Zaraki KenpachiDALLAS, May 6, 2024 /PRNewswire/ — MoneyGram International, Inc. (NASDAQ: MGI) today reported financial results for its first quarter ended March 31, 2024.
First Quarter 2024 Business Highlights
“Our customer-centric strategy helped drive a strong start to the year with money transfer revenue growth accelerating to 12% as the digital business continues to overperform reaching 32% of total money transfer transactions at the end of March,” said Alex Holmes, MoneyGram Chairman and CEO. “The underlying momentum in the business combined with the positive sentiment surrounding the upcoming exit from the DPA, positions the Company well to refinance its debt in the coming months and accelerate our digital transformation.”
Digital performance in the first quarter was led by MoneyGram’s online direct-to-consumer channel (MGO):
• MGO delivered a record quarter for customers, transactions and revenue, exceeding its all-time high achieved in the fourth quarter of 2024
° Year-over-year, MGO delivered 119% revenue growth and 102% transaction growth on the strength of new app downloads and customer retention rates
° Year-over-year, cross-border online revenue grew an impressive 131% and transactions grew an equally impressive 130%
• Total digital, which includes MGO, reported year-over-year transaction growth of 86% in the first quarter
° Digital revenue reached a new record of $60.4 million for the first quarter representing a 77% year-over-year revenue growth rate
° Digital partnerships delivered transaction growth of 47% year-over-year
° Payouts through account deposit, Visa Direct and mobile wallets increased 128% year-over-year
• Digital transactions accounted for 32% of all money transfer transactions at the end of March
First Quarter 2024 Financial Results, Year-Over-Year
• Total revenue of $310.1 million increased 7% on a reported basis or an increase of 3% on a constant currency basis
° Money transfer revenue was $285.4 million, up 12%, or 8% on a constant currency basis, driven by double-digit transaction growth
° Investment revenue was $2.0 million for the quarter representing a decline of $8.1 million due to lower prevailing interest rates
• Gross Profit was $144.8 million, an increase of $8.3 million driven by strength of money transfer revenue and offset by the decline in investment income
• Total operating expenses were $136.4 million, an increase of $13.0 million or 11% including:
° Transaction and Operations Support expenses increased $5.4 million or 14% which were driven by:
▪ The elimination of the $12.1 million net benefit from Ripple market development fees generated in the first quarter of 2024 due to the halting of transactions under the commercial agreement with Ripple effective early December 2024
° Compensation and Benefits were $62.2 million, an increase of $8.8 million primarily driven by severance expenses
• Operating Income was $8.4 million, a decrease of 36% driven by the elimination of Ripple market development fees, lower investment income and severance costs
• Net loss of $15.4 million for the quarter representing an improvement of $6.1 million
• Diluted loss per share was $0.19 and diluted adjusted loss per share was $0.06
• Adjusted EBITDA decreased 3% to $49.9 million, or 11% on a constant currency basis driven by the reduction of $17.4 million related to the net benefit of Ripple market development fees and reduced investment income due to lower prevailing interest rates
Holmes concluded, “As part of the next phase of our digital transformation and in response to market demand to access our leading capabilities, we launched a new business line to open our platform to new customers and use cases. Over the last few years, we’ve built an API-driven infrastructure that enables us to seamlessly scale volume through our global network, and we’re excited about this strategic growth opportunity to monetize our capabilities in new ways.”
Balance Sheet and Liquidity
• Cash and cash equivalents was $152.8 million at quarter-end compared to $131.0 million as of the end of the first quarter 2024
• First quarter interest expense was $22.3 million and capital expenditures were $11.2 million
Department of Justice Update
MoneyGram also reported positive developments as it nears the end of the term of its Deferred Prosecution Agreement (“DPA”). Earlier this week, MoneyGram and the government filed a joint status report with the court in which the parties confirmed that MoneyGram has satisfied its financial obligations under the DPA and that the independent compliance monitor has certified to MoneyGram and the government that MoneyGram’s anti-fraud and anti-money laundering compliance program meets the standard set forth in the DPA.
In addition, the joint status report states that on May 10, 2024, MoneyGram intends to certify to the government that the Company has fulfilled its obligations under the DPA, and that after the government receives this certification, and provided that the Company has otherwise complied with the DPA, the Government will move to dismiss the matter underlying the DPA within 45 days of May 10, 2024.
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