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MoneyGram (MGI) Q4 Earnings Beat on Record Digital Revenues
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MoneyGram International, Inc. reported fourth-quarter 2022 adjusted earnings per share of 23 cents, which beat the Zacks Consensus Estimate by 77%. The bottom line rose 4.5% year over year.
The company’s fourth-quarter results benefited from lower operating expenses and higher investment income due to higher short-term interest rates. Strong contributions from the Global Funds Transfer and Financial Paper Products segments also contributed to the quarterly results.
Revenues improved 5% year over year to $342.1 million and beat the consensus mark by 1.1%.
MoneyGram International Inc. Price, Consensus and EPS Surprise
Fee and other revenues of $323.1 million inched up 0.1% year over year in the fourth quarter but missed the consensus mark of $326 million. Investment revenues increased 10 times to $19 million year over year, higher than the Zacks Consensus Estimate of $12.2 million.
Total operating expenses decreased 9% year over year to $125.5 million, mainly due to higher legal accruals recorded in the fourth quarter of 2021 and lower fourth-quarter transaction and operations support costs. Interest expense of $14.2 million rose 21% year over year in the quarter under review due to higher prevailing interest rates.
Adjusted EBITDA increased 4% year over year to $63.6 million. Adjusted EBITDA margin of 18.6% deteriorated 20 basis points year over year.
Segments in Detail
Global Funds Transfer
The segment reported revenues of $312.2 million, which inched up 0.3% year over year on the back of growing money transfer revenues. Segmental gross profit grew 1.3% year over year to $142.7 million.
Money transfer transactions improved 8% year over year in the fourth quarter. Cross-border online revenues of MoneyGram Online climbed 9% year over year, while transactions climbed 14% year over year. Active cross-border customer growth rose 11% year over year in the quarter under review.
Digital transactions increased 47% year over year, accounting for 47% of MoneyGram’s money transfer operations at the fourth-quarter end. Digital revenues attained a record figure of $98.6 million, climbing 33% year over year.
Financial Paper Products
Total revenues of $29.9 million increased 124.8% year over year. While money order revenues of $11.9 million improved 20.2% year over year, official check revenues increased more than five-fold to $18 million year over year. The segment reported a gross profit of $17.9 million for the fourth quarter, which grew 36.6% year over year.
Financial Position (as of Dec 31, 2022)
MoneyGram exited 2022 with cash and cash equivalents of $172.1 million, higher than $155.2 million at 2021-end. MGI’s payment service obligations of $3,607.2 million inched up from $3,591 million at 2021-end. Net debt dipped to $785.4 million from $786.7 million at 2021-end.
Adjusted free cash flow of $23.3 million plunged 32.2% year over year in the fourth quarter.
Capital expenditures came in at $13.6 million compared with $10 million in the year-ago period.
Merger Update
MoneyGram is expected to be acquired by Chicago-based private equity firm Madison Dearborn Partners, LLC, for $1.8 billion. The company is awaiting the Approval of Reserve Bank of India, after which a marketing period of 15 days will prevail, and the transaction will close a few business days after.
Euronet Worldwide reported fourth-quarter 2022 adjusted earnings of $1.39 per share, which outpaced the Zacks Consensus Estimate by 14.9% and our estimate of $1.20. The bottom line improved 21% year over year.
Total revenues amounted to $865.7 million, which rose 7% year over year or 16% on a constant-currency basis in the quarter under review. The top line beat the consensus mark by a whisker and our estimate of $855 million.
Synchrony Financial reported fourth-quarter 2022 adjusted earnings per share of $1.26, which outpaced the Zacks Consensus Estimate by 12.5%. However, the bottom line dropped nearly 15% year over year.
The net interest income of SYF amounted to $4,106 million, which improved 7.2% year over year. The top line beat the consensus mark by 1.7% and exceeded our estimate of $3,930.2 million.
American Express reported its fourth-quarter 2022 earnings of $2.07 per share, missing the Zacks Consensus Estimate of $2.18. The bottom line also decreased 5% year over year.
For the quarter under review, AXP’s total revenues net of interest expense increased 17% year over year to $14,176 million. The top line, however, missed the Zacks Consensus Estimate of $14,246 million.
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MoneyGram (MGI) Q4 Earnings Beat on Record Digital Revenues
MoneyGram International, Inc. reported fourth-quarter 2022 adjusted earnings per share of 23 cents, which beat the Zacks Consensus Estimate by 77%. The bottom line rose 4.5% year over year.
The company’s fourth-quarter results benefited from lower operating expenses and higher investment income due to higher short-term interest rates. Strong contributions from the Global Funds Transfer and Financial Paper Products segments also contributed to the quarterly results.
Revenues improved 5% year over year to $342.1 million and beat the consensus mark by 1.1%.
MoneyGram International Inc. Price, Consensus and EPS Surprise
MoneyGram International Inc. price-consensus-eps-surprise-chart | MoneyGram International Inc. Quote
Quarterly Operational Update
Fee and other revenues of $323.1 million inched up 0.1% year over year in the fourth quarter but missed the consensus mark of $326 million. Investment revenues increased 10 times to $19 million year over year, higher than the Zacks Consensus Estimate of $12.2 million.
Total operating expenses decreased 9% year over year to $125.5 million, mainly due to higher legal accruals recorded in the fourth quarter of 2021 and lower fourth-quarter transaction and operations support costs. Interest expense of $14.2 million rose 21% year over year in the quarter under review due to higher prevailing interest rates.
Adjusted EBITDA increased 4% year over year to $63.6 million. Adjusted EBITDA margin of 18.6% deteriorated 20 basis points year over year.
Segments in Detail
Global Funds Transfer
The segment reported revenues of $312.2 million, which inched up 0.3% year over year on the back of growing money transfer revenues. Segmental gross profit grew 1.3% year over year to $142.7 million.
Money transfer transactions improved 8% year over year in the fourth quarter. Cross-border online revenues of MoneyGram Online climbed 9% year over year, while transactions climbed 14% year over year. Active cross-border customer growth rose 11% year over year in the quarter under review.
Digital transactions increased 47% year over year, accounting for 47% of MoneyGram’s money transfer operations at the fourth-quarter end. Digital revenues attained a record figure of $98.6 million, climbing 33% year over year.
Financial Paper Products
Total revenues of $29.9 million increased 124.8% year over year. While money order revenues of $11.9 million improved 20.2% year over year, official check revenues increased more than five-fold to $18 million year over year. The segment reported a gross profit of $17.9 million for the fourth quarter, which grew 36.6% year over year.
Financial Position (as of Dec 31, 2022)
MoneyGram exited 2022 with cash and cash equivalents of $172.1 million, higher than $155.2 million at 2021-end. MGI’s payment service obligations of $3,607.2 million inched up from $3,591 million at 2021-end. Net debt dipped to $785.4 million from $786.7 million at 2021-end.
Adjusted free cash flow of $23.3 million plunged 32.2% year over year in the fourth quarter.
Capital expenditures came in at $13.6 million compared with $10 million in the year-ago period.
Merger Update
MoneyGram is expected to be acquired by Chicago-based private equity firm Madison Dearborn Partners, LLC, for $1.8 billion. The company is awaiting the Approval of Reserve Bank of India, after which a marketing period of 15 days will prevail, and the transaction will close a few business days after.
Zacks Rank
MoneyGram currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Industry Releases
Other Financial-Miscellaneous Services industry players that have reported results so far are Euronet Worldwide (EEFT - Free Report) , Synchrony Financial (SYF - Free Report) and American Express Company (AXP - Free Report) . Let’s see how they’ve performed.
Euronet Worldwide reported fourth-quarter 2022 adjusted earnings of $1.39 per share, which outpaced the Zacks Consensus Estimate by 14.9% and our estimate of $1.20. The bottom line improved 21% year over year.
Total revenues amounted to $865.7 million, which rose 7% year over year or 16% on a constant-currency basis in the quarter under review. The top line beat the consensus mark by a whisker and our estimate of $855 million.
Synchrony Financial reported fourth-quarter 2022 adjusted earnings per share of $1.26, which outpaced the Zacks Consensus Estimate by 12.5%. However, the bottom line dropped nearly 15% year over year.
The net interest income of SYF amounted to $4,106 million, which improved 7.2% year over year. The top line beat the consensus mark by 1.7% and exceeded our estimate of $3,930.2 million.
American Express reported its fourth-quarter 2022 earnings of $2.07 per share, missing the Zacks Consensus Estimate of $2.18. The bottom line also decreased 5% year over year.
For the quarter under review, AXP’s total revenues net of interest expense increased 17% year over year to $14,176 million. The top line, however, missed the Zacks Consensus Estimate of $14,246 million.