EURONET WORLDWIDE, INC. (EEFT) FY 2022 MD&A

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the consolidated financial statements and accompanying notes included elsewhere in this Annual Report on Form 10-K. This section of this Form 10-K generally discusses 2022 and 2021 items and year-to-year comparisons between 2022 and 2021. Discussions of 2021 items and year-to-year comparisons between 2021 and 2020 that are not included in this Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

Company Overview, Geographic Locations and Principal Products and Services

Euronet is a leading 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, POS, card outsourcing, card issuing and merchant acquiring services, software solutions, electronic distribution of prepaid mobile airtime 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 45,009 ATMs and approximately 613,000 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 816,000 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.

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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 522,000 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 75% 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 and Item 7A - Quantitative and Qualitative Disclosures About Market Risk).

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 28% of total consolidated revenues for the year ended December 31, 2022, are derived from fees charged for transactions made by cardholders on our proprietary network of ATMs, fixed management fees and transaction fees we charge to customers for operating ATMs and processing debit and credit cards under outsourcing and cross-border acquiring agreements, foreign currency exchange margin on DCC transactions, domestic and international surcharge, foreign currency dispensing and other value added services such as advertising, prepaid telecommunication recharges, bill payment, and money transfers provided over ATMs. 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 30% of total consolidated revenues for the year ended December 31, 2022, 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 as compared with other electronic products has decreased over time, and digital media content now produces approximately 67% of epay Segment revenues. Other electronic 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 year ended December 31, 2022, are primarily derived from transaction fees, as well as the margin earned from purchasing foreign currency at wholesale exchange rates and selling the foreign currency to customers at retail exchange rates. 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. 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.

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The Company offers 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.

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, 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 that we operate in that 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.

2) The epay Segment opportunities include renewing existing and negotiating new agreements in target markets in which we operate, primarily with mobile operators, digital content providers, financial institutions and retailers. The overall growth rate in the prepaid mobile phone and digital media content 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.

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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 2021 and part of 2022. These types of orders were first put into effect in the first half of 2020. 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. During 2022, we experienced a significant recovery from the previous business closures and travel restrictions that were in place in many of our markets during 2020 and 2021. However, the travel industry has not yet fully recovered as the airlines and airports have not returned their staffing levels to pre-COVID levels, which has limited the level of recovery. 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 has experienced the impacts by the pandemic-related restrictions in certain markets that limit customers' ability to access our network of Company-owned stores and agents.

In response to the COVID-19 pandemic driven impacts, we implemented several key measures to offset the impact across the business, including re-negotiating certain third party contracts, reducing travel and decreasing capital expenditures.

Segment Revenues and Operating Income For The Years Ended December 31, 2022 and 2021

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Summary

Our annual consolidated revenues increased by 12% for2022 compared to2021.The increase in revenues for2022 was primarily due to the easing of COVID-19 related travel restrictions in 2022 compared to 2021, which led to an increase in demand for DCC, domestic and international surcharge and other value added services in our EFT Processing Segment as well as growth in the number of money transfers processed by the core Ria business and the number of transactions processed by our epay subsidiaries.

Our annual consolidated operating income increased by 109% for 2022 compared to 2021. The increase in operating income for2022 was primarily due to the increases in transaction volume across all three segments.

Net income attributable to Euronet for 2022 was $231.0 million, or $4.41 per diluted share compared to a net income attributable to Euronet for 2021 of $70.7 million, or $1.32 per diluted share.

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. Considering the results by country and the associated functional currency, our 2022 consolidated operating income was approximately (12%) lower due to changes in foreign currency exchange rates when compared to 2021. If significant, in our discussion we will refer to the impact of fluctuations in foreign currency exchange rates in our comparison of operating segment results.

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 during 2022 and 2021, of the currencies of the countries in which we have our most significant operations:

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Comparison of Operating Results For The Years Ended December 31, 2022 and 2021 - By Operating Segment

EFT Processing Segment

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

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n/m: not meaningful

Revenues

EFT Processing Segment total revenues were $924.2 million for the year ended December 31, 2022, an increase of $333.1 million or 56% compared to the same period in 2021. In2021, we began increasing our estate of active ATMs as certain countries began easing COVID-19 restrictions; however, remaining cross-border travel patterns prevented our volume of DCC and surcharge transactions from returning to pre-COVID-19 levels. During 2022 we saw further easing of COVID-19 restrictions. Revenues increased for the year ended December 31, 2022 compared to the same period in 2021 as cross-border travel and corresponding DCC and surcharge revenues increased. Also, the acquisition of Merchant Acquiring Business of Piraeus Bank in 2022 added $88.8 million of revenues. Foreign currency movements decreased revenues by approximately ($110.9) million for the year ended December 31, 2022, compared to the same period in 2021.

Average monthly revenues per ATM increased to $1,633 for the year ended December 31, 2022 compared to $1,188 for the same period in 2021. Revenues per transaction was $0.14 for both years ended December 31, 2022 and 2021.

Direct operating costs

EFT Processing Segment direct operating costs were $475.8 million for the year ended December 31, 2022, an increase of $121.5 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 involved with POS DCC transactions. For the year ended December 31, 2022, the increase in direct operating costs was primarily due to the increase in transaction volumes, and costs associated with modifying our estate of ATMs. Foreign currency movements offset direct operating costs increases by approximately ($54.8) million for the year ended December 31, 2022 compared to the same period in 2021.

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Gross profit

Gross profit, which is calculated as revenues less direct operating costs, was $448.4 million for the year ended December 31, 2022, an increase of $211.5 million or 89% compared to $236.9 million for the same period in 2021. Gross profit as a percentage of revenues (“gross margin”) increased to 48.5% for the year ended December 31, 2022, compared to 40.1% for the same period in 2021. For the year ended December 31, 2022, the increase in gross profit and gross margin was primarily driven by the increase in higher-margin cross-border transactions and overall increase in transaction volumes.

Salaries and benefits

Salaries and benefits expenses were $112.0 million for the year ended December 31, 2022, an increase of $13.4 million or 14% compared to the same period in 2021. The increase in salaries and benefits for the year ended December 31, 2022 compared to the same period in 2021 was primarily driven by an increase in salaries and bonus expense offset by ($14.0) million decrease from foreign currency movements in the countries where we employ our workforce. As a percentage of revenues, these expenses decreased to 12.1% for the year ended December 31, 2022, compared to 16.7% for the same period in 2021.

Selling, general and administrative

Selling, general and administrative expenses were $57.0 million for the year ended December 31, 2022, an increase of $9.2 million or 19% compared to the same period in 2021. The increase in these expenses is primarily driven by a $16.8 million increase in professional fees, travel & meals, advertising and other expenses offset by ($7.6) million decrease from foreign currency movements. As a percentage of revenues, these expenses decreased to 6.2% for the year ended December 31, 2022, compared to 8.1% for the same period in 2021.

Depreciation and amortization

Depreciation and amortization expenses were $95.5 million for the year ended December 31, 2022, an increase of $4.5 million or 5% compared to the same period in 2021. Foreign currency movements offset these increases by ($10.1) million for the year ended December 31, 2022, compared to the same period in 2021, with the remainder of the increase driven by the acquisition of additional ATMs and software assets. As a percentage of revenues, these expenses decreased to 10.3% for the year ended December 31, 2022, compared to 15.4% for the same period in 2021.

Operating income (loss)

EFT Processing Segment had operating income of $183.9 million for the year ended December 31, 2022, compared to operating losses of $0.5 million in 2021, an increase of $184.4 million compared to the same period in 2021. Operating income (loss) as a percentage of revenues (“operating margin”) increased to 19.9% for the year ended December 31, 2022, compared to (0.1%) for the same period in 2021. Operating income (loss) per transaction was $0.03 for the year ended December 31, 2022, compared to ($0.00) for the same period in 2021. For the year ended December 31, 2022, the increase in operating income and increase in operating margin was primarily driven by further easing of COVID-19 restrictions.

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epay Segment

The following table summarizes the results of operations for our epay Segment for the years endedDecember 31, 2022 and 2021:

Revenues

epay Segment total revenues were $998.0 million for the year ended December 31, 2022, a decrease of ($13.5) million or (1%) compared to the same period in 2021. Foreign currency movements decreased revenues by approximately ($95.3) million for the year ended December 31, 2022, compared to the same period in 2021. The decrease in revenues due to foreign currency movements was offset by an increase in revenues of $81.8 million due to increase in transaction volumes in all markets where we operate. Revenues per transaction decreased to $0.03 for the year ended December 31, 2022, compared to $0.04 for the same period in 2021. The decrease in revenues per transaction was primarily driven by the increase in the number of mobile transactions processed in a region where we generally earn lower revenues per transaction.

Direct operating costs

epay Segment direct operating costs were $753.1 million for the year ended December 31, 2022, a decrease of ($7.7) million or (1%) 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 foreign currency movements of approximately ($69.8) million offset by the increase in cost for transaction volumes of low-value mobile top-up transactions and an increase in retailer commissions.

Gross profit

Gross profit was $244.9 million for the year ended December 31, 2022, a decrease of ($5.7) million or (2%) compared to $250.6 million for the same period in 2021. Gross margin decreased to 24.5% for the year ended December 31, 2022, compared to 24.8% for the same period in 2021. The decrease in gross profit and gross margin was primarily driven by foreign currency movements.

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Salaries and benefits

Salaries and benefits expenses were $81.7 million for the year ended December 31, 2022, an increase of $2.2 million or 3% 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 and an increase in bonus expense. Foreign currency movements in the countries where we employ our workforce offset these increases by ($7.7) million for the year ended December 31, 2022, compared to the same period in 2021. As a percentage of revenues, these expenses increased to 8.2% for the year ended December 31, 2022, compared to 7.9% for the year ended December 31, 2021.

Selling, general and administrative

Selling, general and administrative expenses were $36.0 million for the year ended December 31, 2022, a decrease of ($3.6) million or (9%) compared to the same period in 2021. Foreign currency movements decreased these expenses by ($3.5) million for the year ended December 31, 2022, compared to the same period in 2021. As a percentage of revenues, these expenses decreased to 3.6% for the year ended December 31, 2022, compared to 3.9% for the same period in 2021.

Depreciation and amortization

Depreciation and amortization expenses were $6.2 million for the year ended December 31, 2022, a decrease of ($2.3) million or (27%) compared to the same period in 2021. 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 0.6% for the year ended December 31, 2022, compared to 0.8% for the same period in 2021.

Operating income

epay Segment operating income was $121.0 million for the year ended December 31, 2022, a decrease of ($2.1) million or (2%) compared to the same period in 2021. Operating margin decreased to 12.1% for the year ended December 31, 2022, compared to 12.2% for the same period in 2021. Operating income per transaction was $0.03for the year ended December 31, 2022, compared to $0.04 for the same period 2021. The decrease in operating income was due to foreign currency movements and the decrease in operating margin was primarily due to an increase in the number of low-margin digital transactions.

Money Transfer Segment

The following table summarizes the results of operations for our Money Transfer Segment for the years ended December 31, 2022and 2021:

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Revenues

Money Transfer Segment total revenues were $1,444.3 million for the year ended December 31, 2022, an increase of $43.3 million or 3% compared to the same period in 2021. The increase in revenues was primarily due to 13% growth in US-outbound transactions, 13% growth in international-originated money transfers - which included 13% growth in transfers initiated largely in Europe and 14% growth in transfers initiated in the Middle-East and Asia and 25% growth in xe transactions, partially offset by a 17% decline in the intra-US business. These transaction growth rates include 38% growth in direct-to-consumer digital transactions. Revenues per transaction decreased to $9.77for the year ended December 31, 2022, compared to $10.37 for the same period in2021. Foreign currency movements decreased revenues by approximately ($86.1) million for the year ended December 31, 2022, compared to the same period in 2021.

Direct operating costs

Money Transfer Segment direct operating costs were $797.0 million for the year ended December 31, 2022, an increase of $3.7 million 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 U.S. outbound and international-originated money transfer transactions and corresponding increase in agent commissions. Foreign currency movements decreased direct operating costs by approximately ($42.9) million for the year ended December 31, 2022, compared to the same period in 2021.

Acquired contract cost impairment

During the fourth quarter of 2021, we identified certain contract assets that had a carrying balance greater than the estimated remaining cash flows in the contracts and recorded a corresponding $38.6 million non-cash impairment of costs to fulfill a contract. The impairment charge is the result of lower-than-expected customer transaction volumes related to these specific contracts, stemming primarily from COVID-19 related disruptions.

Gross profit

Gross profit was $647.4 million for the year ended December 31, 2022, an increase of $39.6 million or 7% compared to $607.7 million for the same period in 2021. Gross margin increased to 44.8% for the year ended December 31, 2022, compared to 43.4% for the same period in 2021. The increase in gross profit was primarily attributable to the increase in transaction volume for the year ended December 31, 2022.

Salaries and benefits

Salaries and benefits expenses were $277.0 million for the year ended December 31, 2022, an increase of $21.2 million or 8% 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. Foreign currency movements in the countries where we employ our workforce decreased these expenses by ($15.1) million for the year ended December 31, 2022, compared to the same period in 2021. As a percentage of revenues, these expenses increased to 19.2% for the year ended December 31, 2022, compared to 18.3% for the same period in 2021.

Selling, general and administrative

Selling, general and administrative expenses were $182.4 million for the year ended December 31, 2022, an increase of $24.4 million or 15% compared to the same period in 2021. The increase in these expenses was primarily driven by an increase in marketing expenses, professional fees and travel related expenses. Foreign currency movements decreased these expenses by ($8.9) million for the year ended December 31, 2022, compared to the same period in 2021. As a percentage of revenues, these expenses increased to 12.6% for the year ended December 31, 2022, compared to 11.3% for the same period in 2021.

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Depreciation and amortization

Depreciation and amortization expenses were $33.7 million for the year ended December 31, 2022, a decrease of ($2.0) million or (6%) 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 2.3% for the year ended December 31, 2022, compared to 2.6% for the same period in 2021.

Operating income

Money Transfer Segment operating income was $154.3 million for the year ended December 31, 2022, an increase of $34.7 million or 29% compared to the same period in 2021. Operating margin increased to 10.7% for the year ended December 31, 2022, compared to 8.5% for the same period in 2021. Operating income per transaction increased to $1.04 for the year ended December 31, 2022, compared to $0.89 for the same period in 2021. The increase in operating income, operating margin and operating income per transaction for the year ended December 31, 2022 compared to the same period in 2021 was primarily driven by the increase in transaction volume, specifically the higher margin transactions for US outbound and international-originated money transfers, and the impairment of the contract assets in 2021, partially offset by the increase in agent commissions, and an increase in headcount to support the growth of the business.

Corporate Services

The following table summarizes the results of operations for Corporate Services for the years ended December 31, 2022 and 2021:

Corporate operating expenses

Total Corporate operating expenses were $73.7 million for the year ended December 31, 2022, an increase of $15.6 million or 27%, compared to the same period in 2021. The increase was primarily due to a $7.6 million increase in share based compensation and a $4.8 million increase in bonuses as a result of improved performance for the year ended December 31, 2022, compared to the same period in 2021.

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Other Expense, Net

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 re-measurement 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 a net foreign currency exchange loss of $28.2 million for the year ended December 31, 2022, compared to a net foreign currency exchange loss of $10.9 million for the same period in 2021. 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.

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Income Tax Expense

Our effective income tax rates as reported and as adjusted are calculated below:

We calculate our effective income tax rate by dividing income tax expense by pre-tax book income. Our effective income tax rates were 28.5% and 48.0% for the years ended December 31, 2022 and 2021, respectively. The effective income tax rates were significantly influenced by the impact of acquired contract cost impairment, and foreign currency exchange gains (losses). Excluding foreign currency exchange gains (losses), and acquired contract cost impairment items from pre-tax income, as well as the related tax effects for these items, our adjusted effective income tax rates were 22.7% and 36.1% for the years ended December 31, 2022 and 2021, respectively.

The effective income tax rate, as adjusted, for 2022 was higher 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 and certain foreign earnings being subject to higher local statutory tax rates. The effective income tax rate, as adjusted, was offset by a decrease in the valuation allowance related to the projected utilization of U.S. tax benefits.  The effective income tax rate, as adjusted, for 2021 was higher than the applicable statutory income tax rate of 21% primarily because of an increase in the valuation allowance related to the projected utilization of U.S. tax benefits, the non-recognition of tax benefits from losses in certain foreign countries where we have a limited history of profitable earnings and certain foreign earnings being subject to higher local statutory tax rates.  We determine income tax expense based upon enacted tax laws applicable in each of the taxing jurisdictions where we conduct business. Based on our interpretation of such laws, and considering the evidence of available facts and circumstances and baseline operating forecasts, we have accrued the estimated income tax effects of certain transactions, business ventures, contract and organizational structures, and the estimated future reversal of timing differences. Should a taxing jurisdiction change its laws or dispute our conclusions, or should management become aware of new facts or other evidence that could alter our conclusions, the resulting impact to our estimates could have a material adverse effect on our results of operations and financial condition.

Income before income taxes, as adjusted, income tax expense, as adjusted and effective income tax rate, as adjusted, are non-U.S. GAAP financial measures that management believes are useful for understanding why our effective income tax rates are significantly different than would be expected. These non-U.S. GAAP measures are used by management to conduct and evaluate its business during its regular review of operating results for the periods presented.

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Our total liability for uncertain tax positions under Accounting Standards Codification ("ASC") 740-10-25 and -30 was $42.8 million as of December 31, 2022. The application of ASC 740-10-25 and -30 requires significant judgment in assessing the outcome of future income tax examinations and their potential impact on the Company's estimated effective income tax rate and the value of deferred tax assets, such as those related to the Company's net operating loss carryforwards. It is reasonably possible that the balance of gross unrecognized tax benefits could significantly change within the next twelve months, as a result of the resolution of audit examinations and expirations of certain statutes of limitations and, accordingly, materially affect our Consolidated Financial Statements. At this time, it is not possible to estimate the range of change due to the uncertainty of potential outcomes.

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 (Loss) Attributable to Euronet

Net income attributable to Euronet was $231.0 million for the year ended December 31, 2022, an increase of $160.3 million compared to net income in the same period in 2021. For the year ended December 31, 2022, the increase in net income was primarily attributable to the $245.4 million increase in gross profit driven by an increase in transaction volumes across all three segments, an $38.6 million decrease in contract asset impairment,  partially offset by an $49.4 million increase in salaries and benefits, a $26.8 million increase in income tax expense, a $33.2 million increase in selling, general and administrative expenses, and a $46.1 million increase in foreign currency exchange losses.

Translation Adjustment

Translation gains and losses are the result of translating our foreign entities' balance sheets from local functional currency to the U.S. dollar reporting currency prior to consolidation and are recorded in comprehensive (loss) income. As required by U.S. GAAP, during this translation process, asset and liability accounts are translated at current foreign currency exchange rates and equity accounts are translated at historical rates. Historical rates represent the rates in effect when the balances in our equity accounts were originally created. By using this mix of rates to convert the balance sheet from functional currency to U.S. dollars, differences between current and historical exchange rates generate this translation adjustment.

We recorded a net loss on translation adjustments of $78.4 millionfor2022and a net loss of $78.5 million for 2021. In 2021 and  2022, the U.S. dollar strengthened compared to key foreign currencies, resulting in translation losses which were recorded in comprehensive (loss) income.

Liquidity and Capital Resources

Working capital

As of December 31, 2022, we had working capital of $1,372.6 million, which is calculated as the difference between total current assets and total current liabilities, compared to working capital of $1,455.8 million as of December 31, 2021. The decrease in working capital was due to several changes in working capital line items, mainly due to 2022 ending in the weekend, which impacts funding needs for our agents. Our ratio of current assets to current liabilities was 1.58 and 1.79 at December 31, 2022 and December 31, 2021, respectively.

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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, but much of it 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 December 31, 2022, we had approximately $515.6 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 decreased $27.8 million from $543.4 million as of December 31, 2021 to $515.6 million as of December 31, 2022.

The Company has $1,131.2 million of unrestricted cash as of December 31, 2022 compared to $1,260.5 million as of December 31, 2021. The decrease in unrestricted cash was primarily due to the $175.0 million of shares repurchased under the stock repurchase programs, the acquisition of the Piraeus Bank Merchant Acquiring business of Piraeus Bank for $343.0 million (see Note 6, Acquisitions, to our Consolidated Financial Statements for additional information) and $109.1 million of capital expenditures, partially offset by the $750.4 million of cash provided by operating activities and an increase in borrowings of $171.4 million. Including the $515.6 million of cash in ATMs at December 31, 2022, the Company has access to $1,990.9 million in available cash, and $740.6 million available under the Credit Facility with no significant long-term debt principal payments until March 2025.

We had cash, cash equivalents and restricted cash of $1,990.9 million as of December 31, 2022, of which $1,533.0 million was held outside of the U.S. and is expected to be indefinitely reinvested for continued use in foreign operations. Repatriation of these assets to the U.S. could have negative tax consequences.

The following table identifies cash and cash equivalents provided by/(used in) our operating, investing and financing activities for the years ended December 31, 2022and2021(in thousands):

Operating cash flow

Cash flows provided by operating activities were $748.3 million for the year ended December 31, 2022 compared to $406.6 million for the same period in 2021. The increase in operating cash flows was primarily due to the increase in net income and fluctuations in working capital mainly associated with the timing of the settlement processes with content providers in the epay Segment, with correspondents in the Money Transfer Segment, and with card organizations and banks in the EFT Processing Segment.

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Investing activity cash flow

Cash flows used in investing activities were $453.8 million for the year ended December 31, 2022 compared to $98.1 million for the same period in 2021. We used $109.1 million for purchases of property and equipment for the year ended December 31, 2022 compared to $92.2 million for the same period in 2021 and $343.0 million for the acquisition of Piraeus Bank Merchant Acquiring business of Piraeus Bank. There were no acquisitions in 2021.

Financing activity cash flow

Cash flows used in financing activities were $1.2 million for the year ended December 31, 2022 compared to $212.2 million for the same period in 2021. The decrease in cash used in financing activities was primarily the result of the $171.4 million net borrowings on debt obligations for the year ended December 31, 2022 compared to $13.0 million for the same period in 2021. We repurchased $175.0 million of common stock during the year ended December 31, 2022 compared to repurchases of $229.9 million for the same period in 2021. We received proceeds of $9.1 million and $10.8 million during the year ended December 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 24, 2022, the Company amended its revolving credit agreement (the “Credit Facility”) to increase the facility from $1.03 billion to $1.25 billion and to extend the expiration to October 24, 2027. The revolving credit facility contains a sublimit of up to $250 million, with $150 million committed, for the issuance of letters of credit, a $75 million sublimit for U.S. dollar swingline loans and a $75 million sublimit for swingline loans in euros or British pounds sterling.  The Credit Facility allows for borrowings in British pounds sterling,  euro and U.S. dollars. 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. Fees and interest on borrowings vary based upon the Company's corporate credit rating and will be based, in the case of letter of credit fees, on a margin, and in the case of interest, on a margin over a secured overnight financing rate, as defined in the agreement, with a margin, including the facility fee, ranging from 1.00% to 1.625% or the base rate, as selected by the Company.  The applicable margin for borrowings under the credit facility, based on the Company's current credit rating is initially 1.25% including the facility fee. As of December 31, 2022 and 2021, the Company had stand-by letters of credit/bank guarantees outstanding under the Credit Facility of $54.6 million and $57.3 million, respectively. Stand-by letters of credit/bank guarantees reduce the Company's borrowing capacity under the Credit Facility and are generally used to secure trade credit and performance obligations. As of December 31, 2022 and 2021, the stand-by letters of credit interest charges were each 1.1% per annum. Borrowing capacity under the Credit Facility as of December 31, 2022 was $740.6 million.

Uncommitted Line of Credit - On June 24, 2022, the Company entered into an Uncommitted Loan Agreement for $150 million, for the sole purpose of providing vault cash for ATMs, that expires no later than June 23, 2023. The loan was fully repaid and there was no balance at December 31, 2022. The loan was either a Prime rate loan, a Bloomberg Short-term Bank Yield rate loan or bears interest at the rate agreed to by the bank and the Company at the time such loan is made. The weighted average interest rate from the loan inception date to December 31, 2022 was 2.76%.

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.

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Senior Notes - On May 22, 2019, the Company completed the sale of €600 million ($669.9 million) aggregate principal amount of Senior Notes that mature on May 2026 (the "Senior Notes"). The Senior Notes accrue interest at a rate of 1.375% per year, payable annually in arrears commencing May 22, 2020, until maturity or earlier redemption. As of December 31, 2022, the Company has outstanding €600 million ($642.1 million) principal amount of the Senior Notes. In addition, the Company may redeem some or all of these notes on or after February 22, 2026 at their principal amount plus any accrued and unpaid interest. As of December 31, 2022, the Company had $4.1 million of unamortized debt issuance costs related to the Senior Notes.

Other debt obligations — Certain of our subsidiaries have available credit lines and overdraft facilities to generally supplement short-term working capital requirements, when necessary. There were $0.2 million and $0.9 million outstanding under these other obligation arrangements as of  December 31, 2022 and December 31, 2021.

Other uses of capital

Capital expenditures and needs— Total capital expenditures for 2022 were $104.3 million. These capital expenditures were primarily for the purchase of ATMs to expand our IAD network in Europe, 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 2023 are currently estimated to be approximately $100 million to $110 million.

Contractual lease obligations— The Company has entered into contractually binding operating and finance lease commitments to operate the business. Operating lease expenses were $51.0 million and $55.6 million for the years ended December 31, 2022 and 2021, respectively. Finance lease expenses were not material for 2022 or 2021. For additional information on operating and finance lease obligations, see Note 13, Leases, to the Consolidated Financial Statements.

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, 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.

Share repurchase plan

On December 8, 2021, the Company put a repurchase program in place to repurchase up to $300 million in value, but not more than 5.0 million shares of common stock through December 8, 2023. For the year ended December 31, 2022, the Company repurchased 1.6 million shares under the repurchase program at a weighted average purchase price of $106.71 for a total value of $175.0 million. On September 13, 2022, the Company put a repurchase program in place to repurchase up to $350 million in value, but not more than 7.0 million shares of common stock through September 13, 2024.  Repurchases under the programs may take place in the open market or in privately negotiated transactions, including derivative transactions, and may be made under a Rule 10b5-1 plan.

Inflation and functional currencies

Generally, the countries in which we operate have experienced low and stable inflation in recent years, further 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.

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Off-balance sheet arrangements

We have certain significant off-balance sheet items described in Note 20, Commitments, to the Consolidated Financial Statements. 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. To date, we are not aware of any significant claims made by the indemnified parties or parties to whom we have provided guarantees on behalf of our subsidiaries and, accordingly, no liabilities have been recorded as of December 31, 2022.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with U.S. GAAP which requires management to make estimates, judgments and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Management considers an accounting policy and estimate to be critical if it requires the use of assumptions that were uncertain at the time the estimate was made and if changes in the estimate or selection of a different estimate could have a material effect on the Company's financial condition and results of operations. Our most critical estimates and assumptions are used for computing income taxes, allocating the purchase price to assets acquired and liabilities assumed in acquisitions, and potential impairment of intangible assets and goodwill. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from these estimates. For a summary of all of the Company's significant accounting policies, see Note 3, Summary of Significant Accounting Policies and Practices, to the accompanying Consolidated Financial Statements.

Accounting for income taxes

The deferred income tax effects of transactions reported in different periods for financial reporting and income tax return purposes are recorded under the asset and liability method prescribed under ASC Topic 740,Income Taxes("ASC 740"). This method gives consideration to the future tax consequences of deferred income or expense items and immediately recognizes changes in income tax laws upon enactment. The consolidated statement of operations effect is generally derived from changes in deferred income taxes, net of valuation allowances, on the balance sheet as measured by differences in the book and tax bases of our assets and liabilities.

We have significant tax loss carryforwards, and other temporary differences, which are recorded as deferred tax assets and liabilities. Deferred tax assets realizable in future periods are recorded net of a valuation allowance based on an assessment of each entity's, or group of entities', ability to generate sufficient taxable income within an appropriate period, in a specific tax jurisdiction.

In assessing the recognition of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will be realized. As more fully described in Note 14, Income Taxes, to the Consolidated Financial Statements, gross deferred tax assets were $265.0 million as of December 31, 2022, partially offset by a valuation allowance of $90.4 million. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. We make judgments and estimates on the scheduled reversal of deferred tax liabilities, historical and projected future taxable income in each country in which we operate, and tax planning strategies in making this assessment.

Based upon the level of historical taxable income and current projections for future taxable income over the periods in which the deferred tax assets are deductible, we believe it is more likely than not that we will realize the benefits of these deductible differences, net of the existing valuation allowance at December 31, 2022. If we have a history of generating taxable income in a certain country in which we operate, and baseline forecasts project continued taxable income in this country, we will reduce the valuation allowance for those deferred tax assets that we expect to realize.

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Additionally, we follow the provisions of ASC 740-10-25 and -30 to account for uncertainty in income tax positions. Applying the standard requires substantial management judgment and use of estimates in determining whether the impact of a tax position is "more likely than not" of being sustained on audit by the relevant taxing authority. We consider many factors when evaluating and estimating our tax positions, which may require periodic adjustments and which may not accurately anticipate actual outcomes. It is reasonably possible that amounts reserved for potential exposure could change significantly as a result of the conclusion of tax examinations and, accordingly, materially affect our operating results.

Business combinations

In accordance with ASC Topic 805,Business Combinations("ASC 805"), we allocate the acquisition purchase price of an acquired entity to the assets acquired, including identifiable intangibles, and liabilities assumed based on their estimated fair values at the date of acquisition. Management applies various valuation methodologies to these acquired assets and assumed liabilities which often involve a significant degree of judgment, particularly when liquid markets do not exist for the particular item being valued. Examples of such items include loans, deposits, identifiable intangible assets and certain other assets and liabilities acquired or assumed in business combinations. Management uses significant estimates and assumptions to value such items, including, projected cash flows and discount rates. For larger or more complex acquisitions, we generally obtain third-party valuations to assist us in estimating fair values. The use of different valuation techniques and assumptions could change the amounts and useful lives assigned to the assets and liabilities acquired and related amortization expense. During the measurement period, which is not to exceed one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings.

Goodwill and intangible assets

In accordance with ASC Topic 350, Intangibles - Goodwill and Other (“ASC 350”), we evaluate the carrying value of our indefinite-lived assets, including goodwill, at least annually or more frequently whenever events or changes in circumstances indicate that the asset may be impaired, or in the case of goodwill, that the fair value of the reporting unit may be less than its carrying amount. Our annual impairment tests are performed during the fourth quarter and are performed at the reporting unit level. Our annual process for evaluating goodwill allows us to perform a qualitative assessment for all reporting units, and then perform a quantitative goodwill impairment test for those reporting units in which it is deemed necessary. The qualitative factors evaluated by the Company include: economic conditions of the local business environment, overall financial performance, sensitivity analysis from the most recent quantitative test, and other entity specific factors as deemed appropriate. If we determine a quantitative goodwill impairment test is appropriate, the test involves comparing the fair value of a reporting unit to its carrying amount, including goodwill, after any long-lived asset impairment charges. Generally, the fair value is determined using discounted projected future cash flows and market multiple of earnings. If the carrying amount of the reporting unit exceeds the fair value of the reporting unit, a goodwill impairment loss is recognized in an amount equal to the excess. Determining the fair value of reporting units requires significant management judgment in estimating future cash flows and assessing potential market and economic conditions. It is reasonably possible that our operations will not perform as expected, or that estimates or assumptions could change, which may result in the recording of material non-cash impairment charges during the year in which these determinations take place.

Acquired finite-lived intangible assets are amortized over their estimated useful lives. We evaluate the recoverability of our finite-intangible assets, as a part of our long-lived assets, for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. The evaluation is performed at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If such review indicates that the carrying amount of intangible assets is not recoverable, the carrying amount of such assets is reduced to its fair value. In addition to the recoverability assessment, we routinely review the remaining estimated useful lives of our finite-lived intangible assets. If we reduce the estimated useful life assumption for any asset, the remaining unamortized balance would be amortized over the revised estimated useful life.

As of December 31, 2022, the Consolidated Balance Sheet includes goodwill of $828.3 million and acquired intangible assets, net of accumulated amortization, of $188.3 million. For the year ended December 31, 2022, no impairment of goodwill or acquired intangible assets has been identified.

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Recently Issued Accounting Pronouncements

See Item 8 of Part II, "Financial Statements and Supplementary Data - Note 3 - Summary of Significant Accounting Policies and Practices.

Forward-Looking Statements

This document 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;

business strategy;

government regulatory action;

the expected effects of changes in laws or accounting standards;

the impact of the COVID-19 pandemic, including its variants on our results of operations and financial position;

technological advances; and

projected costs and revenues.

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; inflation; the war in Ukraine and the related economic sanctions; our ability to successfully integrate the operations of Piraeus Merchant Services; the effects in Europe of the U.K.'s departure from the E.U. and economic conditions in specific countries and regions; technological developments affecting the market for our products and services; our ability to successfully introduce new products and services; foreign currency exchange rate fluctuations; the effects of any breach of our computer systems or those of our customers or vendors, including our financial processing networks or those of other third parties; interruptions in any of our systems or those of our vendors or other third parties; our ability to renew existing contracts at profitable rates; changes in fees payable for transactions performed for cards bearing international logos or over switching networks such as card transactions on ATMs; our ability to comply with increasingly stringent regulatory requirements, including anti-money laundering, anti-terrorism, anti-bribery, sanctions, consumer privacy and data protection and the European Union's General Data Protection Regulation and Second Revised Payment Service Directive requirements; changes in laws and regulations affecting our business, including tax and immigration laws and any laws regulating payments, including DCC transactions, changes in our relationships with, or in fees charged by, our business partners; competition; the outcome of claims and other loss contingencies affecting Euronet; the cost of borrowing (including fluctuations in interest rates), availability of credit and terms of and compliance with debt covenants; and renewal of sources of funding as they expire and the availability of replacement funding and those factors referred to above and as set forth and more fully described in Part I, Item 1A — Risk Factors. Any forward-looking statements made in this Form 10-K speak only as of the date of this report. Except as required by law, we do not intend, and do not undertake, any obligation to update any forward looking statements to reflect future events or circumstances after the date of such statements.

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