• Net Income: $3.9 million, slightly lower than $4 million for the same period last year.

• Revenue: $24 million, a 2% increase from the same period last year.

• EBITDA Margin: 29% compared to 28% for the same period last year.

• Operating Expenses: Increased by about $100,000 or 1%.

• Net Operating Income: $6.75 million, 5% higher than the same period last year.

• Revenue Growth by Product Line: Banknotes increased by $210,000 or 1%; Payments increased by 5%.

• Revenue by Geographic Location: United States revenue grew by 3%; Canada revenue declined by 6%.

• Share Buyback: 96,000 shares bought back for $1.8 million USD.

• Return on Equity (ROE): 9% compared to 17% for the same period last year.

• Payments Processed: Nearly 40,000 payments, representing $3.38 billion in volume.

• Employee Count: 384 employees as of July 31, 2024, down from 391 as of April 30, 2024.

• Warning! GuruFocus has detected 3 Warning Sign with CURN.

Release Date: September 12, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Currency Exchange International Corp (CURN) reported a 19% increase in revenue for the third quarter of 2024 compared to the second quarter, consistent with typical growth patterns.

• The company's net income in the United States grew by 13% to $5.14 million, showcasing strong performance in the U.S. market.

• The payments product line in the United States experienced a significant growth of 27% in the last three months, driven by new customer acquisitions and increased activity from existing financial institutions.

• The company successfully added Maryland and Iowa to its network, expanding its online services to almost 93% of the United States population.

• Currency Exchange International Corp (CURN) is focusing on international expansion, with new clients in London and potential partnerships with sizable banks in the pipeline.

Negative Points

• Net income for the third quarter was slightly lower at $3.9 million compared to $4 million for the same period last year.

• The company's return on equity (ROE) decreased to 9% from 17% in the same period last year.

• Revenue in Canada declined by 6% in the third quarter compared to the same period last year, primarily due to reduced transactional volumes and economic pressures.

• Operating expenses increased by 1% for the three-month period ended July 31, 2024, slightly impacting profitability.

• The Mexican peso contributed to net foreign exchange losses for the three-month period ended July 31, 2024, contrasting with gains in the same period last year.

Q & A Highlights

Q: Could you expand on the Canadian revenue decline, particularly in payments, and discuss the impact of inflation and trust agreements? A: Randolph Pinna, CEO, explained that the decline in payments revenue is due to reduced margins as fintechs push for lower spreads. Despite increased transaction volumes, profits are down. Inflation has led to cautious purchasing behavior among clients. The trust agreement with a multibillion-dollar trust company is in place but hasn't gained traction due to credit concerns from large banks.