of December 31 45,009 42,713 2,296 5 % Average active ATMs 47,166 41,461 5,705 14 % _________________ n/m: not meaningful Revenues EFT Processing Segment total revenues were $924.2 million for the year ended December 31, 2022, an increase of $333.1 million or 56 % compared to the same period in 2021.
Biggest changeTo provide further perspective on the impact of foreign currency exchange rates, the following table shows the changes in values relative to the U.S. dollar during 2023 and 2022 , of the currencies of the countries in which we have our most significant operations: Average Translation Rate Year Ended December 31, 2023 Increase (Decrease) Percent Currency 2023 2022 Australian dollar $ 0.6644 $ 0.6949 ( 4.4 ) % British pound $ 1.2435 $ 1.2374 0.5 % Canadian dollar $ 0.7412 $ 0.7691 ( 3.6 ) % euro $ 1.0813 $ 1.0541 2.6 % Hungarian forint $ 0.0028 $ 0.0027 3.7 % Indian rupee $ 0.0121 $ 0.0127 ( 4.7 ) % Malaysian ringgit $ 0.2197 $ 0.2278 ( 3.6 ) % New Zealand dollar $ 0.6141 $ 0.6361 ( 3.5 ) % Polish zloty $ 0.2385 $ 0.2255 5.8 % 41 Comparison of Operating Results For The Years Ended December 31, 2023 and 2022 - By Operating Segment EFT Processing Segment The following table summarizes the results of operations for our EFT Processing Segment for the years ended December 31, 2023 and 2022 : Year Ended December 31, Year-over-Year Change (dollar amounts in millions) 2023 2022 Increase (Decrease) Amount Increase (Decrease) Percent Total revenues $ 1,058.3 $ 924.2 $ 134.1 14.5 % Operating expenses: Direct operating costs 572.1 475.8 96.3 20.2 % Salaries and benefits 126.5 111.9 14.6 13.0 % Selling, general and administrative 58.8 57.1 1.7 3.0 % Depreciation and amortization 94.6 95.4 ( 0.8 ) ( 0.8 ) % Total operating expenses 852.0 740.2 111.8 15.1 % Operating income $ 206.3 $ 184.0 $ 22.3 12.1 % Transactions processed (millions) 8,473 6,459 2,014 31.2 % Active ATMs as of December 31 47,303 45,009 2,294 5.1 % Average active ATMs 49,080 47,166 1,914 4.1 % Revenues EFT Processing Segment total revenues were $ 1,058.3 million for the year ended December 31, 2023 , an increase of $ 134.1 million or 14.5 % compared to the same period in 2022 .
Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If such review indicates that the carrying amount of intangible assets is not recoverable, the carrying amount of such assets is reduced to its fair value.
The recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If such review indicates that the carrying amount of intangible assets is not recoverable, the carrying amount of such assets is reduced to its fair value.
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. 36 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 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. 39 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.
Sources of Revenues and Cash Flow Euronet earns revenues and income primarily from ATM management fees, transaction fees, commissions and foreign currency exchange margin. Each operating segment's sources of revenues are described below.
Sources of Revenues and Cash Flow Euronet earns revenues and income primarily from ATM management fees, transaction fees, commissions, and foreign currency exchange margin. Each operating segment's sources of revenue are described below.
To date, we are not aware of any significant claims made by the indemnified parties or parties to whom we have provided guarantees on behalf of our subsidiaries and, accordingly, no liabilities have been recorded as of December 31, 2022. Critical Accounting Policies and Estimates The preparation of financial statements in conformity with U.S.
To date, we are not aware of any significant claims made by the indemnified parties or parties to whom we have provided guarantees on behalf of our subsidiaries and, accordingly, no liabilities have been recorded as of December 31, 2023 . Critical Accounting Policies and Estimates The preparation of financial statements in conformity with U.S.
If we have a history of generating taxable income in a certain country in which we operate, and baseline forecasts project continued taxable income in this country, we will reduce the valuation allowance for those deferred tax assets that we expect to realize. 51 Additionally, we follow the provisions of ASC 740-10-25 and -30 to account for uncertainty in income tax positions.
If we have a history of generating taxable income in a certain country in which we operate, and baseline forecasts project continued taxable income in this country, we will reduce the valuation allowance for those deferred tax assets that we expect to realize. 54 Additionally, we follow the provisions of ASC 740-10-25 and - 30 to account for uncertainty in income tax positions.
For the fluctuations described above, a strengthening U.S. dollar produces a financial loss, while a weakening U.S. dollar produces a financial gain. 54 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.
For the fluctuations described above, a strengthening U.S. dollar produces a financial loss, while a weakening U.S. dollar produces a financial gain. 57 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.
Based upon the level of historical taxable income and current projections for future taxable income over the periods in which the deferred tax assets are deductible, we believe it is more likely than not that we will realize the benefits of these deductible differences, net of the existing valuation allowance at December 31, 2022 .
Based upon the level of historical taxable income and current projections for future taxable income over the periods in which the deferred tax assets are deductible, we believe it is more likely than not that we will realize the benefits of these deductible differences, net of the existing valuation allowance at December 31, 2023 .
Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis s hould be read in conjunction with the consolidated financial statements and accompanying notes included elsewhere in this Annual Report on Form 10-K. This section of this Form 10-K generally discusses 2022 and 2021 items and year-to-year comparisons between 2022 and 2021.
Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis s hould be read in conjunction with the consolidated financial statements and accompanying notes included elsewhere in this Annual Report on Form 10-K. This section of the Form 10-K generally discusses 2023 items and year-to-year comparisons between 2023 and 2022 .
Money Transfer Segment — Revenues in the Money Transfer Segment, which represented approximately 42 % of total consolidated revenues for the year ended December 31, 2022 , are primarily derived from transaction fees, as well as the margin earned from purchasing foreign currency at wholesale exchange rates and selling the foreign currency to customers at retail exchange rates.
Money Transfer Segment — Revenues in the Money Transfer Segment, which represented approximately 42% of total consolidated revenues for the year ended December 31, 2023 , are primarily derived from transaction fees, as well as the margin earned from purchasing foreign currency at wholesale exchange rates and selling the foreign currency to customers at retail exchange rates.
Any forward-looking statements made in this Form 10-K 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. 53 Item 7 A.
Any forward-looking statements made in this Form 10-K 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. 56 Item 7 A.
The remaining $0.2 million , or less than 0 % 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.
The remaining $ 0.3 million , or less than 0 % 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.
EFT Processing Segment — Revenues in the EFT Pro cessing Segment, which represented approximately 28 % of total consolidated revenues for the year ended December 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.
EFT Processing Segment — Revenues in the EFT Pro cessing Segment, which represented approximately 29% of total consolidated revenues for the year ended December 31, 2023 , 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.
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: o ur business plans and financing plans and requirements; trends affecting our business plans and financing plans and requirements; trends affecting our business; the adequacy of capital to meet our capital requirements and expansion plans; the assumptions underlying our business plans; our ability to repay indebtedness; our estimated capital expenditures; the potential outcome of loss contingencies; our expectations regarding the closing of any pending acquisitions; business strategy; government regulatory action; the expected effects of changes in laws or accounting standards; the impact of the COVID-19 pandemic, including its variants on our results of operations and financial position; technological advances; and projected costs and revenues.
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: o ur business plans and financing plans and requirements; trends affecting our business plans and financing plans and requirements; trends affecting our business; the adequacy of capital to meet our capital requirements and expansion plans; the assumptions underlying our business plans; our ability to repay indebtedness; our estimated capital expenditures; the potential outcome of loss contingencies; our expectations regarding the closing of any pending acquisitions; business strategy; government regulatory action; the expected effects of changes in laws or accounting standards; the impact of the pandemics, including its variants on our results of operations and financial position; technological advances; and projected costs and revenues.
This presentation assumes that $100 was invested in shares of the relevant issuers on December 31, 2017, and that dividends received were immediately invested in additional shares. The graph plots the value of the initial $100 investment at one-year intervals for the fiscal years shown.
This presentation assumes that $ 100 was invested in shares of the relevant issuers on December 31, 2018, and that dividends received were immediately invested in additional shares. The graph plots the value of the initial $ 100 investment at one -year intervals for the fiscal years shown.
Deferred tax assets realizable in future periods are recorded net of a valuation allowance based on an assessment of each entity's, or group of entities', ability to generate sufficient taxable income within an appropriate period, in a specific tax jurisdiction.
Deferred tax assets realizable in future periods are recorded net of a valuation allowance based on an assessment of each entity, or group of entities', ability to generate sufficient taxable income within an appropriate period, in a specific tax jurisdiction.
Equity Compensation Plan Information Re fer to Pa rt I I, It em 8, Financial Statements and Supplemen tary Data , Note 16 , Stock Plans, and Part III, Item 12, Securit y Owners hip of Certain Beneficial Owners and Management and Related Stockholder Matters, for information related to our equity compensation plans. 33 Stock Repurchases The following table provides information with respect to shares of the Company's Common Stock that were purchased during the three months ended December 31, 2022 .
Equity Compensation Plan Information Re fer to Pa rt I I, It em 8 , Financial Statements and Supplemen tary Data , Note 16 , Stock Plans, and Part III, Item 12 , Securit y Owners hip of Certain Beneficial Owners and Management and Related Stockholder Matters, for information related to our equity compensation plans. 36 Stock Repurchases The following table provides information with respect to shares of the Company's Common Stock that were purchased during the three months ended December 31, 2023 .
This figure does not include an estimate of the indeterminate number of beneficial holders whose shares may be held of record by brokerage firms and clearing agencies. 32 Private Placements and Issuances of Equity During 2022 , we did not issue any equity securities that were not registered under the Securities Act of 1933, which have not been previously reported in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.
This figure does not include an estimate of the indeterminate number of beneficial holders whose shares may be held of record by brokerage firms and clearing agencies. 35 Private Placements and Issuances of Equity During 2023 , we did not issue any equity securities that were not registered under the Securities Act of 1933 , which have not been previously reported in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.
As of December 31, 2022, we held foreign currency derivative contracts outstanding with a notional value of $1.0 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.
As of December 31, 2023 , we held foreign currency derivative contracts outstanding with a notional value of $ 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.
In connection with the issuance of the Convertible Notes, we recorded $ 12.8 million in debt issuance costs, which are being amortized through March 1, 2025. 49 Senior Notes - On May 22, 2019, the Company completed the sale of €600 million ($669.9 million) aggregate principal amount of Senior Notes that mature on May 2026 (the "Senior Notes").
In connection with the issuance of the Convertible Notes, we recorded $ 12.8 million in debt issuance costs, which are being amortized through March 1, 2025. 52 Senior Notes - On May 22, 2019, we completed the sale of € 600 million ($ 669.9 million) aggregate principal amount of Senior Notes that mature in May 2026 (the "Senior Notes").
For the year ended December 31 , 2022, the increase in direct operating costs was primarily due to the increase in transaction volumes, and costs associated with modifying our estate of ATMs .
For the year ended December 31 , 2023, the increase in direct operating costs was primarily due to the increase in transaction volumes, and costs associated with modifying our estate of ATMs .
With approximately 75% of ou r revenues denominated in currencies other than the U.S. dollar, any significant changes in foreign currency exchange rates will likely have a significant impact on our results of operations (for a further discussion, see Item 1 A - Risk Factors and Item 7 A - Quantitative and Qualitative Disclosures About Market Risk).
With approximately 76% of our revenues denominated in currencies other than the U.S. dollar, any significant changes in foreign currency exchange rates will likely have a significant impact on our results of operations (for a further discussion, see Item 1 A - Risk Factors and Item 7 A - Quantitative and Qualitative Disclosures About Market Risk).
The majority of our foreign currency exchange gains or losses are due to the remeasurement of intercompany loans which are not considered a long-term investment in nature and are in a currency other than the functional currency of one of the parties to the loan.
The majority of our foreign currency exchange gains or losses are due to the re-measurement of intercompany loans which are not considered a long-term investment in nature and are in a currency other than the functional currency of one of the parties to the loan.
Revenues in this segment are also derived from cardless payment, banknote recycling, tax refund services, license fees, professional services and maintenance fees for proprietary applicati on software and sales of related hardware. epay Segment — Revenues in the epay Segment, which represented approximately 30 % of total consolidated revenues for the year ended December 31, 2022 , are primarily derived from commissions or processing fees rec eived from mobile phone operators for the processing and distribution of prepaid mobile airtime and commissions earned from the distribution of other electronic content, vouchers, and physical gifts.
Revenues in this segment are also derived from cardless payments, banknote recycling, tax refund services, license fees, professional services and maintenance fees for proprietary applicati on software and sales of related hardware. epay Segment — Revenues in the epay Segment, which represented approximately 29% of total consolidated revenues for the year ended December 31, 2023 , are primarily derived from commissions or processing fees rec eived from mobile phone operators for the processing and distribution of prepaid mobile airtime and commissions earned from the distribution of other electronic content, vouchers, and physical gifts.
Share repurchase plan 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.
Share repurchase plan 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.
Other debt obligations — Certain of our subsidiaries have available credit lines and overdraft facilities to generally supplement short-term working capital requirements, when necessary. There were $0.2 million and $0.9 million outstanding under these other obligation arrangements as of December 31, 2022 and December 31, 2021 .
Other debt obligations — Certain of our subsidiaries have available credit lines and overdraft facilities to generally supplement short-term working capital requirements, when necessary. There were $ 0.3 million and $ 0.2 million outstanding under these other obligation arrangements as of December 31, 2023 and December 31, 2022 .
Foreign currency exchange rate risk For the years ended December 31, 2022 and 2021 , 75 % and 73 % of our revenues, respectively, were generated in non-U.S. dollar countries. We expect to continue generating a significant portion of our revenues in countries with currencies other than the U.S. dollar.
Foreign currency exchange rate risk For the years ended December 31, 2023 and 2022 , 76 % and 75 % of our revenues, respectively, were generated in non-U.S. dollar countries. We expect to continue generating a significant portion of our revenues in countries with currencies other than the U.S. dollar.
The following performance graph and related text are being furnished to and not filed with the SEC, and will not be deemed to be "soliciting material" or subject to Regulation 14A or 14C under the Exchange Act or to the liabilities of Section 18 of the Exchange Act and will no t be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent we specifically incorporate such information by reference into such filing.
The following performance graph and related text are being furnished to and not filed with the SEC, and will not be deemed to be "soliciting material" or subject to Regulation 14 A or 14 C under the Exchange Act or to the liabilities of Section 18 of the Exchange Act and will no t be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent we specifically incorporate such information by reference into such filing.
For the year ended December 31, 2022, no impairment of goodwill or acquired intangible assets has been identified. 52 Recently Issued Accounting Pronouncements See Item 8 of Part II, "Financial Statements and Supplementary Data - Note 3 - Summary of Significant Accounting Policies and Practices.
For the year ended December 31, 2023 , no impairment of goodwill or acquired intangible assets has been identified. 55 Recently Issued Accounting Pronouncements See Item 8 of Part II, "Financial Statements and Supplementary Data - Note 3 - Summary of Significant Accounting Policies and Practices.
We estimate that a 10% fluctuation in foreign currency exchange rates would have a non-cash impact on total comprehensive (loss) income of approximately ( $110) million to ( $115) million as a result of the change in value of these items during translation to the U.S. dollar.
We estimate that a 10 % fluctuation in foreign currency exchange rates would have a non-cash impact on total comprehensive (loss) income of approximately ( $80) million to ( $90) million as a result of the change in value of these items during translation to the U.S. dollar.
On September 13, 2022, the Company put a repurchase program in place to repurchase up to $350 million in value, but not more than 7.0 million shares of common stock through September 13, 2024.
On September 13, 2022, we put a repurchase program in place to repurchase up to $ 350 million in value, but not more than 7.0 million shares of common stock through September 13, 2024.
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.
We have 35 principal offices in Europe, 14 in Asia Pacific, 10 in North America, three in the Middle East, two in South America and three in Africa. Our executive offices are located in Leawood, Kansas, USA.
The increase in operating income, operating margin and operating income per transaction for the year ended December 31, 2022 compared to the same period in 2021 was primarily driven by the increase in transaction volume, specifically the higher margin transactions for US outbound and international-originated money transfers, and the impairment of the contract assets in 2021, partially offset by the increase in agent commissions, and an increase in headcount to support the growth of the business.
The increase in operating income, operating margin, and operating income per transaction for the year ended December 31, 2023 compared to the same period in 2022 was primarily driven by the increase in transaction volume, specifically the higher margin transactions for US outbound and international-originated money transfers, partially offset by the increase in agent commissions, and an increase in headcount to support the growth of the business.
Dividends Since our inception, no dividends have been paid on our common stock. We do not intend to distribute dividends for the foreseeable future. Holders At December 31, 2022 , we had 50 stockholders of record of our Common Stock, and none of our Preferred Stock was outstanding.
Dividends Since our inception, we have not paid dividends on our common stock. We do not intend to distribute dividends for the foreseeable future. Holders At December 31, 2023 , we had 50 stockholders of record of our common stock, and none of our preferred stock was outstanding.
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; inflation; the war in Ukraine and the related economic sanctions; our ability to successfully integrate the operations of Piraeus Merchant Services; the effects in Europe of the U.K.'s departure from the E.U. and economic conditions in specific countries and regions; technological developments affecting the market for our products and services; our ability to successfully introduce new products and services; foreign currency exchange rate fluctuations; the effects of any breach of our computer systems or those of our customers or vendors, including our financial processing networks or those of other third parties; interruptions in any of our systems or those of our vendors or other third parties; our ability to renew existing contracts at profitable rates; changes in fees payable for transactions performed for cards bearing international logos or over switching networks such as card transactions on ATMs; our ability to comply with increasingly stringent regulatory requirements, including anti-money laundering, anti-terrorism, anti-bribery, sanctions, consumer privacy and data protection 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.
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 pandemics; inflation; the war in Ukraine and the Middle East and the related economic sanctions; our ability to successfully integrate any acquired operations 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 EU'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 1 A — Risk Factors.
The revolving credit facility contains a sublimit of up to $250 million, with $150 million committed, for the issuance of letters of credit, a $75 million sublimit for U.S. dollar swingline loans and a $75 million sublimit for swingline loans in euros or British pounds sterling. The Credit Facility allows for borrowings in British pounds sterling, euro and U.S. dollars.
The revolving credit facility contains a sublimit of up to $ 250 million, with $ 150 million committed, for the issuance of letters of credit, a $ 75 million sublimit for U.S. dollar swingline loans and a $ 75 million sublimit for swingline loans in euros or British pounds sterling.
We continually review inflation and the functional currency in each of the countries where we operate. 50 Off-balance sheet arrangements We have certain significant off-balance sheet items described in Note 20, Commitments, to the Consolidated Financial Statements.
We continually review inflation and the functional currency in each of the countries where we operate. 53 Off-balance sheet arrangements We have certain significant off-balance sheet items described in Note 21, Commitments, to the Consolidated Financial Statements.
GAAP measures are used by management to conduct and evaluate its business during its regular review of operating results for the periods presented. 46 Our total liability for uncertain tax positions under Accounting Standards Codification ("ASC") 740-10-25 and -30 was $42.8 million as of December 31, 2022.
GAAP measures are used by management to conduct and evaluate its business during its regular review of operating results for the periods presented. 49 Our total liability for uncertain tax positions under Accounting Standards Codification ("ASC") 740-10-25 and - 30 was $ 51.8 million as of December 31, 2023.
The increase in direct operating costs was primarily due to the increase in the number of U.S. outbound and international-originated money transfer transactions and corresponding increase in agent commissions. Foreign currency movements decreased direct operating costs by approximately ($42.9) million for the year ended December 31, 2022, compared to the same period in 2021 .
The increase in direct operating costs was primarily due to the increase in the number of U.S. outbound and international-originated money transfer transactions and corresponding increase in agent commissions. Foreign currency movements increased direct operating costs by approximately $ 4.9 million for the year ended December 31, 2023, compared to the same period in 2022 .
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 December 31, 2022, the Company had foreign currency forward contracts outstanding with a notional value of $228.4 million, primarily in euros.
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 December 31, 2023 , the Company had foreign currency forward contracts outstanding with a notional value of $ 563.1 million, primarily in euros.
Depreciation and amortization primarily represents amortization of acquired intangible assets and depreciation of money transfer terminals, computers and software, leasehold improvements and office equipment. As a percentage of revenues, these expenses decreased to 2.3 % for the year ended December 31, 2022 , compared to 2.6 % for the same period in 2021 .
Depreciation and amortization primarily represent amortization of acquired intangible assets and depreciation of money transfer terminals, computers and software, leasehold improvements, and office equipment. As a percentage of revenues, these expenses decreased to 2.0 % for the year ended December 31, 2023 , compared to 2.3 % for the same period in 2022 .
The applicable margin for borrowings under the credit facility, based on the Company's current credit rating is initially 1.25% including the facility fee. As of December 31, 2022 and 2021, the Company had stand-by letters of credit/bank guarantees outstanding under the Credit Facility of $54.6 million and $57.3 million, respectively.
The applicable margin for borrowings under the credit facility, based on the Company's current credit rating is initially 1.25 % including the facility fee. As of December 31, 2023 and 2022, the Company had stand-by letters of credit/bank guarantees outstanding under the Credit Facility of $ 51.9 million and $ 54.6 million, respectively.
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 we operate in that may impact the volume of cross-border and cross-currency transactions .
Our profitability is dependent on the laws and regulations that govern DCC transactions, specifically in the E.U., increasing expansion of prepaid forex cards, as well as the laws and regulations of each country that we operate in that may impact the volume of cross-border and cross-currency transactions .
As of December 31, 2022, we had foreign currency derivative contracts outstanding with a notional value of $398.6 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.
As of December 31, 2023 , we had foreign currency derivative contracts outstanding with a notional value of $ 393.3 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.
Finance lease expenses were not material for 2022 or 2021. For additional information on operating and finance lease obligations, see Note 13 , Leases, to the Consolidated Financial Statements.
Finance lease expenses were not material for 2023 or 2022 . For additional information on operating and finance lease obligations, see Note 14 , Leases, to the Consolidated Financial Statements.
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. As of December 31, 2022, the Company had $4.1 million of unamortized debt issuance costs related to 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. As of December 31, 2023, we had $ 2.9 million of unamortized debt issuance costs related to the Senior Notes.
Quantitative and Qualitative Disclosures about Market Risk Interest rate risk As of December 31 , 2022 , our total debt outstanding, excluding unamortized debt issuance costs, was $1,622.1 million . Of this amount, $525 million, or 32 % of our total debt obligations, relates to our contingent Convertible Notes that have a fixed coupon rate.
Quantitative and Qualitative Disclosures about Market Risk Interest rate risk As of December 31 , 2023 , our total debt outstanding, excluding unamortized debt issuance costs, was $ 1,874.4 million . Of this amount, $ 525 million, or 28 % of our total debt obligations, relates to our contingent Convertible Notes that have a fixed coupon rate.
As of December 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 $110 million to $115 million .
As of December 31, 2023 , 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 $140 million to $150 million .
Forward-Looking Statements This document contains statements that constitute forward-looking statements within the meaning of section 27A of the Securities Act of 1 933 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.
Forward-Looking Statements This document contains statements that constitute forward-looking statements within the meaning of section 27 A of the Securities Act of 1 933 and section 21 E 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.
Considering the results by country and the associated functional currency, our 2022 consolidated operating income was approximately (12%) lower due to changes in foreign currency exchange rates when compared to 2021 . If significant, in our discussion we will refer to the impact of fluctuations in foreign currency exchange rates in our comparison of operating segment results.
Considering the results by country and the associated functional currency, our 2023 consolidated operating income was approximately 0.2 % higher due to changes in foreign currency exchange rates when compared to 2022 . If significant, in our discussion we will refer to the impact of fluctuations in foreign currency exchange rates in our comparison of operating segment results.
Stand-by letters of credit/bank guarantees reduce the Company's borrowing capacity under the Credit Facility and are generally used to secure trade credit and performance obligations. As of December 31, 2022 and 2021, the stand-by letters of credit interest charges were each 1.1% per annum. Borrowing capacity under the Credit Facility as of December 31, 2022 was $740.6 million.
Stand-by letters of credit/bank guarantees reduce the Company's borrowing capacity under the Credit Facility and are generally used to secure trade credit and performance obligations. As of December 31, 2023 and 2022, the stand-by letters of credit interest charges were each 1.25% per annum. Borrowing capacity under the Credit Facility as of December 31, 2023 was $ 661.2 million.
By using this mix of rates to convert the balance sheet from functional currency to U.S. dollars, differences between current and historical exchange rates generate this translation adjustment. We recorded a net loss on translation adjustments of $78.4 million for 2022 and a net loss of $78.5 million for 2021 .
By using this mix of rates to convert the balance sheet from functional currency to U.S. dollars, differences between current and historical exchange rates generate this translation adjustment. We recorded a net gain on translation adjustments of $ 47.9 million for 2023 and a net loss of $ 78.3 million for 2022 .
Net (Income) Loss Attributable To Noncontrolling Interests Noncontrolling interests represent the elimination of net income or loss attributable to the minority shareholders' portion of the following consolidated subsidiaries that are not wholly owned: Subsidiary Percent Owned Segment - Country Movilcarga 95% epay - Spain Euronet China 85% EFT - China Euronet Pakistan 70% EFT - Pakistan Euronet Infinitium Solutions 65% EFT - India Net Income (Loss) Attributable to Euronet Net income attributable to Euronet was $231.0 million for the year ended December 31, 2022, an increase of $160.3 million compared to net income in the same period in 2021 .
Net (Income) Loss Attributable To Non-controlling Interests Non-controlling interests represent the elimination of net income or loss attributable to the minority shareholders' portion of the following consolidated subsidiaries that are not wholly owned: Subsidiary Percent Owned Segment - Country Movilcarga 95 % epay - Spain Euronet China 85 % EFT - China Euronet Pakistan 70 % EFT - Pakistan Euronet Infinitium Solutions 65 % EFT - India Net Income (Loss) Attributable to Euronet Net income attributable to Euronet was $ 279.7 million for the year ended December 31, 2023 , an increase of $ 48.7 million compared to net income in the same period in 2022 .
We had cash, cash equivalents and restricted cash of $1,990.9 million as of December 31, 2022 , of which $1,533.0 million was held outside of the U.S. and is expected to be indefinitely reinvested for continued use in foreign operations. Repatriation of these assets to the U.S. could have negative tax consequences.
We had cash, cash equivalents and restricted cash of $ 2,247.0 million as of December 31, 2023 , of which $1,728.6 million was held outside of the U.S. and is expected to be indefinitely reinvested for continued use in foreign operations. Repatriation of these assets to the U.S. could have negative tax consequences.
As a percentage of revenues, these expenses decreased to 12.1% for the year ended December 31, 2022, compared to 16.7% for the same period in 2021 .
As a percentage of revenues, these expenses decreased to 12.0 % for the year ended December 31, 2023, compared to 12.1 % for the same period in 2022.
As a percentage of revenues, these expenses decreased to 6.2 % for the year ended December 31 , 2022, compared to 8.1 % for the same period in 2021 .
As a percentage of revenues, these expenses decreased to 5.6 % for the year ended December 31 , 2023, compared to 6.2 % for the same period in 2022 .
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 December 31, 2022 , the fair value of our fixed rate Convertible Notes was $525.0 million , compared to a carrying value of $520.8 million .
Our $ 525.0 million outstanding principal amount of Convertible Notes accrues cash interest at a rate of 0.75 % of the principal amount per annum. Based on quoted market prices, as of December 31, 2023 , the fair value of our fixed rate Convertible Notes was $ 530.3 million , compared to a carrying value of $ 525.0 million .
In 2021 and 2022 , the U.S. dollar strengthened compared to key foreign currencies, resulting in translation losses which were recorded in comprehensive (loss) income.
In 2023 , the U.S. dollar weakened compared to key foreign currencies, resulting in translation gains which were recorded in comprehensive (loss) income. In 2022 , the U.S. dollar strengthened compared to key foreign currencies, resulting in translation losses which were recorded in comprehensive (loss) income.
Additionally, as of December 31, 2022, we had approximately $4.3 million of finance leases with fixed payment and interest terms that expire between the years of 2023 and 2027 .
Additionally, as of December 31, 2023 , we had approximately $3.9 million of finance leases with fixed payment and interest terms that expire between the years of 2024 and 2028 .
Liquidity and Capital Resources Working capital As of December 31, 2022, we had working capital of $1,372.6 million, which is calculated as the difference between total current assets and total current liabilities, compared to working capital of $ 1,455.8 million as of December 31, 2021.
Liquidity and Capital Resources Working capital As of December 31, 2023 , we had working capital of $ 1,462.1 million, which is calculated as the difference between total current assets and total current liabilities, compared to working capital of $ 1,372.7 million as of December 31, 2022.
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 December 31, 2022, the Company has outstanding €600 million ($642.1 million) principal amount of the Senior Notes.
The Senior Notes accrue interest at a rate of 1.375 % per year, payable annually in arrears commencing May 22, 2020, until maturity or earlier redemption. As of December 31, 2023, we have outstanding € 600 million ($ 662.2 million) principal amount of the Senior Notes.
See Note 12 , Derivative Instruments and Hedging Activities to our Consolidated Financial Statements for additional information. 55
See Note 13, Derivative Instruments and Hedging Activities to our Consolidated Financial Statements for additional information. 58
The decrease in cash used in financing activities was primarily the result of the $171.4 million net borrowings on debt obligations for the year ended December 31, 2022 compared to $13.0 million for the same period in 2021 .
The increase in cash used in financing activities was primarily the result of the $ 532.2 million net borrowings on debt obligations for the year ended December 31, 2023 compared to $ 171.4 million for the same period in 2022 .
We have a sending agent network in place comprised of agents, customer service representatives, Company-owned stores, primarily in North America, Europe and Malaysia, Ria, and xe branded websites, along with a worldwide network of correspondent agents, consisting primarily of financial institutions in the transfer destination countries.
We have a sending agent network in place comprised of agents, customer service representatives, Company-owned stores, primarily in North America, Europe and Malaysia, Ria, and xe branded websites, along with a worldwide network of correspondent agents, consisting primarily of financial institutions in the transfer destination countries. Under the brand "Dandelion", Ria offers payment processing services to third party partners.
We recorded a net foreign currency exchange loss of $28.2 million for the year ended December 31, 2022, compared to a net foreign currency exchange loss of $10.9 million for the same period in 2021.
We recorded a net foreign currency exchange gain of $ 8.0 million for the year ended December 31, 2023 , compared to a net foreign currency exchange loss of $ 28.2 million for the same period in 2022.
Revenues per transaction decreased to $0.03 for the year ended December 31, 2022, compared to $0.04 for the same period in 2021 . The decrease in revenues per transaction was primarily driven by the increase in the number of mobile transactions processed in a region where we generally earn lower revenues per transaction.
Revenues per transaction increased to $ 0.29 for the year ended December 31, 2023 , compared to $ 0.26 for the same period in 2022 . The increase in revenues per transaction was primarily driven by a decrease in the number of low-margin mobile transactions processed in a region where we generally earn lower revenues per transaction.
O perating income (loss) as a percentage of revenues (“operating margin”) increased to 19.9 % for the year ended December 31 , 2022, compared to (0.1%) for the same period in 2021 . Operating income (loss) per transaction was $0.03 for the year ended December 31 , 2022, compared to ($0.00) for the same period in 2021 .
O perating income as a percentage of revenues (“operating margin”) decreased to 19.5 % for the year ended December 31 , 2023, compared to 19.9 % for the same period in 2022 . Operating income per transaction was $ 0.02 for the year ended December 31 , 2023, compared to $ 0.03 for the same period in 2022 .
As a percentage of revenues, these expenses decreased to 3.6% for the year ended December 31, 2022, compared to 3.9 % for the same period in 2021. Depreciation and amortization Depreciation and amortization expenses were $6.2 million for the year ended December 31, 2022, a decrease of ( $2.3) million or (27%) compared to the same period in 2021 .
As a percentage of revenues, these expenses decreased to 12.1 % for the year ended December 31, 2023 , compared to 12.6 % for the same period in 2022. 46 Depreciation and amortization Depreciation and amortization expenses were $ 31.0 million for the year ended December 31, 2023 , a decrease of ( $ 2.9 ) million or ( 8.6 %) compared to the same period in 2022 .
Total capital expenditures for 2023 are currently estimated to be approximately $100 million to $110 million. Contractual lease obligations — The Company has entered into contractually binding operating and finance lease commitments to operate the business. Operating lease expenses were $51.0 million and $55.6 million for the years ended December 31, 2022 and 2021, respectively.
Total capital expenditures for 2024 are currently estimated to be approximately $90 million to $100 million. Contractual lease obligations — We have entered into contractually binding operating and finance lease commitments to operate the business. Operating lease expenses were $ 50.1 million and $ 51.0 million for the years ended December 31, 2023 and 2022 , respectively.
As a percentage of revenues, these expenses decreased to 10.3 % for the year ended December 31, 2022 , compared to 15.4% for the same period in 2021 .
As a percentage of revenues, these expenses decreased to 8.9 % for the year ended December 31, 2023 , compared to 10.3 % for the same period in 2023.
The increase in operating cash flows was primarily due to the increase in net income and fluctuations in working capital mainly associated with the timing of the settlement processes with content providers in the epay Segment, with correspondents in the Money Transfer Segment, and with card organizations and banks in the EFT Processing Segment. 48 Investing activity cash flow Cash flows used in investing activities were $453.8 million for the year ended December 31, 2022 compared to $98.1 million for the same period in 2021 .
The de crease in operating cash flows was primarily due to the decrease mainly associated with the timing of the settlement processes with content providers in the epay Segment, with correspondents in the Money Transfer Segment, and with card organizations and banks in the EFT Processing Segment offset by an increase in net income . 51 Investing activity cash flow Cash flows used in investing activities were $ 157.6 million for the year ended December 31, 2023 compared to $ 453.8 million for the same period in 2022 .
As more fully described in Note 14 , Income Taxes, to the Consolidated Financial Statements, gross deferred tax assets were $265.0 million as of December 31, 2022 , partially offset by a valuation allowance of $90.4 million .
As more fully described in Note 15, Income Taxes, to the Consolidated Financial Statements, gross deferred tax assets were $ 260.6 million as of December 31, 2023 , partially offset by a valuation allowance of $ 90.7 million .
Our annual consolidated operating income increased by 109% for 2022 compared to 2021. The increase in operating income for 2022 was primarily due to the increases in transaction volume across all three segments.
The increase in revenues for 2023 was primarily due to the increases in transaction volumes across all three segments. Our annual consolidated operating income increased by 12.2% for 2023 compared to 2022 . The increase in operating income for 2023 was primarily due to the increases in transaction volumes across all three segments.
The loan was either a Prime rate loan, a Bloomberg Short-term Bank Yield rate loan or bears interest at the rate agreed to by the bank and the Company at the time such loan is made. The weighted average interest rate from the loan inception date to December 31, 2022 was 2.76%.
The loan is a Prime rate loan, Bloomberg Short-term Bank Yield ("BSBY") rate loan plus 0.95 % or bears interest at the rate agreed to by the Bank and the Company at the time such loan is made. The weighted-average interest rate from the loan inception date to December 31, 2023 was 6.29 %.
Uncommitted Line of Credit - On June 24, 2022, the Company entered into an Uncommitted Loan Agreement for $150 million, for the sole purpose of providing vault cash for ATMs, that expires no later than June 23, 2023. The loan was fully repaid and there was no balance at December 31, 2022.
Uncommitted Line of Credit - On June 26, 2023, the Company entered into an Uncommitted Loan Agreement for $ 150 million, fully drawn and outstanding at December 31, 2023, for the sole purpose of providing vault cash for ATMs, that expires no later than June 21, 2024.
Our effective income tax rates were 28.5% and 48.0% for the years ended December 31, 2022 and 2021, respectively. The effective income tax rates were significantly influenced by the impact of acquired contract cost impairment, and foreign currency exchange gains (losses).
Our effective income tax rates were 30.2 % and 28.5 % for the years ended December 31, 2023 and 2022, respectively. The effective income tax rates were significantly influenced by the impact of foreign currency exchange gains (losses).
Opportunities and Challenges The global product markets in which we operate are large and fragmented, which poses both opportunities and challenges for our technology to disrupt new and existing competition.
These services are not directly identifiable with our reportable operating segments. Opportunities and Challenges The global product markets in which we operate are large and fragmented, which poses both opportunities and challenges for our technology to disrupt new and existing competition.
Net income attributable to Euronet for 2022 was $231.0 million , or $4.41 per diluted share compared to a net income attributable to Euronet for 2021 of $ 70.7 million, or $ 1.32 per diluted share.
Net income attributable to Euronet for 2023 was $ 279.7 million , or $ 5.50 per diluted share compared to a net income attributable to Euronet for 2022 of $ 231.0 million, or $ 4.41 per diluted share.
For the year ended December 31, 2022, t he Company repurchased 1.6 million shares under the repurchase program at a weighted average purchase price of $106.71 for a total value of $175.0 million .
For the year ended December 31, 2023 , t he Company repurchased 1,400,229 shares under the repurchase program at a weighted average purchase price of $ 89.31 for a total value of $ 125.0 million .
Excluding foreign currency exchange gains (losses), and acquired contract cost impairment items from pre-tax income, as well as the related tax effects for these items, our adjusted effective income tax rates were 22.7% and 36.1% for the years ended December 31, 2022 and 2021, respectively.
Excluding foreign currency exchange gains (losses) as well as the related tax effects for these items, our adjusted effective income tax rates were 32.0 % and 22.7 % for the years ended December 31, 2023 and 2022, respectively.

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