EURONET WORLDWIDE, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

Date:

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

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           CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

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

º our business plans and financing plans and requirements;

º trends affecting our business plans and financing plans and requirements;

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º trends affecting our business;

º the adequacy of capital to meet our capital requirements and expansion

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     plans;
   º the assumptions underlying our business plans;
   º our ability to repay indebtedness;
   º our estimated capital expenditures;
   º the potential outcome of loss contingencies;
   º our expectations regarding the closing of any pending acquisitions;
   º business strategy;
   º government regulatory action;
   º the expected effects of changes in laws or accounting standards;
   º technological advances; and
   º projected costs and revenues.

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

Investors are cautioned that any forward-looking statements are not guarantees
of future performance and involve risks and uncertainties. Actual results may
materially differ from those in the forward-looking statements as a result of
various factors, including, but not limited to, conditions in world financial
markets and general economic conditions, including impacts from the COVID-19
pandemic; the war in the Ukraine and related economic sanctions; our ability to
successfully integrate the operations of Piraeus Merchant Services; and economic
conditions in specific countries and regions; technological developments
affecting the market for our products and services; our ability to successfully
introduce new products and services; foreign currency exchange rate
fluctuations; the effects of any breach of our computer systems or those of our
customers or vendors, including our financial processing networks or those of
other third parties; interruptions in any of our systems or those of our vendors
or other third parties; our ability to renew existing contracts at profitable
rates; changes in fees payable for transactions performed for cards bearing
international logos or over switching networks such as card transactions on
ATMs; our ability to comply with increasingly stringent regulatory requirements,
including anti-money laundering, anti-terrorism, anti-bribery, sanctions,
consumer and data protection and privacy and the European Union's General Data
Protection Regulation, and Second Revised Payment Service Directive
requirements; changes in laws and regulations affecting our business, including
tax and immigration laws and any laws regulating payments, including DCC
transactions, changes in our relationships with, or in fees charged by, our
business partners; competition; the outcome of claims and other loss
contingencies affecting Euronet; the cost of borrowing (including fluctuations
in interest rates), availability of credit and terms of and compliance with debt
covenants; and renewal of sources of funding as they expire and the availability
of replacement funding and those factors referred to above and as set forth and
more fully described in Part I, Item 1A - Risk Factors of our Annual Report on
Form 10-K for the year ended December 31, 2021. Our Annual Report on Form 10-K
is available on the SEC's EDGAR website at www.sec.gov, and copies may also be
obtained by contacting the Company. Any forward-looking statements made in this
Form 10-Q speak only as of the date of this report. Except as required by law,
we do not intend, and do not undertake any obligation, to update any
forward-looking statements to reflect future events or circumstances after the
date of such statements.
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                                    OVERVIEW

COMPANY OVERVIEW, GEOGRAPHIC LOCATIONS AND PRINCIPAL PRODUCTS AND SERVICES

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


1) The EFT Processing Segment, which processes transactions for a network of
44,353 ATMs and approximately 491,000 POS terminals across Europe, the Middle
East, Africa, Asia Pacific, and the United States. We provide comprehensive
electronic payment solutions consisting of ATM cash withdrawal and deposit
services, ATM network participation, outsourced ATM and POS management
solutions, credit, debit and prepaid card outsourcing, DCC, and other value
added services. Through this segment, we also offer a suite of integrated
electronic financial transaction software solutions for electronic payment and
transaction delivery systems.

2) The epay Segment, which provides distribution, processing and collection
services for prepaid mobile airtime and other electronic content. We operate a
network of approximately 760,000 POS terminals providing electronic processing
of prepaid mobile airtime top-up services and other electronic content in
Europe, the Middle East, Asia Pacific, the United States and South America. We
also provide vouchers and physical gift fulfillment services in Europe.

3) The Money Transfer Segment, which provides global consumer-to-consumer money
transfer services, primarily under the brand names Ria, IME, AFEX, and xe and
global account-to-account money transfer services under the brand name xe. We
offer services under the brand names Ria and IME through a network of sending
agents, Company-owned stores (primarily in North America, Europe and Malaysia)
and our websites (riamoneytransfer.com and online.imeremit.com), disbursing
money transfers through a worldwide correspondent network that includes
approximately 495,000 locations. xe is a provider of foreign currency exchange
information and offers money transfer services on its currency data websites
(xe.com and x-rates.com). In addition to money transfers, we also offer
customers bill payment services (primarily in the U.S.), payment alternatives
such as money orders and prepaid debit cards, comprehensive check cashing
services for a wide variety of issued checks, along with competitive foreign
currency exchange services and prepaid mobile top-up. Through our xe brand, we
offer cash management solutions and foreign currency risk management services to
small-to-medium-sized businesses.

We have six processing centers in Europe, five in Asia Pacific and two in North
America. We have 36 principal offices in Europe, 14 in Asia Pacific, 10 in North
America, three in the Middle East, two in South America and one in Africa. Our
executive offices are located in Leawood, Kansas, USA. With approximately 73% of
our revenues denominated in currencies other than the U.S. dollar, any
significant changes in foreign currency exchange rates will likely have a
significant impact on our results of operations (for a further discussion, see
Item 1A - Risk Factors in our Annual Report on Form 10-K for the year ended
December 31, 2021).

SOURCES OF REVENUES AND CASH FLOW

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


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

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epay Segment - Revenues in the epay Segment, which represented
approximately 33% of total consolidated revenues for the three months ended
March 31, 2022, are primarily derived from commissions earned from the
distribution of electronic content, vouchers, and physical gifts and commissions
or processing fees received from mobile phone operators for the processing and
distribution of prepaid mobile airtime. Branded payments, which includes the
distribution of digital media content, were 66% of epay Segment revenues for the
three months ended March 31, 2022. Branded payments include digital content such
as music, games and software, as well as, other products including prepaid long
distance calling card plans, prepaid Internet plans, prepaid debit cards, gift
cards, vouchers, transport payments, lottery payments, bill payment, and money
transfer.

Money Transfer Segment - Revenues in the Money Transfer Segment, which
represented approximately 47% of total consolidated revenues for the three
months ended March 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. We
have a sending agent network in place comprised of agents, customer service
representatives, Company-owned stores, primarily in North America, Europe and
Malaysia, and Ria, and xe branded websites, along with a worldwide network of
correspondent agents, consisting primarily of financial institutions in the
transfer destination countries. Sending and correspondent agents each earn fees
for cash collection and distribution services, which are recognized as direct
operating costs at the time of sale.

We offer a money transfer product called Walmart-2-Walmart Money Transfer
Service which allows customers to transfer money to and from Walmart stores in
the U.S. Our Ria business executes the transfers with Walmart serving as both
the sending agent and payout correspondent. Ria earns a lower margin from these
transactions than its traditional money transfers; however, the arrangement has
added a significant number of transactions to Ria's business. The agreement with
Walmart establishes Ria as the only party through which Walmart will sell U.S.
domestic money transfers branded with Walmart marks. The agreement is effective
until April 2026. Thereafter, it will automatically renew for subsequent
one year terms unless either party provides notice to the contrary. The
agreement imposes certain obligations on each party, the most significant being
service level requirements by Ria and money transfer compliance requirements by
Walmart. Any violation of these requirements by Ria could result in an
obligation to indemnify Walmart or termination of the contract by Walmart.
However, the agreement allows the parties to resolve disputes by mutual
agreement without termination of the agreement.

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

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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. As an organization, our focus is on increasing our market
presence through both physical (ATMs, POS terminals, company stores and agent
correspondents) and digital assets and providing new and improved products and
services for customers through all of our channels, which may in turn drive an
increase in the number of transactions on our networks. Each of these
opportunities also presents us with challenges, including differentiating our
portfolio of products and services in highly competitive markets, the successful
development and implementation of our software products and access to financing
for expansion.

1) The EFT Processing Segment opportunities include physical expansion into
target markets, developing value added products or services, increasing high
value DCC and surcharge transactions and efficiently leveraging our portfolio of
software solutions. Our opportunities are dependent on renewing and expanding
our card acceptance, ATM and POS management and outsourcing, cash supply and
other commercial agreements with customers and financial institutions.
Operational challenges in the EFT Processing Segment include obtaining and
maintaining the required licenses and sponsorship agreements in markets in which
we operate and navigating frequently changing rules imposed by international
card organizations, such as Visa® and Mastercard®, that govern ATM interchange
fees, direct access fees and other restrictions. Our profitability is dependent
on the laws and regulations that govern DCC transactions, specifically in the
E.U., as well as the laws and regulations of each country in which we operate
may impact the volume of cross-border and cross-currency transactions. The
timing and amount of revenues in the EFT Processing Segment is uncertain and
unpredictable due to inherent limitations in managing our estate of ATMs, which
is dependent on contracts that cover large numbers of ATMs, which are
complicated by legal and regulatory considerations of local countries, as well
as our customers' decisions whether to outsource ATMs.
25


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

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

For all segments, our continued expansion may involve additional acquisitions
that could divert our resources and management time and require integration of
new assets with our existing networks and services. Our ability to effectively
manage our growth has required us to expand our operating systems and employee
base, particularly at the management level, which has added incremental
operating costs. An inability to continue to effectively manage expansion could
have a material adverse effect on our business, growth, financial condition or
results of operations. Inadequate technology and resources would impair our
ability to maintain current processing technology and efficiencies, as well as
deliver new and innovative services to compete in the marketplace.

COVID-19


The outbreak of the COVID-19 (coronavirus) pandemic has resulted in varying
degrees of border and business closures, travel restrictions and other social
distancing orders in most of the countries where we operate during the three
months ended March 31, 2022 and 2021. As the number and rate of new cases has
fluctuated in various locations around the global, the closures, restrictions
and other social distancing orders have been modified, rescinded and/or
re-imposed. Although vaccines for COVID-19 are widely available, a significant
portion of the population remains unvaccinated and long term effectiveness of
the vaccines, especially against new variants, is still unknown. The EFT Segment
has experienced declines in certain transaction volumes due to these
restrictions, especially high-margin cross-border transactions. The epay Segment
has experienced the impacts of consumer movement restrictions in certain
markets, while other markets have been positively impacted where we have a
higher mix of digital distribution or a higher concentration of retailers that
are deemed essential and have remained open during the pandemic. The Money
Transfer Segment continues to be impacted by the pandemic-related restrictions
in certain markets that limit customers' ability to access our network of
company-owned stores and agents as well as certain restrictions that may impact
immigrant laborers.

26

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SEGMENT SUMMARY RESULTS OF OPERATIONS

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


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



                                             Operating Income (Loss) for the Three
                                                    Months Ended March 31,                Year-over-Year Change
                                                                                        Increase          Increase
                                                                                       (Decrease)        (Decrease)
(dollar amounts in thousands)                      2022                  2021            Amount           Percent
EFT Processing                               $     (6,467 )         $    (40,096 )   $     33,629            (84) %
epay                                               26,205                 29,157           (2,952 )          (10) %
Money Transfer                                     33,465                 35,403          (1,938)             (5) %
Total                                              53,203                 24,464           28,739             117 %
Corporate services, eliminations and other        (16,500 )              (14,015 )         (2,485 )            18 %
Total                                        $     36,703           $     10,449     $     26,254             251 %


Impact of changes in foreign currency exchange rates


Our revenues and local expenses are recorded in the functional currencies of our
operating entities, and then are translated into U.S. dollars for reporting
purposes; therefore, amounts we earn outside the U.S. are negatively impacted by
a stronger U.S. dollar and positively impacted by a weaker U.S. dollar. If
significant, in our discussion we will refer to the impact of fluctuations in
foreign currency exchange rates in our comparison of operating segment results.

To provide further perspective on the impact of foreign currency exchange rates,
the following table shows the changes in values relative to the U.S. dollar of
the currencies of the countries in which we have our most significant
operations:
                                                         Average Translation Rate
                                                       Three Months Ended March 31,
                                                                                         Decrease
Currency (dollars per foreign currency)                    2022              2021         Percent
Australian dollar                                    $        0.7238     $   0.7725          (6) %
British pounds sterling                              $        1.3415     $   1.3790          (3) %
Canadian dollar                                      $        0.7895     $   0.7899          (0) %
euro                                                 $        1.1221     $   1.2052          (7) %
Hungarian forint                                     $        0.0031     $   0.0033          (6) %
Indian rupee                                         $        0.0133     $   0.0137          (3) %
Malaysian ringgit                                    $        0.2387     $   0.2461          (3) %
New Zealand dollar                                   $        0.6761     $   0.7188          (6) %
Polish zloty                                         $        0.2433     $   0.2655          (8) %


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COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND
2021


EFT PROCESSING SEGMENT

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

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



Revenues

EFT Processing Segment total revenues were $145.6 million for the three months
ended March 31, 2022, an increase of $58.5 million or 67% compared to the same
period in 2021. The increase in revenues was primarily due to the increase in
domestic and international withdrawal transactions resulting from continued
lifting of travel restrictions across Europe and the increase in volume of
transactions for low-value point-of-sale transactions in Europe and low-value
payment processing transactions in Asia Pacific. Foreign currency movements
decreased revenues by approximately $8.5 million for the three months
ended March 31, 2022 compared to the same period in 2021.

Average monthly revenues per ATM increased to $1,118 for the three months
ended March 31, 2022 compared to $793 for the same period in 2021. Revenues per
transaction increased to $0.11 for the three months ended March 31,
2022 compared to $0.09 for the same period in 2021. The increases in average
monthly revenues per ATM and revenues per transaction were primarily due to the
increase in domestic and international withdrawal transactions resulting from
continued lifting of travel restrictions across Europe, partially offset by the
increase in volume of low-value point-of-sale transactions in Europe and
low-value payment processing transactions in Asia Pacific.

Direct operating costs, exclusive of depreciation

EFT Processing Segment direct operating costs were $93.3 million for
the three months ended March 31, 2022, an increase of $23.7 million or
34% compared to the same period in 2021. Direct operating costs primarily
consist of site rental fees, cash delivery costs, cash supply costs,
maintenance, insurance, telecommunications, payment scheme processing fees, data
center operations-related personnel, as well as the processing centers’
facility-related costs and other processing center-related expenses and
commissions paid to retail merchants, banks and card processors.
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The increase in direct operating costs was primarily due to the increase in the
number of ATMs under management as there were fewer deactivated ATMs during the
three months ended March 31, 2022 compared to the same period in 2021 resulting
in an increase in ATM site rental fees and cash delivery costs. Foreign currency
movements decreased direct operating costs by approximately $5.6 million for
the three months ended March 31, 2022 compared to the same period in 2021.

Gross profit


Gross profit, which is calculated as revenues less direct operating costs,
was $52.2 million for the three months ended March 31, 2022, an increase of
$34.7 million or 198% compared to $17.5 million for the same period in
2021. Gross profit as a percentage of revenues ("gross margin") increased
to 35.9% for the three months ended March 31, 2022, compared to 20.1% for the
same period in 2021. The increase in gross profit and gross margin was primarily
due to the incremental volume of transactions that were processed on our network
relative to the fixed costs incurred, and the higher proportion of high value
and high margin DCC transactions due to the lifting of travel restrictions.

Salaries and benefits


Salaries and benefits expenses were $25.2 million for the three months ended
March 31, 2022, an increase of $1.7 million or 7% compared to the same period
in 2021. The increase is primarily due to an increase in headcount to support
the growth of the business. Foreign currency movements in the countries in which
we employ our workforce decreased these expenses by $1.6 million for the three
months ended March 31, 2022 compared to the same period in 2021. As a percentage
of revenues, these expenses decreased to 17.3% for the three months ended March
31, 2022, compared to 27.1% for the same period in 2021.

Selling, general and administrative

Selling, general and administrative expenses were $11.1 million for
the three months ended March 31, 2022, a decrease of ($0.8 million) or (7%)
compared to the same period in 2021. As a percentage of revenues, these expenses
decreased to 7.6% for the three months ended March 31, 2022, compared
to 13.7% for the same period in 2021.

Depreciation and amortization


Depreciation and amortization expenses were $22.3 million for the three months
ended March 31, 2022, an increase of $0.3 million or 1% compared to the same
period in 2021. As a percentage of revenues, these expenses decreased to
15.3% for the three months ended March 31, 2022, compared to 25.3% for the same
period in 2021.

Operating loss

EFT Processing Segment had an operating loss of ($6.5 million) for the three
months ended March 31, 2022, a reduction of 84% compared to the same period
in 2021. Operating loss as a percentage of revenues ("operating margin")
decreased to (4.4%) for the three months ended March 31, 2022, compared to
(46.0%) for the same period in 2021. Operating loss per transaction was less
than ($0.01) for the three months ended March 31, 2022, compared to ($0.04) for
the same period in 2021. The decrease in operating loss, improved operating
margin and decrease in operating loss per transaction were primarily due to
increased volumes processed on our network, and associated revenues, compared to
the same period in 2021.
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EPAY SEGMENT
The following table presents the results of operations for the three months
ended March 31, 2022 and 2021 for our epay Segment:

                                                Three Months Ended
                                                    March 31,                  Year-over-Year Change
                                                                                                 Increase
                                                                              Increase          (Decrease)
(dollar amounts in thousands)                   2022          2021       (Decrease) Amount       Percent
Total revenues                              $  235,838     $ 242,303     $      (6,465 )            (3) %
Operating expenses:
Direct operating costs, exclusive of
depreciation                                   178,320       182,633            (4,313 )            (2) %
Salaries and benefits                           20,177        19,369               808                4 %
Selling, general and administrative              9,440         9,020               420                5 %
Depreciation and amortization                    1,696         2,124             (428)             (20) %
Total operating expenses                       209,633       213,146            (3,513 )            (2) %
Operating income                            $   26,205     $  29,157     $      (2,952 )           (10) %
Transactions processed (millions)                  852           667               185               28 %



Revenues

epay Segment total revenues were $235.8 million for the three months ended March
31, 2022, a decrease of ($6.5 million) or (3%) compared to the same period
in 2021. The decrease in revenues was primarily due to the $13.2 million
decrease caused by foreign currency movements for the three months ended March
31, 2022 compared to the same period in 2021 as well as a decrease in branded
payments in India, partially offset by the increase in transactions processed.

Revenues per transaction decreased to $0.28 for the three months ended March 31,
2022, compared to $0.36 for the same period in 2021. The decrease in revenues
per transaction was primarily due to the increase in the number of transactions
processed in a region where we generally earn lower revenues per transaction.

Direct operating costs, exclusive of depreciation


epay Segment direct operating costs were $178.3 million for the three months
ended March 31, 2022, a decrease of ($4.3 million) or (2%) compared to the same
period in 2021. Direct operating costs primarily consist of the commissions paid
to retail merchants for the distribution and sale of prepaid mobile airtime and
other prepaid products, expenses incurred to operate POS terminals and the cost
of vouchers sold and physical gifts fulfilled. The decrease in direct operating
costs was primarily due to the $9.5 million decrease caused by foreign currency
movements for the three months ended March 31, 2022 compared to the same period
in 2021.

Gross profit

Gross profit was $57.5 million for the three months ended March 31, 2022, a
decrease of ($2.2 million) or (4%) compared to $59.7 million for the same period
in 2021. Gross margin decreased to 24.4% for the three months ended March 31,
2022, compared to 24.6% for the same period in 2021. The decrease in gross
profit and gross margin is primarily due to decrease in revenues associated with
the shift in mix of transactions processed.

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Salaries and benefits


Salaries and benefits expenses were $20.2 million for the three months
ended March 31, 2022, an increase of $0.8 million or 4% compared to the same
period in 2021. The increase in salaries and benefits was driven by an increase
in headcount to support the growth of the business, partially offset by a $1.1
million decrease from foreign currency movements for the three months ended
March 31, 2022 compared to the same period in 2021. As a percentage of revenues,
these expenses increased to 8.6% for the three months ended March 31, 2022,
compared to 8.0% for the same period in 2021.

Selling, general and administrative

Selling, general and administrative expenses were $9.4 million for
the three months ended March 31, 2022, an increase of $0.4 million or 5%
compared to the same period in 2021. As a percentage of revenues, these expenses
increased to 4.0% for the three months ended March 31, 2022, compared to
3.7% for the same period in 2021.

Depreciation and amortization


Depreciation and amortization expenses were $1.7 million for the three months
ended March 31, 2022, a decrease of ($0.4 million) or (20%) compared to the same
period in 2021. Depreciation and amortization expense primarily represents
depreciation of POS terminals we install in retail stores and amortization of
acquired intangible assets. As a percentage of revenues, these expenses
decreased to 0.7% for the three months ended March 31, 2022, compared to
0.9% for same period in 2021.

Operating income


epay Segment operating income was $26.2 million for the three months ended March
31, 2022, a decrease of ($3.0 million) or (10%) compared to the same period
in 2021. Operating margin decreased to 11.1% for the three months ended March
31, 2022, compared to 12.0% for the same period in 2021. Operating income per
transaction decreased to $0.03 for the three months ended March 31, 2022
compared to $0.04 for same period in 2021. The decreases in operating income,
operating margin and operating income per transaction for the three months ended
March 31, 2022 compared to the same period in 2021 were primarily due to the
shift in mix of transactions processed.

31

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MONEY TRANSFER SEGMENT

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

                                               Three Months Ended
                                                   March 31,                  Year-over-Year Change
                                                                                               Increase
                                                                            Increase          (Decrease)
(dollar amounts in thousands)                  2022          2021       (Decrease) Amount      Percent
Total revenues                             $  338,966     $ 324,900     $     14,066                4 %
Operating expenses:
Direct operating costs, exclusive of
depreciation                                  188,397       183,878            4,519                2 %
Salaries and benefits                          67,225        60,540            6,685               11 %
Selling, general and administrative            41,037        36,116            4,921               14 %
Depreciation and amortization                   8,842         8,963             (121 )            (1) %
Total operating expenses                      305,501       289,497           16,004                6 %
Operating income                           $   33,465     $  35,403     $     (1,938 )            (5) %
Transactions processed (millions)                33.5          31.2              2.3                7 %


Revenues

Money Transfer Segment total revenues were $339.0 million for the three months
ended March 31, 2022, an increase of $14.1 million or 4% compared to the same
period in 2021. The increase in revenues was primarily due to the increase in
international-originated money transfers, U.S. outbound transactions, and
direct-to-consumer digital transactions, partially offset by a decrease in U.S.
domestic transactions. Revenues per transaction decreased to $10.12 for the
three months ended March 31, 2022, compared to $10.41 for the same period
in 2021 due to a shift in the mix of transactions processed. Foreign currency
movements decreased revenues by approximately $11.9 million for the three months
ended March 31, 2022 compared to the same period in 2021.

Direct operating costs, exclusive of depreciation


Money Transfer Segment direct operating costs were $188.4 million for
the three months ended March 31, 2022, an increase of $4.5
million or 2% compared to the same period in 2021. Direct operating costs
primarily consist of commissions paid to agents who originate money transfers on
our behalf and correspondent agents who disburse funds to the customers'
destination beneficiaries, together with less significant costs, such as bank
depository fees. The increase in direct operating costs was primarily due to the
increase in the number of international-originated and U.S. outbound money
transfer transactions, partially offset by foreign currency movements that
decreased direct operating costs by approximately $5.9 million for the three
months ended March 31, 2022 compared to the same period in 2021.

Gross profit


Gross profit was $150.6 million for the three months ended March 31, 2022, an
increase of $9.6 million or 7% compared to $141.0 million for the same period in
2021. Gross margin increased to 44.4% for the three months ended March 31, 2022,
compared to 43.4% for the same period in 2021. The increase in gross profit and
gross margin was primarily due to increases in international-originated money
transfers, U.S. outbound money transfers and direct-to-consumer digital
transactions.
32


--------------------------------------------------------------------------------

Salaries and benefits


Salaries and benefits expenses were $67.2 million for the three months ended
March 31, 2022, an increase of $6.7 million or 11% compared to the same period
in 2021. The increase in salaries and benefits was primarily driven by an
increase in headcount to support the growth of the business. As a percentage of
revenues, these expenses increased to 19.8% for the three months ended March 31,
2022, compared to 18.6% for the same period in 2021.

Selling, general and administrative


Selling, general and administrative expenses were $41.0 million for
the three months ended March 31, 2022, an increase of $4.9 million
or 14% compared to the same period in 2021. The increase was primarily due to an
increase in marketing expenses and travel related expenses. As a percentage of
revenues, these expenses increased to 12.1% for the three months ended March 31,
2022, compared to 11.1% for the same period in 2021.

Depreciation and amortization


Depreciation and amortization expenses were $8.8 million for the three months
ended March 31, 2022, a decrease of ($0.1 million) or (1%) compared to the same
period in 2021. 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 2.6% for the three months
ended March 31, 2022, compared to 2.8% for the same period in 2021.

Operating income


Money Transfer Segment operating income was $33.5 million for the three months
ended March 31, 2022, a decrease of ($1.9 million) or (5%) compared to the same
period in 2021. Operating margin decreased to 9.9% for the three months ended
March 31, 2022, compared to 10.9% for the same period in 2021. The decreases in
operating income and operating margin were primarily driven by the increase in
salaries and selling, general and administrative expenses incurred. Operating
income per transaction decreased to $1.00 for the three months ended March 31,
2022, compared to $1.13 for the same period in 2021 due to a shift in the mix of
transactions processed.
CORPORATE SERVICES
The following table presents the operating expenses for the three months
ended March 31, 2022 and 2021 for Corporate Services:
                                              Three Months Ended
                                                   March 31,                  Year-over-Year Change
                                                                                               Increase
                                                                            Increase          (Decrease)
(dollar amounts in thousands)                 2022           2021       (Decrease) Amount      Percent
Salaries and benefits                     $    14,126     $  12,188      $     1,938               16 %
Selling, general and administrative             2,265         1,680              585               35 %
Depreciation and amortization                     109           147              (38 )           (26) %
Total operating expenses                  $    16,500     $  14,015      $     2,485               18 %



33

——————————————————————————–

Corporate operating expenses


Total Corporate operating expenses were $16.5 million for the three months ended
March 31, 2022, an increase of $2.5 million or 18% compared to the same period
in 2021. The increase is primarily due to a $1.3 million increase in share based
compensation.

OTHER EXPENSE, NET
                                             Three Months Ended
                                                  March 31,                 Year-over-Year Change
                                                                                             Increase
                                                                          Increase          (Decrease)
(dollar amounts in thousands)                2022          2021       (Decrease) Amount      Percent
Interest income                           $     145     $     182      $       (37 )           (20) %
Interest expense                             (6,134 )      (9,189 )          3,055             (33) %
Foreign currency exchange loss, net          (5,462 )      (4,032 )         (1,430 )             35 %
Other gains, net                                192            31              161              519 %
Other expense, net                        $ (11,259 )   $ (13,008 )   $      1,749             (13) %


Interest expense

Interest expense was $6.1 million for the three months ended March 31, 2022, a
decrease of ($3.1 million) or (33%) compared to the same period in 2021. The
decrease in interest expense relates to the $3.9 million accretion expense
incurred for the three months ended March 31, 2021, which was reduced to $0 for
the three months ended March 31, 2022 as a result of the adoption of ASU
2020-06, partially offset by increased borrowings on the revolving Credit
Facility for the three months ended March 31, 2022 compared to the same period
in 2021. See Footnote 2, Recently Issued and Adopted Accounting
Pronouncements, for more information on the impact of this adoption.

Foreign currency exchange loss, net


Foreign currency exchange activity includes gains and losses on certain foreign
currency exchange derivative contracts and the impact of remeasurement of assets
and liabilities denominated in foreign currencies. Assets and liabilities
denominated in currencies other than the local currency of each of our
subsidiaries give rise to foreign currency exchange gains and losses. Foreign
currency exchange gains and losses that result from remeasurement of these
assets and liabilities are recorded in net income. The majority of our foreign
currency exchange gains or losses are due to the remeasurement of intercompany
loans which are not considered a long-term investment in nature and are in a
currency other than the functional currency of one of the parties to the loan.
For example, we make intercompany loans based in euros from our corporate
division, which is composed of U.S. dollar functional currency entities, to
certain European entities that use the euro as the functional currency. As the
U.S. dollar strengthens against the euro, foreign currency exchange losses are
recognized by our corporate entities because the number of euros to be received
in settlement of the loans decreases in U.S. dollar terms. Conversely, in this
example, in periods where the U.S. dollar weakens, our corporate entities will
record foreign currency exchange gains.

We recorded net foreign currency exchange losses of $5.5 million and $4.0
million for the three months ended March 31, 2022 and 2021, respectively. These
realized and unrealized foreign currency exchange losses reflect the fluctuation
in the value of the U.S. dollar against the currencies of the countries in which
we operated during the respective periods.

INCOME TAX EXPENSE


Our effective income tax rate was 67.4% and (236.9%) for the three months ended
March 31, 2022 and 2021, respectively. Our effective income tax rate for
the three months ended March 31, 2022 was higher than the applicable statutory
income tax rate of 21% as a result of the Company's U.S. deferred tax activity
on foreign exchange positions and certain foreign earnings of the Company being
subject to higher local statutory tax rates. Our effective income tax rate for
the three months ended March 31, 2021 was lower than the applicable statutory
income tax rate of 21% as a result of the non-recognition of tax benefits from
losses in certain foreign countries where we have a limited history of
profitable earnings, certain foreign earnings of the Company being subject to
higher local statutory tax rates, and the Company's U.S. deferred tax activity
on foreign exchange positions.

34

——————————————————————————–

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 $8.3 million for the three months ended
March 31, 2022, an increase of $17.0 million or 196% compared to the net loss in
the same period in 2021. The increase in net income was primarily attributable
to the $65.8 million increase in revenues, largely driven by the increases
within the EFT Segment as tourism and cross-border travel increased during the
first quarter of 2022 compared to the first quarter of 2021. The increased
revenues led to a $42.2 million increase in gross profit, with $34.7 million of
this increase within the EFT Segment. The increase in gross profit was partially
offset by an $11.1 million increase in salaries and benefits expense, an $11.1
million increase in income tax expense and a $5.1 million increase in selling,
general and administrative expense.

LIQUIDITY AND CAPITAL RESOURCES

Working capital


As of March 31, 2022, we had working capital of $1,354.9 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. The decrease in working capital was primarily due to the $346.2 million
acquisition of PBMA and the $70.4 million of share repurchases, partially offset
by a $303.5 million increase in borrowing on the Credit Facility as of March 31,
2022 compared to December 31, 2021. Our ratio of current assets to current
liabilities was 1.77 and 1.79 at March 31, 2022 and December 31, 2021,
respectively.

We require substantial working capital to finance operations. The Money Transfer
Segment funds the payout of the majority of our consumer-to-consumer money
transfer services before receiving the benefit of amounts collected from
customers by agents. Working capital needs increase due to weekends and banking
holidays. As a result, we may report more or less working capital for the Money
Transfer Segment based solely upon the day on which the reporting period ends.
The epay Segment produces positive working capital, some of which is restricted
in connection with the administration of its customer collection and vendor
remittance activities. In our EFT Processing Segment, we obtain a significant
portion of the cash required to operate our ATMs through various cash supply
arrangements, the amount of which is not recorded on Euronet's Consolidated
Balance Sheets. However, in certain countries, we fund the cash required to
operate our ATM network from borrowings under the revolving credit facilities
and cash flows from operations. As of March 31, 2022, we had $644.4 million of
our own cash in use or designated for use in our ATM network, which is recorded
in ATM cash on Euronet's Consolidated Balance Sheet. ATM cash increased $101.0
million from $543.4 million as of December 31, 2021 to $644.4 million as of
March 31, 2022 as a result of the increase in number of active ATMs as of March
31, 2022 compared to December 31, 2021.The Company has $986.5 million of
unrestricted cash as of March 31, 2022 compared to $1,260.5 million as of
December 31, 2021. The decrease in unrestricted cash was primarily due to the
$346.2 million acquisition of PBMA, the $101.0 million allocated from
unrestricted cash to ATM cash and the $70.4 million of share repurchases during
the first quarter of 2022, partially offset by the $303.5 million increase in
borrowings on the Credit Facility. Including the $644.4 million of cash in ATMs
at March 31, 2022, the Company has access to $1,630.9 million in available cash,
and $386.8 million available under the Credit Facility with no significant
long-term debt principal payments until October 2023.
35


--------------------------------------------------------------------------------

The following table identifies cash and cash equivalents provided by/(used in)
our operating, investing and financing activities for
the three months ended March 31, 2022 and 2021 (in thousands):

                                                                 Three Months Ended
                                                                      March 31,
Liquidity                                                        2022           2021
Cash and cash equivalents and restricted cash provided by
(used in):
Operating activities                                         $    5,671     $   (2,645 )
Investing activities                                           (356,848 )      (18,225 )
Financing activities                                            235,312    

(269,211 )
Effect of foreign currency exchange rate changes on cash and
cash equivalents and restricted cash

                            (37,542 )   

(53,188 )
Decrease in cash and cash equivalents and restricted cash $ (153,407 ) $ (343,269 )




Operating activity cash flow

Cash flows provided by operating activities were $5.7 million for the three
months ended March 31, 2022 compared to cash flows used in operating activities
of $2.6 million for the same period in 2021. The increase in operating cash
flows was primarily due to the $17.0 million increase in net income, partially
offset by fluctuations in working capital mainly associated with the timing of
the settlement processes with content providers in the epay Segment, with
correspondents in the Money Transfer Segment, and with card organizations and
banks in the EFT Processing Segment.

Investing activity cash flow


Cash flows used in investing activities were $356.8 million for the three months
ended March 31, 2022 compared to $18.2 million for the same period in 2021. The
increase in cash used in investing activities is primarily due to the $331.0
million of cash paid at the closing of PBMA during the quarter. Additionally, we
used $23.8 million for purchases of property and equipment for the three months
ended March 31, 2022 compared to $16.4 million for the same period in 2021. The
increase in purchases of property and equipment is primarily due to the prior
quarter expenditures being reduced by the COVID-19 related impacts to the EFT
segment. Cash used for software development and other investing activities
totaled $2.1 million and $1.8 million for the three months ended March 31, 2022
and 2021, respectively.

Financing activity cash flow


Cash flows provided by financing activities were $235.3 million for the three
months ended March 31, 2022 compared to cash flows used in financing activities
of $269.2 million for the same period in 2021. Our borrowing activities on the
Credit Facility for the three months ended March 31, 2022 consisted of net
borrowings of $303.5 million compared to net repayments of $270.4 million for
the same period in 2021. The increase in net borrowings on the Credit Facility
is primarily the result of treasury management relating to settlement
requirements across currencies as well as increased funding requirements for
acquisitions and share repurchases during the first quarter of 2022. We
repurchased $70.5 million of common stock during the first quarter of 2022
compared to repurchases of $0.8 million during the first quarter of 2021. We
received proceeds of $2.3 million and $3.7 million during the three months ended
March 31, 2022 and 2021, respectively, for the issuance of stock in connection
with our Stock Incentive Plan.

Other sources of capital


Credit Facility - On October 17, 2018, the Company entered into a $1.0 billion
unsecured credit agreement (the "Credit Facility") that expires on October 17,
2023. The Credit Facility allows for borrowings in Australian dollars, British
pounds sterling, Canadian dollars, Czech koruna, Danish krone, euro, Hungarian
forints, Japanese yen, New Zealand dollars, Norwegian krone, Polish zlotys,
Swedish krona, Swiss francs, and U.S. dollars. The Credit Facility contains a
$200 million sublimit for the issuance of letters of credit, a $50 million
sublimit for U.S. Dollar swingline loans, and a $90 million sublimit for certain
foreign currencies swingline loans.

As of March 31, 2022, fees and interest on borrowings are based upon our
corporate credit rating (as defined in the credit agreement) and are based, in
the case of letter of credit fees, on a margin, and in the case of interest, on
a margin over the London InterBank Offered Rate ("LIBOR") or a margin over the
base rate, as selected by us, with the applicable margin ranging from 1.125% to
2.0% (or 0.175% to 1.0% for base rate loans).
36


--------------------------------------------------------------------------------

As of March 31, 2022, we had $586.9 million of borrowings and $56.3 million of
stand-by letters of credit outstanding under the Credit Facility. The
remaining $386.8 million under the Credit Facility was available for borrowing.


Convertible debt - On March 18, 2019, we completed the sale of $525.0 million in
principal amount of Convertible Senior Notes due 2049 ("Convertible Notes"). The
Convertible Notes were issued pursuant to an indenture, dated as of March 18,
2019 (the "Indenture"), by and between us and U.S. Bank National Association, as
trustee. The Convertible Notes have an interest rate of 0.75% per annum payable
semi-annually in March and September, and are convertible into shares of Euronet
common stock at a conversion price of approximately $188.73 per share if certain
conditions are met (relating to the closing prices of Euronet common stock
exceeding certain thresholds for specified periods). Holders of the Convertible
Notes have the option to require us to repurchase for cash all or part of their
Convertible Notes on each of March 15, 2025, 2029, 2034, 2039 and 2044 at a
repurchase price equal to 100% of the principal amount of the Convertible Notes
to be repurchased, plus accrued and unpaid interest to, but excluding, the
relevant repurchase date. In connection with the issuance of the Convertible
Notes, we recorded $12.8 million in debt issuance costs, which are being
amortized through March 1, 2025.

Senior Notes - On May 22, 2019, we completed the sale of €600 million ($669.9
million) aggregate principal amount of Senior Notes that expire on May 2026 (the
"Senior Notes"). The Senior Notes accrue interest at a rate of 1.375% per year,
payable annually in arrears on May 22 of each year, until maturity or earlier
redemption. As of March 31, 2022, we have outstanding €600 million ($663.9
million) principal amount of the Senior Notes. In addition, we may redeem some
or all of these notes on or after February 22, 2026 at their principal amount
plus any accrued and unpaid interest.

Other debt obligations - Certain of our subsidiaries have available credit lines
and overdraft facilities to generally supplement short-term working capital
requirements, when necessary. There were $0.4 million and
$0.9 million outstanding under these other obligation arrangements as of March
31, 2022 and December 31, 2021, respectively.

Other uses of capital


Capital expenditures and needs - Total capital expenditures for the three months
ended March 31, 2022 were $23.8 million. These capital expenditures were
primarily for the purchase and installation of ATMs in key under-penetrated
markets, the purchase of POS terminals for the epay and Money Transfer Segments,
and office, data center and company store computer equipment and software. Total
capital expenditures for 2022 are currently estimated to range from
approximately $95 million to $100 million.

At current and projected cash flow levels, we anticipate that cash generated
from operations, together with cash on hand and amounts available under our
Credit Facility and other existing and potential future financing will be
sufficient to meet our debt, leasing, and capital expenditure obligations. If
our capital resources are not sufficient to meet these obligations, we will seek
to refinance our debt and/or issue additional equity under terms acceptable to
us. However, we can offer no assurances that we will be able to obtain favorable
terms for the refinancing of any of our debt or other obligations or for the
issuance of additional equity.

Inflation and functional currencies


Generally, the countries in which we operate have experienced low and stable
inflation in recent years. Therefore, the local currency in each of these
markets is the functional currency. Currently, we do not believe that inflation
will have a significant effect on our results of operations or financial
position. We continually review inflation and the functional currency in each of
the countries where we operate.

OFF BALANCE SHEET ARRANGEMENTS


On occasion, we grant guarantees of the obligations of our subsidiaries and we
sometimes enter into agreements with unaffiliated third parties that contain
indemnification provisions, the terms of which may vary depending on the
negotiated terms of each respective agreement. Our liability under such
indemnification provisions may be subject to time and materiality limitations,
monetary caps and other conditions and defenses. As of March 31, 2022, there
were no material changes from the disclosure in our Annual Report on Form 10-K
for the year ended December 31, 2021. To date, we are not aware of any
significant claims made by the indemnified parties or parties to whom we have
provided guarantees on behalf of our subsidiaries and, accordingly, no
liabilities have been recorded as of March 31, 2022. See also Note 14,
Commitments, to the unaudited consolidated financial statements included
elsewhere in this report.

CONTRACTUAL OBLIGATIONS


As of March 31, 2022, there have been no material changes outside the ordinary
course of business in our future contractual obligations from the amounts
reported within our Annual Report on Form 10-K for the year ended December 31,
2021.
37

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