International Money Express, Inc. (IMXI) Earnings Call Transcript & Summary

I would like to welcome, everybody, to Intermex' Inaugural Investor Day, and thank you all for attending in person. And for the audiences listening via online, thank you for your interest, and we hope to be able to meet you in person one day coming up very soon also. Let me spend -- and by the way, I'm Mike Gallentine, Vice President of Investor Relations. And if you have any follow-up questions after this event, as you go back to your office, looking through the material, please feel free to reach out to me. And hopefully, I'll be able to answer all of your questions. Obviously, I will not be reading our safe harbor statement and non-GAAP statement, but I would like to call your attention to it and to let you know that our complete list of safe harbor cautionary language, please refer to our 10-K that we have filed with the SEC. You can also reach that -- see that on the website. We have our Reg G non-GAAP reconciliations contained in the back of the slide presentation to the reconciliation to the nearest GAAP measures. Also today, after -- before the break and at the end, there will be another chance for Q&A. So we ask that you hold your questions until the breaks. Also, there will be people with microphones so that the people that will be listening via webcast will be able to hear the questions. Please wait until we provide a microphone to you to ask the question so that everybody online can hear, too. There are facilities around the corner, down the hall, and then there's the refreshments next door if you need to take a break. I'm going to be turning to the slide -- the presentation over in a second to Bob Lisy. He's our Chairman, Chief Executive Officer and President of Intermex. He's going to provide an overview of kind of some of the history to the current day and the strategy. Then, Joseph Aguilar, Chief Operating Officer, will be talking about our customer service, compliance and how we differentiate with our award-winning customer service; Randy Nilsen, our Chief Revenue Officer, talking about the market, our customers, our omnichannel strategy in retail and digital. Fireside chat will be a highlight of the day, I think, with some agents from the West Coast and East Coast, talking about their experience with the customers and Intermex in the marketplace. Christopher Hunt, our Chief intelligence -- or Information Officer, sorry about that, will be talking about the technology and how our proprietary technology is really the basis for all that we do. And then Andras Bende, final, to talk about the financials as well as some forward aspirations and our 2022 guidance as it relates to our strategy for this year. But let me turn it over to Bob Lisy, Chairman, President, Chief Executive Officer.

Yes. Well, welcome you all. Thank you for coming today. We think we've got some good information to share with you, some stuff that you may have not had a chance to get as deep into the company in the past, if you looked at us, going to get a chance to meet what we think has been a really great management team that we've assembled. There have been a lot of change in our company as we've gone from a small private company of $40 million in revenue to a company this year that pushing close to more than $0.5 billion in revenue. It was a great company that had set itself in the right path in 2 really key areas. It had great technology, and it had focused in on Mexico and Guatemala, 2 most important markets in Latin America. And as we continue to work through that business, we understood how to leverage that better. They had a really big difference between us and the competitors of retail. Our technology sets us apart. It processes much quicker than the competition. It's more reliable. And we built upon that strong presence in Mexico and Guatemala. As you guys will see as we talk through a little bit more in the presentation in the next couple of hours, you'll see just how critical Mexico and Guatemala are to the overall Latin American business, both in terms of their size, but in terms of their margin. These are the 2 most profitable markets in Latin America and 2 of the most profitable markets in the world in terms of margin per transaction. So what we did is we took a look at the market and we said, we couldn't really go the way that everyone else has gone in the marketplace. Western Union, MoneyGram and all the big players had what we consider to be ubiquity. There were companies like the large big-box retailers. And it was difficult for us to do that, but it also wouldn't have been smart for us to do that because the wires and where the business was, was ZIP code by ZIP code, the kind of retailers that you'll meet later in today's event that really represent our kind of consumers and are there at the retail level and do the kind of business with them that -- and response in the way that they need. We continue to build that out. And what we've done differently is have a business that's been built on highly productive retailers. Our average retailer performs at a level that's 4 or 5x the level of the average retailer in the marketplace. And because of that, it's made our model so much more profitable. We continue to increase our proprietary network. I don't know if you're aware of that, but we not just only pay through all the payers that everyone else does, but we have a payer network of our own. And this network is really critical because that network enables us to go into the small villages and pay wires where some of our competitors do not. And some of the small villages are where a lot of the people come to the United States, particularly from Mexico, Guatemala, where we have that kind of presence. We really focused a lot on our customer management platform. And as a result, you'll hear us talk a lot about the quality of our service. If you call our customer service line, you'll get a live person in probably 5 seconds or less. With some of the competitors, it will take several minutes. That service attribute is a big thing that sets us apart from our competitors at retail, but even sets us even further apart from our competitors at digital. And we've invested in innovative and highly scalable technology. Let's talk a little bit about our check direct product, which is something where we process checks for our retailers that enable them to be able to cash checks for their consumers. We want to come in and do more than one service. As we look at '18 to current, and this is the period since we've been public, our revenue growth has been about 19% per year, which has very much outpaced anyone in the market, and we've continued that strategic agent growth. We've expanded more deeply into the western states. We've got a greater percentage of our business now in California, Texas and all of the Western states. When we started out in 2009, California was brand-new to us. And today, California is bigger than the whole company was in 2009. And Texas is moving along and growing very quickly. We started offering during that period, our digital offering, which is Intermex Online, which has been -- we're really excited about our new app, which you heard our announcement this week, and we think that's going to make it a lot easier for consumers to use us online. But we're very focused on the omnichannel sort of approach to the market. We're not forcing people onto the online. We still think the business is very much at retail. We've expanded into the new regions, including Africa and Asia. We go directly to Africa, and we process for third party into Asia, and we opened up Canada outbound. And we've launched the general purpose reloadable card, which is a card that we think sort of bridges the gap between our consumers and going online. They're -- today, one of the biggest obstacles is in technology, but it's being banked, and that card enables them then once they have the card to be able to go online and do a wire if they choose. What we've been able to do, we've had a long history of operating excellence. I mean we've been public now 14 quarters, and we've beaten our EBITDA numbers 14 quarters. This quarter, we've -- I think this year, in 2021 that passed, we beat and raised each and every quarter. I think we didn't first, we beat -- didn't raise, but we beat and raised in second and beat and raised in third and then we ended up beating those numbers. So we've had a long history of excellence. There's a significant opportunity for growth. We still think in our existing markets. We're still way underpenetrated, and Randy will talk more about it in the Western region. We're very strong in the East, but the West is a place where there's still huge opportunities for us with empty ZIP codes and underperforming ZIP codes. We continued our digital investment, and we think that's going to prolong our growth and give us a longer sort of runway. Again, we think that there's still a lot of life at retail. And we'll show you today that how retail in itself has actually grown faster than the GDP. So whereas people think that it's all going to online. It's not the case. We'll show you how that the retail business is still growing faster than GDP is. And again, we have a long track record of strong financial results. I mean this year, we're going to throw off more than $50 million free cash. We've got about $110 million in free cash on our balance sheet, and we're going to have probably deliver close to $100 million in EBITDA, as you've heard our guidance. The sixth slide is a bit busy, and we probably won't go through a lot of this information. A lot of it will be done as we get into the different sections and Joseph and Randy and others speak. But we really focused at the beginning on the operational excellence. We wanted to make sure that we cut a lot of the waste out of the system. And as a result, you'll see that other than some of the very biggest companies in the industry, our margins -- EBITDA margins are still up there near the very top because of the waste that we've cut out and the efficiencies we've added. We continue to add those strategically located agents and continue to develop our digital app. And we think that there's still a lot of opportunity for us, both at retail and in the digital app. Talk a little bit about the team. As you can see, a lot of folks are kind of new to us, but they're not new to the industry. Andras, so you'll meet a little later, has a long history of working with GE in the banking industry, has almost 20 years of financial tech experience. Randy Nilsen, who's our Chief Revenue Officer, and has been here for most of the growth of the company. He's really been here since we were sort of in the earlier stages and delivered that growth, a long level of experience of Western Union and CA, one of the large independent players; Joseph Aguilar, who was the CEO of Sigue European business, who is our COO; Chris Hunt, a long background at BBT and others. And then we've joined with Juan Manuel González, who's been a MoneyGram guy and a Bank of America guy, a long history of really quality work and compliance. Ernesto Luciano, who will not present today, but is here, is our General Counsel. And Peggy Scholzen is our new Head of Human Resources. So you'll get a chance to meet the team either up here on the stage or afterwards at the cocktail hour, hopefully. And with that, I will introduce to you, Joseph Aguilar, who's our Chief Operating Officer. Joseph has been with the company about 2 years. He has a long history and a very strong history in operations and in compliance. He's delivered great results for us, was a senior person at Sigue, was their Chief Operating Officer and then became the CEO of their European business and I think earlier in his career, worked for some banks and things like that in the area of compliance. So brings a broad background and welcome, Joseph, to talk to you a little bit about operations, compliance and stuff like that.

Good afternoon, everybody. My glasses on here. As Bob said, I'm the Chief Operating Officer at Intermex, and I'm really thrilled to be here and introduce to you a lot of the things that we do in customer service and regulatory compliance and products. When I look at my main role and responsibility, it's really focused on customer service and really the customer experience. How do we differentiate ourselves not only in our products and our services and our regulatory compliance over but also our engagement with our consumer. That's what really makes us different, I think, compared to the competition that we work with. So through our omnichannel solutions, we're able to meet our customers' needs wherever they are on their journey, whether they are recent immigrants to the U.S. or longer-term residents. Fully banked or partially banked or unbanked, we're actually there to meet their needs and provide them a choice and the solution on how they want to do a transaction with us. At our retail locations, our agents are in the communities that we serve. That's a big differentiator for us as well. We are where our customers live, socialize and work, and that's important. Our partner agents, not unlike our consumer,, are part of the community that we operate in. They know our joint customer extremely well. Like Intermex, they've become -- our consumers have become comfortable and trust our agents. Their stores are many times the hubs of the community and where they operate and serve. Our agents assist our customers in their language to successfully complete a transaction with Intermex. And that's really fundamental. Many of them come not knowing the culture of how to operate and they're able to be assisted by our agents who help us help them be successful. Using our digital solutions, consumers can access our service anytime 24/7 via mobile app or online at our Intermex websites. Whenever they're ready, they can decide what they choose. They can pay for their transaction by debiting their bank account via ACH or debit card. They can also use a credit card to pay for their transaction. Again, at a digital option, our consumers need to be banked to be able to operate in that space. But what's truly different between ourselves and our service online and let's say, those are companies that are pretty much 100% online, is the support we provide to our consumers when they're online. Our customer support is available via live chat or telephone in English or Spanish. We can answer any of their questions again, to help them successfully complete a transaction with Intermex. At the center of our omnichannel solution is our high-quality, reliable service that our customers have come to expect from Intermex, whether they're at retail and now at digital. Whether at retail or digital, our consumers will receive a consistent level of personalized service. It's their choice. In addition to our wire transfer services, our portfolio of products are designed to help our consumers with the financial services they need in their daily lives. In many of the neighborhoods we serve, traditional banking offices are not very accessible. And culturally, many of our consumers are not comfortable doing business in a traditional bank due to language or other reasons. Our products bridge that gap for our consumers. Our card products are branded with the Intermex name, and it's a name they trust and rely on to get their money to their families and also are reliant to use as a card. Our prepaid debit card, our GPR card, is a bank alternative for unbanked consumers. It's a reloadable debit card backed by an FDIC-insured bank, which allows our consumers to grow their balances with confidence. They can qualify for the card with a valid U.S. or foreign government-issued ID. They don't need a social security or ITIN to get the card, which really allows them now to participate in the financial services solution. These cards are reloadable at our agent locations, providing new opportunities for revenue for our agents as well. Our payroll card is targeted to businesses that employ H2A of visa workers at no cost to the employers. It's an efficient method for seasonal workers to receive their hard-earned money in a safe and secure way. These card products allow consumers to pay for their wire transfers, either via a mobile app or at the web or at an agent retail location using this debit card. Additionally, cardholders can pay for goods and services at participating Mastercard retail locations or have access to cash withdraws via ATMs. This product empowers our consumers to participate in the e-commerce economy with more opportunity for financial inclusion. Our Check Direct service is a best-in-class check processing system that allows our agents to submit checks to pay for the receivables that they've generated due to the -- for their wire transfers. This service saves time for our agents because they don't have to go to the banks to make cash deposits, and it really creates an efficiency for them, and they can utilize their cash for their services. Additionally, this is a huge cost saving for Intermex in banking fees. The cost of process checks is pennies versus the cost of process over-the-counter deposits made in banks in our -- with our banking partners. Over 45% of our wire transfer receivables are collected via Check Direct. Our Card Direct solution allows consumers to use a debit card to pay for their wire transfers with the debit card at our agent locations. Additionally, they can get cash back when they're making a transaction with their debit card. This really creates an ability for them to have cash to all their financial transactions there at the agent location. With our bill payment and money order services, consumers can meet their monthly bill obligations like utilities or mobile phone bills or pay their rent with money orders. All of these services are fully integrated into our Intermex direct POS system, making it easy for our agents to sell these products and services. It's one sign-on, one look and feel, which creates a very easy opportunity for our agents to offer these services. These services that are offered by our agents create more foot traffic for their businesses. It increases customer loyalty and provides a convenient one-stop shop for our consumers' financial needs. At core of our products and services is our best-in-class customer service. We really take pride in the service we provide to our consumers. With the team of over 600 employees in our call centers in Mexico and Guatemala, we provide culturally relevant service with care and respect along with regional expertise. These are our employees in our facilities using our systems that we offer the services through. Our commitment with service level agreements is unmatched in the industry. Our SLAs for average speed of answering a call is less than 5 seconds, as Bob mentioned earlier. Consistently quarter after quarter, our average speed of answering a call has been really around the 2-second range or less. We've tested this solution with some of our investors and partners, and we've determined that when they've tested against competitors, sometimes they wait 10 to 15 minutes to get their phone call answered. That is a huge differentiator between ourselves and the competition. In the competitive environment that exists in an agent location, where you might see 3 other type -- 3 other money transfer providers having that ability to pick up a phone immediately is critical at the agent location. Sometimes if the consumer waits too long on the phone, they'll hang up and pick up another phone to generate a transaction. So being able to pick up that call immediately is critical for our service. This level of service translates into an SLA that is a 1% -- less than 1% of hanged-up calls, which means abandoned rate. So when a customer picks up a call, sits on hold too long, and they'll hang it up if they don't get their call picked up. That's an abandoned rate. Our abandoned rate quarter after quarter is consistently 0.0025% of total inbound calls that have come into our call center. Excuse me just a second. Behind these SLAs is a really robust quality assurance program where we monitor calls on an ongoing basis of our operators to ensure that the way they're engaging with our consumers is up to the standards that we've established. It also provides an opportunity for us to give guidance to our operators when they fail from our standards or gives us coaching or training opportunities with our employees as well. To meet the needs of our business, the call center is continually looking to enhance its services and offerings. We are currently looking at additional sites for diversity and offerings as well as contingency sites as well. We want to be ahead of the curve, ahead of the service to ensure that we are meeting the needs of our business, whether that means additional sites, additional services or being able to offer services in additional languages to be aligned with our sales team. Whether we offer services in Tagalog, Arabic or Vietnamese, we want to be prepared to offer services as the company grows and diversifies its business. In addition to excellent SLA results, what really makes the difference is our people and the personalized care we aim to give our consumers. We know our consumers will not always receive the best service when they're out in the marketplace or the service that they deserve. But when they call Intermex, we want to make sure that they feel the difference. We see our consumers truly as heroes: people who have left their country, their home, their families, to start a new life and a better life for their families. We need to train our employees to understand our consumer. Most of our call center staff in Mexico and Guatemala are urban, educated bilingual people who don't understand or may not understand the immigrant experience. However, it's important for them to understand what our consumers go through so that they can better serve them in their daily needs. We train our employees empathy for our customers to assist them in helping them help their families. Every time one of our consumers picks up that telephone to ask for help from Intermex or to help with their transaction, we want them to feel that they are touching their families back home. Now to one of my -- let me see here. As a foundation for our business and the ability for our business to continue to grow, regulatory compliance is fundamental for our ongoing success and growth. Built into our core wire system is our robust compliance modules and programs. Compliance checks are conducted at the POS based on KYC thresholds that have been established by our organization and also legal requirements. Identification of remitters is obtained as required by law or aggregate larger amounts. Additional information may be obtained requesting or looking for enhanced due diligence information. Names of remitters and beneficiaries are verified against OFAC lists and other required sanction lists. Our compliance program is built on the strength of the AML pillars and best practices, which, in some cases, exceeds regulatory requirements. And over -- with over 100 qualified compliance professionals dedicated to the program, we continue to invest and grow our compliance program day by day. Not only with new team members, new practices, new policies, but also new technologies as well to create a much more efficient methodology to monitor and review transactions. Our real-time transaction monitoring system flags transactions for potential unusual activity based on dynamic filters that are established by our compliance teams. Whether they be velocity, frequency, out-of-normal patterns, those transactions are identified, flagged. And our team is dedicated to monitor these transactions in queues to ensure that transactions are dispositioned, is identified quickly. We take action fully to release the transactions for payment or where we refer them for further investigation to our FIU team. 90% of all transactions are identified as unusual are cleared within 1 hour of receipt. So we have quite a bit of people dedicated to this process to ensure that we are being safe and secure about monitoring our transactions, but also that those transactions that are cleared are released quickly into the payment system. Looking at that last piece when we talk about our agent monitoring program. In addition to having a strong checks and balances at our POS as well as our ongoing -- our transaction monitoring system, we have an ongoing agent oversight program because it's at our agent locations where we engage directly with our consumers. Knowing who our agents are, it starts with the due diligence of our agents. We have an enhanced due diligence process to review our agents and their activity, their ownership before they become agents with Intermex. Not only our ascending agents but also our paying agents as well. We have a rigorous agent oversight program that is risk-based where we review agents on a periodic basis to ensure that their activities are followed in accordance with our business and our policies and procedures. We have an ongoing comprehensive training for our agents on a regular basis that's required by our policy as well as by the AML requirements to ensure that they are following processes and programs accordingly. We also make ourselves available to our agents for any questions, concerns that they may have by establishing regional compliance offers in their areas that will visit their agents on a periodic basis to ensure that they have a connection and a communication with our compliance teams. So we turn to the next page. This next slide is a -- just a diagram of how the transaction flows within our organization from a compliance perspective and the key milestones that we touch through that process. So at the agent location, an agent has a terminal where they capture the information of the consumer. The identification, as required based on amount or threshold or aggregation total, is captured by our agents. The transaction then goes into our screen against government sanction lists. It identifies any potential false positives. And then it's either -- if it's cleared, it's going to go to the next level of review in our real-time compliance functions. It will check against velocity. It will check against potential structuring. It will check against movements that are not normal with that activity. That could be -- an example might be working hours. If a transaction starts to occur outside the normal working hours of an agent, it may be flagged. If a transaction that they normally do, volume -- exceeds that volume, those transactions may be flagged or if a transaction amount exceeds a normal average transaction that exists within that agent location, it may be flagged for review. Once all those transactions have gone through that process, and like I said, will either be released to the FIU for further investigation or it will be released into our payment system for payments. A key part of our regulatory strength is that we -- it allows us to operate in a safe and sound manner within the business. Because of our strong relationships, we're able to foster great relationships with partner banks with our strength in compliance, our banking partners who review us on an annual basis understand who we are, understand the gravitas in which we address these programs and understand our commitment to regulatory compliance. That allows us to have a very broad network of banking partners. And why is that critically important? It's critical because our agents use our banking network to settle with us on a regular basis. So having that presence, having a broad network -- and we're pleased to have one of our banking partners here with us today from Bank of America -- that allows us to offer our services throughout the United States with the easy footprint of them being able to make deposits and pay their receivables with us. With that, I'm going to introduce my colleague, Randy Nilsen, our Chief Revenue Officer, Randy.

Thanks, Joseph. Good afternoon, and thank you for being here. Let me just take a moment, if I may, and tell you a little bit about myself. And I'm going to be the guy that doesn't know how to advance the slides. Sorry. Okay. So a little bit about me. It was about 30 years ago, I was working for a small payments company, and word came down that a company named Western Union was going to acquire us. I didn't know anything about Western Union at the time. I did a little bit of research about money transfer companies, and I thought what a terrible industry to be in. People sending cash? No way. That's going to die. I've got to get out of this industry. I've got to find a new job. That was 30 years ago when about $5 billion a year was being sent from the United States to Latin America. I'm going to ask you to remember that $5 billion amount. But needless to say, it wasn't as bad of an industry as I originally thought it was going to be. It was a fantastic industry, and I spent a number of years with Western Union. I was able to go open up the United Kingdom for Western Union. I came back from the U.K. They sent me to Canada and say, "Do the same thing in Canada, open up that business for us." I came back worked in a little bit of a head office assignment for a couple of years and then several selling leadership positions around the United States and Canada for a number of years and finished my last 3 or 4 years there leading a team that opened up what we called back then, emerging corridors. My first assignment was China and the Philippines, and we had such great success. We opened up Africa and the Middle East, and it was a really great run. The President of Western Union left, went to a company named Jackson Hewitt. I followed him to Jackson Hewitt. And about 3 years later, another money transfer company called saying, "We're looking to make a big acquisition. We'd love you to come run our sales and marketing team." They were the largest privately held money transfer company in the world at the time. So I gladly went back into this space that I loved and worked with Joseph for a number of years there. And then Bob and I reconnected about 6 years ago here at Intermex. I regularly tell the sales team that Bob has built such a great culture here. He's built a culture on transparency. It's quick-paced. It's metrically-based. And if you're going to be a salesperson in this space, this is the company to be a salesperson in. So that's a little bit about me. Intermex, I've titled my few slides, the Intermex way. Last Friday, I was meeting with a group of about a dozen, 10 or 12 sales leaders in our organization. And I asked them, "When I use the term Intermex way, which I use a lot, what do you guys think of?" And they shared these types of things. It's our culture. It's our DNA. It's our belief, it's our values. We strive for absolute excellence. That's important. We have a strong bias to do the right thing, to be profitability-focused. We're dynamic. We're fast-paced. We're customer-centric. We sell value, not price. We focus on differentiators, both with our agent and our consumers. We're metrically based with our decision-making. We focus on details. We don't let the details get away from us. And we have disciplined execution. So that's what I'm going to talk a little bit about today. I'm going to relate that to our consumer and spend a few minutes on our consumer and how special our consumer really is. I'm going to share with you the way we size the market and the way we attack that market from an omnichannel perspective. So to begin with, I shared this slide quite a bit with our sales team. And I say to them anybody can sell the what. The good salespeople know how to sell the how, but we need to remember the why, and we need to sell the why. And the why is our consumer. And just as Joseph mentioned, our consumer made a large number of our consumers, 90-plus percent of our consumers made a decision to leave their loved ones in their home country, come to this country to work, oftentimes in not very glamorous jobs, to send almost every last dollar they earned back home to their loved ones, so their loved ones can have a better life. And to me, that -- Joseph used the term hero. That customer deserves a lot of respect and courtesy. And we talk about the why, and we're going to -- you're going to meet some retailers here in a few minutes who share that same belief about our consumer and the importance of our consumer. Oftentimes, they're not very well-known. They're under the radar. They're living in the shadows. They're underappreciated, but our economy would be in serious condition if that worker wasn't here taking care of the work that they are here doing. A little bit about the demographics of our consumer. They're male and female, but we skew male for sure. Many of them are right in that core hardworking age 18 to 34. They're here, like I said, working hard, sending money home to their loved ones. Some of them have a desire to stay and live out the American dream, but many of them desire to return home to their country and live a good life with their family, and they're just here trying to set that stage so they can enjoy that life with their family. Many of them are not super highly educated. They're working here in occupations such as construction, service and hospitality, agriculture, et cetera. This is important when I get to the fourth box over. Our consumers regularly tell us that 60% of them will tell us they get paid in cash. 30% of them tell us they get paid with a paper check and 10% tell us that they get paid with some type of a direct deposit or a payroll card, and about another 10% on top of that 10% who get paid on a card or to a bank account say they have some type of a banking relationship here in the U.S., okay? And I'm going to come back to that in a few minutes. As Bob said, this is a consumer that's very tech-savvy. They live on their phone -- that's their lifeline home to their loved ones. So a little bit about our consumer. Now if I address the market that we're in today, best estimates are that last year in 2021, $100 billion were sent from the United States to Latin America. About -- our best estimate is about $20 billion. Actually, we think it's about $18 billion. But for this slide, we're using $20 billion of those dollars were sent digitally. And when I say digitally, I mean from a phone or a computer originating, right? Other companies use a little bit different definition, but we mean it originated online with a handheld phone or a computer. That means $83 billion were sent at retail locations. We're in this space because it's the biggest space to be in from the United States. It's the most profitable space to be in. So it makes sense that we're here. The next, next step in our evolution, most likely means to focus on the United States outbound. Bob already mentioned that we have relationships in Africa and in Asia, and we can start to expand on that and go from the U.S. worldwide. That's a $170 billion opportunity. And then the next evolution is to go country to country all around the world, which is about a $700 billion opportunity. And we think as we take those steps in our evolution that the natural step is to be with digital. It's relatively easy to -- when someone wants to send money online to open up other countries in which we have payer relationships, too. Little bit more difficult to open up the right retail relationships for those consumers. But a great opportunity as we look to continue to grow. Now we look at this Latin America piece. The very fundamental building block in which we build our business is on a consumer that we refer to often times as foreign born. People that were born somewhere in Latin America or the Caribbean that now reside in the United States. There are 24 million of those foreign-borns in the U.S., and that group sent, as I mentioned, about $103 billion last year back home to their loved ones. Remember, I said that in 1990, there was about $4 billion, $5 billion sent from the U.S. to Latin America. Last year, again, $103 billion were sent to Latin America. And we've got 9 years' worth of information here. But in 2014, $47 billion were sent. And in those 9 years, the market has grown over twice, twofold, during that time period, more than doubled. And in talking to our retail partners, sorry, our pay partners who give us information on our competitors, who sends how much money, et cetera, et cetera. Again, our best estimate is about $18 billion was paid out via -- that was sent via digitally, paid out to those pay partners in Latin America. Again, we've got $20 billion as an example here, best estimate. But in 2014, there was probably about $2 billion being sent digitally and about $45 billion being sent at retail. If we just extrapolate that, again, that retail size of that market, which we often hear is shrinking, it's not shrinking at all. It's gone from $45 billion to $83 billion in the last 9 years. It grew about $14 billion just last year. And I think, importantly, we think both of these are great avenues. The customer chose to send about $8 billion of the incremental $22 billion last year via digital and about $14 billion of the incremental $22 billion at their retailers. Curiously, the customer choosing is choosing a ratio of about 2:1 at retail versus online when they have the opportunity to send more money. Again, we like both channels, and that's why we're here to talk to you about our omnichannel strategy. Let's go back to -- there are 9 countries that we really focus on. Tier 1, that's Mexico and Guatemala. That market in and of itself grew at 29% last year. We grew that market 40% last year. We grew 38% faster than a very fast-growing market. If we look at Tier 2 and Tier 3 markets, that's Honduras, El Salvador, Dominican Republic, Colombia, Ecuador, Peru, Nicaragua, those 7 markets grew at 27% last year. We grew at 42%, 56x faster than the market, already a very fast-growing market. So we love the space that we're in. Now if we look at the top 10 countries to Latin America, which is, again, where we choose to focus our attention right now, those 10 countries contribute about $99 billion of the $103 billion being sent to Latin America or about 96% of the market. If we look on the left-hand side, those top 5 markets comprise $86 billion or 84% of the business to Latin America. That's why we're right there focused on these all-important countries. Remember, I said that Mexico and Guatemala on the previous slide, we were growing at almost 40% faster than a very fast-growing market and 45% faster than the rest of the market. Now if we look at how we're doing on our market share, you might say, "Well, that's fine, you're a small company. You don't have a big base of business, that's why you're growing so fast." But that's not the case. If we look at 4 countries that make up 75% of the volume from the U.S. to Latin America, Mexico, Guatemala, Honduras, El Salvador, those 75% of the business, we have a 21% market share, too. We think that makes us, a, if not the market leader to Latin America. And clearly, it's our objective to be the leader -- undisputed leader to Latin America. So the space that we're in is great. The market is growing fast, and Intermex is outpacing the market. Now let's talk about the way we attack the market. We've heard the term omnichannel several times. Let me just share with you my perspective of omnichannel. I mentioned that about 20% of our consumers tell us that they're banked, okay? And we've just spent an awfully lot of money to build out what we consider is going to be the industry-leading app to help these consumers choose who want to send money via online, have that opportunity to send money online. Our marketing team is chomping at the bit to be able to get out the promotion and start promoting that. But importantly, 90% of our consumers tell us they're paid with cash or check. So that's why the retailer is so important. The retailer is important because this consumer goes there -- it's not a Walgreens or a Duane Reade that they're going to. They're going to a location that's where they live, in their neighborhood. They know the employees. They trust the employees. They have confidence in the employees. They have comfort going there. It reminds them of home. And importantly, they're taking their hard-earned cash, and they're passing that cash over to someone who they know and trust. That's why the retailer is so important. The customer has an inherent distrust in banks. Our bank partners in the receiving side of the business tell us the same thing. 80% of the money transfer that's sent to Latin America is paid out in cash. And oftentimes, that consumer who receives the cash will want to hold it, look at it, count it, and then they may put it in their account to be deposited. But the important thing is they want to know they've gotten in cash. Now we see, as we've talked -- Joseph talked about all the options that we offer both for the sending agent and the paying agent, we offer that. We saw about a 3% shift this last year from paying out in cash to paying out at other options. So cash is still very, very important, although as we've said many times, we want to give the sending customer as many options as possible, the receiving customers as many options as possible and let them choose what's best for them. Now we'll talk a little bit about retail. When we sell at retail, we sell the differentiators, and we've talked about it. Joseph just did a great job articulating we've got the best system in the industry. We've got the best hardware. We've got the best software. So when agents are entering that information on our computer, it's a fast transaction. That's so important to the agent. We talked about our call centers picking up the phone in seconds. We talked about the banks that we work with. Why is that important? Because the retailer needs to be able to get to the bank to deposit the money at a convenient location, not to drive miles and minutes away, but where it's most convenient for them. We've got a great compliance program. When transactions get caught in the filter, we're releasing them through the filter in minutes so that the customer doesn't have to call us saying, "Where is my money transfer?" All of that is extremely important to the retailer. When their lobby is full of customers on Friday, Saturday, Sundays, Mondays and they need to help those customers quickly, they choose Intermex because of the speed that we help them -- that we provide to them. Now Bob built a culture here that is a great sales culture. It's a disciplined focus that he helped build here. And I subscribe to it and since joining, I've ran with it, and I love it. Most of our competitors would say "Open up locations. The more locations, the better." And we have 2 of our sales leaders here, Carlos Vizcarra and Juan Espinel, from here in New York, and they've heard me say many, many times, opening up new locations to us is nowhere near as important as the wire generation that's going to come from those new locations. We'd much rather open fewer locations but have volume than just open up locations to open up locations. That would be a cardinal sin to us, and we don't do it. We like to go take the business. So our sales team will go to a retailer, they'll do what's called an on-site business review. They'll talk about the business. They'll talk about how many wires do you typically send a month here. What countries do you send them to? Who are the payers? What's the exchange rate? What's the fee? And by the time they're finished, they've negotiated. Here's where we'll operate with you in terms of our fee, our exchange rate, the commission we pay you and negotiate a committed number of wires so that we don't have to cross our fingers and hope wires come in from new locations we've added. We can have a high level of confidence that we've negotiated that business already. That's very different than the industry. And our sales team really understand unit economics. We teach them unit economics on their first day with the company and how important it is managing commissions, exchange rates, fees, payer fees, managing that gross margin line. So they make really good decisions. That's all part of the culture we've built here. If we were to ask our sales team, what's important to them, they would say, "Unserved ZIP codes, underserved ZIP codes and underperforming agents." And what do we mean by that? Exactly what we've got here on the screen. We've identified over 1,700 ZIP codes in the United States that have more than 200 foreign-borns, but we don't even have one agent serving those customers or potential customers. We've identified almost 1,000 agents where we have less -- that are in ZIP codes where we have less than 20% market share in that ZIP code. So our sales team will have sales plans designed to open up agents where we need agents in unserved ZIP codes, work with agents or open up agents where we're underserved and then work with agents who are underperforming, meaning we're not getting the majority of the business in those locations. What do we need to do to help get that? But if we execute in these 1,800-or-so ZIP codes, the way that we do in the ZIP codes where we have good service and we're fully served, it means about 1 million extra wires a month to us in ZIP codes where we don't have presence today, and another 800,000 wires a month in ZIP codes where we're just underserved right now. So again, a lot of opportunity. Bob mentioned that we focus on agent productivity that our agents are about 4x more productive than the average in the industry. Let me spend a quick minute on how we attack the opportunity at online. The challenge, and I think you're all aware of this, is the cost of consumer acquisition is just terribly expensive, primarily for 2 reasons. One, as I mentioned, about 90% of the consumers looking to send money home to Latin America don't have a bank relationship. They have cash or checks. So even if they wanted to send money home, they don't have the banking relationship that would enable them to. And time and time again, the consumer continues to demonstrate that they want to go to the retailer to send money. That's where they have that confidence, it's that comfort level. So it's hard to spend millions of dollars marketing to consumers who aren't ready to make that transition. But we will market to consumers in other ways. We have a call center that -- of marketers that talk to our consumers who have stopped using us. Maybe it's been 3 months since they've used us. We call them. Every day, we're making those phone calls. Sometimes they tell us, "Oh, I'm not going to a retailer anymore. I'm sending money online. I found it more convenient." Boom, we can move them over to Intermex online easy. They've used us in the past. They know us. They trust us. And we're not harming our relationship with our agents or our retailers because the consumer already moved out of there. So we're -- and that doesn't cost us hardly anything to make that type of consumer acquisition. We're just moving them -- or moving them from a competitor where they're already using online. We also will use strategic alliances, affiliate marketing programs. Marketing companies who already have consumers that share our same demographic going to their website to buy a product because they have the opportunity, the means to do so. We'll work with them to promote our service because they're already on their website, making e-commerce transactions. And then thirdly, we've talked about the payroll card. As some of these employers transition away from a check onto a card, we'll be there to help them transition. And we'll offer them what we call a satellite location. We'll send an agent of ours in to offer money transfer services right there at the employer location on a Thursday or Friday, whenever the customers are looking to send money. Or we'll help them load our app on their phone and they can send money on their app, if they choose to. Again, omnichannel strategy, we're going to let our customers decide what's best for them. Now the way we're going to market, we're excited to begin marketing our online app. There are some major differentiators with our app that separate us from our competition. There's competitors out there that say, "We offer the best rate." There's other competitors that say, "We offer the best exchange rate." There's other competitors that say, "We're the fastest." We're giving our customer the option to choose whichever one of those options they want. No one else does that. If they want the best exchange rate, they can choose I want the best exchange rate. If they want the lower fee, they can choose I want the lower fee. If they want to send us, so it doesn't need to get paid out same day, it can be paid out 2 days, 3 days later, they get it even a lower fee. So the customer is in charge. We love that. It's going to be very easy for our customers to register online only with an e-mail. That's unheard of in this space. And perhaps the biggest differentiator is what we've talked about several times, the customer service that we're offering this online customer. You've all had experiences with DoorDash or Uber where your burger didn't make it. That's okay if your burger didn't make it to your house, and you just have to be a little bit hungry. But when your hard-earned dollars don't make it to your loved ones and you can't find anybody to talk to, to figure out where those dollars are, it's very different, and we're going to be helping this customer online as well. And then we've got, I think, about 5 million unique customers that trusted us last year to send their money home at our retail locations. So we've got great brand recognition, and we'll leverage that brand recognition with the digital consumer. Our marketing is a little bit different. Almost every money transfer company says, "Send money. Send money to Mexico. Send money to Guatemala." We say, "Mandar, mandar," which is you're in control. You can choose. Choose Intermex and be in control of your money transfer, your hard-earned money. And lastly, let me just wrap up by saying that it's a very strong market that we're in. We just saw that 26%, 27% growth year-over-year just last year, $22 billion incrementally being set last year versus 2020. The digital channel is growing great. We're going to be there. The retail channel is growing great, we're already there. So we're going to be there. Intermex will continue to outpace the market growth. Again, as I've said, a very high growth market, we're growing faster. We'll continue to execute in that disciplined surgical focus that Bob has set in this culture of this company in the future years, just as we have in the past. And whether it be online or at retail, we'll continue to win. We'll continue to win because of our superior customer service, our industry-leading technology and our ever-growing portfolio of products. So again, thank you for your time. I think I have the opportunity to -- it's a Q&A, right? So if I could ask Joseph and Bob to come join up on the stand, we'll take a few questions, if there are any.

I guess. Any questions for us? Mr. Scharf.

Got it. Just curious, Randy, the makeup of your consumer with respect to how they're being paid. Do you have a sense for -- of the 10% to say they're getting something, either an ACH into a payroll or they're currently banked? Are they still generally paying out -- coming to an agent location with cash in hand?

Yes. Sorry. Go ahead and finish your question.

No, because what I'm trying to get a sense of, as you think about the first wave of users that may adopt digital solution, do you think it's actually going to be that 10% that's walking into a store? Are we talking about an entirely newly targeted customer?

It's hard to say the consumers that we're talking to on a regular basis, they are our consumers who have used us at retail. So that's how they're -- that's the ones we're talking to and we're serving. So we know that even though they had money put on a card or into a bank account, they're still going to a retailer to send money. Now will they be the first adopters? High likelihood because -- of the 100% of the customers, they're part of the subset that has the means to send money online where the others they simply don't have a banking relationship.

Got it. And maybe just a follow-up to that. It may be more difficult to answer, but do you want them to adapt?

I think we're ambivalent. We really are. As long as the unit economics are similar to us, and from a gross margin perspective, we're making about the same amount of money online as we are at retail, T.hen we really do want the customer to be able to choose what's more convenient for them.

Great. Question somewhat of a follow-on to that. So if your 5 million customers, what percentage use bill pay? And then what percentage of those customers are part of your Check Direct, whether cashing the check with the agent? Are you able to correlate that?

Yes. So -- do you want -- let me go and Joseph...

Sure, go ahead. I can augment...

We both work on this. So we don't offer a lot of bill payment. We don't really like bill payment, to be honest, because it's a very low-margin service. And oftentimes, by the time we bank the money, given the revenue stream we have, we're upside down on it. So we don't push that a lot hardly ever. So I'd say a very small percentage of our money transfer customers use us to pay their bills. And your question about Check Direct, it's really difficult to do a 1:1 ratio. Joseph said, about 46% of our business is reconciled with us via check, but that doesn't necessarily mean the person coming in with the check actually send money or sends money with us. We think there's a pretty high correlation but really difficult to prove that out.

What about money orders?

Money on the same way, where we -- we don't really track money order to money transfer. Joseph, maybe you can answer that. I don't know.

We don't. But what we do identify with money orders is that agents who sell money orders definitely have an increased volume in wires, and they're offering broader products and services. They do come to our agent locations and use the services of our agents. But we don't do a 1:1 correlation of how many money orders versus how many wires they generate.

I'll piggyback on that. Joseph makes a really good point. These ancillary services that we talk about, primarily money order and Check Direct, have a really high stickiness with both agents and consumers. So where our average agent will sell about 400, 430 wires a month, the agents that have these products that we're talking about will average 800, 900 wires a month, twice as much. Okay. Thank you. Yes. Other questions? Okay. If there's no other questions, Mike, I think we'll have a break for -- 10-minute break. We'll be back and then we'll have the opportunity to meet some of our agents. Thank you.

Thank you. [Break]

If I can have everybody take their seats, we're getting ready to start for the second half with the fireside chat, please. And Randy if...

Okay. Let's do a quick mic check. [ Gaz ], do you want to try?

1, 2, 1, 2.

Yes. Okay. good. Okay. As we're coming back and getting resituated. I'm going to take the opportunity. Thank you, Bob, for allowing me to kind of step in here and have a little conversation with a couple of our agents. And as we mentioned, at the onset when Mike mentioned that we have an agent here in New York, another agent from California. So Gazi and Sandy are here. I'm going to ask them to give some more detail, but they have a family-owned business. They manage some stores. Some of Sandy's siblings and father have a bigger business here in the greater New York market. And the Martinezes out in Northern California, have been in the industry for a long, long time and to manage about 5 stores, and they're getting -- their children are here. We want to recognize their children because now their children are working at their stores and looking to make a contribution as well. So why don't we just take a moment -- Gazi, can you and Sandy just introduce yourselves and share a little bit about how long you've been in the industry and then we'll go from there.

Sure. Good afternoon, everybody. My name is Gazi. We've been in the industry actually for 22 years. It started as a family business with one store and right now, we grow into 25 store retail stores. And everything is going fine. We go with the flow of the adoption of the technology and all the business that we have to go with -- everything that goes, everything that is changing, so we try to adapt and we'll go further maybe the treatment of customers.

Okay. Sandy, any opening comments, a little bit of your background?

Well, I came to -- good afternoon to everyone. I came to this country in 1999. I started with the first -- I started with my father with our first store. And at the beginning, I didn't like it as much. I think it was like a business that was going like I don't know how -- it was not going to last. But then after the time I start to like my job, I start to like what I did because I started like a cashier with the customers. And with time and time, we have now more a lot of employees and a lot of friends. It's like a big family, like we work together to try to grow the business more and more. Everything has been changing, but the business never stopped growing, and we are happy with what we do.

Great. Great. And I forgot to mention you're from Ecuador. Gazi, you're from?

Albania.

Albania. Okay. All right. Jose, Jose and Lupita, you're out in the Northern California market. Please introduce yourselves.

Yes, my name is Jose, and my wife, Maria. Yes, we're from California, our business is based in San Francisco, 5 locations. We came into the business, yes, about 23, 24 years ago. We started out with the travel agent, but that went away basically, it went all online. And then we got into a money transfer and then check cashing later. We've worked -- we have worked with a lot of different companies, including the well-known ones like Western Union, MoneyGram and all these companies. So we know all of them from being an agent of all of them. And we've seen a lot of changes. We've grown our business from 1,000 transactions to over 20,000 transactions per month and very excited about the industry. My -- now I got my kids trying to get involved in this business and try to grow the business as well. Yes, and we are the -- like I said, the founders of Mex Express Incorporated in San Francisco, California. And we're from El Salvador, both of us from El Salvador.

Any thoughts there down in the end?

In Español?

Sure.

Okay. [Foreign Language]

Just giving a brief description of basically when we came to the United States and how we got into the business and just as we're visionaries, and we like the industry. And this is what we've done since -- basically since we got married, and it's been a great industry, has given us a lot. And we're excited now to have our kids get involved. My daughter just graduated from college, and she's coming to work for us. And so we're pretty excited about that. And having Intermex on our side, it makes a huge difference in like I was saying, we work with a lot of other companies, and we've seen the difference. We know the difference and Intermex makes a difference. So that's why we're here.

Okay. Thank you. Thank you, and we welcome to each of you. Why don't we ask the question on everyone's mind, why Intermex? Why do you work with Intermex? Isn't it all about whichever company pays you the most commission rates or that gives the customer the best exchange rates? Why? Clearly, Intermex isn't that company. Why do you choose to work with Intermex?

Well, of course, prices are important. The exchange rate is important. But for us, the most important thing is that some -- a company that we can trust, a company that is not going to disappear like in a week and when we lost the money or the customer lost money. A company that has a good customer service because our customers, they want the money right away. They have people in their own countries that needs the money, sometimes for medical bills, sometimes for food, for some things that cannot wait. And Intermex can give us like -- we try so many companies in the past, and we still have another companies, too. But we're always choose in Intermex because they are very fast. The customer service is very good. The compliance service also, they can call us when we need them, to give them more information about any transaction. And we don't have problems that we have with other companies, especially with them, with the software they use. The program they use is very fast. It's very friendly. We not even have to call to customer services on time because we can look on the system what is going on with the transaction. So there's many advantages that they offer to us and that's why we are with them. And we want to continue with them in the future too.

Okay.

Yes. I remember, I believe, 2008, when we were working with a company called [ money flow ]. And that's when we actually knew about Intermex. We were, I guess, part of their transaction. And we were kind of afraid because we've had many bad experiences with other companies. And as we started to know and working with them, we liked it more and more. And that's why we stick with them. And we got rid of a lot of -- we used to have -- I think, as agents, we could have many companies, including Western Union, MoneyGram. And like I said, I've had them all. And we decided to get rid of them because it didn't make any sense. And now with compliance, as agents, it's super important to be with a company who can be there with you and support you. And one of the things that I wanted to mention real quick is that Intermex does understand. They do understand us as agents. And they're going to be there. They understand our position because we are actually -- our -- like we always say, we work for our customers. And we can't help the customer if we don't have the support up on -- up with Intermex. And one of the things I wanted to mention real quick too is that loyalty is important. And Intermex, Randy was speaking -- when he was speaking about why not open many locations, open location, locations everywhere -- and that's what Western Union and MoneyGram did. And I hated that and because they give you like -- you have their own -- your own competition. We can't -- they don't give you space to work. Intermex does understand that, and they try to help me as an agent to grow my business and not put another competition next to me. And I -- and that's to me, I -- that's really, really important. I appreciate that. And they've been like that. For these 15 years that I've worked with Intermex, they've been very loyal, very -- and one of the things that I also wanted to mention was that pricing is important. Their compliance, it's super great. I really appreciate it. Marketing, awesome. Marketing is really good with Intermex, their platform super excellent, a lot of things that they offer that other companies do not offer. And so yes. That's what makes the difference. And that's why we have decided to be with Intermex and, hopefully, be with them for as long as necessary, yes. It's a great company.

As long as necessary...

I don't know...

Okay, Jose. We're going to come back to...

Like I said -- real quick, Randy. I wanted to see -- I wanted to say this. A lot of the companies with agents, they come to us, and they want us to sign like an exclusive contract. Intermex doesn't do that, so basically you're not tied up to them. You are with them because they help you. You're not tied to a contract. And that's really, really important too. And yes.

That's a great point. Thank you, yes. [ Gazi ], any thoughts as to why you think -- anything you'd add here [ to the kind of session ]?

Everything Jose says, it's completely true. And as he said, we also had the same experience. So many years in the business, we had all the companies, all the remittances that exist, but you can see the difference. So we can tell the difference right away and makes us -- as you said, [ we do help ] the customer. And the customer comes back. It makes -- everything is -- makes faster, secure, cheaper. And so that's how we grow.

Okay, all right, good. Thank you. One of the questions that was asked was kind of the correlation between customers coming in with a check and customers not coming in with a check. And in New York, there's check cashing regulations that make it difficult to get a license. And you all don't cash checks, but you have many -- all of your customers come in with cash in hand. Talk a little bit about that dynamic. And then Jose, we'll come over to you and [ Lupita ] because, on the other hand, they cash checks in California, so...

This hasn't been a problem for us here because the people is used to go to the office with cash. And for us, what help us bring more customers is also because we have other services. We offer them shipping. We offer them travel tickets. We offer them like paying bills or cards or different kind of other things, but all of them come with cash. And most of them, they -- when they work, they receive cash, [ most of customers ]...

Okay, that's a great point. So they're coming to your store. And they're not just sending money, but they're taking care of other needs at the same time that they can't necessarily do online.

Yes, they do other business, yes.

Okay, good. What about on the West Coast, do you cash checks? Is it -- yes.

We do. We do. About 60% of our revenue comes from the check cashing, and the rest from the wire transfer. So we are an MSB, money business service (sic) [ money service business ]. Strictly we don't offer any other service other than check cashing, money transfer, bill pay, money orders. And yes, the...

And what's the correlation you see to someone coming in with a check to cash the check, send money? Is it one to one?

Yes. Our check cashing, it works really great because our customers come in with the check. And I say about 95% -- 90%, 95% of our customers will wire a portion of their check. And it makes it super -- and that's another big difference with Intermex because, the check the customer brings in, we'll give it to Intermex so we don't need to take it to a bank. Because we used to do that and they charged a fee. Now we give it to Intermex as a payment for the wire transfer. And they give us the difference. So we don't pay anything, and that's another huge one for us too. Our check -- we cash, I say, about $30 million per month, so it's quite a bit. And it's been really, really good. It works really great. It integrates with our system really easy, and easy for us as well, yes.

Yes, yes, great point. Thank you. Let's switch gears now. You two, if you'll tell us a little bit about your consumer: Who is your consumer? And why are they sending money home? And maybe you can add a little bit to what I was trying to say a little bit earlier.

So the majority of the -- our consumers is -- it's residents that -- they live on the area. So fortunately, we are located a little bit of -- like a little bit everywhere on the tri-state and New Jersey as well. So there are customers that -- they live here, might be of immigration background with -- but mostly they don't have a bank account, so they -- it's like you said before. It's the main reason is that they're sending their hard-worked money home. So it's something that -- I mean, [ with years, you get it very seriously ] and you know how it feels, so we try to do our best. And that's how they feel it too. So that's [indiscernible], but our customers are people that live on the area. And mostly -- of course, it depends on the area of -- from Mexico or from maybe other countries, but it depends on the location of the store that we have, but...

Okay. And what do they do for work? I'm curious.

It [indiscernible] construction -- and electrician -- and any kind of work they do, but it's -- but a little bit of everything, so yes.

Okay, okay. [ Sandy ], would you add anything?

Well, yes, most of the customers are like people that come here to work like on restaurants, work construction; baby sitters; like all kind of this work. Like sometimes people that [indiscernible] people that were here, they don't want to do those kind of jobs that sometimes -- so the people who doesn't want to do, they do it. They were here -- they come here. They live like in a small apartment, a lot of people together, to save money. And all the money they made on the week, they go on the weekend to send to their countries. They only keep a little bit of that money to survive, to eat, to pay the rent, but all the rest of the money, they send to their countries.

Yes, okay, great, good. Jose, what about your customers, what do they do?

Yes. Our customer base, well -- in San Francisco there's a lot of tourism, so a lot of our customers are the cooks of the restaurants. They're -- they work in the restaurant business. And also a lot of them construction. And they live in San Francisco and they live in the area, so that's why our locations are strategically in areas where it's close to them. These people, they -- a lot of them hold 2 jobs. Some, I -- we know people who have 4 jobs, a lot of hardworking people. And a lot of them, they live together in San Francisco. It's been so expensive. They live together. So they grab their check. When they go get their check, they come to us. And they try to, like she was saying, just retain a bit for them to live here. And the rest, they send it, so -- and -- but these people who live, live in the area. And so yes. And a lot of them, obviously they don't trust the bank. And one thing we know is because -- and also going to a bank, to them, is waste of time. They have to be in huge lines and a lot of questions. They get intimidated. So that's where we are. They come to us. They know us. If there is an issue, a problem, we're there to help them. And we go over and above to help our customers because we work for them, yes.

Okay, great, great. Back here to [ Sandy and Gazi ]. The question that we've been talking about today is, look, there's a lot of people sending money via their phones, a lot of people sending money at retail. How do you feel about that?

Of course, I guess, technology is changing, so it might a little bit implicate some changes on the profits for us, but the retail, it's still going to be strong. It's, I mean, the technology has been since so many years now changing. And we're growing with our stores as well, so -- and we saw the numbers [ that it presents ], so I agree. We agree 100%. So it's not going to affect the -- our business. Even -- it doesn't matter how is -- our customer base is people with -- it's not very tech savvy, let's say, like this, so we -- and they prefer come straight to it, watching somebody right in the face. And if they have a problem, like I said, we help them either way instead of being in front of a screen and trying to fight with a screen for many reasons, starting with an exchange rate or compliance problems. So they're going to have a much better service with somebody one on one then.

Okay. [ Sandy ], would you add anything to that?

[indiscernible] is that, when they come to a person, we speak the same language. We [ can talk to them ]. We make a joke with them. They talk about what they experience. Sometimes, many of those people, they don't live with anybody else. They are alone in this country, so when they go to the stores, they find somebody who can talk to them, who can ask them of what they eat, what they did during the day. They have like a friendship, a conversation, like somebody that helps them to give them some encouragement, somebody that is not a computer or a phone.

Sure, yes, great point. Thank you. Jose, what are -- [ Maria ], your thoughts on digital versus retail?

Well, I -- yes, I know there is a market out there for -- technology, it's advancing. I don't see it as a threat, like I said, because our experience has been that, people, they're looking for interaction. They're looking for someone who's going to be out there to help them. And that's where we come in. So I think this industry -- and we've been growing. I see the numbers going, every year, up. And so this business is -- trust has a lot to do. Someone to be out there to help them, that's very big to our customers, so...

[ Maria ], thoughts?

Okay. [Foreign Language]

Yes. Essentially choosing, it's face-to-face interaction with the customer. That's why they come to us, and that's where we make the difference. And a lot of people are afraid of technology, still. And plus it's their hard-earned money. They want to make sure that it's going to get to the place, to their families, safe and fast. And if there is an issue, they can -- they know where to go.

Okay, all right. I know our time is up, so I just -- 30 seconds. I think it's important. I'm going to ask Jose to be really brief, but he and [ Maria ] are both from El Salvador. And as we all know, cryptocurrency is different in El Salvador. What are your thoughts with respect to how that might impact this industry?

I don't -- in the beginning when -- I got a little worried, but I don't see any impact any soon. I know with crypto people have to be -- they have to know a little bit more about technology. And plus, one thing that I've seen that's huge is that -- pricing too. Even though you can send money, crypto, it's very cheap and fast, but it's very expensive to get. If you go to Coinbase, for example, and you have to go buy and -- they will charge you a transaction fee, a percentage. And by the time you have it in your wallet and you want to wire it, you already pay more than what they're paying coming to us directly. So it's more expensive, at least for the time being, to acquire it. And so yes, it's maybe in the -- I don't see it in the near future, so I don't worry much about it. And yes.

All right, good. I know we're overtime. We've invited all 4 of these folks to stay with us for the cocktail reception, so if you have questions, feel free. You'll make yourselves available to answer any questions we might have, but thank you again for your time this afternoon.

Now I guess it's my pleasure to introduce our Chief Intelligence Officer -- do you prefer intelligence?

[indiscernible].

Chief Information Officer, Chris Hunt. Chris has been -- I'll just say Chris has been such a great addition to our team. He comes in with a sense of urgency. And he's been so great at listening to the needs of the sales team, applying those needs and delivering great-quality products. So Chris, we're happy to have you with us. Thanks.

Thank you, Randy. [Audio Gap] Moment as they take the chairs up the stage. Thank you. All right, well, welcome, everyone. Thank you for being here today. I am very thankful to be here today with everybody. My name is Chris Hunt. I'm the CIO. And I wanted to take a minute very briefly, just talk a little bit about my background. I feel like I've been around technology my whole life. I remember being 8 years old and wrote my first computer program on the Timex Sinclair 1000. And if anybody in the room knows what a Timex Sinclair 1000 is, I'd like to talk to you afterwards because it's an old computer, but the point of it was I wrote that program. And I was immediately fascinated with the fact that we could build things on computers and tell machines to do things. And I was very passionate about it that it resonates very much with me here at Intermex. At Intermex, we use technologies to build products that impact people's lives, so it was very impactful, even from my childhood, coming into Intermex and having that. I've been at Intermex for about a year now. And I remember, a year ago, [ I was probably ] sitting in a seat, had questions similar to some of you in the audience today. My questions were around what is Intermex about. What are the growth opportunities? What are the -- what does the market look like around the world? For me in particular, it was about how are we using technology products. Now I fast forward a year, and I've come to find out that we use technology everywhere. We're digital and retail and have been for a very long time, digital [ and ] mobile, digital online. Our entire back-end platform really runs on digital. And in saying that, it incurred me digital has really been a part of our DNA for a very long time. Now I want to point out 4 main components around the digital aspect here. Number one is our very robust technology platform. And when I mention that, I talk about all the agency software, all of our online, all of our mobile, our entire back end, our complete data ecosystem, so really everything that makes up and composes our platform. Everything an agency uses, an employee uses, a customer, digital online user, all runs on our technology platform. The second thing is having a very modern and scalable architecture now. We spent and had a very good time this year investing and fast forwarding our modernization efforts around our architecture. And why is that important? 2 things. Number one, modernization has done a couple things for us. It's allowed us to remove a significant amount of tech debt that we had brought forward for many years, and that's going to translate to products getting to market much more quickly. And then from an architecture and scalability perspective, we want to be able to be there and be ready using elastic cloud resources when we're ready to go. So as our transactions continue to grow at retail and grow at digital, we put ourselves in a good position through this modernization to get us there and be ready for that. Third thing is open integration. Now for me this is super important. And integration isn't simply how do all the systems talk, and it's not just internal systems. It's how do we talk with external systems, how the data flows communicate. I have a slide a little later on in the presentation where I go into our new platform a little more in depth, but really it's how are we providing the interconnectivity of all these systems. And the last is cyber: And I don't think I really need to spend a lot of time talking about how important and big a deal cyber is. I think we all know that. I don't think there's a day that goes by that you don't read in the news about a ransomware attack, data breach, some kind of social engineering scam, but you name it. It's across the board, the problem itself not getting any smaller. It's actually getting bigger at a very, very fast pace. It's a little bit scary, but we're doing a lot to mitigate that, so I want to talk through a few things with you what we're doing. Number one is I'm very big on talent, so we've spent time building our information security team and working to get the best talent. As a matter of fact, next week, on Monday, we'll be introducing a new Chief Information Security Officer. It's a gentleman with relevant industry experience and a recognized leader in the cyber space, so it's going to definitely strengthen our posture on our internal team. The second component is external talent. We work extensively with third parties and we pick the best vendors to work with. They're helping us with things like vulnerability assessment, application pen tests, red team, blue team. All the proactive services that you look for in a partner, they're helping us with. Second thing we do is we invest heavily in both software and hardware. From a software security space, we have software running through our entire environment. Every piece of equipment inside of our environment is being monitored. We're monitoring traffic data. All flows of information going through our environment are being monitored today. They're being monitored 24/7. And they're running sophisticated, complex machine learning algorithms to quickly detect and identify any problems in the environment as quick as we can because we need to be able to respond that quickly in order to avoid these threats. Third thing, and it's not as glamorous, but it's recovery. And unfortunately, it's a place we're in today with how prevalent cybersecurity has become, but you have to have the ability to recover. I don't want to say it's a matter of if but when, but so many companies are being hit. And if you neglect this space, you are susceptible to your business having a major problem if you do fall to a cyber attack, so we've made significant investments, time over the course of the last year; and really put ourselves in a good position to help recover if we are hit with an incident. And the last piece, and I've always said this is something very important to me, is training. We've embedded security within our culture. It has to be a part of your company culture. We spend a lot of time requiring security training throughout the year. We talk to our employees about it. It's communicated throughout the company and we do real-time testing on our employees. We have systems in place that, as they're interacting throughout the day, they may do something that isn't the -- what we want them to be doing. And the system will flag them and say, "Do you think this activity was okay?" And they can answer yes or no. If it was a bad activity, it identifies and flags them as an opportunity and we take the proactive measure of going out and training those employees. So we really put a lot of focus because, I always say, compromising an employee's credentials is far easier than breaking through a segmented network with sophisticated hardware on the outside protecting you. So certainly embedding training into our environment is very important. Shifting gears on to something that's not security related but product and really at Intermex focused on delivering world-class products. And there's 4 main things that we do to do that. Number one, you heard a few of them up here, but we really try to understand our customer. And we really spend a lot of effort. We go to agencies. We conduct field visits. We take feedback. We have focus groups. We have innovation committees. So we're listening to everything with the pain points of going into an agency and watching them during a very crowded hour, having to deal with a system that's super fast rather than slow when you're working with a line going out the door. So we really try to put ourselves in their shoes and show the empathy of how can we deliver a better product for them. With online, it's a little more sophisticated. We're gathering a lot of data and determining through behavior analytics what the best path for a better user experience is but the same things. We focus heavily on the customer experience. The second thing is data. I mentioned that before, but I love data. I'm a big fan of it. I'll talk a little more later about how we're using it, but as a company, we're just completely data-driven and action oriented on that. So amassing as much information we can about a customer, using it for behavioral analytics and really driving our strategy around what we build as a product based on that data. The third is business strategy. Now you can build the best product in the world to be the coolest thing ever, but if it doesn't make money and it doesn't align with your strategy, it's not that great a product, so we use these first 2 things to be very surgical and very calculated as to what we want to invest in and build into our products from a feature perspective. And last thing is we really look into our market and industry. What's happening out there? What's relevant? How are things changing? How are things shifting? What's the competitor doing? Is that working? Is it not? So a lot of market and industry research goes into creating and crafting a world-class product. Once we craft the product, one of the investments we're making is really shifting towards an agile delivery method. I think some of us may have heard about that. And usually when you ask people, you say, "Do you use agile or waterfall?" And they don't have a great answer for it. They say, "We're agile. We're waterfall-agile," but the truth is we're making an effort to get to agile. And that's really to the point where we want to increase our speed of delivery. You've heard horror stories in the past, [ or the ] companies you've worked for certainly, where they're doing software releases and software builds. And those take 3 months, 6 months, a year. Doing this, we've -- got to the point where we can release multiple times a day, so through those investments making significant progress in how quickly we can get features into the market. We heard about this a little earlier from Randy and Joseph. I'm not going to talk a lot about the features right now. I do have a demo video right after this slide, but I wanted to focus on 3 key tech components for this which are important. Number one, we wanted to build it mobile first. And this is important because I identified that about 90% of our transactions are done from a mobile device. It's not from a browser. It's not from a website. So really crafting the entire user experience around mobile first and allowing them to make this transaction as simple as possible as it could be in their hands. And we think we've achieved that with a best-in-class app. Second thing which is very important is build to scale. Touched on it earlier, but we've built this on a cloud-native platform. We have the elasticity for the performance of the cloud in place today. And again as our digital transactions continue to increase as they have year-over-year, we're in a great position at this point to be able to scale with them. And the third is platform-driven. I mentioned the integration platform in previous slide. This one was a super important one for us. We wanted to make sure that everything we built going forward, including the launch of this mobile app, was built on our new IMX Connect integration platform. And that's going to allow us to really deliver value very quickly through this by unifying the back end. I do have a brief video of the app right now. It's about 1.5 minutes. It doesn't have any voice over. We were trying to figure out a way to walk through. It's essentially an assessment of walking through a standard wire transaction, a couple options. And then you'll see some of the other screens, but it will give you a good idea of the simplicity of use of the app. So that's supposed to be the cue... [Presentation]

Excellent. A couple of other features you saw in there but a lot of real functionality about very quickly being able to contact our customer service center. It's a big differentiator but multi language. You hit a button. You can be online with anybody, if you have a problem with your transaction, to begin, very quick to be able to perform a transaction on the new mobile app. Other product we've spoken a little bit about today is our Intermex direct. Now this is our flagship product we have run for a long time on the software that has been built. And we went on a mission to make a better version of that and we've succeeded. We took a lot of information from our customers. We went on to the field. We conducted surveys. We've really crafted what we feel is the best software in the industry. Now you've heard people talk about the speed of our software and how quick it is now. So we made it even better. We've actually made it even faster to conduct on that. We've also embedded security in it. We've added some anti-fraud features in it. And we've also conducted with a third-party a -- extensive user experience surveys and really having them craft, not only with the software itself but as we expand our digital journeys, how does that impact the software delivery and the user interface they use. So really continuing to just focus on delivering the best customer experience possible. In addition, I believe Bob or Randy mentioned it as well with the software, we're also deploying with new agency hardware. We feel that the agencies will love this. It's going to be a very quick, high-performance machine. The software will run very quickly on it as well as anything they happen to do on that machine. It will keep them on that machine as well. So we've got an extensive plan. Currently right now in Intermex direct we have about 18% of our transactions happening on that. We're looking to roll that out through the rest of the year and compress that time line as much as we can possible. Last component of this really, which Joseph mentioned too, which was important, was unifying the POS. And I think that's, if you look at our agency stance today, they go around with multiple applications. They've got to toggle back and forth, and we wanted to remove that for them. So now they come into the application. Everything is right in front of them readily available. And they can handle their clients much more efficiently than they do today. So this is the integration platform I was speaking about. I'm very excited about it, yes. I'm a developer at heart, so it's something that's very cool to me -- commercially available. I'm not sure how familiar everybody is, but normally you launch one of these things and there's open API documentations for engineers. There's an SDK, which is a software development kit, that engineers can download, play with the tool in the sandbox, but really the objective of this is, as I mentioned, unifying what we build our products on to be able to deliver more quickly as the main component but then also opening up B2B opportunities we haven't had in the past. So at this point, if we want to partner with a third party that has engineering and want to embed Intermex products as services into their applications, they're able to do that through our Intermex connect platform. We're very excited about it. It's been a while. It's been a long time coming. And we feel that with this, along with our co-branded offer that we have today, we've really been able to kind of offer everything to these third parties that would embed Intermex within their services, so we're very excited about this. Last thing, topic I'll speak about, data-driven. I don't think I've worked at a company that is as data-driven and strategic and analytical as Intermex. We use data a lot today. Every decision we make, [ it feels ] based on data. And a lot of companies are doing this, but we're really going to look to, in 3 areas, expand our data capabilities. We're doing so today, but 3 of them in particular are the ones you see here, 1 being predictive analytics, so using data to get better at target marketing, offering promotions, identifying customer behaviors. As you start seeing patterns with customer migrations, meet them at that point. Don't wait to fall behind. Identify this stuff upfront. Build the products to meet them there when they get there. So predicting is going to be very important to our strategy going forward. On the machine learning front. We have embedded a bit of this right now within our information security posture. I mentioned it before. We have a lot of machine running algorithms running on top of our network today that's helping us identify patterns. It's the coolest thing ever. It sits there and continuously learns about what's happening in the background and automatically updates to detect more quickly as it goes on and learn, so very excited with that. And then look into some opportunities we have in the pricing area as well to detect patterns and shift our pricing due to that. And the last piece is AI. It's a bit of a buzzword. I'll split it in 2 parts. I'll call it augmented intelligence and artificial intelligence. And I'm big on augmented intelligence and we're building a lot of that into our efficiencies today. If you think about our call centers or our internal sales teams, how do we make them more efficient? Well, we're developing tools that's using technology to predict and serve screens up so they're -- they have more relevant information in front of them when they need to do their job. So we're essentially augmenting and allowing them to do things more quickly. When I think about AI: We do have a real space where it could become valid because right now we have a very robust, great customer service network, but as the population ages and people want to be more frictionless in their conversations, it may open up the fact that they want to have a no-touch experience, no-call experience. And we'll be there ready for them with artificial intelligence to provide that support. So I think, in summary, today [ I'm just going to say ] Intermex has and will continue to invest in world-class products to deliver to our customers. I thank you all for your time today. And I'm going to turn it over to Andras Bende.

Afternoon. Thanks, everyone, for being here. Just a little bit about my background and my path to Intermex. I spent 18 years with GE Capital, did a couple of CFO roles for them out in Europe; subsequent to that, spent 2 years within financial technology, core banking software; and then eventually found my way to Intermex. When I got approached by a recruiter about Intermex, I had never heard about it, but first thing I'm going to do as a CFO is go take a look at the numbers. And the numbers were pretty compelling; and I said, okay, I think I'll have the conversation. I had a conversation with Bob. For those of you who have met him: He's very no-nonsense, straightforward, transparent individual; really sold me on the growth story. And then the next step is I want to start and meet the team, really an exceptional group of low-ego, high-results, metric-driven individuals. It was -- very much felt like part of my DNA. And that's how I started to join end of 2020, but I'll show you some of those numbers that caught my eye that are a year-plus later. Hopefully, a lot of you had the chance to join our earnings call this morning, really a set of phenomenal results when you've got our ecosystem of agents growing at 12% year-over-year and you've got transactions growing at over 25% year-over-year. Our digital transaction is growing around 90% year-over-year. Those are results you get. So really across all of our key measures in the 20s and the 30s in terms of year-over-year growth, so a great story. Really important to underscore this is not because we had a soft COVID comp, all right? You can look at a 2 year over on the right. We had a really strong 2020. We grew EBITDA around 19% in 2020. Even in the second quarter, when a lot of the industry went reversed, we were growing both EBITDA and net income, so we had a really strong 2020 and even stronger 2021. Going to the next slide here. One of the threads that I'll go between all the financial slides is really around efficiency. And you've heard a lot about it, but that's going to play through in all the financials that I talk about. So from a money transfer standpoint, what you're seeing over there is a product of a relentless 10-year focus on efficiency. And first and foremost, efficiency of the product, simple, easy-to-use product; efficiency of customer service, easy to get a hold of service and easy product to use. So great product to put out there; and then the thought behind it to go and find the agents who are going to value that, who are going to lean into that, lean into the customer service element, simple technology, and find the agents where we're going to generate a lot of wires. And that's the product of 10 years of that focus. And we're reaping the benefits, so you can see money transfers growing at 18.5% CAGR since we've been public, so a great story. Over on the right, you can see the revenue growth that came from it. I put some clouds under the money transfer growth to -- so you can see what's happening with unit economics. It's something we keep an eye on every day. The margin has stayed very robust in the space. We're doing the right things to keep them that way. And so you can see that growth in money transfers plus an eye on the unit economics is yielding what you can see in revenue over to the right. And what's really exciting for us is we're just starting to hit our stride in the West of the U.S. We're in the best and most profitable corridors in the world. And we're really hitting our stride in the West, and that's exciting for us. [ So we go to ] the next slide, more on efficiency, if you take a look at EBITDA over on the left growing about 3 to 4 points faster than the revenue. And that's what we want to do, what we want to show. That's the operating leverage that we want to show, a couple of areas that we've been driving within the business efficiency. Randy touched on it before, but when you're generating this type of growth; our ability to find good [ pay partners that values the ] growth that we're delivering; and at a unit economic standpoint, from a payer fee standpoint, keep those fees down and bring them down over time is a great story for us. Also, from a bank fee standpoint, most of -- there's a lot of hesitancy as it pertains to banks dealing with MSBs. The fact that we've been public for 4 years, the fact that we have an excellent track record in compliance -- we're regulated by 50 states who look at it all the time. We use external parties to come in and challenge us and make sure that we're best in class from a compliance perspective. So we now have more banking relationships than we've ever had, more banks lined up that want to do business with than [ they ] ever had. And that gives us a lot of banking options, the ability to keep those fees down. That's a big deal. One other thing on the EBITDA growth standpoint is from a -- there are credit losses in this industry. Our volumes went up 40% from 2020 to 2021. Our credit losses went down 13%. So super efficient use by our internal -- or super efficient performance by our internal team keeping those credit losses down and making sure we're collecting on the short-term receivables that [ we're on ]. And then just underlying in the business, it's just part of our DNA: We're very careful from a spend perspective, very careful in terms of challenging where we're adding costs and what the benefits of those are going to be. That's what you're seeing from an EBITDA standpoint, on the left. If you talk about net income, on the right. I keep using the word efficiency. Part of what's accelerating that faster than adjusted EBITDA, more efficient use of our debt facilities and better debt facilities over time. So you can see that flowing through. And then just benefiting from this model, we invest plenty in technology, to have great technology, but we are a CapEx-light model. And that's a huge advantage for us. And I'll show you what that means in terms of cash on the next page -- in 2 pages. So it's worth spending a moment on digital. We talked a lot about it, great digital growth from a transactions originated standpoint, but we think about digital in its entirety, right, so we don't just build a strategy to make sure that we can capture more digital customers at the front end. The payout side, all right, directly to bank accounts is a big deal for us, all right? And if we're generating the volumes that we are and paying out, we can incentivize our customers to actually pay directly into bank accounts. It becomes more economically beneficial for them. It becomes more economically beneficial for us, so we've got strategy on both sides to grow digital, whether it's digital send or digital received. One thing I can't underscore enough is we're committed to grow here. And we'll grow and succeed in digital, but we are going to keep an eye on unit economics. And we're going to find creative ways to win in digital. Randy said outsmart, not outspend, so -- and this is the result of the -- generally a very efficient model. We generate a lot of cash. If you -- it's tricky if you try to look at operating cash flow. Depending on what day of the week the financial close happens, it can be kind of nonsensical because we are very micro cyclical depending on the day of the week. When you take those timing elements out of it, we use an internal measure called free cash generated, and you can see it over to the left. So really, really robust cash growth over time. We pull down between 50% and 60% of adjusted EBITDA, down into cash. Over on the right side of the page, you can see the -- what I call liquidity summary. We got a question on it from one of the analysts this morning. That $132 million on the balance sheet, that's going to differ by the day, all right, so I'm going to have to caveat there is that micro cyclicality in it, but we ended the year with $132.5 million in cash on the balance sheet and the revolver at that point being undrawn at $150 million. It doesn't mean we never use the revolver. We've used it more in the fourth quarter than we ever have. We had a draw of $40 million on that revolver, but we sit in a great balance sheet position. And then the question, what are you going to do with all that cash? Best thing that we can do is reinvest in the business, which we're doing. And you'd see that within net income and EBITDA, reinvesting so that we can go and accelerate in our growth in what we do well and in very profitable spaces. Inorganic, we've talked about it more quarter after quarter. And I think we're deeper into the inorganic path than we have. And we think in 2022 we're going to have the proof points of showing some success in inorganic, but we're going to be thoughtful. We're going to be value focused. We're not going to chase the shiny objects. We're not going to overpay. And then finally, returning capital. We started the buyback program in the third quarter. You will [ notice we were ] more active in the fourth quarter. And we feel that we can have both a meaningful participation in the M&A space and in the buyback space. And I said I think 2022 is going to show the proof points that we can deliver on both of those. All right, just in terms of guidance, I won't go too deep into what we already talked about this morning but, from a top line perspective, 17% to 19% in revenue; and from an EBITDA standpoint, 15% to 18%, so a really, really solid outlook for 2022. This is not a layup. This is going to be a lot of work. This is going to be a lot of shoulder to the wheel, but we feel like we're off to a great start. We feel like we can deliver on them. And then finally, we get asked a lot about multi years out. "What could you look like in 2024?" And so we put out our aspirational targets, which you can see on the left. So really think from a revenue perspective we can be between $800 million and $855 million. We think from an adjusted EBITDA perspective somewhere between $140 million and $150 million. I think -- the good news about this, I think, most of this is organic. Inorganic is going to play a piece of this, but if we keep executing [ what we can ] execute, we can deliver a lot of this growth organically. And then over to the right, you can see just the evolution of our business. I probably should have used a much bigger pie on the bottom, but you can see from digital -- that whole pie is getting much, much bigger, but digital is taking a bigger share of it. Now we're just talking about the digital send side here, but digital is taking a bigger share of it. And then as I mentioned, we're just hitting our stride in the West, a great group of sales folks out there, great leadership, some different tactics than we used in the past. And we see being much more penetrated in the West at the end of 2024. So with that, we can do Q&A. And we can do Q&A -- or Bob's summary, first. All right, I'll turn it over to Bob, to summary. And then we'll have some time for Q&A.

Well, that's it for today, folks. Hopefully, it's been helpful. I think what we wanted to really make sure that we came across today is to talk a little bit more about our business in depth than you usually get from our quarterly earnings releases; or those of you that have been with us, in investor meetings. I think it was important for us to be able to show a profile of the very strong management team that we put together. I think all the members that presented today really have great command of their disciplines and have really brought a lot to the table. As you kind of digest what we've spoken about today, I hope that you'll take a look at and remember, as we talked about, the retail piece of the business. We don't want you to think that we're not focused at all on digital. We're definitely an omnichannel provider, but just there's so much misinformation about digital out there in the marketplace and how -- about its sweeping control that it's taking over our industry. And it really hasn't happened. We've seen that very clearly, as of late, with the latest totally online provider. I won't mention their name. They went out a little bit ago. And I think they're down about 80% unit economics. Customer acquisition fees are very, very challenging in that industry; very complicated relative to what we face. We are not at retail because that's all we know how to do. We're at retail because we know that's where the customer is, and the customer will remain at retail for a while. Now we continue, as Chris showed you, building a great application for digital. And we think that's going to be state-of-the-art and be competitive with anyone. The important part, that when we build that app, we'll be just as good as everybody else on the front end, but these folks are horrible on the back end, the digital guys. They're just like, if you ever don't get an Uber in the right place or you didn't get the right burger from DoorDash or Grubhub, try to get someone on the phone. We'll still have that same 5 seconds with a quality customer service rep that's going to help that customer and sort things out. And you learned a little bit from our guests. And I want to thank the -- our agent partners that came. Thank you, folks, for being here. You learned a little bit from them how important that hand-holding and that quality of the connection to the retailer is. And that's something that's sorely missing in the digital half, along with all the other things we've talked about, the unfamiliarity of the technology possibly but really the banking relationships and everything else. Today, we will continue to really build and grow it at retail. Please don't look at the folks that are shrinking at retail; the big players, as an example of what's going on. We showed you how big retail has gotten over the years and how we've been a big part of that. And we've been growing. There are some people that haven't executed well and decided to retreat from retail and become all digital. And they've really walked away from 80% of the retail market to Latin America today. So please keep that in mind. Hopefully, we're helpful today in illustrating the team and the company that we built. And with that, I'll turn it over if there are some questions for anyone in the team for you folks to ask. I think we have someone circulating around with a microphone, just like The Jerry Springer Show.

[indiscernible].

[indiscernible].

Can you just explain a little bit more about the unit economics in digital? And especially, you saw an 88% growth last year in transactions -- but how the unit economics have changed year-over-year.

Well, the unit economics haven't really changed. There's 2 obstacles with digital. The first one is to get customers to come onboard and do a digital transaction. Everybody is experiencing, that we're aware of in the industry, somewhere between a $75 to a $100 fee cost, a marketing fee, to drive someone to do a transaction. And when you look at the lifetime value of that consumer, it doesn't really offset that. The second thing, that the digital world or the digital online world really sprung into action because we said, well, we can disintermediate the retailer. You guys are going to cover your ears because you'll be offended not by what I'm going to say but the market, but really when you look at the processing fees online and the fraud costs online, which -- it costs us about $0.04 per wire for all our losses at retail. On digital, that could be $1 or $1.5. So you've got processing. You've got fraud fees. You've got a lot of costs. And digital has tried to compress the industry as a whole but pricing down to a level that is not sustainable. We see one of the recent companies that are about the same revenue as us. They lost $10 million last year in EBITDA. And they came back and said, "We're going to get bigger and we're going to lose $40 million this year," so you figure it out for yourself. What does that look like to you? It looks like a company that's struggling quite a bit and is going up against a proposition that doesn't quite work now. There's going to be changes in the digital marketplace. You can't make it up in volume if you can't make it on unit economics.

Can I just follow up?

Sure.

I -- just how are you doing it differently [ than the ] market to succeed in digital?

I think one of the ways we'll do it differently is we have 4 million real customers, that when those customers walk away from retail, we can be there. We have a brand. We have customer service that's different and better. So we don't intend on that customer acquisition fee to be anywhere near what it is for the marketplace. And then I think there needs to be work done related to the unit economics. And I think you'll see prices come up, frankly, in retail over time, particularly in countries that don't have an FX component, because it's just not going to be sustainable when you look at the losses, the processing fee and the payer fee. So we'll look at it from that perspective. We're not -- as you can see from our financials, we're old school. We're in business to make money, to do a great job with our consumers, but we're not building revenue that's unsustainable. It's one of the reasons we did so well during COVID, when everybody struggled. We grew 19% EBITDA because we have a real model that really works.

It's Chris from Crédit Suisse. I just wanted to dig in a little bit on the growth algorithm to get to the 2024 target. I just wanted to see the way you think about it in terms of either existing customer growth versus new customer growth or existing location growth versus new location or existing versus new markets. And then also, specifically how much of that would be inorganic?

Yes, sure. Well, all the plans you've seen are all organic at this point. Anything that we would do that would be inorganic will be over and above the plans that you see, our guidance and all that. Andras and Randy, maybe each of you want to chime in on the sort of the model and where we're going with that. I'll be happy to add in, but why don't you go ahead?

Yes. I mean, as you saw, we grew our ecosystem for the agent network by 12% year-over-year. The ramp-up of those is they're usually in their second year. You're going to see a kind of step change in terms of the productivity that they're delivering. We're 20% more in terms of customers, but I mean, Randy, what would you add to that?

Yes. I will -- I'm not sure [indiscernible]. I will just add that, that second-year ramp that Andras is responding to, I think it really does speak volumes to the fact that, once the new agent gets activated; understands the value that we're bringing in terms of the system that we've delivered, the customer service, the banking, everything we're talking about, that's when they start to move some of their customers over not just in year 1 but in year 2. And even into year 3, we see that customer acquisition, so -- and I will just add that we're getting better, I think Jose Martinez brought it up, with our marketing programs, but our marketing team is getting better and better at using our relatively grassroots, not very highly expensive-type marketing programs to bring new customers to our franchise; [ and to improve that ].

And when we talk about the unit economics of the retail marketplace. When we put up a retailer, our all-in cost to put them in, all the way to CapEx, is about $2,500. And with the average retail performance, we'll get a payback on that within about 6 to 7 months. And then it's all gravy and that retailer will continue to grow from there. Very -- quite different sort of model -- again if you go to online where you might pay $75 to $100 to get one customer in. And then that customer, you may not make a lot of money and unit economics in. So a lot of what you're seeing in terms of our growth for 2022 is the fact that, already embedded in our plan and people that are already out and selling, we've added about -- was it, Randy, 10 more salespeople out West...

13.

13.

Out West, yes, 12.

12 more salespeople out West. And it's really a factor of how many people we have [ for ] how many [ people months ] out there targeting the zip codes. Unlike any other company that's ever existed in our space -- and I know it sounds like a crazy thing to say, but it's a true thing to say. We are focused on understanding where the consumer is. And there's no better proof of that than the fact that we average 400 wires per month per retailer, where the average in the industry probably averages about 125 wires to maybe even as low as 100 wires. And so that methodology is, when you look it out West where we've added, I don't know, in California 70 people, we're going to have zip codes that we don't have any presence in or we're underrepresented where our market share that we've attained relative to the opportunity is quite low. We -- anything below 20%, for us, as a market share in any [indiscernible] zip code would be a low-performing zip code. And we would be going up to that zip code for more retailers, better retailers, but the way you really market that is our partnership with folks like you met today. It's not -- there's not a lot of advertising or anything. It's needed. It's [ not a ] point of sale. It's having the right product. It's our technology. It's the quality of our service. It's having great agent retailers that already have a base of business. And typically we're taking wires away from the competition when we come in, and that'll be a big part of the beat. Typically -- just to answer, just make sure I do answer the question. And we do answer it. If we're at in the high teens in terms of growth, all right, about -- a little more than half of that comes from what we would call same store, any retailer that's over 12 months, with a big part of that coming in the 12 -- 13 through 24 months and 25 to 36 months. And then the other part of it, probably the -- let's say, if it's 18% growth, maybe 10% or 11% is coming from same store. The other 7% or 8% is coming from new retailers that [ are put up ] that are within their first inaugural 12 months with the company.

I think we have one from Mr. Scharf there.

Yes, a couple questions. Maybe, first one, for Chris, regarding a lot of the analytics you referenced with AI, machine learning, which are the buzzwords of the day. I mean, without giving away your special sauce, I'm curious, does that relate to pricing? And is it telling you anything about any changes in the market, as far as price sensitivity?

I would answer that yes. I don't know if I can go too far into it, but absolutely. That's one of the areas we're looking to expand. And specifically it's around pricing. Particularly it's in the machine learning aspect of what we heard today.

Got it. And for Bob maybe: I think this morning, when asked about potential M&A areas, you talked about product adjacency. There are a lot of products to serve the underbanked. And you're already rolling out payroll cards, GPR cars. Do you draw -- as it relates to M&A, do you draw any hard line in the sand in terms of any service or product that involves credit risk [ in ] lending?

No. I think we typically have thought about lending as something a little bit on the other side of the line for us. Part of that is because some of the established lending companies we've looked at gained very, very high interest rates that we haven't necessarily wanted to participate in related to our customers. So that's been something that we've looked at with a little bit more of a [indiscernible], but I think when you think about M&A for us, we're further along, as we said in the call earlier today, than we've ever been in M&A, nothing to announce yet. Hopefully, we will, not a given, for sure. There are a few avenues of M&A that can work for us. One is, as we've always talked about, there can be an augmentation of even our retail money transfer business [ and ] something that brings a country that we're not really strong in. Or it brings a geography that we're not necessarily really strong in. And those are still options. Secondly would be -- what could be another category could be things that would enhance our work related to card GPR and payroll card. There could be things that help us from the costs side from acquisition. There could be things that help us [ get a little bit ] further down the road with some business they built up and we could cross-sell with that. And then lastly, I think that there are businesses -- the way we look at our business is, particularly with the expertise we now have with Joseph with compliance and Chris with technology and Andras with finance, we're not limited only to the what -- the lanes that we've been in, but I think we can move money and information faster and better than most everybody we know. And we can do it very efficiently and effectively given the fact of our financial performance and our cash flow and our cash on the books. And so we believe that there are adjacent things. Like, for instance, we've talked about before -- and not to say this will be something we go into, but there are companies out there that are doing B2B stuff cross-border, same technology, same licenses, same banking arrangements. All of that stuff would be really helpful for us. There are other companies that are doing things like payroll on cards for specific marketplaces, the cruise industry, for third-party multilevel marketing companies. So we think there's all kinds of opportunities out there that we could look at. The key for us always is to make sure that we're buying things that enhances shareholder value. And we're not just jumping, as Andras -- he likes to call it the first shiny object, right, because we got a pocket full of money. And one of the challenges we always have is that -- when we look at things, our own stock. Even though it's had a pretty good [ day to day ] in a bad market -- still way, if you look at where we were when we went public -- we were [ 9 91 ]. And we're more than 2.5x EBITDA, 2.5x net income. We've gotten rid of any remnants of the SPAC. We don't have any warrants out there. We've had 14 consecutive quarters of beating our numbers. And the best thing probably we can do is these buyback times when we can't find something that enhances shareholder value. We want to find that. We think we have 1 or 2 we're looking at now, but we also think that we're so undervalued that we'll continue with the buyback that we've been doing because it's -- there's nothing else we can buy more effectively than buying ourselves.

[ Just got more ]...

I was wondering if you'd talk about the online business again from 2 different parameters. One is this crypto approach. Facebook, if you believe the Israeli press, has basically completely caved in on their money transfer, but it's not clear why. Ripple seems to be in regulatory problems and so on, and so I'm wondering. Could you go maybe amplifying what your agents said about the costs of crypto? Coinbase is talking about renting the Remitly network now. And Remitly is -- you said...

Yes, yes, but Remitly doesn't even own their own network. As you know, they go through Euronet a lot of the time. So they don't even have a network. Their network is to hitch onto [ Euronet's and others' ]...

So Coinbase is paying 2 levels of...

Yes, yes, 2 levels up, so -- but let me start with -- I guess, with -- what was the last one that you said?

[indiscernible].

Ripple. So we saw the effects of Ripple. I mean look at MoneyGram this quarter. And I don't want to [ use the thing ], but I mean that relationship with Ripple is -- I guess that's done. That was so exciting, right, and it was the big news. And it had a great impact 1 year, and the next year, it had a really negative impact. So we've seen that. I think, from a standpoint of the going to the next piece, which would be the cryptocurrencies, they're highly volatile. As we talked about, 80% -- or I think it's 90% of our consumers at retail are getting paid in cash or by check, so I just don't see a time when at the wall or the door of the orange factory, orange plant -- orange, what is it, grove, let's call it, the orange grove in Fresno, that there is going to be someone handing out pieces of bitcoin. It's very ineffective and very inefficient. You're going to have to have a bank account first, which is the first limitation. So just like you said, it's one more removed with -- if somebody is buying Remitly's network. It's one more removed if you're going to give -- do a bitcoin or any of the cryptocurrencies. You've got to have a bank account to be able to exchange and buy that. Then if you buy that, you're holding on to it, and it's so volatile from day to day. I know there's talk about the Facebook stablecoin and stuff like that, but the bitcoin itself and other cryptocurrencies have been really very volatile. And our consumers are not holding on to these. They would go in and buy it one day. If they wanted to go ahead and open a bank account that they don't have so they could then go and buy a cryptocurrency that they don't need to send a wire that might cost them a lot more money because it's volatile -- and it costs them money to buy it. And they go 2 steps versus going to these friendly folks like this that we brought in. We just don't see that happening. There just is no real value there. It's very difficult to understand why because you're not going to save money. You risk a lot of volatility, and at the same time, you're going to need a bank account. So we don't see that happening. Relative to the online. I think online is going to be a real product. We think so. It's growing with us. We invest in it. We -- you saw Chris's demonstration. And we're really proud of the front end that we put in on that, but what we think is there's going to need to be changes. We think we have a leg up because our customer acquisition costs will be much different and much more efficient because we have 5 million real customers that know us today. And when ever they're ready -- we're not trying to push them to digital, but when ever they're ready, we're there and waiting. And then secondly, we think that the unit economics are going to have to change a bit related to online. When you look at that fraud cost, when you look at the processing costs, you look at the payer costs still, it is not a very profitable business. You saw in -- one of Andras's slides talked about that we still make an average of over $4 gross margin on every wire. Online is nowhere near that today. Remember they're starting out, in many cases, charging $4.99 or -- $4.99, Joseph? I think somewhere...

Yes.

$4.99. Our gross margin is $4.20. I mean they got to pay a payer. They got to pay processing. They've got fraud. It's not hard to figure out. I mean the SG&A will be a little bit lower. They won't have a sales team, but that gross margin line is just horrible these days, and it's going to have to change. And we see that in some of the numbers that we've seen from people who are exclusively digital, how they've struggled to get their head above water and how they've done it mostly on the investor dime and not on the dime of the consumer who is willing to pay a fair amount for that service.

And going back to the only example we have of online, which was Zoom, but [ in completely bank tie-in corridors ] of India and the Philippines. They were break-even EBITDA, but they were spending a lot on acquisition. Is there anything you can talk about either the fraud or processing costs in those banked markets versus your Latin American markets?

Well, we -- what we understand from -- we work with a Philippine company online and we process for them. And we've been really careful when we started some of the Asian markets that are higher socioeconomic in terms of consumers and therefore more online, have had terrible amounts of fraud coming in. We don't have a lot of experience with either of those markets. And I do believe that the Indian market, the Philippine market, the Chinese market will all be better markets much sooner for online than will be Latin America for added reasons in Latin America over and above the customer acquisition costs and the unit economics costs. And those are, like we talked about, the form in which our consumers get paid because they're more humble and they're modest income because there's a lack of trust with the banks, because of the comfort level they have, because we have such a large Hispanic population. So we have large pockets of consumers that are very comfortable walking right -- I mean how it works is a guy just got paid. He just was at Home Depot today. He got paid $200. He helped some guy with his deck on the backyard or whatever it is. And he gets dropped off right in front of one of these folks' stores or maybe even a store where he buys himself a couple of beers and some snacks to go watch the soccer game tonight. And while he does that, he sends his wire because it's really convenient. There's not a reason for him to go to the bank and deposit that and then go online and send the money when he's got that comfort level. And when you're handing that cash, you want to know the people. And that's that level of comfort that we think the retail market will continue to provide. Again there's those markets like India, Philippines, China, Vietnam that are going to be much more profitable sooner with digital because the customer acquisition cost is not going to be the drain that is in Latin America, but those unit economics are still going to have to change because, if you're starting out barely getting more money than we get at the gross margin line after we pay our agent, after we pay our payer, then you're really kind of starting out a bit in the hole. And that's where that is. The whole premise has been -- first started was, hey, this retail business really gouges these consumers; and it's a crazy notion to start with. I mean the average consumer sends $400 and they pay about $12. They spent less than 3% to send the money to be immediately available, in minutes, in their local currency in their home country. And the whole notion of digital was, well, as if we were charging $30 or $40 in the old days of Western Union, maybe having really exclusive marketplace to Latin America. And so their premise had to be, "Well, we're going to come in and we're going to save money because we're disintermediating the agent." And they did, but there's a lot of other costs that came in that more than replaced the cost of that agent retailer, from our perspective. And you did mention Facebook as well. And we can't predict what's -- but it seems as though Facebook is, if not stopping, certainly slowing down with their notion of doing remittances. And that would...

[ It would be really impressive entirely ]...

Yes, that's what -- yes. So I mean that's a big deal, right? I mean -- so without a development team -- Chris, we couldn't do without a development team...

Tough.

I tried to file...

We'd figure that out, [ but it's tough ]...

So really expensive, but we had to [indiscernible]. So other questions? Okay then. Well, we -- again we thank you all for taking the time. We know you're all busy. We really appreciate you coming and hearing our story a little bit today. And as they say, [ we've been ] up in the Catskills. Tell your friends, right? So we'll be here all week. So now we'll open it up for a cocktail party. And we'll be around and -- I'm sorry.

Cocktails are down the hall.

Cocktails are down the hall. I think, if you follow this lady...

[indiscernible].

She seems to know, and Laurie does. So we'll see you all there. Thank you very much. Appreciate it very much. Thanks.