Jeff Newman - Executive Vice President, General Counsel Mike Brown - Chairman of the Board, President, Chief Executive Officer Rick Weller - Chief Financial Officer, Executive Vice President Kevin Caponecchi - Executive Vice President, Chief Executive Officer, epay, Software and EFT Asia Pacific Division

Chris Shutler - William Blair Peter Heckmann - Avondale Partners Mike Grondahl - Northland Capital Markets Rayna Kumar - Evercore ISI Tim Willi - Wells Fargo Alex Veytsman - Monness, Crespi, Hardt Jason Deleeuw - Piper Jaffray Matt O'Neill - Autonomous Research

Greetings, and welcome to the Euronet Worldwide Fourth Quarter and Full Year 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a remainder, this conference may be recorded. It is now my pleasure to introduce your host, Mr. Jeff Newman, Executive Vice President and General Counsel for Euronet Worldwide. Thank you. Mr. Newman, you may begin.

Thank you, Stephanie. Good morning and welcome, everyone, to Euronet's quarterly results conference call. We will present our results for the fourth quarter and the full year 2015 on this call. We have Mike Brown, our Chief Executive Officer; Rick Weller, our Chief Financial Officer; and Kevin Caponecchi, the CEO of our epay division on the call. Before we begin, I need to make our forward-looking statements disclaimer. Statements made on this call that concern Euronet's or its Management's intentions, expectations or predictions of future performance are forward-looking statements. Euronet's actual results may vary materially from those anticipated in such forward-looking statements as a result of a number of factors, including economic conditions in specific countries or regions, technological developments affecting the market for the Company's products and services; foreign currency exchange rate fluctuations; the effects any of breaches in the security of our computer systems, the ability to renew existing contracts at profitable rates; changes in fees payable for transactions performed over our networks and changes in laws and regulations affecting the Company's business, including immigration laws and anti-money laundering regulations. These risks and other risks are described in the Company's filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Each of these filings may be obtained via the SEC's EDGAR website or by contacting the Company or the SEC. Euronet does not intend to update these forward-looking statements and undertakes no duty to any person to provide any such update under any circumstances. The Company regularly post important information to the Investor Relations section of its website. Now, I will turn the call over to our CFO, Rick Weller. Rick?

Very good Jeff thanks a lot. Good morning and thank you to everyone joining us today. I will begin my comments on Slide 5. We finished the year with strong results, delivering fourth quarter revenue of $470 million, operating income of $55 million and adjusted EBITDA of $77 million. We delivered adjusted cash earnings per share of $0.92, a 24% increase year-over-year. This result includes about a $0.150 of headwind from foreign currency since we gave guidance in October, so without the FX headwind, we would have nearly hit $0.94 a share. The 24% increase also marks the 12th consecutive quarter we have had double-digit year-over-year growth in adjusted cash EPS. While 24% earnings growth is certainly impressive enough on its own, this result also includes approximately $0.11 of headwind from foreign currency on a year-over-year basis. If added to the $0.92, we would have achieved growth of approximately 39% year-over-year, exceptional to say the least. We are proud that each of our segments contributed to these outstanding results, another great quarter for Euronet. Next slide please. On Slide 6, we show our three-year transaction trend by segment, EFT transactions grew 6% with increases across Europe and India. I might point out that this 6% transaction growth number reflects the loss of a substantial number of transactions from the termination of the unprofitable China contract we disclosed in the second quarter. If not for this termination, transactions would have grown approximately 15%. Epay transactions were essentially flat, growth in Germany, Australia, New Zealand and the Middle East were offset by declines in Brazil, North America, Russia and the U.K. We continue to see a shift in the mix of mobile versus non-mobile transactions. While we do not disclose the specific number of non-mobile transactions, non-mobile gross profits expanded on a year-over-year basis. Total money transfer transactions grew 32%. This growth was the result of a 38% increase in money transfer transactions and a 3% increase in non-money transfer transactions such as check-cashing, bill payment and international recharge. The 38% growth in money transfers was driven by double-digit organic growth, including strong growth in the Walmart2Walmart transaction together with contribution from the 2015 acquisition of IME. Next slide please. Slide7 presents our results on an as reported basis. Key currency changes included double-digit year-over-year declines in the euro, Polish zloty and the Australian, Canadian and New Zealand dollars, and single-digit declines in the Indian rupee and British pound. To normalize the impact of these foreign-currency fluctuations, we have presented our results adjusted for currency exchange rates on the next slide. Before we get there, just a comment about currencies, I might point out that while currency fluctuations have had a significant impact on our reported GAAP financials. The fluctuations have little impact on our overall business economics, due to two key factors. First, we have essentially naturally hedge our cost in each country where we generally generate our revenue. Second, we generally use the resulting free cash flows for in country capital expenditures or to largely complete foreign acquisition. Accordingly, our foreign free cash flow production this year has relatively the same purchasing power as it did last year. Another way to perhaps think about the impact of foreign currency to our economics would be to seeing what our cash EPS would be if we were a euro-based currency reporting Company. If you simply converted our reported USD cash EPS to Euros for both, 2015 and 2014, you would see the resulting euro cash EPS would be euro €2.98 for 2015 and €1.95 for 2014 or a 53% increase. That would be a 53% increase in Euros to invest in largely euro or euro-tracking markets, further demonstrating no deterioration in economic buying power. I am on Slide 8 now. The ETF team had another really good quarter. Constant currency revenue grew 19% as a result of a 12% expansion of our global ATM network and transaction growth of 15% after adjusting for the loss of the China contract. Regarding the 2% operating income and 6% EBITDA growth it is important to understand a couple of discrete items. As you saw in our press release, there were two items that impacted this quarter's numbers. First, the previously announced Company-initiated contract amendment and extension with one of our largest European customers, which resulted in a reduction of operating income and adjusted EBITDA of $1.2 million in the fourth quarter and we recorded a $1.3 million reserve for cash in transit to ATMs, which was held in an account at a bank, which declared bankruptcy. Had these two events not occurred constant currency operating income and adjusted EBITDA, would have grown 13% and 14%, respectfully. Year-over-year operating income and adjusted EBITDA margins declined due to increased fixed and semi-fixed cost from a continued shift of ATMs from those we operate on an outsourced basis to those we own and operate. In the same regard, you can see the step-down in revenues from the third quarter to the fourth quarter and further an additional step-down in the first quarter before traffic begins ramping back up for our seasonally strongest quarter of the EFT segment, the third quarter. As we continue to deploy more of our own ATMs, we will continue to see more dramatic seasonal effects between the fourth quarter and the first quarter. The epay segment finished the year with a constant currency revenue decline of 3%, operating income growth of 15% and adjusted EBITDA growth of 11%. The revenue decline was the result of a shift in the mix of transactions, where we earn a commission we share with retailers to transactions we earn a processing fee and lighter revenues from our cadooz B2B unit, where revenues are largely recorded at face value. If the sum of these two items were added back to constant currency epay revenue, our epay constant currency revenues would have grown about 4%. While constant currency revenue declined, constant currency gross profit increased 4%, which we were able to nicely leverage to the bottom-line. As you can see, a better reflection of the business growth is at the gross profit level, where you can see the 4% adjusted constant currency revenue growth rate is essentially the same as the gross profit growth rate. Gross profit growth was the result of increased non-mobile transaction, partially offset by certain mobile declines. Gross profit per transaction was up slightly year-over-year. This growth combined with efficient operating expense management, resulted in operating income and adjusted EBITDA growth of 15% and 11% respectfully. Year-over-year and sequential improvement in operating income and adjusted EBITDA margins was a result of continued growth in higher-margin non-mobile sales. This represents the fifth consecutive quarter of double-digit constant currency operating income growth from the epay segment. The money transfer segment continued its outstanding year, delivering 27% growth, operating income growth of 62% and adjusted EBITDA growth of 44%. These strong growth rates were the result of double-digit organic growth from each of Ria's core business, Walmart2Walmart and HiFX, together with the June 2015 acquisition of IME. Before I leave this slide, I would also like to point out that if one were to add back for the epay mix cadooz revenue impacts, our consolidated constant currency revenues would have grown approximately 15% year-over-year. We are very pleased with the results contributed by each of our segments in this fourth quarter as we finished the year. Let us move to Slide 10, please, to review some full-year results. On Slide 10, you can see full-year revenue approached $1.8 billion, operating income exceeded $200 million and adjusted EBITDA approached $300 million. Full-year cash EPS was $3.32, a 28% increase year-over-year. Foreign currency rates impacted this result by approximately $0.56 per share, which if added back to cash EPS would have resulted in a year-over-year growth of approximately 50%. Next slide please. On Slide 11, for each segment, the full-year transactions trends were virtually the same as we discussed in the quarterly results. For the full-year, EFT grew 4%, but excluding the China contract would have been 9%, epay transactions grew 7% and money transfer transaction increased 42%. Let us move to Slide 13 to discuss full-year on a constant dollar basis. On Slide 13 now, for the full-year, EFT revenue increased 22%, adjusted operating income increased 21% and adjusted EBITDA increased 20%. This growth was driven by ATM expansion across Europe and India, combined with increased POS, DCC and other value-added transactions Epay revenue grew 5%, operating income grew 25% and adjusted EBITDA grew 16%, largely contributed non-mobile to this improvement and cost management. Money transfer had an exceptional year, growing revenue at 40%, operating income at 105% and adjusted EBITDA of 73%. Organic growth, including Walmart2Walmart, together with the May 2014 acquisition of HiFX ended June 2015 acquisition of IME, drove these strong results. With double-digit constant currency results up and down this page, I think it bears repeating that this was simply an exceptional year for Euronet. Next slide please. Slide 14, presents highlights from our year-end balance sheet. On a year-over-year basis, we continued to strengthen our balance sheet. Our cash and debt remained about the same, while at the same time we completed two important acquisitions and improved our leverage. Said differently, free cash flows from operations essentially paid for our two important acquisitions in Malaysia and Canada, and the growth in our EBITDA against little change in debt results in further leverage improvements. Net-net, we have been able to strengthen our balance sheet, while growing our business and investing in the future. Overall, this was an outstanding year for Euronet. With that, I will turn it over to Mike.

Thank you, Rick, and thanks to everyone for joining today. The results we achieved in 2015 are exceptional. What more can I say about a 50% constant currency growth and op income and adjusted cash EPS. That is just really impressive and a real tribute to our team to work hard every day to make these results happen. I would also like to share with you a few other key highlights of the year. We processed more $2.7 billion transaction. Between our three segments, we were responsible for the collection or dispersion of $74 billion in cash. We added 2,700 ATMs across our current markets as well as five new markets. In June, we acquired IME, a leading Malaysia-based money transfer provider. IME brought us immediate entry into the markets, which account for $133 billion in money transfers each year. In July, we acquired XE, the world's most trusted currency authority. In 2015, XE's websites had more than 256 million unique visitors, nearly 4.2 billion page views and their app has achieved more than 41 million downloads since it was introduced. All of this was the result of three key strategies to continue to add more content to more devices in more markets. Number two, to expand our digital presence; Number three to invest in our business to ensure long-term shareholder value. I had considered the earnings evidence of our success in 2015 and I will highlight some of these areas as we talk about each segment. Please let us move onto Slide #18. This was another outstanding year for the EFT team. What can I say; I just can't enough good things about their ability to remain focused and to select new high-quality sites for our ATMs and POS terminals, while continuing to develop new and innovative offerings for our devices and those for other customers. Let us move onto Slide #19, and we will talk about some of them. Slide 19, we continue to focus on delivering more innovation in more product, on more devices in more markets. As part of that focused, we look for new mechanisms or new technology to grow our business. As an example of this innovation, during the quarter, we launched mobile ATMs recyclers with Idea Bank in Poland. There is a little picture here on the slide. These devices are like mini armored cars and allow retailers to call for a cash pick, to deposit the funds directly into their bank account, removing the risk that comes from carrying a large amount of cash to the bank or to an ATM. This is a completely new offering and we have seen very positive response since the launch. In Romania, we signed ATM network participation agreements with UniCredit Bank. UniCredit is the fifth largest bank in Romania and this agreement allowed their customers to use Euronet ATMs without additional charges. In addition to new agreement, we renewed several of our agreements with Raiffeisenbank. In Croatia, we renewed our ATM and POS outsourcing and driving an ATM acquiring agreement. In Romania, in Serbia, we renewed our ATM and POS driving agreements. We also renewed our ATM POS and card outsourcing agreements, with AIK Bank and Komercijalna Bank in Serbia. Next Slide please, Slide #20. Okay, so we are talking about growth drivers here. We continued to introduce more value-added products to our portfolio. Throughout the year, we have seen significant growth in our card management business. During the quarter, we launched our Euronet open loop gift card at Argos, a large retailer in the U.K. We also launched the private-label closed loop debit card for Erzsebet in Hungary that we told you about last quarter. We added prepaid gift cards through our ITM software for Sogebank in Haiti and Arvest issued EMV debit card using Euronet's ITM software in the United States. Finally, we signed an agreement with Raiffeisen Solutions in Poland, a subsidiary of Raiffeisenbank, which was established to handle all of the bank's foreign-exchange traffic. This agreement is unique, because we were able to leverage our companywide foreign-currency expertise with our EFT cardless payout technology and our Ria Money Transfer to provide an innovative solution for Raiffeisen customers. Raiffeisenbank customers can transfer funds from their Polish zloty account into a foreign currency-denominated account at Raiffeisen Solutions. Customers have the ability to transfer funds to 48 countries using the service powered by Ria. If they wish to withdraw their funds, they can set up a cardless cash withdrawal using their mobile app and collect the funds at the bank branch or using one of Euronet's foreign-currency dispensing ATMs. As you know from our history, we grow our business through more value-added products on more ATM. The list on slide 20 certainly speak to adding more products, so let us go to Slide #21, and we will talk more about the ATM. On Side #21, we presented the key highlights of our ATM deployment progress. This is kind of a new slide, so I have talked about this subject matter before we make it pictorial. During the quarter, we added 823 ATMs, with the largest increases in Europe and India. We finished the year with 21,360 ATMs. These additions were offset by our historical practice of temporarily winterizing 591 seasonal ATMs. Excluding the Chinese contract termination, we told you about in the second quarter, we added more than 2,700 ATMs across Europe and India in 2015. Consistent with the expectation we set out for 2015, we expect to install approximately 2,000-plus ATMs in 2016. As we have told you for the last several years, we experienced more seasonality as our deployed ATMs become a greater percentage of our total ATM. To better illustrate this trend, we have provided an illustration of our ATM mix over the last five years. As you can see in 2011, deployed ATMs made up about a fourth of our total ATMS. By 2013, that percentage was up to 30% and by the end of last year 2015 that percentage increased to more than 40% and we expect this to continue as we put in more of our own ATMs. The greater number of ATMs, we own will contribute to a greater variation of revenue and operating income amongst quarters, because many of the costs to own and operate ATMs are relatively consistent through the year. While revenue, though, is much more significant with the season, this has been exacerbated over the last three years, due to our more recent appointment in Europe, where downtown and other busy locations demand much higher rent than our historical Central European locations. Accordingly, we will continue to see our first quarter as our lowest earnings quarter, followed by the second quarter and then the fourth quarter, with the third quarter being our highest earnings quarter. All around, this was another excellent year for EFT. With the addition of good ATM sites and exciting new products, we expect another strong year for 2016 from EFT. Now, let us move onto Slide #24, and we will talk about epay for a minute. Epay delivered a strong 2015, with double-digit operating income growth in each quarter, which was a result of our ability to expand our non-mobile content in the channels in which sell in. I would also like to reflect on a few comments that Rick made earlier. As you may remember, epay traditionally contributes about half Euronet's total revenue, yet because of its economic model, contributes 25% of Euronet's EBITDA. Bearing this in mind, it takes a lot more revenue to push my profit needle in epay than the other two segments. Due to the fact that in Q4, we had a significant amount of epay's contribution, morphing from a commission model to a transaction model and due to the high growth face value revenue of cadooz compared to its contribution. You might say that on an apples-to-apples basis, our total company revenue would have grown approximately 15% on a constant currency comparison to Q4 2014, without these two changes in our retailer or content vendor relationships. As an epay colleague once told me, revenue is for vanity, profit for sanity. Let us move onto Slide #25, and we will talk about the highlights in this exciting segment. We continued to expand our non-mobile content to more retailers and through more channel. In Germany, we added Google Play digital codes to the Deutsche Bank and Postbank online banking platform. We also added Pin-on-Receipt for iTunes, Xbox and Amazon in 10,000 Lekkerland locations. In Italy, we added iTunes Pin-on-Receipt for 800 Eurospin location and Sony content in 110 media marked locations. In India, we created a white label website, which allows IDBI Bank customers to view and select from all available digital content without logging into the online banking app. Once they have selected their content, they can choose to pay for it directly from their bank account. We also launched a new music service through ICICI Bank website. Customers can now download multilingual music and movies directly from their banking app. These two services in India highlight our ability to provide customers with innovative digital services that they want while making payment convenient and easy. Finally in France, we system launched closed loop gift card processes and a gift card mall for Système U, a group of large retail stores with more than 800 locations. Next slide please. Slide #26 shows highlights from our mobile business. In Germany, we launched six mobile SIM products at 350 Valora stores. In the U.K., we introduced SIMPOSA in 240 independent retail locations. In case, you aren't familiar, historically, SIM cards for prepaid phones come preloaded with the phone number. Our SIMPOSA product assigns a phone number to the SIM card at the point-of-sale, reducing the number of phone numbers sitting idle on a retailer shelf. This is particularly beneficial in markets like the U.K., where telephone numbers are at a premium. We also signed an agreement with Lebara and Talk Mobile to use SIMPOSA to distribute SIM cards for their brands. Finally, we renewed our distribution agreement with Woolworths, the largest supermarket chain in Australia. As I reflect back on 2015, for epay, we added new global non-mobile content, including Ticketmaster and Blizzard, as well as new local content such as Deezer, Magix and CyberLink. As we continue to add content to our network, we will continue to add distribution through our retail network around the globe. This was a great year for our epay segment, where we achieved double-digit operating income growth in all four quarters from good execution of our strategy to distribute more products through more channel. Now let us move onto #Slide 29 and we will talk about money transfer. Well, here we go again. This was another exceptional year for money transfer segment, delivering double-digit growth across all metrics, which is a result of strong execution on our strategy to organically grow our business, as well as from the successful completion of three acquisitions over the last two year. We will move onto #Slide 30, please. As Rick mentioned, we continued to see excellent money transfer transaction growth. We received our 19th consecutive quarter of double-digit money transfer growth, with a 38% increase in money transfers. This growth was made possible by continued expansion of our network, which now reaches 292,000 locations in 147 countries, a 20% year-over-year increase in total network locations. This quarter, we launched 13 new correspondents in nine countries. In Armenia, we launched send and receive service at more than 577 Haypost locations. Haypost is the national postal operator in Armenia, and beneficiaries can now claim cash payments at any of its locations in the country. In addition to paying remittances to beneficiaries, this new relationship enables customers in Armenia to send outbound remittances to beneficiaries in any of the additional 146 countries where Ria has payout services. In Mexico, we launched in INPAMEX, also known as Instant Pay de Mexico, with 489 locations. Through INPAMEX, Ria transactions can be paid out at respected supermarket and drugstore chains, which are more often closer to our customers and offer greater convenience and extended pickup hours. The more options we can provide our customers for cash pick up locations, the better service we can provide them. Mexico, as you probably know is the world's fourth largest received market and was expected to receive nearly $26 billion in money transfers in 2015, and we are pleased to add INPAMEX to this very important corridor. The services launched with Bank Alfalah is a significant addition to Ria's aim to extended service coverage throughout Pakistan, with 624 branches located in more than 200 cities, a fifth largest private bank in Pakistan brings the prestige of one of the largest banking institutions in the country to Ria. We also signed agreements with 19 new correspondents across 16 countries. As you may have read in our press release issued on Monday, Ria has launched a new cash pickup and tax refund service in partnership with American Express and Walmart. One of the benefits of a successful relationship with Walmart is having the visibility of proven success with a large global brand. Over the last two years, we have been able to demonstrate our ability as a superior global processor, which Walmart recognized with the consecutive Financial Services Supplier of the Year awards. This recognition helped us win the agreement with American Express. We are pleased to extend our service offering in Walmart and to partner with the two leading global brands. 2015 was a very exciting year for our money transfer segment. We continued to grow our Ria business at double-digit rates. We launched HiFX in the U.S.; we made two important acquisitions in IME and XE, which will continue to drive our momentum as we go forward. Now, let us move onto Slide 31 and we will wrap up. Slide 31, we achieved fourth-quarter adjusted cash EPS of $0.92, a 24% reported increase and a remarkable 39% constant currency increase over Q4 2014. This also marked the 12th consecutive quarter we have achieved double-digit cash EPS growth. Adjusted for currency changes, our full-year cash EPS grew approximately 50%. That one is hard for me to believe, but it is true. EFT results reflect continued expansion of our ATM and POS networks. Epay achieved its fifth consecutive quarter of double-digit operating income growth, driven by continued sales of non-mobile content. Money transfer delivered another strong quarter of exceptional earnings growth driven by double-digit organic growth, including strong performance from Walmart2Walmart, combined with the acquisitions of HiFX, IME and XE.com. We continue to de-leverage our balance sheet and generate good cash flow. We expect our first-quarter adjusted cash earnings per share to be approximately $0.68 assuming foreign exchange rates remain constant from today. As we look forward to 2016, we continue to have substantial opportunity to deploy ATM, which as we mentioned, we plan to deploy an additional 2,000-plus ATMs in this year. We are pleased to have launched HiFX U.S. and are excited to launch in Canada with XE. We continue to see opportunities to sign more correspondents across our Ria business, including in Malaysia through IME. In epay, we continue to attract global and local content and we plan to add more content to more jurisdictions around the world. We also look forward to a year, where we hope that foreign-currency fluctuations won't be so darn impactful to our earnings. With that, we will be happy to answer your questions. Operator, will you please assist?

Thank you. [Operator Instructions] Our first question comes from Chris Shutler with William Blair. Your line is open.

Hey, guys. Good morning.

Good morning, Chris.

Let us start in EFT, first, Mike, I was hoping to just get a better explanation of what you mean by winterization and the impact of that has on the P&L in the quarter.

Okay. You know, in Europe, we are in a number of these Mediterranean kinds of coastal countries and if we happen to have ATMs in these coasts or islands or whatever, there is basically no customers there. There is no local and there is no tourists. During the wintertime, we basically just kind of put a tarp over them and close them down. We probably still are paying rent, but at least we are not paying for money delivery services and so forth.

Okay. Got it.

That is almost 600 ATMs.

Right. Yes. I just wanted to understand whether there is still associated with those machines in the quarter.

Yes. That is the whole trick and we are trying on that pie chart, and I have been saying this for a number of years that as we have moved into Western Europe, things just get more expensive. I mean, you know, a location in downtown [ph] cost the same as in downtown Rome, and the thing rents is you got to pay them 12 of the year unless you happen to be on an island or so.

Okay. Then in Q4, you added 823 ATMs, you said you winterized 591.

Let me just add to that too, those 591, we have to continue to depreciate them even while they are closed down for the winter.

Yes.

…so they still do have expense associated with them.

Understood. On the deployment of what winterization numbers though, can you give us some sense of how those numbers in the quarter compared to prior fourth quarters? I am just wondering if, particularly the ATM addition number of 823, whether that was materially more aggressive than prior quarters.

Yes. Look, we never…

…higher.

Yes. We have never put 800 ATMs in a quarter, so that was higher. Then we have just got - I mean, we had a stunning year. We are just a little over 2,000 the last several years and we did 2,700 this year, so that's 2,700 additional ones that you are paying full price on and we winterized more this year too just, because we were more penetrated into those markets.

Okay. Got it.

I think, kind of just get ready for, in the fourth quarter and in the first quarter, we are going to have much higher cost as a proportion revenues and EFT and that is just kind of the way it is, but we have got enough empirical experience that we know these things just you know print money for us in the other quarters.

I guess the other thing I would point out, Chris, is that while we do have the higher cost, you can see in the results of our profits is we have got good contribution coming in from a number of our different business segments that, again, if you look at on a constant currency basis, we were up in earnings almost 40% year-over-year. We recognized that we may have some of these, let's call it, more seasonally different costs, but we are really pleased with our teams' efforts to be able to bring in the type of revenue sources and profit sources that give us that ability to grow 40% in this case year-over-year, despite having that kind of load of expenses.

Yes. Understood. Is there any way, guys, to classify the kind of the earnings hit in the Q1 earnings guidance from more deployments? I am just thinking last year's Q4 to Q1 versus maybe 2014 Q4 to 2015 Q1, just is there a couple of pennies of additional headwind from more aggressive deployment or how should we think about that or is it similar?

It is a little bit more, but again, we also have the cumulative effect of a year's worth of ATM growth coming into the picture there, so we expect to see a continued improvement in our EFT business, but clearly on a just on a cost basis, it will be more in the first quarter this year than last year.

One thing we did find maybe five or six years ago, when were a little bit smaller, we were kind of careful not to install many ATMs in the first quarter, because we knew there are highly negative financial impacts on our numbers. We have got enough experience now putting these individual ATMs in these markets that you just can't get enough of them and if you do not start working in January, so basically we are putting them in as fast as we can really around the whole calendar and that cost us more in Q1, but that is the payoff is in Qs 2, 3 and 4.

I guess just to finish the comment, if you just take a look at our first quarter guidance, we are expecting that it is a nice improvement over last year's first quarter, which as well includes appreciation or accretion from the EFT segment. Net-net, again, while we will have additional cost there, that cumulative year-over-year growth has given us the ability to believe that we will see yet an expansion in our op income of our EFT segment into the first quarter.

Last year '14 over '13, we grew first quarter profit by about 20%, and we can hit our guidance of $0.68, it will be very similar for this quarter, so we are happy we can kind of walk and chew gum at the same time, we can take on higher expenses and still deliver those kind of growth numbers.

Then just one more quick one, on EFT, the ATM deployments in the quarter and roughly over 800 number and the 2,000-plus and in 2016, how does that breakout Eastern Central Europe versus more on developer to Europe as well as India?

Well, I won't break it out between Central and West, Europe, my bet is a little bit more in the Western Europe versus Central and probably Europe versus India is probably 75-25 is a guess. When we think 2,000-plus, you know, we obviously have enough staff to put in 2,700. The question is, finding really good site, so I do not want to just find numbers for you guys, you know, put in bigger numbers. I want to put in ATMs that are profitable, so that is why we say 2,000-plus, because we still restrict our site pointers to find excellent locations.

All right, thank you.

Our next question comes from Peter Heckmann with Avondale Partners. Your line is open.

Hey, good morning gentlemen. Thanks for taking my questions. It is regards the, Rick, [ph] in the quarter, lower than expected. Were there any one-time or discrete items that you want to call out there?

In the first quarter?

In the fourth quarter.

Well, I think it is really those couple that we pointed out in our press release there.

Say again, I am sorry. I missed it.

It just would be those couple that we pointed out in our press release.

Okay. Then just in terms of trying to get the consensus a little tighter. You have given your EPS guidance. Can you talk about how you are thinking about constant currency organic revenue growth maybe in the first quarter and if possible for all of '16?

Well, Pete, we can give some consideration as to whether we would expand the line items that we give guidance on, but so far we felt comfortable to stay to bottom-line. As Mike said earlier in his comments, our epay business more specifically can have a little bit more of an erratic top-line, but as you can see from the illustration I pointed out on a gross margin basis if you made a couple of adjustments for some of the gross revenue reported versus transaction that really what we saw was a consistent improvement in transactions and gross profit on a year-over-year basis, so that is why we been reluctant to want to give more specific guidance on the top-line. We will take revenue from, let us say, for example cadooz and be glad to serve our customers and our markets out there. Even though it may turn out to be gross revenue that we report, we know what we will make in terms of a transactional profit and I think you can look back to our history and see the consistency of that and also the consistency of the delivery of our bottom-line. Sometimes the top-line can be a little bit more erratic. I think, we are seeing that for example in this fourth quarter, but I would encourage us to continue to take a real strong look at the bottom-line, because clearly we cannot produce that level of profits if we do not have the gross profits coming through the business.

Right, and I think that is important point is that there is a real makeshift here and that is benefiting that the bottom-line and do not want to get the consensus in a situation where you are missing the top-line, but you are beating the bottom-line, because you have not given enough details on the mix shift.

Yes. I guess that always kind of gets around as to who is missing what, whether it is missing or the analysts, but we will leave the humor at, Pete.

All right, just last question. I will get back in the queue, but in terms of kind of the percentage change in the mix shift in prepaid. I may have missed it, but was there anything in particular from a seasonality perspective in the fourth quarter in epay that is a consideration and how should we think about it over the next year in terms of will we expect kind of mobile prepaid to be shrinking at a rate of about 10% a year, but content growing at 25%. Then we can kind of do our own calculations of what that does to margins.

Yes. I mean, we have not put a specific number on it, but I think that you are in a mid-to-upper single-digit number on the mobile and you are in a nice strong double-digit on the non-mobile, Pete.

Okay. Then just last, any seasonality in the fourth quarter in epay that is worth calling out or is that kind of…

Nothing of remark.

Okay. I will get back in the queue. I appreciate it.

Our next question comes from Mike Grondahl with Northland Capital Markets. Your line is open.

Yes. Thanks for taking my question guys. Maybe I will just try one follow-up on epay. This shift from a commission to a processing fee and the cadooz kind of face value stuff, what inning are we in of that kind of working itself through revenue? Are we at the beginning stages of that? Do you see that continuing for a while? Can you give us some color there?

I would say that the cadooz is kind of like a quarter-by-quarter thing. It just happens to be the relationship of this year's fourth quarter compared to last year's fourth quarter, so it kind of does not have a continuing effect. The other item which was the mix from what I will call commission-based revenues to transaction fee revenue largely happened in the fourth quarter and we will kind of see some of that effect as we go throughout the year on the revenue line, but not on the gross profit line.

Right. I think to take away for epay is revenue trends are lumpy, but the gross profit line and the bottom-line, you are pretty happy with and you have got your own…

Yes, and it is very constant.

Yes. Well, said. Well, said, Mike.

Okay. Then just thinking about 2016 for a moment, where do you see your investment dollars going in 2016? What are a couple of the larger buckets? Like, is Ria online still several million dollars and what else would you call out?

That is one. We will continue to invest in that digital space there. There is a few others that I would call out that we have been quite pleased with in completing our investments for continued growth. We will continue to rollout the HiFX U.S. business and hopefully we will see it gain more momentum. As Mike said, we will be focused on HiFX Canada to be ready for capitalizing on our XE.com acquisition, echo another comment that Mike said, we will continue to invest in ATM deployments. We will continue to see more EFT products rolled out to really leverage what is on our ATM and POS network across our many countries In pre-pay, we will continue to attract more non-mobile names, so I guess that kind of in a real macro perspective would be the areas that we have focused on. I would not necessarily say that each of those are going to drive incremental investment dollars. Some will take a little bit of incremental investment dollars, we factor that into our guidance that we have given for the first quarter, but we are pretty excited about a number of these things. I did not mention IME in Malaysia. We see that is an extremely attractive opportunity for us. We do not see a lot of what I characterize as being dollar investments, but we will make significant time investments to grow that property.

Okay. Then some of the fourth quarter renewals, and maybe Woolworths in Australia, are those being renewed on similar terms or you having to make greater than expected concessions. Just could you talk about those renewals sort of generally?

That is specifically in epay?

Well, I guess just any renewals you are doing, whether it is ATM that you are managing, whether it is or non-mobile?

Yes. From an epay perspective, this is Kevin, I can speak to that. We are having quite a bit of success renewing retail arrangements and brand agreements with no material impact on the business. In fact, as we add more and more products to our portfolio, we actually are getting some leverage in those discussions.

I would even add to that, while we have talked about the mobile decline for really several years, we have also recently changed a little bit of our approach with some of those vendors where we recognize that there are some drops in the volume, so we have negotiated effectively increases in the rates. We have not seen any kind of downward pressure on the renewal of these things. We think that we will continue to advance the ball there, but I do not ever want to try to, let us say oversell our margin numbers out there too, because I believe we always have competition out there. That is always going to be there, but what we have been able to demonstrate year-in and year-out is that we find ways to grow through that.

Got it. Maybe just last question for Mike, how do you see 2016 setting up for Euronet? In light of the fact that adjusted cash EPS has grown 25%-plus the last three years. As you guys point it out on a constant currency basis almost 50% in 2015, so how was 2016 setting up?

Honestly, we have got a lot of momentum behind it. It is hard to do 28% on 27% on 28% over and over and over. I will agree, but the nice thing is, we have got a lot of momentum and we really know what we are doing here, so I am really excited about this year. We want to sustain those high levels of growth like we have as close as we can and I will tell you everybody knows, we have got an implicit arrangement with all our managers as they keep delivering these kinds of numbers. You can double your stock price or double your earnings in three years, so it is hard to do, but that is at least at goal so.

Got it. Okay. Thanks, guys.

Our next question comes from Rayna Kumar with Evercore ISI. Your line is open.

Good morning.

Hi, Rayna.

Hi. When do you expect epay revenue to return to growth given the shift from commission to processing fees? Can you quantify revenue from cadooz?

Well, I did not specifically call out that revenue number for cadooz. I just added it together with the other one to kind of get that net effectively increase of 4% for epay on a year-over-year basis, so you could do a little bit of math Rayna and get to there, but I won't set out the two numbers. I would tell you it was slightly more in favor of the transaction shift in the cadooz number. In terms of the return of the revenue, it is probably a little bit like what I would say, to my comments to I think it was Pete about guidance on that. I probably would not speak a great deal to the top-line, but again I would talk about the gross profit line and I think we will continue to see that that number will move up the page. We have got good product in our retailers today. We have got others stuff it is in the pipeline. We have got other ideas on the drawing board, so I would expect to see that we will continue to see a growth in our gross profit number. I would probably be a little careful to try to set an expectation of what would happen on the top-line, just because of some of the - maybe as Mike's said, some of the lumpiness in that prediction.

Got it. That is very helpful. Do you expect to win a cross-border money transfer contract with Walmart this year?

I do not expect anything with Walmart. All I accept that, if I can just continue to deliver good service to them, good products, good quality then we can perhaps get other deals and you saw the deal that we just announced with AmEx and Walmart. It certainly would not have happened if we were not good graces with Walmart with our current that Walmart2Walmart product. What they want to do with their international business is up to them. As you saw, our competitor within Walmart is now in a non-exclusive arrangement, so that I think opens the door for a lot more discussions in the future.

Understood. Just one last question, could you speak about on your expectations for negative FX translation, the impact of revenue and earnings for 2016?

Well, let me tell you, if I knew the answer to that one, I would be a billionaire. I mean at the end of the day, all we do every one of these quarters is we tell you what we are going to do next quarter based upon current FX rate of the dollar. You know, the dollar to the euro goes 1 to 2 then we are really going to have some problems. If it goes 2 to 1, then we are going to have a really nice year, but that just as reported. That is why we always do in constant currency.

Rayna, as Mike's said, we may be doing something else. We are glad to be able to grow our earnings on a constant currency basis 50% year-over-year. If I were to try to guess what is going to happen with currencies, I do not think we would have near that luck, but if you take a look at the year euro on average for 2015, it was about $1.11. Okay? At one point each for each euro, you are end up with about $1.11. The euro today is trading at about $1.12, so if it remains and there is many of the other currencies are, let us call it, similarly packed around the euro rather than the dollar, so if it would remain like that throughout this year, you could see that the earnings would have relatively insignificant impact from FX, but that is just dependent upon whether those currencies kind of continue at the current rate.

Thank you.

Our next question comes from Tim Willi with Wells Fargo. Your line is open.

Hi, Tim.

Thanks. Good morning. Hi, guys. A question on EFT, I guess staying this quarter or next quarter, but how do you think about ultimately your growth opportunity in Western Europe. Then does that at some point in time have you looking at other regions that you are currently not in and I guess I think about like South East Asia?

Well, let me. I think this is something that bears repeating. I mean, when you take a look at the ATM penetration of North America versus Western Europe, North America has twice many AMTs per capita. Compared to the Central Europe, it is probably four times as many ATMs here as there on a per capita basis. There are about 400,000-ish ATMs in Europe, so that would say that if Europe wanted to have the same kind of numbers as the U.S. does. I could put in 400,000 new ATMs to get up to our standards you might say. We are putting in 2,500. I mean, we are not even scratching the surface and then you add to that, places like India and some of these other those places where you going to get 10X difference or 20X difference, so I still believe it is a target-rich environment. Although it is not built like the U.S. is through surcharge, it is built by finding really good locations that you can get lots of locals to come visit. Then with a little bit of luck, you can catch some tourists and you make a little bit money on those transaction. I do not think Europe is ever going to have as many ATMs as the U.S. does on a per capita basis, but we have got a long runway before we run out of sites. I will also say we are not just looking at Europe and we are not just looking at India. We are looking at other markets too.

Okay. That is what I was most curious about it is if there are geographies.

…but I do not want you to get all excited and expect the whole bunch of ATM in some wacky new market, because that is not going to happen this year. We might test a few, see how they work and that is typically how we are going to any of our new markets, we test it with 20 or 30, see how that works. Then if it works, we will blow out a couple of hundred.

Yes. Question for Rick on the balance sheet and then I will hop off. Just sort of how you are thinking about cash and share buyback that pay down what the M&A pipelines look like?

Well, as we typically have, we have a number of opportunities that are on the examination table, so to speak. I think, as we have done in the past, we will look to those opportunities and whether we think that there is a good chance to complete them. It is always really difficult. We went a couple of years there without doing anything and then last year we completed two acquisition, the IME and the XE, so we have got some what appear to be some interesting opportunities, but from there it gets to be really hard as to whether or not you can actually close out on them. As I think you saw in our announcement in January, there we had approved some share repurchase, we will consider that in balance with the opportunity or let us say what our view and our optimism may be with respect to completion of an acquisitions and then whether or not it would be a more sizable acquisition. Right now, we do not see really large things on the acquisition horizon, but we do see things consistent with transaction sizes we have completed in the past. Tim, again that is really kind of hard one to say, but there is good opportunity there. We will see how they work out.

Great. Thanks very much, guys.

Our next question comes from Alex Veytsman with Monness, Crespi, Hardt. Your line is open.

Good morning, guys. For epay, I just wanted to get more color on the non-mobile products extension, specifically, what you expect in 2016, what are some of the tailwinds you could see for non-mobile as well as for epay overall?

Yes. I do not know that we necessarily see any other additional tailwinds out of non-mobile there out of our epay segment. As I mentioned earlier, we have seen some of that tailwind. We have talked about it in the past and we recognize that it is a product that has a more mature lifecycle to it. As a result, we are bringing in other product to offset that. Our team has done a really good job at bringing in that non-mobile product to offset it, but I would not expect to see any additional tailwind in that, but Kevin if you have any other observations, you can jump in.

Yes. The only other thing I would add to that Rick is that we continue to add more channels, not necessarily more markets, but more channels specifically the digital channel, distributing our content via wallets and online merchants and online banking and mobile apps, so we will see an expansion of channel distribution and we are always adding content, but I would agree with Rick in terms of one or two specific products, I do not see one or two products making a significant difference in the year. It just about adding a lot more content across more channels and optimizing the distribution that we have in place today.

Got it, that is helpful. Then for Walmart cross-border, I know that at this point nothing is signed, nothing is there, but if that were to happen besides Mexico, what are the most logical markets for the Walmart-2-Walmart cross-border for you guys?

Well, I think it is just best to say Walmart has to make those decisions in which way they want to go. If they would like us to be their partner, we will be happy to negotiate.

Okay. Great. Thank you.

Our next question comes from Jason Deleeuw with Piper Jaffray. Your line is open.

Hi, Jason.

Hi, Mike. Thanks and good morning. First question on EFT, so the margin outlook for the full year basis. I think I understand kind of the increasing shift to the owned AMTs and how that is creating more pronounced seasonality in that segment, but when I think about on a full-year basis for EFT, I mean the incremental margins must still be pretty high. Can we still expect margin expansion for the segment on the full year?

Well, as I might have covered with you before, when we throughout an ATM in - Western Europe and maybe across the board, probably our incremental margin on that is about 30%. [ph] some purchases infinity, theoretically if we put in gods and gods of new ATM our margin should approach 30%, so that might even be less than what we have today, but that is because today we have a mix of that and very high-margin probably 90% margin outsourcing deal, so it is really a race to see how much outsourcing revenue we can bring in. At the same time, we are bringing in 30% margin owned ATM revenue.

Got it. I was just going to add that what is exactly driving the shift towards more owned ATMs versus outsourcing?

I mean, it all started with the banking crisis seven years ago, the friggin' banks had their balance sheet upside down. Nobody could make a decision. They still and do not seem to be able to do that good of job with it, so we are going to wait for them to do outsourcing. The banks are very unstable right now, particularly the banks in Europe and idea of outsourcing is a difficult thing to sell in any environment, particularly now, so why sit around and wait for them to get the sites and make the right decisions. Let us put some ATMs of our own. We know how to do it. We have been putting in take in individual sides for 21 years, so let us do what we know how to do and if more outsourcing deals come then all the best.

Got it. Then for epay, also I just want it to make sure I understand. What is driving the shift from this transaction from commission to more processing transaction?

That was one of our larger customers and that is just how they wanted to renegotiate their dealer how we wanted to, and then it has all worked out. I mean, to use is a relevant what the top-line is as long as we continue to see growth on that bottom-line.

Then for money transfer, I know you guys are continuing to try to grow share and get more agents. Obviously, Walmart international is the big one, but I know there are others that you are looking for possibly just U.S., domestic and when you are competing for this business like what are the key negotiating points are differentiators. I mean, has this strictly come down to price and the commission share?

You know what, what we are seeing here is, Walmart is the largest retail in the world and they are probably the most sophisticated. What they realized is that an exclusive relationship with one provider does not make a lot of sense long-term and they want to give their customers choice. They said that when we announced the product and you can see that also on payout, payout has gone from exclusives to non-exclusive as well. As this industry evolves, it is going to move more towards non-exclusive, because at the end of the day there is no it does not make sense for you to ally yourself with just one provider who might only have the largest provider out there is 17% market share that means you are saying no to the other 83%, so we would expect an evolution just like we have seen in payout on the SIM side, where more people will go non-exclusive and allow their customers choice.

Thanks. Then just the last one, beginning question is on the global macro obviously a little bit more forefront given the last few months, but I know you guys are put in a pretty strong constant currency growth across all your businesses, but are you starting to see any macro softness and any of your businesses in any regions that you would called out?

No. That is something I want to be make really clear. We have not felt any of these, we do not see it. Immigration continues to grow around the world. Our site for ATMs, are still there regardless of these macro events. Epay continues to throw more content into more channels all the time. I mean, we grew constant currency last year by 50% bottom-line. I mean, obviously, we are not feeling a lot of impact.

Thank you.

Our final question comes from Matt O'Neill with Autonomous Research. Your line is open. Matt O'Neill: Good morning, guys. I was wonder if you could give any update on the possibility of Visa opening DCC on ATMs outside of EU?

Well, I mean, we have announced that we do that now in other countries. We do it in India. We announced to the State Bank of India's as a DCC partners of ours, with 45,000 - Did you say Visa? That is up to Visa right now. I mean, the EU mandated the Visa allow DCC, it is kind of dumb that they do not. MasterCard has a certainly embraced it as a way that you can make more profit and also allow their customers to have more transparency in that transaction rather than being surprised when they get home. We hope that Visa brightens up as well, so we will just see what happen. Matt O'Neill: Great. Thanks. Lastly, any updates or changes to the plan for the XE migration following the notice period?

No. We have given them notice. Basically it took us about a month or so after the acquisition to give them their notice. We are now working out the mechanics of connecting all the pipes together, so that we can have a nice flawless transaction flow for our customers. We expect later this year, just like what we are originally anticipating to go live with that. We do have the exact date yet, but we are working towards that. Matt O'Neill: Great. Thanks very much.

Okay. Operator, I think, we were a little bit or 15 minutes over. I thank everybody for their time and their patience.

Thank you. Ladies and gentlemen, that does conclude today's conference. You may all disconnect. Everyone have a great day.