Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

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

 our business plans and financing plans and requirements;

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

 trends affecting our business;

 the adequacy of capital to meet our capital requirements and expansion plans;

 the assumptions underlying our business plans;

 our ability to repay indebtedness;

 our estimated capital expenditures;

 the potential outcome of loss contingencies;

 our expectations regarding the closing of any pending acquisitions;

 our ability to successfully integrate acquired businesses and to realize any anticipated synergies;

 business strategy;

 government regulatory action;

 the expected effects of changes in laws or accounting standards;

 the impact of pandemics on our results of operations and financial positions;

 technological advances; and

 projected costs and revenues.

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

Investors are cautioned that any forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may materially differ from those in the forward-looking statements as a result of various factors, including but not limited to, the Company's ability to retain customers and retain and hire key personnel and maintain relationships with their suppliers and customers, and on their operating results and businesses generally; the risk of rating agency actions and the Company's ability to access short- and long-term debt markets on a timely and affordable basis; conditions in world financial markets and general economic conditions, including impacts from pandemics or other disease outbreaks; inflation; tariffs; military conflicts 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, including artificial intelligence, 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 dynamic currency conversion transactions, stablecoins and digital currencies; 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. These risks and other risks are described in the Company's filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Copies of these filings may be obtained via the SEC's Edgar website or 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.

OVERVIEW

COMPANY OVERVIEW, GEOGRAPHIC LOCATIONS AND PRINCIPAL PRODUCTS AND SERVICES

Euronet is a leading global financial technology solutions and 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, point-of-sale ("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 meets the needs of financial institutions and consumers through Euronet-owned and outsourced ATMs and POS terminals combined with value added and transaction processing services. We deploy and operate our own ATMs, providing ATM services for financial institutions and providing electronic payment processing solutions. EFT offers a suite of integrated electronic financial transaction software solutions for electronic payment and transaction delivery systems. Transactions processed span a network of 52,579 installed ATMs and approximately 608,000 POS terminals. EFT operates in 70 countries.

2) The epay Segment provides retail payment solutions and delivers innovative connections between the digital content of the world's leading brands and consumers. epay has one of the largest retail networks across Europe and Asia for the distribution of physical and digital third-party content, including branded payments, mobile, and alternative payments, partnering with 1,000+ of the world's leading brands. In addition, through our own products, we have leveraged our technology to solve business challenges, delivering scalable solutions to drive efficiency and effectiveness. Our comprehensive range of consumer products simplifies transactions and provides financial convenience across a wide range of branded payments. epay operates in 66 countries. We operate a network that includes approximately 731,000 POS terminals that enable electronic processing of prepaid mobile airtime "top-up" services and other digital media content.

3) The Money Transfer Segment provides global money transfers and currency exchange information in retail stores, apps, and websites through Ria Money Transfer, Xe and the Dandelion cross-border real-time payments network. Euronet's Money Transfer segment offers real-time, cross-border payments to consumers and businesses across 200 countries and territories, enabling banks, fintechs and big tech platforms to integrate an international payments solution into their own platforms. Ria Money Transfer offers real-time international money transfers with a special focus on emerging markets. In addition, Ria offers safe and affordable money transfers through a global network of cash locations and online, serving over 20 million customers annually. Xe offers web and app-based currency information and industry-leading consumer and business cross-border money transfer services. Customers can send money, buy property overseas, and execute other international payments via the Xe website or app. Dandelion offers consumer and business transaction processing and fulfillment with alternative payout channels like bank accounts, cash pick-up and mobile wallets. Dandelion powers cross-border payments for Xe and Ria, as well as third party banks, fintechs, and big tech platforms. Money Transfer Segment has digital connections to 4.1 billion bank accounts and 3.7 billion digital wallet accounts.

Our executive offices are located in Leawood, Kansas, USA. With approximately 74% 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, 2025).

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 29% of total consolidated revenues for the three months ended March 31, 2026 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.

epay Segment - Revenues in the epay Segment, which represented approximately 29% of total consolidated revenues for the three months ended March 31, 2026 are primarily derived from commissions or processing fees received 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. The proportion of epay Segment revenues earned from the distribution of prepaid mobile phone time has decreased over time, and digital media content now produces approximately 75% of epay Segment revenues. Digital media content offered by this segment includes 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 42% of total consolidated revenues for the three months ended March 31, 2026, 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, 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. The Dandelion cross-border payments platform provides financial institutions, fintechs such as digital wallets and banks, and enterprise software companies access to Euronet's money transfer network through an API connection. 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.

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

Opportunities and Challenges

The 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, POS and merchant acquiring services, 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. These laws and regulations may impact our 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. Our ATM estate is dependent on contracts that cover large numbers of ATMs, and management is complicated by legal and regulatory considerations of local countries, as well as customers' decisions whether to outsource ATMs. Inflationary pressure may impact our business as travelers have less cash available to spend on vacations.

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 inherent 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. Recently, inflation has been increasing our cost structure in many parts of the world in which we operate.

SEGMENT SUMMARY RESULTS OF OPERATIONS

Revenues and operating income by segment for the three months ended March 31, 2026 and 2025 are summarized in the tables below:

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:

COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED MARCH, 31, 2026 AND 2025

EFT PROCESSING SEGMENT

The following table summarizes the results of operations for our EFT Processing Segment for the three months ended March 31, 2026 and 2025:

Revenues

EFT Processing Segment total revenues were $295.4 million for the three months ended March 31, 2026, an increase of $62.9 million or 27% compared to the same period in 2025. Revenue growth was driven by continued growth in acquiring, REN infrastructure sales and contributions from the CoreCard acquisition completed in the fourth quarter of 2025. Fluctuations in foreign currency exchange rates increased revenues by approximately $17.6 million for the three months ended March 31, 2026 compared to the same period in 2025.

Direct operating costs

EFT Processing Segment direct operating costs were $175.2 million for the three months ended March 31, 2026, an increase of $38.7 million or 28% compared to the same period in 2025. 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. The primary drivers of the increase in direct costs were additional expenses required to support increased business volumes from both new (CoreCard) and existing operations. Direct costs were also impacted by overall cost inflation in products and services. Fluctuations in foreign currency exchange rates increased direct operating costs by approximately $11.9 million for the three months ended March 31, 2026 compared to the same period in 2025.

Gross profit

Gross profit, which is calculated as revenues less direct operating costs, was $120.2 million for the three months ended March 31, 2026, an increase of $24.2 million or 25% compared to $96.0 million for the same period in 2025. Gross profit as a percentage of revenues ("gross margin") decreased to 40.7% for the three months ended March 31, 2026, compared to 41.3% for the same period in 2025. The decline in gross margin was primarily driven by a shift in revenue mix resulting from card activation volumes for the Bilt credit card on the CoreCard processing platform during the first quarter of 2026, which generates higher revenue at relatively lower margins.

Salaries and benefits

Salaries and benefits expenses were $48.4 million for the three months ended March 31, 2026, an increase of $12.9 million or 36% compared to the same period in 2025. The increase is primarily due to the acquisition of CoreCard in the fourth quarter of 2025, an increase in headcount to support the growth of the business and salary increases due to inflationary pressures. As a percentage of revenues, salary expense increased to 16.4% for the three months ended March 31, 2026, compared to 15.3% for the same period in 2025.

Selling, general and administrative

Selling, general and administrative expenses were $16.6 million for the three months ended March 31, 2026, an increase of $3.7 million or 29% compared to the same period in 2025. As a percentage of revenues, these expenses increased to 5.6% for the three months ended March 31, 2026 compared to 5.5% for the same period in 2025.

Depreciation and amortization

Depreciation and amortization expenses were $31.8 million for the three months ended March 31, 2026, an increase of $7.5 million or 31% compared to the same period in 2025. As a percentage of revenues, these expenses increased to 10.8% for the three months ended March 31, 2026, compared to 10.5% for the same period in 2025.

Operating income

EFT Processing Segment had operating income of $23.4 million for the three months ended March 31, 2026, an increase of $0.1 million compared to the same period in 2025. Operating income as a percentage of revenues ("operating margin") decreased to 7.9% for the three months ended March 31, 2026, compared to 10.0% for the same period in 2025. The decrease in operating margin was primarily attributable to lower gross margins resulting from expansion into lower-priced markets and increased salary and benefit expenses to support business growth.

EPAY SEGMENT

The following table presents the results of operations for the three months ended March 31, 2026 and 2025 for our epay Segment:

Revenues

epay Segment total revenues were $293.5 million for the three months ended March 31, 2026, an increase of $26.1 million or 10% compared to the same period in 2025. Fluctuations in foreign currency exchange rates increased revenues by approximately $19.9 million for the three months ended March 31, 2026 compared to the same period in 2025. Excluding the impact of foreign currency, revenue growth reflects favorable transaction mix and pricing. The decrease in transactions processed primarily relates to high-volume, low-revenue transactions in the Asia Pacific region and did not have a significant impact on revenues.

Direct operating costs

epay Segment direct operating costs were $221.5 million for the three months ended March 31, 2026, an increase of $19.4 million or 10% compared to the same period in 2025. 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. Fluctuations in foreign currency exchange rates increased direct operating costs by approximately $15.1 million for the three months ended March 31, 2026 compared to the same period in 2025.

Gross profit

Gross profit was $72.0 million for the three months ended March 31, 2026, an increase of $6.7 million or 10% compared to $65.3 million for the same period in 2025. Gross margin increased to 24.5% for the three months ended March 31, 2026, compared to 24.4% for the same period in 2025. The increase in gross profit and gross margin were primarily a result of a shift in the mix of transactions processed.

Salaries and benefits

Salaries and benefits expenses were $28.2 million for the three months ended March 31, 2026, an increase of $4.1 million or 17% compared to the same period in 2025. As a percentage of revenues, these expenses increased to 9.6% for the three months ended March 31, 2026, compared to 9.0% for the same period in 2025. Fluctuations in foreign currency exchange rates increased salaries and benefits by approximately $1.9 million for the three months ended March 31, 2026 compared to the same period in 2025.

Selling, general and administrative

Selling, general and administrative expenses were $9.9 million for the three months ended March 31, 2026, a decrease of $2.9 million or 23% compared to the same period in 2025. As a percentage of revenues, these expenses decreased to 3.4% for the three months ended March 31, 2026, compared to 4.8% for the same period in 2025. The decrease in selling, general and administrative expenses was primarily due to the payment of $4.5 million to resolve a non-recurring, multi-year operating tax matter during the same period in 2025.

Depreciation and amortization

Depreciation and amortization expenses were $1.5 million for the three months ended March 31, 2026, a decrease of $0.1 million or 6% compared to the same period in 2025. Depreciation and amortization expense primarily represent depreciation of POS terminals we install in retail stores and amortization of acquired intangible assets. As a percentage of revenues, these expenses decreased to 0.5% for the three months ended March 31, 2026, compared to 0.6% for the same period in 2025.

Operating income

epay Segment operating income was $32.4 million for the three months ended March 31, 2026, an increase of $5.6 million or 21% compared to the same period in 2025. Operating margin increased to 11.0% for the three months ended March 31, 2026, compared to 10.0% for the same period in 2025. The increase in operating income and margin was primarily driven by improved gross margins resulting from a favorable shift in transaction mix, partially offset by increased salaries.

MONEY TRANSFER SEGMENT

The following table presents the results of operations for the three months ended March 31, 2026 and 2025 for the Money Transfer Segment:

Revenues

Money Transfer Segment total revenues were $425.2 million for the three months ended March 31, 2026, an increase of $7.5 million or 2% compared to the same period in 2025. Direct-to-consumer digital transactions grew by 35%, reflecting strong consumer demand for digital products. Revenues per transaction increased to $9.69 for the three months ended March 31, 2026, compared to $9.37 for the same period in 2025 mainly due to foreign currency fluctuations. Fluctuations in foreign currency exchange rates increased revenues by approximately $22.9 million for the three months ended March 31, 2026 compared to the same period in 2025. The revenue decreased taking into account the impact of foreign currency fluctuations. The revenue decrease was driven by the impact of immigration reform affecting transfers from the United States to Mexico, as well as reduced volume in the Middle East. Offsetting the decline in transfers to Mexico and the Middle East was growth in all other markets together with accelerated growth in consumer-to-consumer digital transactions and the Money Transfer's Dandelion product.

Direct operating costs

Money Transfer Segment direct operating costs were $223.0 million for the three months ended March 31, 2026, a decrease of $1.5 million or 1% compared to the same period in 2025. 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. Fluctuations in foreign currency exchange rates increased direct operating costs by approximately $11.3 million for the three months ended March 31, 2026 compared to the same period in 2025.

Gross profit

Gross profit was $202.2 million for the three months ended March 31, 2026, an increase of $9.0 million or 5% compared to $193.2 million for the same period in 2025. Gross margin increased to 47.6% for the three months ended March 31, 2026, compared to 46.3% for the same period in 2025. The increase in gross profit and gross margin was primarily due to increases in international-originated money transfers and direct-to-consumer digital transactions.

Salaries and benefits

Salaries and benefits expenses were $92.7 million for the three months ended March 31, 2026, an increase of $4.8 million or 5% compared to the same period in 2025. The increase in salaries and benefits was primarily driven by an increase in headcount to support the growth of the business and salary increases due to inflationary pressures. As a percentage of revenues, salary expenses increased to 21.8% for the three months ended March 31, 2026, compared to 21.0% for the same period in 2025.

Selling, general and administrative

Selling, general and administrative expenses were $61.2 million for the three months ended March 31, 2026, an increase of $7.1 million or 13% compared to the same period in 2025. The increase in selling, general and administrative expenses was primarily driven by higher costs across all SG&A line items, with the most significant contributors being increased advertising and promotion spending and higher bad debt expense. As a percentage of revenues, these expenses increased to 14.4% for the three months ended March 31, 2026, compared to 13.0% for the same period in 2025.

Depreciation and amortization

Depreciation and amortization expenses were $6.4 million for the three months ended March 31, 2026, an increase of $0.3 million or 5% compared to the same period in 2025. Depreciation and amortization expenses 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 were 1.5% for both the three months ended March 31, 2026 and 2025.

Operating income

Money Transfer Segment operating income was $41.9 million for the three months ended March 31, 2026, a decrease of $3.2 million or 7% compared to the same period in 2025. Operating margin was 9.9% for the three months ended March 31, 2026, compared to 10.8% for the same period in 2025. Operating income per transaction was $0.95 for the three months ended March 31, 2026, compared to $1.01 for the same period in 2025. Operating income benefited from expanded gross margins which were utilized to increase digital marketing expenditure, resulting in reduced operating income year-over-year.

CORPORATE SERVICES

The following table presents the operating expenses for the three months ended March 31, 2026 and 2025 for Corporate Services:

Corporate operating expenses

Total Corporate operating expenses were $25.7 million for the three months ended March 31, 2026, an increase of $5.7 million or 29% compared to the same period in 2025. This increase was largely driven by an increase in long-term share-based compensation.

OTHER EXPENSE, NET

Interest income

Interest income was $4.1 million for the three months ended March 31, 2026, a decrease of $1.2 million or 23% compared to the same period in 2025. This decrease was driven by a decrease in interest rates.

Interest expense

Interest expense was $14.1 million for the three months ended March 31, 2026, a decrease of $5.3 million or 27% compared to the same period in 2025. This decrease for the three months ended March 31, 2026 compared to the same period in 2025 was largely driven by the shift of borrowing from the Credit Facility to the 2030 Convertible Notes during the first quarter of 2026.

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.

We recorded net foreign currency exchange gains of $8.4 million for the three months ended March 31, 2026, compared to net foreign currency exchange losses of $18.1 million for the same period in 2025. These realized and unrealized foreign currency exchange results reflect the fluctuation in the value of the U.S. dollar against the currencies of the countries in which we operated during the respective period.

Other gains

The other gains and losses mainly relate to a discrete non-cash investment.

INCOME TAX EXPENSE

The Company's effective income tax rate was 43.7% for the three months ended March 31, 2026, compared to 15.6% for the same period ended March 31, 2025. The Company's effective income tax rate for the three months ended March 31, 2026 was higher than the applicable statutory income tax rate of 21% as a result of certain foreign earnings being subject to higher local statutory tax rates and our U.S. deferred tax activity. The Company's effective income tax rate for the three months ended March 31, 2025 was lower than the applicable statutory income tax rate of 21%, mainly as a result of our U.S. deferred tax activity on the repurchase of the 2049 Convertible Notes.

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:

NET INCOME ATTRIBUTABLE TO EURONET

Net income attributable to Euronet was $37.5 million for the three months ended March 31, 2026, a decrease of $0.9 million or 2% compared to the same period in 2025. The decrease in net income was primarily attributable to a $21.9 million increase in income tax expenses due to deferred tax activity on the repurchase of the 2049 Convertible Notes in the first quarter of 2025 and the $6.6 million increase in other gains (losses), pertaining to the revaluation of an investment, partially offset by $26.5 million foreign currency exchange gains (losses), which are due to the weakening of the U.S. dollar compared to our other reporting currencies.

LIQUIDITY AND CAPITAL RESOURCES

Working capital

As of March 31, 2026, we had working capital of $903.3 million, which is calculated as the difference between total current assets and total current liabilities, compared to working capital of $415.5 million as of December 31, 2025. Our ratio of current assets to current liabilities was 1.28 and 1.11 at March 31, 2026 and December 31, 2025, 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 in order to cover 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 our revolving credit facilities, uncommitted credit agreements and cash flows from operations. ATM cash, which is our own cash in use or designated for use in our ATM network, increased $220.9 million from $650.3 million as of December 31, 2025 to $871.2 million as of March 31, 2026 as a result of the increase in the number of active ATMs as of March 31, 2026 compared to December 31, 2025. The Company has $1,229.5 million of unrestricted cash as of March 31, 2026 compared to $1,040.3 million as of December 31, 2025. Including the $871.2 million of cash in ATMs at March 31, 2026, we have access to $2,614.2 million in available cash, and $1,233.1 million available under the Credit Facility.

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, 2026 and 2025 (in millions):

Operating activity cash flow

Cash flows used in operating activities were $122.0 million for the three months ended March 31, 2026 compared to provided by operating activities of $1.7 million for the same period in 2025. The decline was primarily driven by unfavourable changes in working capital due to timing. Net income remained relatively consistent year-over-year.

Investing activity cash flow

Cash flows used in investing activities were $28.8 million for the three months ended March 31, 2026 compared to $54.7 million for the same period in 2025. The decrease in cash outflows was primarily attributable to the issuance of convertible notes receivable in 2025, which did not recur in 2026. Other investing activities, including purchases of property and equipment, remained relatively consistent year-over-year.

Financing activity cash flow

Cash flows provided by financing activities were $441.3 million for the three months ended March 31, 2026 compared to $162.6 million for the same period in 2025. The increase in cash flows was primarily attributable to the repayment of the 2049 Convertible Notes in 2025, which did not recur in 2026.

Effect of exchange rates on cash, cash equivalents and restricted cash

Fluctuations in foreign currency exchange rates impacted cash, cash equivalents, and restricted cash by ($39.1) million and $91.8 million for the three months ended March 31, 2026 and 2025, respectively.

Other sources of capital

Credit Facility - On December 17, 2024, the Company amended its revolving credit agreement (the "Credit Facility") to increase the facility from $1.25 billion to $1.9 billion and to extend the expiration to December 17, 2029. The amended Credit Facility includes a multi-currency borrowing tranche totaling $1,685 million and a U.S. dollar borrowing tranche totaling $215 million. The amended Credit Facility also removes the credit spread adjustment on SOFR and SONIA borrowings. All other terms remain substantially the same as the previous Credit Facility. The multi-currency tranche of the revolving Credit Facility contains a sublimit of up to $500 million 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 multi-currency tranche of the Credit Facility allows for borrowings in British pounds sterling, euro and U.S. dollars. Subject to certain conditions, the Company has the option to increase the Credit Facility by up to an additional $500 million by requesting additional commitments from existing or new lenders. Borrowings under the revolving Credit Facility (other than swing line loans) bear interest based on a margin over a secured financing rate or the base rate, as selected by the Company, which varies from 0.875% to 1.375%, in each case based on the Company's current credit rating. The applicable margin for borrowings under the Credit Facility, based on the Company's current credit rating is 1.075%. In addition, the Company pays a facility fee on the total commitments made under the revolving Credit Facility, which varies from 0.125% to 0.250%. The current facility fee is 0.175%.

As of March 31, 2026, we had $570.7 million of borrowings and $96.2 million of stand-by letters of credit outstanding under the Credit Facility. The remaining $1,233.1 million under the Credit Facility was available for borrowing.

2049 Convertible Notes - On March 18, 2019, we completed the sale of $525.0 million in principal amount of Convertible Senior Notes due 2049 ("2049 Convertible Notes"). The 2049 Convertible Notes were issued pursuant to an indenture, dated as of March 18, 2019, by and between us and U.S. Bank National Association, as trustee. The 2049 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 2049 Convertible Notes have the option to require us to repurchase for cash all or part of their 2049 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 2049 Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the relevant repurchase date. In connection with the issuance of the 2049 Convertible Notes, we recorded $12.8 million in debt issuance costs, which were amortized through March 1, 2025. Almost all of the holders exercised their repurchase option in March 2025 and we repurchased $491.8 million of the 2049 Convertible Notes with a combination of cash on hand and a borrowing under our Credit Facility. As of March 31, 2026, $33.2 million of the 2049 Convertible Notes remain outstanding.

2030 Convertible Notes - On August 15, 2025, the Company completed the sale of $1,000.0 million of Convertible Senior Notes maturing in October 2030. ("2030 Convertible Notes"). The 2030 Convertible Notes mature in October 2030 unless redeemed or converted prior to such date and are convertible into shares of Euronet common stock at a conversion price of approximately $127.04 per share if certain conditions are met (relating to the closing price of Euronet common stock exceeding certain thresholds for specified periods. The 2030 Convertible Notes have an interest rate of 0.625% per year, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2026. In connection with the issuance of the 2030 Convertible Notes, we recorded $23.5 million in debt issuance costs, which will be amortized through October 1, 2030. The 2030 Convertible Notes are convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding April 1, 2030 if certain conditions are met.

Capped Call Transactions - In August 2025, in connection with the issuance of the 2030 Convertible Notes, the Company entered into privately negotiated capped call transactions (the "2025 Capped Call Transactions") with certain of the initial purchasers of the 2030 Convertible Notes or affiliates thereof and other financial institutions (the "Option Counterparties"). The capped call transactions initially cover, subject to customary anti-dilution adjustments, the number of shares of the Company's common stock that initially would be issuable upon conversion of the 2030 Convertible Notes. The Capped Call Transactions are net purchased call options in Euronet common stock. The Capped Call Transactions are separate transactions, entered into by the Company with the Option Counterparties, and are not part of the terms of the 2030 Convertible Notes and will not change the holders' rights under the 2030 Convertible Notes. Holders of the 2030 Convertible Notes will not have any rights with respect to the Capped Call Transactions. The Company has concluded that the 2030 Capped Call Transactions meet the scope exceptions for derivative instruments, and as such, the 2030 Capped Call Transactions meet the criteria for classification in equity and are included as a reduction to additional paid in capital.

Senior Notes - On May 22, 2019, we completed the sale of €600 million ($669.9 million) aggregate principal amount of Senior Notes that expire 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, 2026, we have outstanding €600 million ($693.1 million) principal amount of the Senior Notes. In addition, we may redeem some or all of these notes after February 22, 2026 at their principal amount plus any accrued and unpaid interest. Depending on market conditions, the Company may repay the Senior Notes at or prior to their maturity date using cash on hand, borrowing under its Credit Facility, the issuance of additional senior notes or a combination thereof.

Uncommitted Credit Agreements - On June 20, 2025, the Company entered into an Uncommitted Loan Agreement for the sole purpose of providing vault cash for ATMs, that expires no later than June 19, 2026. This Uncommitted Line of Credit had a credit limit of $400 million on September 30, 2025 and $250 million thereafter. The loan had an outstanding balance of $250 million at March 31, 2026. The loan is a Prime Rate Loan, a Daily Term SOFR Rate Loan plus 1.00% or shall bear 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 loan inception date to March 31, 2026, was 5.41%.

Other debt obligations - Certain of the Company's subsidiaries have available lines of credit and overdraft credit facilities that generally provide for short-term borrowings that are used from time to time for working capital purposes. On October 9, 2024, the Company completed a facility of MYR 100 million and an overdraft facility of MYR 140 million for its Malaysian business. Each advance under this facility shall be made for a term of 1 month or such other period of up to 12 months. As of March 31, 2026, $24.7 million was borrowed under this facility. There were no borrowings on the overdraft facility. Including the Malaysian facility, there was a total of $32.8 million outstanding under our subsidiaries credit lines and overdraft facilities as of March 31, 2026.

Other uses of capital

Capital expenditures and needs - Total capital expenditures for the three months ended March 31, 2026 were $28.5 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 2026 are currently estimated to range from approximately $135 million to $145 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 financings will be sufficient to meet our debt (including our uncommitted credit facilities), 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

Historically, the countries in which we operate have experienced low and stable inflation. Therefore, the local currency in each of these markets is the functional currency. We have seen indications that the current inflationary period will put pressure on our results of operations and our financial position. We have seen some signs of inflation impacting discretionary spend items, such as gaming products, in our epay business, discretionary travel expenditures in EFT, as well as some pressure on send amounts in money transfer. As a consequence of this inflationary period, we expect to see increasing expenses forthcoming. 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, 2026, there were no material changes from the disclosure in our Annual Report on Form 10-K for the year ended December 31, 2025. 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, 2026. See also Note 15, Commitments, to the unaudited consolidated financial statements included elsewhere in this report.

CONTRACTUAL OBLIGATIONS

As of March 31, 2026, 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, 2025.