MoneyGram International, Inc.

Revenue was $320 million, down about 1% year over year. MoneyGram Online revenue was $47 million, up 34% year over year, and total digital revenue was a record $70 million. Gross margin improved to 46.7% from 46.0% last year, with MGO gross margin above 50%. Adjusted EBITDA was $56.5 million, with adjusted EBITDA margin at 17.7%, up 110 basis points sequentially. Free cash flow was $33.5 million, a 59% conversion rate, and cash and cash equivalents rose to $152.6 million at September 30, up about $36 million from the second quarter. For Q4, management guided to total revenue of approximately $325 million, adjusted EBITDA of approximately $60 million, adjusted EBITDA margin of 18.5%, and free cash flow after interest expense of approximately $24 million. For 2021, signing bonuses are expected to be about $42 million, down from $59 million in 2020.

Alex Holmes emphasized that the company is becoming a digital-first payments platform, not just a traditional money transfer operator. He said digital sends and receives are scaling quickly, with 34% MGO revenue growth, 49 countries enabled for Visa Direct, and more than 100 digitally enabled countries covering over 90% of the remittance market. He also framed the Stellar/Circle announcement as a transformational bridge between crypto and fiat, and said the company will keep investing in digital marketing, new countries, new wallets, and broader financial services.

Larry Angelilli said the quarter reflected a mix shift toward higher-margin digital businesses and away from lower-margin revenue, which helped improve adjusted EBITDA margin. He cited revenue of $320 million, adjusted EBITDA of $56.5 million, gross margin of 46.7%, and free cash flow of $33.5 million, and said the company has a steady-state annual free cash flow run rate of about $100 million. He also noted signing bonuses were $3.5 million in Q3 and are expected to be about $42 million for 2021, while Q4 interest expense should be lower after the July refinancing and EBITDA should converge more closely with adjusted EBITDA.

Analysts pressed on three main areas: the new business disbursements opportunity, the impact of Walmart pricing, and the Stellar/Circle crypto integration. Management said the business disbursements initiative is aimed at helping companies pay consumers or workers across borders through MoneyGram’s rails, and that the pipeline for MoneyGram as a service is building through inbound interest. On Walmart, management said the revenue hit was about 2.5 points from pricing, with additional transaction softness from repeat customers, and described the competitive pressure as mostly isolated to that channel. On Stellar/Circle, Alex Holmes stressed this is primarily a new interoperability use case for converting crypto into fiat rather than a traditional remittance product, and said it could eventually generate revenue and lower settlement, FX, and capital-related costs.