Currency Exchange International, Corp.

Q3 revenue was $22.4 million, up $1.1 million or roughly 5% year over year. Payments revenue increased $1.8 million, or 54%, to close to $5.2 million, while banknotes revenue decreased $700,000, or 4%, to roughly $17.2 million. Reported EBITDA was $8.1 million, down about 1%; adjusted EBITDA was $8.5 million, up 3%. Net income from continuing operations was $5.3 million, and diluted EPS was $0.87 versus $0.67 last year; adjusted diluted EPS was $0.93 versus $0.68. For the first nine months, revenue rose 6% to about $56 million, adjusted group net income increased 29% to almost $10 million, and adjusted diluted EPS increased to $1.66 from $1.23. Management did not provide formal next-quarter or full-year guidance, but said Q4 should be a normal quarter and noted third and fourth quarters are typically stronger seasonally. They also said payments margins are above 20% at the product level and should improve as wire-fee costs decline.

Randolph Pinna framed the quarter as a good one, while emphasizing that weaker banknote activity remains the key headwind because of geopolitical tensions, inflation, and softer inbound travel, especially from Canada. He said the company is still growing banknotes through more locations, more agents, and selective expansion into non-financial retailers and international customers. On payments, he highlighted the FedLine connection, broader domestic payment capabilities, and new correspondent relationships as strategic steps that should support continued growth and efficiency.

Gerhard Barnard focused on the financial mix shift: total revenue rose 5% to $22.4 million because payments grew 54% to about $5.2 million, offsetting a 4% decline in banknotes to about $17.2 million. Operating expenses increased 11% to $14.6 million, driven mainly by bank service charges of $955,000, higher salaries and benefits, IT spending, marketing, and stock-based compensation of about $460,000. He highlighted strong liquidity, including $105 million in cash and cash equivalents, $29 million invested in AAA-rated money market funds, working capital of $85 million, and an undrawn $40 million revolver; he also noted $4.2 million spent to repurchase and cancel 241,700 shares over nine months.

Analysts focused on payments margin durability, asking whether larger transaction sizes would pressure margins and whether the payments business could still maintain EBITDA margins. Management said payments margins are currently above 20% at the product level and that the main cost to manage is wire fees, which new correspondent relationships should help reduce. They also addressed the year-over-year margin compression in payments, saying it was affected by the move of payment-processing bank charges from discontinued operations into continuing operations after the EBC change. In a separate question, management said there was no exclusivity on the new global bank relationship and that they remain comfortable with a normal fourth quarter and with continuing share repurchases within board-approved limits.