Currency Exchange International (CXI) Q2 2024 earnings summary

Executive summary

• Q2 2024 net income was $500,000, down 77% year-over-year, mainly due to a $1.4M deferred tax expense at Exchange Bank of Canada; adjusted net income was $1.9M, down 14% year-over-year.

• Revenue grew 7% year-over-year to $20M, with strong new customer acquisitions in both banknotes and payments product lines.

• Net operating income increased 2% for the quarter but declined 6% for the six-month period compared to last year.

• Liquidity and capital positions remain strong, with $72.8M in net working capital and $79.9M in total equity as of April 30, 2024.

• Significant investments in technology platforms and operational efficiency initiatives continued.

Financial highlights

• Q2 revenue: $20.1M (+7% YoY); six-month revenue: $38.2M (+7% YoY).

• Q2 net operating income: $3.8M (+2% YoY); six-month: $6.1M (-6% YoY).

• Q2 reported net income: $0.5M (-77% YoY); six-month: $1.36M (-65% YoY); adjusted net income for Q2: $1.9M (-14% YoY); six-month: $2.8M (-27% YoY).

• EBITDA margin was 19%, slightly down from 20%-21% last year.

• Operating expenses increased 9% year-over-year, mainly due to higher salaries and benefits.

Outlook and guidance

• Management expects continued strong growth in U.S. payments and banknotes, with additional integrations and new client acquisitions anticipated.

• Canadian payments growth is expected to improve as new integrations are completed.

• The company is optimistic about Exchange Bank of Canada’s turnaround and resumed activity following recent currency shifts.

• Management remains focused on scaling global payments, expanding in the international banknote market, and increasing penetration with financial institutions.

• Direct-to-consumer growth through online and agent platforms is a strategic priority.