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

Good afternoon, everybody. My name is Andras Bende. I'm the Chief Financial Officer for Intermex. I'm also the CEO of the European business. Welcome, everybody, to our 2025 Investor Day for International Money Express. Happy to see everyone here. Just need to take a moment, as you might expect, just to talk about forward-looking statements. Our remarks today will contain forward-looking statements. And for a discussion of risk and with respect to uncertainties with our forward-looking statements, please consult the Investor Day deck, which you'll see here; and other filings that we've done with the SEC, which will qualify our remarks today. So just a quick -- I'll just talk through the agenda today. We're going to start out and Bob is going to talk about the history of the company and the path we've taken to sustainable growth and scale. And then Andrew and Marcelo will spend some time on our unique omnichannel digital model and talk about what we're doing in both retail and in digital. And then we'll go on to a Q&A session, with a small break. We'll have some refreshments there. And then after, Chris and I will come back and talk about our history with M&A and how we think about M&A in the future. And then Chris will transition to talking about our technology and our differentiators in that space. Then Joseph and Daniella are going to talk about operations and compliance. We'll do some more Q&A. And then we'll come back on the financials and then we will wrap up for the day. Just to provide some notice that this event is being webcast at the moment, so when we go to Q&A, Q&A will only be available to those in the room, but those online who will and do have questions, we will be happy to follow up with the IR team. We can schedule separate meetings as well. We'd be happy to set those up. And so first and foremost, I'll introduce Bob Lisy, who is the Chairman and the CEO of the company. Bob, while not the founder of the company, is definitely the architect of what's a very differentiated model for Intermex in the space. And I'll hand it over to him to talk about the history of the company. Thanks very much.

Good morning, everybody. Thanks, all, for coming today. I see a lot of faces we haven't seen for a while, some that we see often, so I appreciate you being here and giving us some of your time. I want to start out a little bit by just sort of giving you a little bit of the background of the company. I think we don't talk enough about sort of our history and how we got to where we are. So I came to Intermex in 2009 as a consultant. I was coming right off of a very successful run with Vigo. We had bought Vigo from an individual owner, Helio Gusmao, here in New York; bought it for about $80 million; and sold it to Western Union for well over $400 million, so it was a great and successful event for us and for our private equity sponsors. And I was taking a bit of time off and I got a call from the folks at Lindsay Goldberg that had bought Intermex. And they bought a business that, whereas it was a great business, had started to stumble a bit. It really hadn't anticipated its growth model, kind of sort of coming to where it was at. There were some difficult times happening in the marketplace. And it was -- needed a little bit of work. So here's what I found. And we'll talk a little bit about some of the things on the page, but I found a business that was really struggling. Intermex in 2008 and 2009 was making about $1 million in EBITDA per year, so it was a business that was struggling to be able to have their necessary cash flow to be able to pay its wires on time. It was a business that was very regional, wasn't driven by metrics. It was caught up in what was going on in the industry, which is this model that was focused -- as you see that first bullet point there on the left side, focused on market ubiquity and agent exclusivity. It was focused more on the market ubiquity, not so much the exclusivity, but putting up agents like crazy. And the agents weren't productive -- and spending a lot of money doing that. It was -- didn't really have an approach to look at where the consumer lived; what our market share was, down to the zip code level; and how we go and attack that business. It didn't really look at the valuable contribution from an EBITDA perspective and a margin perspective of countries like Mexico where we're extremely profitable, and Guatemala, versus countries where the margins were quite small, so some of the first things we did was begin to look at all of that and look at how do we get productive retailers. How do we go through that? And how do we decide on what makes a productive retailer? Where do we draw the bar? What are the ingredients that we want that retailer to possess? The company was -- really had -- probably 2/3 of the retailers that it had needed to be lifted from the company. They were unproductive. They were put out there and they weren't successful, so right from the beginning -- and it's something I think it's important for all of you to understand that really will carry forward all through our time that we've been here, so far, and the time that now going forward with this sort of regeneration of the company, is performance and efficiency have been right in our DNA. So we looked at the business; and we started to look at how do we build productive agents, productive retailers and do the same. So whereas the marketplace was focused on ubiquity, we were focused on data-driven agent selection. We looked at zip code by zip code, so we can tell you today where we have coverage, where we don't have coverage, down to the zip code level, not only to Mexico but to Guatemala, to Peru, to any of our key countries. We focus on 8 or 9 key countries. The second thing is we -- targeted approach to highly profitable, well-defined corridors, so we weren't looking for ubiquity. We're looking: Where are the wires, and how do we make money? And where are those wires located? And lastly, highly productive, carefully chosen, prescreened locations, locations that we knew wires were existent there, so our model wasn't to go out and cut new ground on new locations. We were going where there was business already and then taking our value-added model into that retailer and finding ways to take the wires away from a competitor. What we came to, as we looked at that, we said, well, we can't be in this model that is really driven by nothing more than a who's got the cheapest product and who puts up the most retailers, so we decided that there were key value-added components of our model that we needed to put into our retail business. One is strong banking relationships. So when you look at our model, we have relationships -- and some of you are here representing some of the banks -- with banks like Bank of America, Wells Fargo, KeyBank, Fifth Third; a number of other banks throughout the country; U.S. Bank, that gives us easy access for our retailers to bank our transactions. And then we also have our check direct product, which makes it even easier because we do that electronic processing of Check 21 at retail, making it easy to move the billions of dollars through the system, that we move through the system. This has become a very strong differentiator for us because a lot of the smaller guys don't have banking relationships, can't get them. And some of the bigger guys, the Western Unions and the MoneyGrams of the world, were not willing to pay for banking relationships. Our technology is another factor that, although proprietary and homegrown, really became something that differentiated us from all the other guys out there in retail. It was faster, easier to run, up more often and more reliable than anybody in the marketplace. And it became something where the retailers preferred it because we would process a transaction as quick as 20 seconds, where other providers would take as much as 60 seconds or more, so it became a very valuable differentiator for us. Our customer service. Joseph and others will talk a little bit more about customer service, but today, if you call our customer service line, you're going to get someone in the customer service line in 4 or 5 seconds, but competitors, some of them minutes. The largest competitor, Western Union, you'll sometimes see them ask you to be called back, that they just can't take the call right now, so it's a big differentiator for both the agent and the consumer. And then our robust regulatory compliance, which gives a sense of security not only to our agents but our banking partners and our paying partners to know that we have the best compliance and the best regulatory system available. Well, what are the results? In the time that we've been here, we have the 3x gross profit productivity per agent over the 5-year period. We have 100%-plus net dollar retention of gross profit per agent and 9x -- 5x -- the retail LTV at CAC. What that means in simple terms is, since we've been public -- we went out public at $34 million. Last year, we made $121 million, so we've more than tripled our EBITDA in a short period of time. We've gone from, a short time ago, a market share of 5%, when we started out, to a market share of 20% across all of the major countries in Latin America, so it's [ played ] big dividends as we differentiated ourselves in retail. So a little bit of information just if you look at the Mexico, Guatemala side. That is really where we spent most of our time and energy. The margins to Mexico are by far the largest in the industry, with the largest FX component. Guatemala is second. And the countries below, most of which are either dollarized or have very small FX components, so not nearly as profitable, they became add-ons as we built the Mexico and Guatemalan business, but when you look just shortly back to 2015 to 2023, you see our market share in those key 8 countries has grown steadily from a 7% share to a 20% share. And that's been done again through that system of carefully targeting the right retailers in the right places and understanding where the consumers live. Strong history of profitability and growth at scale. We're looking here since 2015. If I take you back to 2009, when I came to the company, the -- I think the revenue then was about $50 million. So we've had about a 12x to 15x -- 12x to 14x -- 13x, 14x growth in revenue over the years, but it's been a concentrated growth in EBITDA. We were only about $1.2 million in EBITDA back then and $121 million this last year. High transaction volume, 59 million transactions, so we're averaging almost 5 million transactions a month, most of those, about 2 million of them, going to Mexico; another almost 1 million going to Guatemala. And the rest is mixed throughout the other countries that we've mentioned. Growing customer base: Almost 6 million people use us on an annual basis. So a smaller number per quarter and per month but, over the course of the year, 6 million, which is a huge opportunity for us to leverage that group of consumers into additional products and services. And I think something other that's also lost a lot in what our business is, is the high net free cash conversion. 2024, we would have -- if -- other than our move and other things, we would have generated about $67 million in free cash. And we expect to generate that or a little bit more this coming year. We'll take a minute to go through the team a little bit and talk to the people who you're going to see presenting today. If you look at the first 2 top rows there, those are folks that will all be here. You've met Andras already. Andras comes to us with a lot of experience from GE Capital, has a lot of experience in financial services. And Andras functions not only as our Chief Financial Officer but also functions as our CEO of our European division I-Transfer. And we have Chris Hunt, who you'll meet in a bit. Chris brings a huge amount -- he started as our CIO, brings a lot of technical knowledge and background in both operations and technology. And Chris functions as both the Chief Operating Officer but also as well is the CEO of our La Nacional business out of New York here. Joseph Aguilar. Joseph has, I think, about 30 years experience in the industry; spent a lot of time with companies such as Sigue, ran their European division for a while. And Joseph is the President and General Manager of our Latin American division, which includes all of our call centers and a lot of our backroom activity in Mexico and Guatemala. Marcelo Theodoro, who is our Chief Digital and Product Officer: Marcelo has got a huge amount of experience with companies like Mastercard, [ Citi Corp ]. He is our expert, resident expert, on digital. Marcelo has always got a new idea related to digital. He's a really smart guy with that, and we hang a lot of our future on the things that he's building for us related to digital and new products. Andrew Kugbei. Andrew came to us right out of college. He's been with us 10 or 11 years and has held a number of different positions in the company. And today, he knows the numbers inside the company as well as anybody. And he functions as our Chief Operating Officer for our U.S. outbound retail business. And lastly, Daniella Trinchet: Daniella is our Chief Compliance Officer. She's been in that role just a little under a year, I guess, now. And Daniella is the best compliance person we've had since we've been in the business here. She brings both a really good understanding of the legalities of compliance but a really good business acumen to make sure that we're doing all the right things to continue to drive the business. Driving the future. Well, what's it about for us? We are definitely not giving up on retail. We don't think retail is something to give up on. We think there's countries like Guatemala where less than 15% of the business is still going digitally, most of it retail. Mexico, we think, is probably 70% retail, 30% digital, so there's a huge opportunity still for us. There's a bigger opportunity, as we've talked about for years, out West. We continue to access that opportunity. We're putting more resources there. We need more retailers in the West. Our average number of foreign-borns per retailer in our Western states is 3x or 4x as high, so we have 1/3 or 1/4 as many retailers in the Western states as we do in the Eastern states. And we'll be focused on building those new agent activations and transactions in the key areas, very targeted, as we've done throughout the history of the company. The digital growth, Marcelo and Chris will talk a lot more about, but for the first time, we're investing a decent amount of money into our marketing of digital. We've kind of done what we've done over the transom. We've got a decent "wires as a service" business today that is highly profitable. And the keys for us -- because those of you that -- might say, "Well, geez, Bob, I remember you saying lots of times that it's all about retail and the digital business isn't profitable." A lot has changed. The average margin of the digital business now is better than the unit economics at retail. The customer acquisition cost is still heavy but much more profitable than it's ever been. In addition to that, we've redone our app. And we now feel we have an application that is competitive with anybody in the industry. And we have an opportunity to really grow on the digital perspective. The big opportunity for us is not just retail and digital but the financial services that we can provide both sets of constituents through our retail network and online. And we're working. We've added a few things this year, improved our [ walk-in bill payment ] product or our online bill payment product as well. Our phone top-ups, we've done a really good job with that, but there's many more things. Short-term loans, we look at, a lot of things that could really give us a better connectivity with our consumer and a bigger opportunity to make money off each individual consumer that we have in the franchise. Remember that's almost 6 million people. International expansion. Our I-Transfer division is doing really well. You may have heard on the earnings release earlier today it's growing gross margin by 30% or more. And it continues to grow at a very good rate. We put in the Intermex system there, and that Intermex system is working quite well. And then lastly, in organic growth: We make, we will continue to make small selective acquisitions. We just made the one of Amigo Paisano. It's going to be a great thing, and they'll talk more about that. So we have a little video. I think I'm just about on time. I'm a little bit over, but just in closing: I think it's important for you all to understand where we are as a company. It's easy to look at it relatively and think, well, Intermex is mainly retail. And Intermex has got a lot of work ahead of us. And that's true. It's a lot of opportunity, but where we stand today is the most prominent company that's ever been in business relative to retail transactions to Latin America. And with that, we have already built the strongest -- or amongst the strongest payment-side networks the right banking relationships, the right infrastructure, the right call center, all the things that are needed to take the company to the next level, with a very strong retail business continuing as it is and then building on that digital side and sort of repositioning and reweighing the company to make sure we're not overweight in retail and underweight in digital. All it takes is an investment. We bring the same tenacity, the same efficiencies, the same ability to manage cash. And we have a lot of ideas and a lot of ways that we will grow our digital business to make it equally as productive as our retail business in the coming years. And I ask you to kind of take a fresh look at the company in the sense of what it has versus might -- what you might think about relative to what you might think of as deficiencies, because it's way down the road in terms of its ability to perform and excel and make this next step into a more omnichannel-related business. And we're really confident that today we'll make a really good showing to let you know just how well positioned we are to do that and how well positioned we are to do that profitably and efficiently. So with that, I'm going to play a little video here for you that we think you might enjoy. [Presentation]

Thank you. With that, I will introduce Andrew Kugbei. Andrew is a guy who's been working directly with me for more than 10 years now and knows our business as well as anyone. It's been a huge contributor to where we've gone from the years of 2015 and around then to where we are today; and also represents, I think, a big part of the next generation coming up at Intermex and part of our future. So with that, I'll introduce Andrew, who will talk a little bit more about our U.S. outbound business.

Good afternoon, everyone. I've been given the tough slot here. Not only do I follow the CEO but also the studio production, but I'll try my best. It's nice to be with you all today. As Bob mentioned, I've been with the company for 11 years next week, and that's for a reason; very proud of the work we do. It's been a great company with a great vision that I saw from the beginning. And I'm here to share a little bit about what I've learned and what's really behind the retail model specifically. So if we take a step back; and look at the TAM, the total addressable market, you see that the remittance market is projected to surpass $900 billion in 2025. That's going to reflect some modest growth, but regardless of any headwinds the remittance industry tends to see, it rebounds very quickly and it stays resilient. It's one of the most reliable financial flows worldwide. And the growth continues despite the macro headwinds. And the consumer is just an extremely resilient consumer who needs to work, as you guys experienced in the video. As far as Latin America is concerned, though, that's really where we have built our reputation. It's where we've gained the trust of our consumers. It's where we've served with a really superior product for decades now. It's the -- I would say the essential nature of remittance is the fact that the transaction is a lifeline that truly feels its continued growth, and we expect that industry to continue growing. What's exciting for us is that, as we explore digital and as the consumer base also starts to slowly adopt digital, it presents an interesting way for us to expand. We're no longer really constrained to the physical locations. We can think about expansion in a different, more interesting and more sophisticated way while still serving the base of consumers that rely on cash and will continue to be really the primary senders of the remittance industry. So as far as the TAM, we do have access to another $315 billion through our Europe acquisition. It really opens the passport-ability of our licenses to be able to start to transact digitally there. And then we also have other countries. Currently, Intermex, though we serve around 19 countries, we are in 14 of the 15 most profitable. And we focus, as Bob mentioned, in Mexico, the single largest corridor of any 2 countries, the U.S. to Mexico. It's also where the most profit is, so we've really made our bones there. And we've served a consumer base that has really sustained margins for years, so as we continue to see shifts in the market and folks go digital, we believe we're positioned to serve the consumer wherever they may choose to go. This is a look at our market share, specifically in the LACA region, over the last couple of years. You'll see that we have continuously outpaced the market growth. Though the market itself has been growing, Intermex has been able to take share on a consistent basis. I would say that we've been able to do this with really 3 ways: one, our superior execution. We are structurally and foundationally different than the competitors. We do things the Intermex way. It's a unique approach that I'll get into later. The number two reason I would say is we have an extremely high loyalty in our consumer base, a lot of recurring transactions that fuel our profitability and growth. It's another reason we've been able to continuously take share in the market. And number three, our strategic pricing and optimization that operates at the zip code level. We price and we essentially position ourselves to be able to capture the share in each agent to a large degree because we understand the neighborhood. We understand the economics, the demographics and exactly how to add value in each agent to drive that profitability. As we look at this chart, I do see that 17%, 19% and 20% in 2023, as far as our share. It's a growing market, but what we experience in Latin America is that primary consumer base is restricted to cash. And they will continue to rely on transactions that originate in a physical location, and for that reason, we believe we have a lot of opportunity ahead of ourselves. I think, as Bob mentioned, the Western states where we have yet to gain a significant amount of penetration, it's going to be a retail game at that level. We'll be supported by a digital product, but we just have enormous share to gain still in Latin America and other regions. The Caribbean is relatively new to us, so as we [ adopt ] our world-class product over there, we do expect to continue to gain share. This is now just a more targeted look at the LACA region and our share in specific countries. Mexico, we talk about where we strategically focused our efforts and where the margins are the highest. We've maintained our 20% share there. Guatemala, 29%. These are economies and countries that are heavily dependent on remittances. It's amazing. Countries like Guatemala, Honduras and El Salvador, the GDP that comes from remittances is over 20%, estimated by the World Bank, in some of those markets. You talk about countries like Honduras, estimated at 27%, so these are critical financial flows, predictable revenue streams that we will continue to be a part of and continue to serve the consumer. Let's talk a little bit about our unique approach. Intermex definitely does things differently than the consumer base, and that is what really sets us apart. I would say we have one principle. We believe that, if we serve the consumer better than anybody else, we will win. And that's really been the story. We serve them through our multichannel strategy, which really means we are ready to be there however, whenever and wherever the consumer chooses to transact. Our high-volume agent base. As Bob talked about, we have an agent base that is the leading in terms of profitability and productivity in the industry. It scales rapidly. It's a cash machine. And it throws off enormous amounts of cash that allow us to sustain not only our investments in digital but also our reinvestments in the retail business for years to come. That operational excellence has translated to how we treat all of our consumers, even our employees. And we continue to use data to make sure that we are on top of every opportunity and approaching it with precision and with a lot of detail. Of course, this means technology as well; and that's what's amazing about the brick house that we've built. It allows for a lot of free cash to continue to invest in our technology and make sure that we are a value-added provider. We like to make sure that our agents understand that our technology can serve them as well as the consumer. And we believe that that's the trust that we've built in our long-term relationships at retail. So if you look at the unit economics. That's what really sets us apart. We don't believe in focusing on the number of agents we have. We believe in focusing on the economics of the agent, so in looking at this chart, you'll see that we do invest about $5,000 to acquire an agent. At the retail level, this is a really low-cost, high-retention model. It's very cost effective at not only acquiring agents but retaining agents. The $5,000 is estimated to be made mainly of our sales and marketing costs and about $1,000 that is used in terms of equipment that we set up at the agent, but there's not a long pathway to break even. Within a year, we believe we get that payback, and the agent continues to ramp up. The longer an agent is with us, the more profitable they are, so as we set these agents up, it's not necessarily about just activating them. The work starts with our [ OBR ]. We have a process in which we select agents. We don't just activate agents. They need to meet a specific criteria to have Intermex service in their business. We want agents that are going to drive a lot of volume that we understand the value we add in that agent to make sure that we can advance our market share. So typically we would have a sales rep collect and capture specific data at the agent that is then vetted at HQ to make sure that this is sustainable, to make sure that we have the right offering that can actually steal market share from the competitors. We will not just activate any agent. It's a very selective process, so the payback we get is all reflective of the work and the vetting that goes in and the system that we've created to make sure that we can get an LTV of about 9x. So here's a chart about that flow. You'll see how sustainable and how the recurring predictability of the curve is. Within a year, regardless of how many agents drop off, the profitability retains at 100%-plus. That churn is so low that the compounding profitability of the agent creates a very, very productive; and predictable revenue stream. I would say that this also lends itself well to where we want to go in the future. If we have a retail model that acquires customers at such a low cost, it can allow us to invest in our digital business while protecting the core of our business, remaining profitable and expanding while maintaining our resilience and our profitability. It's a big favor that we have and a competitive advantage that we can lever to not only use the organic growth that our retail business achieves, but word of mouth, the high loyalty in our consumer base, it all translates to a much lesser cost in order to achieve the results that we have. Also, as agents ramp up and the longer they stay with Intermex, the less support they require, so they become more cost effective. And that cash can then be generated and further invested into our digital business. So as I look at retail and digital side by side. As Bob mentioned, I've been here a long time and I've been able to see what really made the retail business great. And I was here before we ever started a digital business. And I remember the days where the margins were about $1, and the retail business was just the clear place to invest. It's been amazing, after bringing on Marcelo, to see him dedicate himself to just raising those margins, bringing down our costs. And now as I look at a business that is as profitable even more so on a per-transaction basis than our retail business, I'm really excited. It's almost like I have another chapter of Intermex ahead of me, so really thank Marcelo for that great work. And it's important that we use the cash machine that we've created in our retail business to fund the transformation that we want from our digital. And we're just so well positioned to be on both sides. As cash remains king, we will continue to invest in digital. Wherever the industry goes, however it evolves, Intermex will be there with a best-in-class product. With that, let me introduce Marcelo Theodoro.

Thank you, Andrew. Thank you very much. Andrew has a [ beautifully ] story at Intermex, like 11 years working for one company and almost bring it from 0 to where we are. It's tremendous. Thank you, Andrew. I'm going to bring a flavor of America -- Latin America here. Sorry for that. You are going to suffer a little bit with my accent and all the [ ED ] at the end of the verbs and words, so bear with me and be patient, okay? I joined Intermex 2 years ago, coming from Mastercard and some other companies. I'm currently responsible for everything digital products and marketing. And I'm going to try to show you guys a little bit of the vision that we have for the future. As Andrew and Bob said, we are starting from a very interesting foundation. The company is very profitable. Our core is very solid. In fact, we provide services for companies that, at the end of the day, are our competitors, so that shows that we are at a whole other level -- where is the -- click. Here we go. So what is our vision for the future? We currently serve 6 million people per year in the United States, but we always forget to mention that we serve more than 6 million people across Latin America. So we have an opportunity to interact on almost a daily basis with a group of people that are completely underserved or unserved by the traditional financial system. Very few companies, again, have this interaction. [ You ] know how much these people make per month. We know how much they send. We know how much their beloved ones receive on the other side. At the same point, there is a huge opportunity for us to leverage the brand that we have. They know Intermex. They trust Intermex. And as I said, they interact with -- all the time, so the question that we place to ourselves is what else can we do. If we are bringing consumers at X cost and we have agents at X cost, how can I make more money out of these opportunities? How can I apply the concept of efficiency that Intermex is carrying for years to the new world that we are trying to explore? Before getting there, I want to highlight a little bit of our digital business. And my perception is that digital is just a channel. It's not the final solution. It doesn't matter if you have the best app in the world or if you are throwing millions and millions of dollars if your services doesn't work. And that's the different approach we have. When you look at our digital business today, almost 99% of the transactions are paid in less than 1 hour. Most of our competitors, particularly the small and mid-sized companies, they cannot offer that because they don't have the direct integration that we have. In 2024, our uptime was 99 -- almost 99%, which is also very solid when you think a consumer-faced platform. And lastly and very important, 96% of our transactions don't require any type of manual intervention. What does it mean? It helps a lot the profitability. So we keep growing on a 67% year-over-year, but our staff, the number of people who are supporting the digital business, remain equal or is lower, depending the business that you are talking about. Bob mentioned a little bit as well the fact that we invested a lot on wire as a service. This is another business line that is extremely interesting because we bring in more transactions. We bring in more gross margin with very, very low investments and even lower operational engagement, so every time we bring these players, basically we are reducing our selling cost and adding transactions and gross margin with little effort. So we started doing that properly in 2024. We have already 6 big partners that are leveraging this solution. We are implementing more 5 in the first quarter of the year. And this is something that we're going to invest a lot again to leverage our existing infrastructure. We might talk a little bit about that in the future. Connecting back to what Andrew said and now we start looking a little bit ahead. As of today -- we always said that we have a multichannel strategy. What do we mean by that? While a consumer can access our services through different channels, they're -- these channels are not necessarily fully integrated, so you'll go to the agent. You send a wire in a seamless way. You go to an app. You send the wires in a seamless way, but the experience is not exactly the same. The data that is supporting this experience is not the same. What we are doing now, we are creating a true omnichannel engagement, so if Daniella goes to an agent and send a wire and, 2 days later, Daniella decides to use a mobile app, all that information is going to be there. All the transactions that she sent in the past are going to be there. It's going to reduce our cost of acquisition a lot because we have the profile. We have the credentials, et cetera, et cetera, so our goal here is not to compete with our own agents. Our agents, as said, is a very profitable business that we want to keep, but we know that we can be under attack from companies like X, Y or Z, so our vision is we have to have a B plan. We have to have an alternative for the consumer that, if the consumer is ready and if the consumer want to go digital, he moves out of our retail then go to our app, but this transition is going to be easier and simpler than moving from our retail and going to another company app. So this omnichannel approach is something that starts to leverage our past record, our track record; and give a very interesting competitive advantage to Intermex. If you are a native digital company, you'll literally have to bring that person from scratch. And that, for those who are more engaged, is not easy. It's not simple. Looking forward, as I just mentioned, we truly believe that retail is still the biggest part of the market for the next few years, but we acknowledge and we are working towards the fact that digital is growing and growing faster, so this is not something that we are leaving on the side. The second thing there, we'll start to be again different than everybody else. We understand that most of the companies that are doing digital business are not profitable. They grow fast. They invest a lot of money. At the end of the day, most of them are not profitable. Some of them are working in this industry for 12, 11, 10 years; and they start to be minimally profitable 1 or 2 quarters ago. We are revamping our digital business. And it's as profitable or more profitable than the retail, so these make us very confident that now is the time to make investments. Now is the time that we can make those investments and get a huge return on those investments. And in the last bullet, you see that very clearly. When I joined the company, us as a leadership team, we have a very initial digital business. And our digital business was making $2.50 per transaction. Today -- or December '24, our digital business makes $6 per transaction, so when you put that in perspective and you consider that we are going to invest and estimate to have a CAC up to $60 -- and today, we're operating between $35 and $40. It's not a promise that we are going to keep doing that, but we believe there is a way to do that. And we consider 5 years lifetime value of $240 per consumer. Just with the remittance business, we have a 4x LTV over CAC. That's a very, very good number; a very, very good return on investment. And again, if we can keep work in a way that we can do more efficiency on the $60, these return on investments get even better. And how we are doing that. And that's -- there's no magic here. We are just trying to do the basics very well done. So first, we are applying our perspective of rifle shot. We are not throwing money out there, millions and millions of dollars, just to say that we are investing in marketing. During 2024, we tried to understand very well how our consumers work and which platform should we invest our money, so as of now, we decided to invest in Google, Meta and Apple. Surprisingly for some people, 45% of our clients, consumers are iPhone users. I remember, when I joined the company, that's something that we didn't believe. After, of course, looking at data, we can see that, despite their social economics, they like iPhone. They invest to iPhone. Once they move to U.S., the first thing they buy is a superior telephone, so that's something that is valuable for us. On top of that, we are going to do 2 things that Intermex never did in history. So first, we are searching for opportunities of sponsorship. And as of today, the biggest opportunity that we see is soccer with the MLS league. So for those who follow soccer: MLS league is growing fast and growing a lot since a Argentinian player joined the league 2 years ago. U.S. is going to host the clubs world cup and the [ nationals ] world cup in the next 2 years, so we believe that, if we join this boat right now, we are going to take advantage of this whole buzz that soccer is going to have in U.S. So we are trying to connect these opportunity of sponsorships with states that we see opportunity for penetration, like Texas and California. We still didn't decide which is the club or which are the clubs that we are going to sponsor, but I would say, as of today, there is a very high chance that we are going to have a presence in the MLS. Lastly, another thing that we never really did, we are going to invest or we are planning to invest on commercial on TVs, radio, events, et cetera, et cetera. So there is a lot of data, a lot of science behind that. Again, a lot of people believe that TV is dead, but TV is not dead for Latinos. So Latinos watch TV. Latinos listen to radios when they are working, so we believe there is an opportunity over there as well. We are careful with peak season. So again, the assets that we plan to put our money are not assets that are not connected with the seasonality of our business, so of course, Mother's Days, Christmas are important days for our business. And you are going to try to be connected with those dates as much as possible. And lastly, again a very rifle shot approach, we are using our data to know which are the states, which are the zip codes with high number of foreign-borns. Which are the states, which are the zip codes that we have a higher GMPT? Which are the states and zip codes that we are low -- we have a low penetration vis-à-vis our retail business? And those are the states that are -- those are the zip codes that you are prioritizing our investments. Moving a little bit from marketing to products. I want to highlight 2 recent features that we released that shows a little bit more our vision of omnichannel approach and how the channel itself is not the most important thing because it's easy copy-able, right? So on the left side of the screen, you have what we call send wire. When you look at that, again, you see that the consumers send wires regularly to 2 or 3 people max. So they send pretty much the same amount, with the same period of time, to the same people, so we create a feature that, literally with 2 clicks, Amazon like, you can send a wire back home. So you're going to click in the person that you sent the wire before. If you need to edit the amount, you edit the amount. You swipe and you send. So you can send a wire in 30 seconds, don't need to type cards; et cetera, et cetera. And this typing -- this kind of enhancement in our client experience supports the fact that you saw in the other slide's that our rate on app stores is really high. Because we are really investing and focus on that. On the other side, on the right side, is something that we launched 1 week ago that is giving the consumer the ability to send wires via WhatsApp. Again for those who are not from Latin America or are not closer to this data: WhatsApp is used by something like 96% of Latinos. So every single person that I talk from my original city, from my family, my dentist in Brazil, everything is through WhatsApp. So when you think about our target audience, that is not, I would say, very sophisticated people. If you can bring them to a channel that they are very used to use on a daily basis and they can send a wire as they are chatting with somebody, we truly believe there is a huge potential for us. So you guys can test it if you want. It's working very well; of course, a lot of things still to do, but I am particularly very, very excited about that. And it's just 2 examples of things that we are doing. Lastly and probably the most important chart, in my opinion, is the 6 strategic pillars that we are going to invest in the next 2 or 3 years. Starting from the left: When we call Latinx bank, it's honestly a lack of a better name for now, but it's the fact of our consumers don't have access to bank accounts. If we can give them access to bank accounts or to debit cards, we are not really worried or focusing that they are going to use this card to do something else. They are going to use this card to go and buy a Coca-Cola. Of course, we want them to do that. And if they do that, we make money, but most important, if they have a debit card, a credit card or a bank account, they are going to have the optionality to move from retail to digital, from digital to retail. And when they do that, the gross margin per transaction is going to increase $2 to $3 because we are going to reduce all the credit card acquirers networks cost. So there is, of course, a value proposition perspective that we bring to these consumers that cannot enter in a JPMorgan agent's and open an account, but behind the scenes, there is a very important economic approach that makes the company even more profitable. The second box is microloans. And there is some confusion about -- between that and anticipating wages, et cetera, et cetera. What we are talking here is that our consumers depend paycheck by paycheck. They don't have savings account. As you saw in the video, everything they generate, they send back home, right? So when there is a hurricane or when there is a rain or whatever happens that is out of normal, they need money to keep moving, like a working capital. If we can provide a microloan and, just for the sake of discussion, we estimate that they are carrying over a $500 balance throughout the year at an average of 25% APR, which for this industry is very reasonable, we are talking about making more $125 per consumer per year. That's a lot of money. These people go to our agents. They trust our brands. They trust our agents, so the opportunity is there. The business is there. And that's something that we're building. Payroll, I don't have to go in details, it pretty much what we said about the bank but leveraging our relationship with small business and farms. If we can use payroll as a disbursement method for their salaries; and they use this card to pay for wires on our app, on our agents, we are making more money. And that's a low-hanging fruit. We had some challenge in the latest few years to make this grow faster, but now we are very confident that we found the right balance for that. Data, AI. Andrew very well mentioned the importance of data for Intermex. What I'm looking here is one step ahead of that: how we can use data, AI to predict needs and predict offer to consumers. As I said, we understand their financial behavior. We understand their income. We understand their outcome, so we are going to use data to predict what they need. They don't have access to a lot of services, so the ones that I exemplified are just a little bit of what we can do. The one before the last is B2B, wire as a service, cross-borders, aggregator. I don't want to get into [ technicalities ] here, but a lot of companies like us use what we call aggregators to disburse their payments in the other countries. We are connected with most of these payers directly, so we can transform that in another business that we can offer to companies who are trying to enter this industry. This is pretty much what Mastercard and Visa are doing, but we have the expertise. And we have the cash pickup disbursement, which these companies don't have, to take a big piece of this opportunity. So you can think about Visa and Mastercard. They are very focused on disbursement via debit card and bank account, but as we saw, and I think you saw that in the movie, a line with 100 people waiting for their money, they are waiting for cash. They need cash. There is no ATM where they live. And we have the opportunity to enable these services to others. And lastly, stablecoins. Of course, it's not a consumer-facing thing. We are not going to give the consumer the opportunity to pay for a wire with bitcoin or things like that. That's not the vision, but it's the opportunity to move money from U.S. to another country using USDC or any type of crypto occurrence (sic) [ currency ] in a way that we can reduce our treasury costs and at the same time give a 24/7 FX process. So today, the FX that we closed the day on Friday is the FX that we carry over the weekend. With that, we are going to be really able to explore every [ cent ] opportunity that we see throughout the weekend. Before announcing the next speaker, I just want to highlight to you guys that I'm extremely confident about what we are doing. I think we are in a very critical moment when we are moving from a remittance company to a financial services provider. We have the leadership team that really understand what we are doing and is really able to guide us through the next step. So thank you all for your time. I want to call one of the smartest and nicest guy that I ever worked with, Christopher Hunt.

All right -- what was that? Good afternoon, everyone. Really happy to be here with everyone today. Bob gave me a quick introduction earlier, but I just want to reiterate I've been here 4 years at Intermex. It's not as long as some of the other members of the team such as Andrew, but what I can say is that I've never been more excited about Intermex overall. I think there is so much opportunity out in front of us. I came here 4 years ago as the CIO looking at what we were looking to build in the future and have played a significant part in that road that we've -- begin to travel at this point. In 2023, in the beginning, I was transferred over and given the role of Chief Operating Officer; allowed me to get a lot more involved with the business overall, which ultimately led to my position of Chief Executive Officer for La Nacional. Now I'm going to go over, give you an update really on the La Nacional acquisition as well as the integration. So one, background on why we chose La Nacional; number two, what we've done, so far, with La Nacional; and number three, where we're going in the future. So when we look at why we chose La Nacional. La Nacional, for those of you who don't know, is the #3 country outbound from the United States, behind Mexico and Guatemala. If you think about it in the world, I think it's #6 or #7, so it is a huge opportunity that we saw and specifically in a country where we did not have a large market share to date. After acquiring them, we set off on an integration plan which we'll spend about 2 years overall in implementing. One of the things that I will cover here is what we've done from an integration perspective. One of the biggest things we needed to ensure that we kept was the brand integrity for La Nacional. I don't know how many of you have spent time up in North Manhattan here, in Washington Heights, but if you do, there is a very dense population of Dominican foreign-borns that leverage La Nacional and have known La Nacional for generations. So the brand awareness for us is one of the most imperative things. Now keeping that brand awareness and running multiple systems and multiple frameworks within that did not seem sustainable at all, so earlier last year, we ended up making the strategic decision that we would be unifying all of our licenses on Intermex and developing a white-labeled platform for La Nacional, so I did a couple of things for us: one, allowed us to keep the brand integrity -- but also starts translating into a lot of the synergies that we've been able to realize within the first year. So thinking about that. We are in the process of unifying the licenses. At this point, we have completed all of our back-office integrations within our call center in Mexico and Guatemala. And we are currently underway with our retail point-of-sale software rollout. We expect that to be completed at some point here in the second quarter in this year. If we look at the percentage of what we have completed, I would say about 60% of our agents are currently on the new platform. And we're processing about 30% to 40% of the wires that we have within the platform today, so high level of success, so far, within those 2 integration opportunities. And we stay on track for the future. Now what had that translated to? It has translated to a significant financial impact for La Nacional. So I think Bob mentioned earlier, within the first 2 years of La Nacional, we've doubled our EBITDA growth and just last year alone had 55% year-over-year adjusted EBITDA growth. In this current year of integration, we've been able to implement and save about $2 million from our integration costs. And if we look towards this year in 2025, we have an additional $2 million that we will be saving from our continued integration efforts with our point-of-sale rollouts for La Nacional. That does not contemplate any of the potential growth that La Nacional has, and this is likely the most excited that I am about for La Nacional. If we consider and talked about that Mexico is roughly 30% of the market being digital and we have Guatemala somewhere around 10% to 15%, we believe, indications of data from our correspondent networks, partner banks and so forth has indicated to us that the Dominican market for La Nacional is likely 50%-plus in digital. So if we think about the opportunity that we're coupling not only with Intermex but also in the third largest country outbound from the United States, we can see that La Nacional represents a significant opportunity from the digital perspective. We're not alone in that strategy. Obviously there's a lot of digital players out there, but what do we have that a lot of them don't? We've got partnerships that have been built with the Dominican Republic banks and payers that are strategic and have been there for years with us, so if we contemplate and look at some of the banks that have strategies where they are approaching the U.S., it offers significant partnership opportunities for us to gather and -- grab their customers, lower our customer acquisition costs around those customers and really start to drive the digital business forward with La Nacional. We think that from an investment perspective there will be dollars well spent in terms of capturing a market which is not only technically enabled but financially enabled as well. I think another couple key areas here are La Nacional has historically been known as a Dominican Republic brand, but that doesn't mean it's limited to Dominican Republic, so we have begun to expand our efforts with additional sales forces within the southern part and mid-Atlantic parts of the United States. If you look at our foreign-born analysis, those are all areas that have high levels of foreign-borns from both Mexico and Guatemala, obviously the highest-margin countries that we would be looking to expand into. So I think, from a perspective of overall with La Nacional, we are on target. I think the integration and what we've shown from a savings perspective and our ability to execute with our POS integration has made the acquisition relevant. And we're really thrilled with the outcome of that, but I think it's only the beginning. I think we've got a huge opportunity out in front of us with this brand. And we will continue to maintain that integrity and we will continue to focus on growing it out of the United States. And with that, I am going to reintroduce Andras Bende to come up and give a little more dialogue around M&A.

Thanks, Chris. I was hoping for but not surprised that I didn't get the smartest and nicest introduction that Marcelo gave, but I'll take it. I'll be brief. It -- I'm between the break and, I think, Q&A. And we've had a long session. I think we'd really like to hear from you in terms of what you're interested in, but I'll just talk a little bit about Europe. I oversee the Europe business. I've spent 15 years of my career in Europe, in banking and financial services, so it suited nicely. I do have a European passport. And the funny name comes with the European passport as well, but -- so I oversee the Europe business. And what I'd just talk about with La Nacional. Chris already talked about why it was the perfect complement for us. It was an outbound Latin American market business that fit great. What came with it -- and so we saw all the value in that. We saw the value in the branches, not a lot of channel overlap; and it was a great acquisition for us. It came with this thing called I-Transfer, which was a European business, outbound, small subscale business. It's still less than 20 million in terms of revenue, but the way we look at it, we feel that we kind of got this business for free, all right? The value in that business that La Nacional really focused on, the branches in the U.S. and being in the Dominican Republic market better penetrated, but the further we got into diligence of this business called I-Transfer, the more we realized what an opportunity we had. And Intermex is always operated by the tenets of not spreading ourselves too thin, all right? We don't need to plant the flag everywhere. We just need to be excellent where we do plant the flag. So initially the Europe opportunity was interesting but not super exciting, but as we got more into the detail of that business and how it's run and how it was competing -- and we knew the faces of the competitors out there and how they competed. And more we got into the diligence, the more we realized it is a terrific opportunity for us, but right now it's a licensed money service business in Spain. It has less than 3% of the market in Spain, less than 2% of the market in Italy, a single store in Germany but access and a passport-able license to an almost $160 billion market. So 18 months into the acquisition, we've done a lot of work in terms of how we segment the market, making sure that we're going to the right places from the right agent network. And as Bob mentioned earlier, we're happy that we're in a position we're growing that business 30% year-over-year on a margin perspective with literally the same-size team. So a lot of opportunity there in Europe. While we've been on that journey, we had the opportunity to purchase a company, a licensed money transmitter, in the U.K., which is you need another license for the U.K. That's a $34 billion market as well. And it's a single retailer that we've got that we're expanding from but great opportunity to grow. And what's really interesting is each of the European markets have a kind of different signature as it pertains to their journey to digital as well. That retailer that's in the U.K., actually 90-plus percent of the remittance that they send are by card. So it gives you an idea about how banked that remittance population is. And that's something that, once we get our digital product up to speed in Europe, we think could be a great opportunity for us as well, but as we talk about the -- you'll see in a couple of pages where we talk about the growth in the financials in digital, we've been quite modest in terms of what we've baked into for Europe and even -- haven't even counted the digital contribution that could come from Europe. So it's a great opportunity for us overall. And then I'll just spend a moment on inorganic overall. I think as a company, since we were public in 2018, we've done 3 deals; 4 if you break out La Nacional into La Nacional and I-Transfer, which both had to close separately, so I would say that from an acquisition standpoint we tend to be thoughtful and disciplined. And we're looking for things that are digestive and accretive and that we can add value to. And La Nacional is a great example of that. I think -- for the next phase of the Intermex growth, I think we'll be looking at a lot of things in the product expansion realm, particularly in digital, and offering more from a financial services space, so a lot of what Marcelo was talking about. I think those are properties we'll take a look at. However, I won't discount we do cast a very wide net being a payments company with a great demographic that we serve, where there's a lot of opportunity where we and potential other businesses could leverage both our technology, our customer base and our distribution network to create shareholder value. There's a lot that we look at, but again, we're selective, which is probably why you've only seen 3 or 4 in the time that we've been public. And the last thing I will say is digestible is kind of one of the tenets. We don't want to create distraction in the business if we don't need to. However, transformational acquisitions: We've gotten asked in the past, "Would you be open to that?" And sure, sure. I mean, if it was something large and transformational that was going to be good for the company and good for the shareholders, that's game on for us as well. So with that, what I wanted to do is just invite everybody from the leadership team who's spoken before me to come on up. And we could do a session of Q&A before we take a break and have some refreshments, so we will pass a microphone around the room for those of you who would like to ask a question. So just raise hands. We've got Andrew here.

Andrew Harte from BTIG. One of the comments was Intermex is looking about moving from a remittance company to a financial services provider. And even one of the last slides on M&A talked about financial services. And there was another one kind of more detailed talking about some of the opportunities there. Can you just share with us maybe how much of the business is that today? Is it a real hook to get people into the digital business? And where you see that going forward.

Okay, I'm on. I would say that, as of today, we've got a couple of products which are financial services with our top-ups as well as our bill payment within the digital space itself. I think what Marcelo talked about earlier is really our transition to becoming that more financial service company. If you think about the barriers to entry, it's not a technological barrier. It's really the banking barrier. And that's the bridge that we really need to focus on and leverage our product development in terms of providing those solutions but I think, if you talked about it today percentage-wise, very low. If we think about the future, it's probably a significant portion of the business overall. I don't know if you'd add anything...

Yes, it's a great question. I will just change a little bit what we said. It's not that we are going to use financial services to grow digital. We are going to grow digital and we are going to maximize the value of that investment by offering financial services through digital and retail. We have 9,000 distribution points today that can offer multiple services. We have an app that we are going to put a lot of dollars to make it grow that can make $6 out of a remittance plus $2 out of this, plus $3 out of that, plus $4 of that, so the vision is to connect channels and products in a more profitable way than we see the industry doing today.

Yes. And I think the important point you said. There was the 9,000 retail. I mean that's an advantage we have that other competitors don't have. You have some that are -- they're retail. They've got some form of a digital offering. It doesn't compare anywhere near to us, but if you look at a pure-digital player, they don't have that same advantage of taking those consumers who aren't banked with the trust that they have in Intermex and creating a product for them that they can use in the future.

And one last piece is that the biggest barrier for somebody to migrate from retail to digital today is the cash. The person holds cash, and there is no way to make that electronically if you don't have access to financial system. Another beauty of what we are trying to build is that you can initiate a transaction on your phone, keep that on hold. And once you go to that bodega, to that small business to buy your rice or your Coca-Cola, you pay and your wire is released, right? So that's another example of this cross-channel that we are talking about. During this strategic exploration that we've been through, one of the companies that we talked to said that, if they have this ability, their business could [ go ] 35%. We have that and we are not exploring as we could yet, so these all start to add up through the combination between products and channels, if it makes sense.

It's David Scharf with Citizens JMP. I wanted to maybe get your thoughts and -- what ultimately you see as some of the differentiation in your digital offering. And specifically I'm thinking back to, over the years, how you were able to ultimately get 20-plus-percent market share. On the retail side, it was a very high-touch approach. I mean I seem to remember Bob talking about inside sales teams and dashboards monitoring traffic, in particular retail agents; maybe when a new retail agent was opened up, somebody on site actually directing consumers. So it was a very high-touch approach that lent itself growing the retail business. Those types of things don't exist in the digital realm, so maybe if you could address a little bit how you see your digital offering being differentiated to the extent the retail approach was.

That's another very good question. I would say that first is our brand. Towards the Latinx community, our brand is very strong, so as I mentioned at some point, we have the ability to connect people who are in the retail that would migrate somewhere else to migrate to our app. Second is client experience. Maybe I'm too passionate about it, but I truly believe that our app is top notch today. There are very few, if something, that is better than our app in the industry. If we can offer a simple, straightforward experience in this industry that is a very sensitive industry, we believe there is value. Third is the fact that we are a company built by Latinos for Latinos, right? So our app has Spanish as first language. Our customer care has Spanish first language. Even you are going to hear from Daniella later our compliance team is compounded by people, most of them from Latin America, so the operations and the solutions that we offer are very customized to the Latinx community. Of course, there is a [ commodity ]. At the end of the day, up to today, the winners in the digital space are the ones that threw more money. That's not what we believe. We believe that, first, we can be way more efficient than any other company in the industry. We can manage our pricing way better than any other industry in the -- player in the industry. And lastly, what we just said, if we can make more money out of the same consumer, which we don't see other companies doing, we can make this business more profitable. So it's a combination of experience, customer care and value proposition, if it makes sense to you.

And I think -- I do want to add. I think the value proposition is important. If you look at a lot of the purely digital players, they have some -- they'll come in and they'll have a very low initial price for the consumer. And it seems very attractive, and they get some retention with that. We've built really fair comparison to all of those and believe we can operate and have it as a differentiator for us being more cost conscious to the consumer and offering better prices ultimately for them.

Got it. Maybe just one follow-up on the -- I guess, the first question, the banking-related services. I know a payroll card has been discussed for 5, 6 years now; and obviously the objective to get that agricultural worker in particular get that payroll on a card. It makes it easier to kind of come into the store and remit. Can you just talk about some of the challenges of getting some scale with that and what might be different kind of going forward...

Absolutely. And you're absolutely right. It's a product that we are trying to scale for a few years. I would say the first and biggest challenge was to find the right partner. So we were working with a company that was not performing well. We decided and it took us 2 years to migrate to another company. I must be candid: It was not a successful experience. And we are moving again to a company that we believe now is working well. The product is making some money. We produce something like $1 million in gross margin per year even if we operate at a low volume. We have something around 20,000 cards live today, but throughout '25, we expect to grow that. One of the ways we are going to do is that now our card is exclusive Mastercard. And they are giving us a lot of money. It could be more, but they are giving us some money to accelerate our growth, so we truly believe that we finally found a combination of a solid partner; internal knowledge; again call center, compliance teams that were not ready for that product; and the ability to do marketing. So we saw some spike in the last year, particularly in the margin, but 2025 is the year that we make it or break it.

So I think the other aspect of that is after enabling the financial solution. What we've seen at least over the last year or so is the propensity for them to use our card for digital transactions. So you're not only getting the [ big ] margin on the card service itself. You're now getting interchange plus all of your digital transactions that you're gathering from them, so the brand awareness continues to build and build and provide more growth -- are you okay, [ Laura ]?

Bill Dezellem with Tieton Capital. 2 questions. So starting with the other side of the digital transaction: One of the retailers in the video referenced that about 65% of the remittances went to rural areas. What sort of a challenge do you have on the receiving end from a digital since cash won't pop out of a phone? And then secondarily, I'd like to talk about the WhatsApp application.

I think, from a banking perspective -- do you want to do that? Okay.

We don't have a challenge. We have an advantage because most of the digital guys are focused on being paid out digitally. So our digital transaction is not locked to anything digital once it goes cross-border. It can be paid out in cash. It can be paid out at an ATM. It could be paid out in a mobile wallet. It could be paid out to a bank account. They're not -- they don't start out digital and they have to end digital. They start out digital. They can end whatever way. It could be a digital transaction paid out in cash. It could be a cash transaction paid out digitally. A lot of our transactions we take today digitally at retail end up being paid out -- I mean, I'm sorry, at retail, end up being paid out digitally on the other side to a bank account. So it's a mix. It's cafeteria style, right, so we have an advantage. A lot of the guys who have built a very quick digital business built that because they go through channels that are really only going to bank accounts directly and -- where our system has been built for cash payouts over the counter as well as digital transaction payouts. So it's actually an advantage for us.

That's helpful.

That's the first part of the answer. And the second one is that is in fact an opportunity for us because we can go to these companies that Bob mentioned that are native digital and today just send to another digital recipient, and offer our services to pay out in cash. So again it's a competitor at some point but can use our service and pay us to disburse their payments via cash. So that is a strength that we are, I think, under-using still but, as I mentioned in the wire as a service chapter, is something that we are investing a lot to make it bigger. And the same answer for WhatsApp: Doesn't really matter. Every time we talk about digital here, we are talking about digital from the sender perspective. WhatsApp is just another way to send. If I want to use WhatsApp to send money, but I want my mom to get that money in cash, our rails are going to support that in the same way.

Okay, so would you talk about that application a bit more? So saw the -- your reference on the slides and the press release a week or 2 ago. And WhatsApp is so ubiquitous outside of the U.S., but I don't think I fully understand how it is that, that works. I mean, if I put your name into a line and say send you $100, I suspect I'm not going to end up having $100 go from my account to yours.

Yes, yes, yes. No, that's not how it works -- and thank you for your question. The way it works is you have an interaction with the chat. And you're going to say, "I want to send money to Joseph. Here is my information. Here is Joseph's information." When you get to a certain point of this chat and talk about like 45 seconds after you start, you're going to be -- you're going to pop up to you a payment stage. And this payment stage that is a web browser, you are going to confirm your payment. And then once you confirm your payment, that transaction is set on our side, let's put this way. Then we are going to use the standard rails to send that money to a cash pickup location or to a bank account. So that's really just the channel, a very friendly channel but a channel that sits on top of our own rails, so instead of typing information on a mobile device -- or sorry, on a mobile app or on a web, you are just typing that information on a chat. And as you said, not a very common solution for Americans, but all the Latinos that are living here, they use for internal within U.S. communication and back to Latin America, so this is really focusing on Latinos and Europeans that are -- live in U.S.

I think Marcelo and I spent time thinking about the persona that would use that over simply opening an app and sending a wire, but you've got voice commands as well. So you sit there and you're like, "I'd like to send a wire to my mom." How much would you like to spend? "$300." And you could be in a car. You could be doing other things, so it enables a completely different channel and a platform that everybody is very familiar with in Latin America.

And I would love you to use it. All you have to do -- I give you the phone number. You create a contact with the phone number; and you can start sending money, as simple as that.

So my question is on the performance of agent vintages. In the past, you've talked about, I think, the bogey is 400 to 500 wires a month. What percentage of the base today is kind of doing that? And looking at the LTV-CACs here on retail, what is the opportunity to kind of push down the CAC? I'm thinking maybe the contract costs when you set up an agent, those incentives. Is there -- have there been any changes in those contracts, maybe there was committed wires before, versus now? Just anything around that would be helpful. And I have a follow-up.

Yes, sure. So I would say that -- and I can get you a more studied number later, but a majority of our agents are at the average of about 400 to 500 wires. It's exactly 475 today. If I look at our agent -- let's say our oldest cohort is actually from the late '90s. That group does about 700. So we do see a ramp-up that's continuous and most of our agents operating in that segment. I think we have tremendous opportunity to bring down that CAC actually. In full transparency: I think it was a little bit overstated. We were generous with how much we allocated from our sales team costs. Hardware, we're also getting better at acquiring those PCs at a lower cost. And we have a huge initiative right now, which is to try and increase our share in agents where we see opportunity for price optimization. It's a big pillar Bob has been pushing. I'm working on it with the inside sales team. We've recently expanded that group. We have a tremendous amount of opportunity. And I do believe that we will continue to work to bring that cost down.

Great. And then on the digital side, can you kind of help us unpack what's going to be top versus bottom funnel this year? Interesting, to hear about the sponsorship ideas versus performance marketing and getting people to actually transact at the bottom funnel.

And when you mentioned top to bottom, you mentioned quantity of users, dollars -- what you are looking...

I'm talking about dollars. So if it's $8 million incremental in digital this year, if you can help us unpack what's going to be top funnel versus what's going to be performance marketing dollars really. Because that's what I imagine kind of what it's going to look like, right?

Let me see if I understood your question. When we look at our budgets today, it's reasonable to believe that something like 85% are going to be platform investments. So Google, Meta, et cetera. The other investments are still a small proportion because, of course, they have a return on investment that is a little bit longer. And we need to grow that faster, so most of the money goes against platform. There is a halo effect here that whatever we invest in both digital platforms as well as sponsorship also impacted the retail, right, so this is something that we don't measure so clearly yet, but of course, it's going to have a positive impact in both channels. Did it answer your question? Not really...

Yes. I was just trying to get the ballpark, but that's helpful.

Okay, thank you.

[indiscernible].

Can you -- 2 things. First, can you explain in some detail where you are with this digital banking proposal? Do you have a launch date? Do you have a sponsor bank, a banking app that -- some banking platform that you've developed or others have developed? And sort of what a rollout might look like. And who's big in that particular application, Mexican immigrant bank app, Chime apps? And then secondarily, with your digital banking today, could you talk about how it's funded, how your transactions are funded? Are they all ACH from an existing bank account, or is it credit card funded?

Thank you for your question. It's a long answer if I try to cover it all. So first, about the banking. The same company that supports our payroll program can immediately support our banking desire. The question that we are trying to address internally is, is this the way to go. Or we should have another partner supporting us. We have conversations open with 2 potential partners. And that's where we are, deciding when is the right time and who is the right partner, so as of today, there is no launch date. We expect to have it live or believe that it can be live by Q3 but depends on a combination of other [ priorities ]. Your second question...

[indiscernible] partner? [ Who is your ] partner...

I cannot share that yet. The second part of your question is we can fund a transaction using ACH, debit card or credit card. However, looking back 4 years data, only 1% of our users were using ACH. Only 2% were using credit card, and 97% were using debit card. So giving risk is another element of the experience, we decided to turn off the option to pay with ACH. And now consumers can just pay with credit and debit card. And the stats remain the same. Now we have 98% of people paying with debit card and only 2% with credit card. Did I answer your question? Thank you.

Could we -- could you help me understand the digital business unit economics? Did you say that it was $6 of gross margin per transaction?

Correct.

And if I took your Q4 disclosures, it looks like you charge basically $7 per transaction.

No.

Okay. Because I saw $5.6 million of digital revenue on 800,000 transactions.

I honestly don't remember exactly the numbers. I can walk you through the unit economics. So in general lines, we charge something between $10 and $11 from the consumer. Of course, it changes a lot, depending the country and depending the face amount of the transaction, because the fee is a percentage of the total, but overall we are -- talk about between $10 and $11. From that, we remove all the costs, and then we land in the $6 that you saw.

Okay, that makes more sense.

You could also be looking at blended as well. So if you look at our Intermex core brand, that's the $6 per transaction. If you can contemplate wire as a service, it's less of a gross margin but less marketing cost upfront as well.

So if I'm looking at your KPIs that have digital transactions and digital revenue, your as-a-service business, that's included in the number of wires sent or transactions sent.

Right.

I see...

Yes. The report has 2 bars, if I remember properly. There is 1 bar that talk about the blended, and there is a higher bar that talks about Intermex only. So this is the difference that Chris has mentioned.

Got it.

I think we're at time, so how long will we do a break?

15 minutes.

15, okay. So 15 minutes for break and refreshment. Thank you, everybody.

Thank you.

Thank you.

Thank you. [Break]

Great. I think we're right about ready to get going and make sure we stay on time. So if everyone can take their seats. All right, thank you. So now we'll go into talking about our technology and what's the underpinnings of what's going to drive our financial technology future as a company. So I'll hand it over to Chris.

Thank you, Andras. For all of you who don't know, Andras is one of the smartest CFOs I've worked with. All right. I'm not sure how many participated in the last Investor Day here, but I got up and spoke about how tech is really a differentiator for us here at Intermex. I'm going to do that today and continue to kind of hit the key points as what has really made us special in this space. One thing I will start off by saying, and I said something along the same lines 3 years ago is technology is not a part of our business. Technology is our business. And when you think about, when we say things around the retail network, around the digital space, those are really channels. We ultimately build software to support the consumers in terms of sending money home and providing financial services. So it's a big difference that is a part of our business rather than really at the core of what we do. Thinking along those lines, one thing I would say that differentiates our products, and Bob spoke about this a little bit. But as you can all imagine, or if you have not seen it before, imagine a line on a Friday afternoon where you've got 100 people waiting to send money home. And if you think of the difference of a 20-second transaction, versus a minute. That is a huge difference. Those retailers could be losing share in their -- in the retail space where they're at. If they're in a strip mall, people may go down to the next competitor. So one of the things that the retail agents have really latched on to about Intermex is the speed of which they can create transactions. That is paramount. If you look at the second bullet point there on the -- or the second silo, I'll call it, I would say we're relentless about our UI and UX experience. So much so that in addition to in-house experience, we partner with third parties that this is all they do, and they are continuously in the space continuously in the space out in retail agents, understanding what retail agent's life looks like in the stores where they're managing the business. They understand our digital consumers. And as they're doing that, you've seen an evolution in what we produced from a software perspective between UI and UX. That is something that we will not sacrifice. We believe that UI and UX translates specifically to not only retention but recurrence as well. So in everything we do, not only at retail but in the future as well, UI and UX is a significant portion of that. Next silo is performance and scalability. We have and will continue to invest significant amounts of money that will allow our business to continue scaling. If you look at the hyper growth phase we went to over the past 2 to 3 years, we really have made a focused effort in terms of scaling our architecture, scaling our infrastructure and really coming up with the perfect blend of today what is a hybrid model between on-prem and cloud. And we effectively look at every metric we can to determine where we can deploy the most effective resources in order to keep our transaction speeds high and our system running efficiently. So that is an area that, again, like UI and UX, we will continue to invest in and continue to scale our business as needed. And the last silo here, if we think about digital-first strategy. Historically, I think one of the best examples I can think through is digital-first from a communications perspective. In the past, you would have someone pick up a phone, have customer service, they have to talk to a human being. And while that is one of our value added, there is a whole segment of the population that does not like to talk with a live human being. They like a digital-first interaction. And I think when we're thinking about that, number one, we want to build products that don't need the interaction, but if they do need the interaction, we are digital-first and how we're communicating with not only our agents but our consumers as well. So very important, I think -- some of the things that Marcelo talked about, all of the future that we consider will be digital first. And that doesn't mean, again, going back to my first point, we're vacating retail or retail is inconsequential. We're applying digital-first from a retail app perspective as well. From an engineering perspective, I will say I talked about investments we've made in infrastructure, but I am very excited to announce that starting next week, we will be bringing on a new Chief Technology Officer. Someone who is really from the software and IT side focused on product development, very much in line with Marcelo's team because if you think about product and IT, it's a very symbiotic relationship. So it's the first time in the position for Intermex that we have had a Chief Technology Officer. Difference, I would say, between a CIO and a CTO as CIO is primarily focused on the internal core of the business, what's driving the business infrastructure, audit, compliance, so forth, architecture and you think about a CTO, it's really aligning with Marcelo's vision and building the most optimal platform that we possibly can. So very excited about him coming on board. And I know that this year, we're going to be making even more enhancements around our engineering team. So thinking about another key pillar of Intermex. We talk a lot about being a data-driven company, a metrical company. And I would say at Intermex, it's not about data being an asset, it's essentially the foundation of our strategy. If we think about it, and I sit in the day looking at decision-making and the strategic direction to which we go, there is not a single time that I can recall that we have said, let's do that because it sounds like a good idea. There's a lot of more information that has compiled not only with internal sources of data but external sources of data. So I think we're exemplary as a company when I focus and looked at past experiences on how we take all of the information we have and really maximize it. And I would say that's a journey, and I think data is always going to be a journey. I read something that I think it was -- half of the data in the world has been created in the last year. And I think that exponential expansion of data is going to continue, and it's going to be a significant advantage for those who can capture it put it into a platform of where we can actually utilize it, report on it, visualize it and make better strategic decisions. The second, looking at the customer insights and personalization. So I think most people are aware in this room that a lot of the online and digital native companies utilize a lot of customer information to dictate personalization, what types of promotions are we going to offer you? What types of fees or pricing can we offer you? How do we send you a push notification to get you back in because we predicted and anticipated that? But we're not stopping there. We think that there's a huge opportunity to understand behavior at the agent level for a consumer and enable our agencies to have that information available at their fingertips and drive more revenue to their business with consumers by bringing them to Intermex. If you have heard some of the -- or read some of the press releases, we recently launched a agency-specific application called [ SOMA ]. And this is the genesis of where we feel there's going to be a huge opportunity that we can provide statistics, analysis of their business and give them insights that they've never had before at their fingertips of owning an agency to understand their consumer behavior, whether or not they're growing, where they're growing and have a lot more insights into how they help drive their business. Operational efficiency and cost reduction. Now for me, operational efficiency, it's not just all about saving money. It's really about maximizing dollars. So what I can say today is we will consistently, today, go through processes, basically 24/7, where we are looking at every single metric, every key indicator that we have available to us to not only streamline our operations, but also to reduce costs. I think a few examples of these really resonated with about 30% year-over-year expense savings and a 2-day SLA reduction time in our shipping of equipment and marketing materials to agencies. So we were able to use a lot of the data that we've put into our platform, aggregate it from third parties, utilize all that and come up with a more strategic plan, which enabled that efficiency and savings in '24, and we're looking to continue savings and efficiencies this year in '25. And the last part, risk management and fraud detection. We've taken really big efforts along with help with Carlos, who's our Head of Security over the last year where we have implemented technology changes, what I'm happy to say that if you look at from a technological perspective, the amount of fraud that we have reduced is near zero at this point. So you're still going to have social engineering. I don't think you're ever going to get away from that kind of attack footprint. But from a technology perspective, where someone is able to remote into the system or do anything along that line, we've effectively reduced fraud to zero through the use of technology, programming and AI and machine learning. So huge benefits this year. And again, that's going to be consistently ongoing in the future. And then lastly here, third pillar, cybersecurity. I think everybody is kind of aware of the recent in the last couple of years uptick in security breaches, failure of companies to do what they needed to do. If you look earlier or later in the year -- last year, we had someone in the same remittance space that was impacted significantly by a cybersecurity breach. And we don't take those things lightly. So we have been in the last 3 years, building up a robust information security program. We brought on a Chief Information Security Officer that has been with us now for a couple of years and is making huge strides in not only building the team, but also building the infrastructure necessary along with the frameworks in order to keep us safe overall. I think at a Board level, it was heard last week that in terms of the focus of Boards and audit committees, 60% to 70% of it was their #1 topic going into this year. So again, I think it's ramped up and it continues to ramp up. So it's something we're spending a lot of money on. Four pillars mainly around this. If you look at identity and access management, we've really moved towards a zero trust model. Now what that means is, we don't make any assumptions. Effectively, every single transaction, whether that's from an application, a person, an access request, we are specifically saying we don't trust you until we have actively authenticated you in that instance. So it's a huge shift from where we were before. It's something that we have implemented and we'll continue to make more robust in this coming year. From an application security perspective, thinking about the future of digital growth and really exposing our attack surface out there, this is where it becomes even more and more paramount. So we've made significant strides in not only making it kind of an add-on to our application security. We're in the process of building out a full robust AppSec program. And what that means is this. It's going to be embedded within the development life cycle. And it's going to continue after the development life cycle and the release to our production environments. Typically, you have a lot of shops and I'm guilty of this, I was an engineer in my former life, where you build applications and security is kind of the last thing you think about and you throw it in, you're like, let's hope that works. That's not how we operate at Intermex. It's not the way we will operate or will ever operate. So I think it's a huge focus of us this year, get that right. Once it's in production, part of this entire AppSec program as well is going to be consistent and ongoing monitoring. So we're going to be going to a 24/7 kind of vulnerability penetration testing, assessment, attack surface monitoring so that we can be out in front of anything that happens to come for anything we did not catch within our application development pipeline. Third is data security and privacy. So if we think about this, this is where most of us would see an impact to ourselves as a consumer. So that's not something that we want to be on the opposite end in delivering that experience to our consumers. So again, what I would say is aligning ourselves to best-in-class frameworks. That is one of the key pillars that we have ongoing this year, reaching an IG Level 1 from a maturity perspective. And on top of all of that, really in focusing and ensuring that all the data that we have is encrypted and anonymized so that if we ever have a problem, we have security around it, that ensures we can effectively have the highest level of data security and data privacy in the industry. And the last is cloud and network security. Again, we've done a lot in the last about 2 to 3 years really enabling real-time scanning. We use significant amounts of tools that are powered by AI that are consistently churning through all of our infrastructure, all of our architecture, all of our applications detecting items that are happening out there, notifying our InfoSec team to take the proper precautions around that. I would say, again, we're knocking on wood with this today, we're happy to report as of now, no major cybersecurity incidents at Intermex, and we hope that with all of the investments we're making in cybersecurity and all of the time and effort we're putting into this, that our security pillars really keep us from being in a bad place in the future. And with that, I will call up Joseph Aguilar, who is our President and General Manager of Latin America to talk through this section. Thank you.

Thank you, Chris. Good afternoon, everybody. As Chris said, my name is Joseph. I'm the President of our Latin America division, responsible for our operations centers in Mexico and Guatemala. And as you can tell, just from my colleagues as well as the video you saw earlier today, the passion that we have here at Intermex for our consumers -- our customers. Our management team as well as the majority of our staff are either immigrants or children of immigrants. And I think we understand exactly what our consumers experience on a day-to-day basis. And we have really established a team that is conscious of that need that our consumers have here in the U.S. It's critical for our consumers. So we make sure that every transaction we do is handled in a critical nature. We have over 650 customer service representatives that are dedicated to service our consumers on a day-to-day basis. They're a highly trained team, not only on regulatory and customer service elements and technical elements, but also on understanding who that consumer is. We go through a process of training our employees empathy for the customer. Many of our employees are working in Puebla and Guatemala. They are urban, their college age employees, and they have not experienced what it's like to be an immigrant. So we go through an effort to train them to have empathy for our consumers. We understand that every transaction is not just a financial transaction, but it's truly the bread and butter [Foreign Language], what our consumers depend on a day-to-day basis to live. I think the moment for Intermex is a key point in our growth I've been in the industry for over 30-plus years. And I think for me, being here at Intermex is probably the most exciting time for me in the industry. One of our mantras in Mexico and Guatemala is how do we get better. We don't wait for a problem to occur, but we constantly contemplate getting better. Our employees among themselves are looking at processes and operational efficiencies to get better on a day-to-day basis. From a performance perspective, we believe that we truly have the best customer service offering in the industry with call center service levels well exceeding, I think, the industry standard. Through benchmark and on a regular basis, we can tell where our service lies. We can pick up a call within 4 seconds, it's what our SLA is. And in reality, we pick it up in less than 3 seconds on a regular basis. Our whole time, our SLA is 1% but consistently, we have less than 1% as our standard in the industry. We are constantly investing, as I said, in getting better in our operation for our call center. We've moved our business now that we are covering operations in our I-Transfer business under Andras' area. We're moving to a 24 -- we've moved to a 24/7 operation. We've enhanced our language capability from a Spanish first, which we continue to be a Spanish first organization, but to a strong English solution as well as Italian and French. We are now positioned to be able to handle calls from our subsidiaries in Europe as well. Let me go to the next page. As our business continues to grow, we will begin -- continue to expand our pay coverage network throughout the world. Our concentration today as you can see is primarily in Latin America. We provide services, as Bob said, in a variety of solutions, wallet, cash, credit to account through our banking partners in Mexico and Guatemala and other Latin American countries as well as in large retailers. However, as our footprint expands and we begin to extend our services to other jurisdictions in Europe and other places, we will be able to continue to expand to those quarters that are vital to those origination countries, specifically Africa, South Asia, Eastern Europe and the rest of Asia. A key differentiator for us is our extensive banking network. I'm pleased to have some of our banking partners here today joining us for this call. You can tell the depth that we have as far as the banking relationship goes, not only national, super regional, regional but also community banks that service our customers. And why is that a differentiator for us in this industry, specifically having this many options allows us to provide options to our agents on a day-to-day basis. It depends on where they are, the proximity, the volume and the need to collect funds on a regular basis is key to that success. Having an in-depth in a large portfolio of banks is reflective of the strength of Intermex as an organization, not just our financial strength but also our strong regulatory and compliance team that really creates a confidence among our banking partners that Intermex is able to manage the complexities of an MSP business. With that said, the foundation of this is our financial strength and our regulatory compliance programs. Being in the industry for over 25, 30 years, I've met a lot of compliance officers, but as truth would have it, and Bob said it earlier today, one of the strongest compliance officers I've ever had or had the opportunity to work for, I had the opportunity to hire her 3.5, almost 4 years ago. And Daniella Trinchet has been a key driver in helping this create a program that is workable to be able to have the strength and confidence to be able to continue to grow this business going forward. With that said, I'd like to bring onboard my colleague and partner, Daniella Trinchet.

Good afternoon, everybody, and thank you for joining us today. As Joseph mentioned, I've been with Intermex now 3, 4 years. I joined Intermex in the compliance space. I'm a previous banker like many of you, I was in the banking risk management space for over 15 years. So I understand a lot of the side on the banking side, but the day that I joined Intermex, I remember coming in on my first day, and I sat with Joseph and he gave me the why. He explained to me the why behind everything that Intermex does. And that's when I knew I was in the right place. Then as I continue to work through, I'm an immigrant. I came when I was 7 years old. So I understood the customer. So when he -- we talked about the why and we were setting up this program, and we were working to how we were going to hand it and move it forward, knowing where the future was going to go. It was always customer first, and you don't see that in the banking side. You don't see and feel the way you do when you work at a company like Intermex, everybody, from the top, from Bob to our tellers, they understand the reason why and who we serve. So it was a pleasure to really kind of come in and help through this program, build it and put it together. One of the things that I always say and people laugh is like it's really difficult. And if you don't understand these consumers truly well. How can you help them? How can you put these compliance programs and think that these highly educated folks are going to understand the complexities behind it when they don't. So one of the key things that we knew had to be there for our growth and where we're going and where we are today was to have a strong program and agile program that can adapt to all of Marcelo's crazy ideas that he brings to the table, right? This -- honestly, my colleagues make my job easy. Andrew talk about how we onboard agents, the kind of screening that they do, by the time they come to me, everything is perfect. They're looking for the right people to be profitable. But on the downside to that, it really makes a compliance space very efficient because these are not just agents where we're trying to go out and teach them how to do money transfer. We're not trying to teach them in the industry. They are experts in the industry. They know the consumers they serve. So that brings a lot of efficiency into the compliance space because by the time they come to me, I know how many consumers are there, I know where they send, I know where they work, and I understand it very, very, very clearly. And Andras has mentioned it, we're licensed in all 50 states. But in addition to our licenses in the U.S., we have licenses in key international spaces. We've come to globalize our compliance program and kind of put that culture into everybody within the organization. We have a proven track record of our regulatory exams. We're constantly being examined whether it's our auditors, whether our state regulators or whether it's our federal regulators, constantly under the scope and always have good results. What does that mean? They trust Intermex. They trust the compliance department. They trust our management team. So whenever we want to launch new products. We want to launch new services. We have that fast track. We have that direct communication with our regulators where we do bounce off ideas and say, "Hey, we want to do this, how do we do it, how can we work together to get it out faster?" And that gives us that competitive edge against some of our competitors. When it comes to our program, the easy thing to do, most compliant people do, copy and paste whatever they've done before because that's what they know best. Our program, not so much. Our program is tailored to Intermex. Our program is set to be the Intermex way. We make it into a way where we can really tailor and put together the risk associated with our specific services. A lot of times, I sit with our banking partners and I sit with our payer partners, and they see companies in the payment space or MSBs exactly the same way. They think everybody operates the same way. And Intermex has a very unique approach to the way we do things. So when you start to educate them and kind of go through that process, they realize and understand. So our program in compliance is set up the same way. We use advanced analytics like everybody else in every department that you heard up here today, data, data, data. That's how we make our decisions, okay? That helps us optimize our compliance resources. We have proprietary systems that our IT department has built, which makes us even more competitive. We're one of the few in the industry that have the capability to not only detect but prevent bad transactions. And that goes back to why our banking partners trust us, our payer trust us, and we can provide these services to our Wire-as-a-Service because we can provide our compliance program as a service to our partners. This is a system that has been around Intermex since before I got to Intermex, and it's something that was built in-house and is very unique to the industry. It's -- in the U.S., the laws is detect and you report and keep the -- you don't keep the bad actors out, rather, you figure it out as you go. At Intermex, we understand the importance of the foundation of having a good program and the trust of the regulatory bodies. So what we do is we prevent. So our proprietary system that our IT team build is very agile. Every moment as the risk emerge, we could change it. That what makes that great is that we don't have to affect every single customer. We don't have to do what some of our competitors do where they have to put baselines across their entire network. We could put baselines as to a single location to a single state to a single point of payment. Hence, we do not interrupt the actual flow of the transactions. Marcelo pointed out about how much transactions need human intervention or intervention. I think it was at 96%. I can happy to share that 1% of that is compliance. The other 5% is not compliance, right? And that's what helps us. That's what helps us stay -- the transaction stays secure, that the customer continues to trust us which is the most important part of what we do and the speed of the transaction is fast. That 1% gets released -- 96% of that 1% gets released within that hour. So by the time that the beneficiary, the mom or the brother or the husband of the child picks up the money on the other side, it will be available to them, okay? Again, because our program is sold risk-based really, it's very scalable framework. So always some great ideas come out of the rooms. Marcelo always has great ideas and keeps me busy, keeps me employed at Intermex with all his new innovations. But our program is that we have a scalable framework in the way that we operate. We brought on a lot of good talent this year into the compliance team, people with experience in digital. We bought some directive for consumer compliance to making sure we're checking off all the boxes and we're really dig diving to where we need to be to send a foundation for growth into the digital space. One of the other things that I'll just highlight, and I think I'm running out of time, but one of the other things that I'll highlight is, Intermex is a very unique, unique, unique place to be. I mean I've never worked at a place where every employee is so touched by the things that we do day in and day out and so passionate about the things that they do. And that makes it fun and exciting because we all get so passionate about it that when we get together to come up with these great ideas, we're just like add each other, right? Because we're really passionate. I mean, Andrew has been here for 20 years. And when he brings in his ideas of what I gave you more years than you needed right now, I was trying to get them close to Joseph at 30. And all those spaces that we see, and I came from this country from Mexico. And I was talking to one of our board members this morning as I never thought myself, I could be standing on this podium today speaking with you guys. And those are some of the consumers we serve. It's not only about those foreign bornes, or why you sign the video today about the guys that are going out picking oranges. It's about the children of those folks. It's about my kids, my kids' kids, of the future of that. And I really think that all these initiatives we're doing with the digital and the framework we've created in regulatory compliance is going to get us there to be able to serve the kids of those kids that came in beforehand. So thank you guys for being here today, and I'll be around later for some Q&A. Thank you.

I think we were going to do a Q&A session before financials or? No. All right. We'll go right into the financials. I got the head on. All right. Just a real quick look from 2021. And this is the first time we've really extricated retail versus digital and make sure that we've got line of sight to what's driving our business. If you talk to retail from 2021 to what is the middle of our guidance range for 2025. You're talking about an 8% CAGR over that period. I think the reason we're able to achieve this is just really through a superior ground game being in the right agents in the right places to the right geographies and at the right margins. And the reason we've been able to achieve those margins is having a superior product, which we talked about. So that's been key to the growth in the retail side. We do have to mention, we've talked about it. We saw it in '24, we're seeing it into '25, and we think it's going to persist for a while. Retail -- the market in retail is in a bit of retrenchment right now. Right now, it's in a period of negative growth. It did go for a period of hyper growth, and we're going to have to manage that. But we're not backing off of retail at all. We think it's going to level out around '26, '27, and we're actually doubling down, but we're increasing our investment in retail to make sure that we're able to separate over the period and when the market itself flattens out that we're going to be able to get separation in retail. Over in '24 and '25, a lot of the uplift in the markets, what's been coming from the digital growth which you can see on the right side, this is our digital growth. So our digital growth, obviously, significantly outpacing the market from a pretty small base overall. But the biggest piece of that journey on the right is the step change from '24 to '25, where we're going to grow well over 100%, and that's going to be backed by the investment that we're making in digital marketing, which we've put out there as a $9 million investment in digital marketing. We're not held to that number. If we are on that journey, and we're finding that we're going to get the returns and we can do it better. We're not going to hold back. We've got plenty of fuel in the tank as a company to feel the digital growth that we need. And it's -- we have the human capital to do it and walk that right line in terms of getting the digital scale in the business and getting the returns at the same time. And we don't think anyone has approached the market like we have with this, and we're excited to do it. I think the other thing that I'd mention is with retail and a bit of retrenchment, the market in a bit of retrenchment. And again, we're going to -- we feel confident we'll successfully navigate that in digital growing it's -- there's probably a temptation to say, okay, is this the tipping point? Is there a wholesale shift. We don't believe that's the case. You have to keep in mind that this is a very unbanked and underbanked market that's at retail. We feel it has long duration. I wouldn't even call it a tail. In fact, we believe in '28, in '29 that still the majority of the market is in retail. And we do it great and better than everyone. And we think over this period of time, we're going to see other players pull back, and that's going to be an opportunity for us. So there's plenty of opportunity from a retail side from a profitability and a cash flow generation standpoint that's going to allow us to fuel the future of this company. When you talk about EBITDA, that's '21 EBITDA to '25 middle range in guidance EBITDA. And that's where you're going to see the digital marketing spend. Again, we put out the number of $9 million. What's additionally impacting is more than $3.5 million that we'll be spending in terms of retail, staffing and marketing like we haven't done from a retail standpoint so that we position ourselves great to separate from whatever the market is doing in retail and continue to capture that profitability and that cash flow in retail. And it's a difficult business. It's a gritty business, and we think we do it better than anyone, and we're not backing down. So that's the picture from an EBITDA standpoint. I think -- it's important to note that in '23 and '24, we're both in excess of $120 million in EBITDA, and you could see the pullback in '25. And as I discussed the reasons why that we're navigating the retail pull back in the market overall and making those investments are going to be critical to our future. Over on the right, you can see what's happened in terms of a CAGR for EPS. That's adjusted EPS. That's the center of our guidance for 2025 and you're talking at 10% CAGR per year. We're a great cash generator as a business. I'll show you why and how we measure that in a couple of pages. We've had a buyback over this period, which has been very active. We've refinanced twice over the period. We've got a great credit facility and great credit partners. And in general, we're a CapEx-light business for fintech. Those all work in our favor in terms of being able to expand EPS over the period. Talking about cash and being a solid cash generator, what's something unique about our business is every day of the week has a different signature of the balance sheet. So if you try to compare your traditional cash flow measures, it can give you a bit of a headache and not make sense. So we have had for years our own internal measure, net free cash generated. And we've published it before as we think it's more useful than your traditional measures. And long and short I won't drag through every element of the calculation. You can see it over on the right. But a pretty consistent generator of cash if you remove some of the exceptional items like M&A restructuring costs, those sorts of things. We tend to deliver more than our net income in terms of free cash generated via this metric. And also, you can do the math on the bottom as well we compare to EBITDA as well. We do adjusted EBITDA and we do down a pretty high percentage of adjusted EBITDA as well in this net free cash generated. I mentioned it's in our favor that we're a CapEx-light model. What do we do with this free cash? M&A. We talked about it. We've been disciplined from an M&A standpoint. And from a buyback standpoint, we're very, very active last year to the tune of about $75 million in stock that we repurchased in the year. The balance sheet. This is where you can see the unique signature of the balance sheet. By day of the week, year-end 2023 was a Sunday, which is a very different looking balance sheet than a Tuesday at year-end this year. And that's our reality. We have -- I think, worth talking about -- we have a terrific credit facility. We moved this year to an all-revolver facility. It's $425 million in terms of capacity in the facility. We're priced at SOFR 185, and we've got a great group of banking partners, some of which are in the room today that we're delighted to partner with. And this is enabling our growth. Year-end, we had a position of $268 million undrawn. So we have a lot of space within the credit facility. Our leverage at year-end was only 1.3 per the metrics. But if you actually did it on a more overtime measure, which is the way our covenant measures is less than 1.2x leverage. So exceptionally low leverage, high cash generator, high production and a great credit facility backing everything we do as a company. And this is the guidance. We put it out this morning. And I think the key thing is to mention on it is it is reflective of us managing a bit of pullback in the retail market. And we're doing that not by cutting costs in retail. We will, of course, manage our costs down in the baseline in the business, but we're doing this through actually investing in retail to make sure that we're able to differentiate from the market, what the market is doing in retail and as it flattens out in '25-'26, get that separation that Intermex has historically achieved, which is going to benefit us as a business. Also in here is reflected, as I said before, the investments in retail and digital. And I think it's also worth mentioning that we will likely definitely incur transaction costs in the first quarter related to the strategic alternative review that we did. Those are not baked with into these guidance, but I think all of them should come through in the first quarter. I think also worth mentioning within this guidance, we will be active in the buyback. We mentioned on the call this morning that our 10b5-1 expired at year-end. So we had a period of a couple of months where we were not active in the market shortly after earnings have digested and the K has been filed. We will be active again. Right now into this guidance is baked a nominal of about $40 million worth of buyback for the year. We do have the opportunity to be more aggressive if we wanted to and saw the opportunity with block trades or other types of transactions, but $40 million in the year is what's baked into the guidance. And then just over time, what we feel we're capable of and what we're -- if we're executing as we feel we can, we think we could look like this in 2027. The metrics on the left, I won't take you through all of it, but I think coupled that the jump off the page are the $800 million-plus in revenue and the EPS growth and then the bottom over that period, '25 to '27 over $250 million in free cash generated, of which there are a lot of things that we'll be able to apply that cash to, including returning to shareholders. On the right side of the page, we become a much more digital business that we are today. That starting block that you see in 2024 is the consolidated global business, of which we're only about 3% digital revenue. By 2027, we think we're going to be at about 16%. And again, if we're getting the better returns, we could grow that faster. Over time, there's nothing that holds us to that $9 million this year, but we think that's a good North Star to target. And if you look in 2029, 25% of the business is digital. In 2029, still the majority of the market we feel will be retail. And we think at that point, we'll be separating nicely, which will be highly profitable and cash generating for the business over the period. With that, I'm going to invite the management team up and we'll go into another Q&A session. We'll have microphones around the room again.

Yes. It's Chris Zhang from UBS. I'll get started. Two questions on the revenue outlook for towards 2027. So the first one looks like the implied retail portion is growing roughly 10% from the, I think, 2024 level. Is that predicated on the U.S. to Mexico market outlook, which is just based on the -- like a high-level projection, it's like kind of flat or down, although in out years is -- you're expecting it to grow to like mid- to high-single digit or something around that level? So like how much of that is -- like what's your like underlying market assumptions, especially U.S. to Mexico growth assumption is for the 2027 and also 2029 retail outlook?

Yes. I mean it's hard to say with any certainty where it's going to go. I think we feel over the next 3 years-or-so, the market U.S. to Mexico could be back in that 5% to 7% growth range. So we think that there's going to be a journey back to that from the 2.5% this year. And I think that what you see impacting retail quite a bit as the economy has -- still growing, but has slowed and you see things like housing starts, pull back, these types of things, we believe are going to impact consumers who are more on the fringe who are more the retail consumer, the unbanked consumers. So that's what I think we're feeling at the moment, but we do feel that the market itself will stabilize back to the 5% to 7% over time, and we'll just have to see what kind of time line we're on with that, but we're going to make the right investments. So whatever the market is growing, that we're going to -- we feel confident we'll be able to separate from that.

Right. Awesome. Appreciate the color. And I guess the second part is just to confirm, is this projection all predicated on just organic growth or is there some inorganic element in either retail or digital as well?

Yes, we haven't factored in an inorganic element here. We think we have the capability to do this organically. Obviously, inorganic could help us on the journey, but it's not something that we've historically ever relied on. And obviously, digital will be a great contributor to this journey, and we're excited about its future.

As we look at the $800 million, how should we think about the financial services contribution to that? And also, I guess, with an aspiration to be the #1 Latino-focused bank, how do we think about the investment that, that requires?

Yes. I think in this build, what you're seeing is retail remittances and digital remittances. I think if we put the bet to the ball and the other financial service elements that we could add to this, there's potential upside to this case.

On the revenue side, but I presume that would take investment as well or how should we kind of frame what you're willing to do from an expense standpoint to grow that side of the business?

Yes. I mean I wouldn't put it in a box. I think it's just like we're looking at our retail or we're looking at our digital spend right now. The $9 million is the North Star, but if we're getting the returns, and we feel we can return -- we can justify those returns to the shareholders, I wouldn't say -- like I said, nothing is off the table, but I would expect us to be -- exhibit our DNA of discipline and productivity, but we're not going to put ourselves in a box in terms of what we can do. If the returns are there, we'll do it.

So I wanted to dig in on the lower customer touch points to start off. This is only Intermex digital, right? This is not including in the Amigo Paisano. What are the levers to driving this lower as you integrate and push acceleration kind of simultaneously here, while keeping that good retention? And just can you talk in general about pricing competition in digital right now, maybe focus on your brick-and-mortar peers that are trying to make the digital push as well? And I have a follow-up.

I didn't understand the first part of your question when you say this is not, what is this?

Sorry. So the first part of the question is, what are you doing to push down that touch rate? Yes, I think it's 4% of the transactions are having to be touched. I -- my thought process here is that helps retention a lot, which is very good for your LTV CAC economics, right? What are the levers that you have to keep this low as you integrate the Amigo Paisano folks? You're pushing more on marketing and adding more customers. Just help us think about how you keep that good retention and kind of related to that, how is pricing competition in digital right now? I imagine that is one of the levers to drive retention, not the key one, partially experience, obviously, and trust, but just talk about that.

First of all, thanks for your question. That number does include Amigo Paisano because Amigo Paisano was a different model. They were our as a service partner, but we were providing the whole technology. So they were just responsible for the marketing side of that. So everything that is processing, customer care, payers, et cetera, was all included. What we've been doing since 2022 is to always improve our client experience. So most of the reasons that consumer call us were first because they couldn't use the app; second, because they want to know the status of the payment; third, because the card was declined at some point. Looking at the data now, we are basically still needs to address the third one. The other 2 are happening way better. And with the WhatsApp solution, we expect to improve it better. The other question was about pricing, correct? So what we are seeing that ongoing discussion is that Intermex is operating at a higher tier of pricing, Amigo Paisano is operating in the mid-Tier of the price, right? It's a challenging balance because we can lower our price, maybe accelerate our growth, but with a lower profitability or we can keep at it is. There is no answer. On a daily basis, we look at data, we look at comparison and try to position ourselves where we think is the best. To finalize the answer, I would say we highly believe that our solution is one of the best. And Intermex was always a companies or is a company that doesn't want to compete by price. We believe that we offer a high value proposition, and we offer a fair price for the proposition that we are offering. So as of today, I don't see a scenario that we will decrease our price significantly. Minor adjustments can happen. We know that some companies, they -- during the periods that they are facing some challenge for their earnings, they drop the revenue a lot or they raise the revenue a lot, that's not how we operate. We are customer-centric folks, so we try to offer what is the best for the consumer first. Did I answer?

Great. No, that's super helpful. And then my last one. Looking through the calendar '27 guide, if we look at the margins versus EBITDA margin this year, the guidance implied 100 bps lower than last year, we're going back up to almost 19% in calendar '27 when we look at those numbers. Can you help us understand how does the marketing mix of OpEx evolve over that time period? That's my final question.

Yes. I think that we -- the digital product is a higher-margin product. It's going to make -- it's going to be more of our business. And as we layered in over time, making that marketing spend and getting that return, I think you'll start to see expansion. I think we plan on still being extremely efficient in the baseline cost of the business overall. And I think that's going to help us as well. And I think the digital business as a whole, the infrastructure to support it is considerably smaller, right? So over that period, where retail is going to be flattish, and I think we'll be able to grow right? But we're not going to have to add a lot of that significant base cost that's required to run a retail business. So the digital business is cleaner in those aspects, right? And so from that perspective, that's helped us get margin.

Got you. That makes sense. So fair to assume CAC continue -- you can leverage on CAC, right?

Yes.

A couple of questions. I'd like to play out the numbers a little bit further, if we may. So the $9 million spending, is that front-end loaded. In the spirit of where I'm coming from here, if we look at the quarterly -- the first quarter guidance, it certainly isn't -- you would not annualize that out to get the full year number. So is that front-end loaded? And then secondarily, as you think about '26, does that $9 million increase because you have a larger digital base you're working off of or is this really a front-end prime the pump and it is pulled back? How are you thinking about that?

Yes. I think I would say -- I wouldn't say it's front-end loaded. I think there's science in terms of how we bring in the spend and determine what CACs we're achieving and then add in more spend. So we're going to ramp up over time. And I think in 2026, not being specific, you're going to see a much higher spend on digital marketing as well. But a lot of that is going to be funded on the returns that we're reaping from the $9 million that we're spending or more this year going into the next period. And that's why in the -- you've got a get over the hump period and then once you've got this going and you're generating margin that you can reinvest, that's where you start to expand and really grow the business profitably.

[indiscernible] first quarter to second to third to fourth. First quarter is by far the slowest quarter of the year. 2 of the slowest 3 months of the year are in the first quarter, January and February. November being the other. So you're going to see a big pickup just in terms of if you did nothing, if all things being equal, Q2, Q3 and Q4, they're virtually pretty close in size and Q1 is just much smaller. So it's not a great representation of any front loading. It's just the business is a lot slower. A lot of parts of the country, agricultural haven't even started to ramp up yet.

And then one additional question relative to cash flow and M&A opportunities. What does the pipeline look like today? And I'm really thinking about how much cash of your free cash may be consumed there versus available for buyback? Whatever insights you can share would be helpful.

Yes. No, I would just say over that period of time, we've assumed a buyback similar to what we've mentioned this year, so $40-ish million over that period of the multiyear journey. Obviously, if they're right -- and we said nothing within that outlook suggested M&A in it. But if right M&A opportunity comes in, that profile looks different, and we're going to get an inorganic boost probably to EBITDA, and maybe we have to lever up some to do it. But with the amount of capacity on our credit facility, that's well with our hands to do that or allocate cash that we would build over time towards that.

The acquisition pipeline, what insights there?

Yes. I mean it's -- I wouldn't comment that it's any more full or less full than it usually is. I mean we're kind of a steady state. We look at -- as I said before, we look at a lot of things. I think we're -- in the fourth quarter, we did close on the Amigo Paisano transaction, and we're pretty deep into looking at something else that we decided to move off of, but it's steady state. I expect that in the next quarter, we'll have a couple of other things to talk about that we're looking at, at least conceptually, but no more active and less active than we typically have been.

There'll be a high standard to hit relative to our own forward trading. With the business that we have and where we're trading today, there'll be a high standard for us to spend money on M&A. It will have to be something that's going to drive some strategic benefit for us that has some synergies and will help us get to where we need to get to quicker because where we're trading ourselves right now, it's the best bargain out there, right?

I guess, this is for everyone up there. I'm looking at the revenue evolution slide you presented at the end there. And I'm wondering -- I mean, the numbers are what they are. But in order to really get a better feel for how the retail business is going to evolve over the next 5 years, it's hard to answer that without really understanding where those digital customers are coming from. And I know it's only 3% of your revenue now. But based on your experience to date and the marketing plan going forward? I mean how much of these new digital customers are going to cannibalize their existing retail base? How much do other digital centers marketing, cannibalize your installed retail base versus how much of the digital is -- do you anticipate being additional customers to the company? Because I think reflecting on comments 2, 3 years ago, the 30% of the industry share to Mexico being digital sends now probably exceeds what everybody expected at the time. There was a theme that it's a less banked center than maybe other corridors. So given it's a long-winded question, but as we think about where these new digital centers are coming from, how much cannibalization is factored in there and the retail base actually shrink over this 5-year period in terms of aggregate dollars.

I think everybody can chime in to answer that. And I wish we know some of the answers that you're looking for. First, looking at current data, the overlap between digital users and retail users is almost insignificant, it's very, very small. And when we look at data, we see a very small transfer from retail to digital within our own company. The second piece of the answer is, we see some companies moving completely to retail and then completely to digital and then completely back to retail, which might affect a little bit the distribution in the market share. Of course, my colleagues can talk a little bit better. But there is one company, for example, that terminated 75% of the retail team, moving all their energy to digital, but they have done that before unsuccessfully, right? So these macro chains might impact this scenario. I particularly believe that our competition is first against other digital native players. And second point that you well raised about we cannibalizing ourselves. I don't think there is a lot of risk there. Might have a natural migration. People who became digital savvy, who became digital eligible and decide to go digital, but we are not going to attack in any shape or form our own base of clients. Of course, other digital companies are attacking this base of clients. But I don't know if there is a lot we can do about that, but keeping and offering the best service we can on the retail side. But probably, Bob, I don't know, Andrew, if you have something to add, or Chris?

No, just in terms of the retail business, we see tremendous opportunity still to grow. We can't really estimate where the market might go. But within our own business, the data that we know, our opportunity is immense based on some geographies where we're underpenetrated as well as our ability to attack geographies where we currently are maybe not ultimately priced. So we think we can grow there. And then I'd also just reference you back to the video in which even some of the consumers that are banked, as they indicated, the retailers are such a community hub, they just have a comfort level there, they prefer to send there. And we see that we receive even debit card transactions at our retail locations. So we believe it's a business that we'll continue to double down on, as Andras mentioned, and we may see -- we will see hopefully, growth there as well, we believe.

No, that's helpful. And maybe as a follow-up to that, when I do the math of sort of the first 2 pie-charts, it seems like the retail business from '24 through '27 is if I think the '27 number comes out to about $670 million. It implies a 36-month CAGR of kind of 0. And is that anticipating and it's further penetrating Western states already built into that? And it's really maybe a capital allocation question. If a lot of investment and the trading further ZIP codes and so forth is leading to a 3-year CAGR flat, is there anything or any metrics you look at that would...

I think you can't really look at this as one whole picture though, right? You're looking at flat the overall business. And it will not be flat relative to our market share at retail. So you got to think about the market share at retail and the market share at digital. And they're very separate and apart. If the market continues in whatever movement to digital, and like you said, no one could predict it a few years ago, no one could predict it now. And in 3 years from now, the market for Mexico digital could be 40%, it could be 38%, it could be 45%. We don't know. We know it's not going to be 100%. I don't think it's going to be 50% even yet in 3 years. but it could grow significantly. And our role and our job at the retail is to continue to grow our market share of the retail business, which is what all of that work in the West and throughout the country will do. We think there's opportunities for us to execute and gain a greater share of the wires that are done in retail, while we get even a bigger share of the wireless that are done and digital. That's why that growth in digital is going to be much bigger but you can't really look at them as all in one because if you take the digital piece separately and apart from that, that's going to be experiencing growth that's going to be well into the higher numbers, and the retail may be flat, and most of the future growth is going to come in a combined fashion, right, it's going to come from the digital side. But that doesn't mean that we're not going to be gaining share at retail, it just means retail will be a smaller share of the overall market. Today, retail might be -- if we take Guatemala and Mexico, the best we know, Mexico is 30%-ish; Guatemala is, let's say, 15%. So combined, maybe that's 25%. That market, even if the market is growing, that share probably in 3 or 4 years is going to be 30% or 35%, which means if the market doesn't grow enough to overshadow the reduction of the percentage that's retail, then retail as a whole is going to be smaller. We believe that we can compete better at retail than we do today through the work that we'll do and have a higher share of retail and then a much higher share of digital. That's why you see that change where in '29, we're 25% digital, that's going to mean that we're growing at a much faster rate than the market digitally and staying approximately flat on the retail side, but not flat in terms of market share in retail. Is that helpful?

Absolutely.

Andrew Harte at BTIG. When we look at the 2027 numbers, can you -- Andras, can you maybe talk about areas where you think there's upside that you touched on more earlier in potentially areas where it could go wrong. I think one of the assumptions was that the market comes back in '26-'27 and I guess, looking at it on '25 to '27 CAGR based off of guidance for this year, it's about 4% growth on the retail side. So can you just talk about areas of upside and downside and where you see risk or opportunity?

Yes. I think from -- let's talk from an upside perspective. I think Marcelo mentioned it from a digital perspective, right now, we've built the model and our forecasting around a $60 CAC. Right now, we're able to achieve about $35 to $40 through really intelligent application of marketing funds. We do that. We have the opportunity to scale up that spend even more and drive up digital quicker. That's why we don't want to put ourselves in a $9 million box. I think what happens with the market, which is completely out of our control. What we had baked in our forecasting by '27, the Mexico markets back up there around 6%. Last year, it was 2.5%. This year is kind of a slow start. So we'll see what that journey between that and '27 looks like, that's a tough one to push through no matter how well we execute. I think we feel confident that we can separate from whatever the market performance is doing in retail and digital, and that's the reason why we're investing in retail as well as we think we can get that separation back. And Bob said, in a smaller market have more of a share in what's a very profitable and meaningful business. But those are 2 of the factors that come to the top of mind. Obviously, M&A within this could change the picture, too. But those are the ones that I think from...

I think there is -- certainly, the market itself, right, the overall market growth to Latin America, where we're presuming relatively low growth for the most of the period. I mean we've seen growth in Latin America be closer to double digits or even into lower double digits. And none of that is presumed in any of this. So if the market came back stronger, than we're predicting. That's certainly a piece of that. Our ability to execute and invest in the West side of the United States. It's not really been our inability to execute there as much as we haven't invested as much as we might otherwise like to. So more people on the street, we have an undersupply of retailers per foreign born in the western part of the United States. For instance, you might go into a state like Georgia or North Carolina, and we have 1 agent retailer for less than every 1,000 foreign born in our target market. But if we were to go into states like Colorado, Arizona or California, we might have 1 agent for every 3,200 or 3,500 foreign born. So there's a big opportunity for us to ratchet up strategically, which is really in our DNA, not in a way that just puts up agents to put them up, but in the way we've talked about early on, very targeted agents in the right ZIP codes with the right pricing, competing against the right competitors with the right offering. And so that's another piece of it. I think a part we haven't discussed at all in this, and we're really early on, but we're talking about aspirations that go out many years. We're really not contemplating much other than Latin America. And we're not contemplating much here on the upside related to Europe. We're not contemplating much on the upside here related to our ability to execute the national, which has a really strong footprint up and down the East Coast, the mid-Atlantic in the Northeast with other countries because it's been primarily driven by the Dominican business. We haven't contemplated leveraging our strong position as a lead brand with national to the Dominican Republic, which is the largest -- third largest country in Latin America receiving money, but probably the largest opportunity as a percentage for money going digitally. So those are all opportunities. And then beyond that, Marcelo continues to work to add more countries to our digital offering, countries that wouldn't really be opportunities for us at retail because there isn't really much of a cash business, but even countries like India and the Philippines and others where we may not compete in large measure in the near term, but they're so large that just transactions over the transom would be positive transactions that we can handle quite well. And it really isn't difficult to build the payer side of that. The payer side of any of these countries is not difficult when you have a record in our financials. The hard part is building that infrastructure and building that sending side, which we're already in place. So we think those are all upsides that exist there in the business going forward.

And then just 1 follow-up for anyone on the team. Obviously, with the strategic review kind of concluding today, I think today's presentation was the culmination of a lot of those findings. But curious if you could just kind of take us behind the curtain on anything, whether it was strategic buyers, financial buyers that are also taking a look and versus where we came out today as a stand-alone public company? Just anything you can share on additional thoughts there would be helpful.

Sure. I mean we entered into the process in the fall. We heard from many folks, both shareholders, analysts, a lot of folks, both off the record and on the record, gosh, you guys should look, you're undervalued. You don't seem to trade nearly related to the value of the business proposition you have. If you think about that, that certainly was true and let me take you through that one more time. We went out at $9.91 when we went public. Totally unknown whether we would even have any clue on how to be a public company. Some might argue today, we still don't have a clue, but we think we do. So we were not at $9.91. And at that time, our trailing 12 was $34 million. And we made $121 million. So we made about 3.4x that. In addition to that, our really, really great financial management, building what I consider to be a brick house we talk about a lot of times. Something that withstands through the storm, through the COVID, through everything that happened, that threw off enough cash for us to buy back 30% to 40% of our shares. We went from over 40 million shares all the way down to 31 million shares. In addition to that, we came out underneath -- from underneath the umbrella of being a controlled company. We got rid of the warrants. We did everything we possibly could do. And where do we find ourselves, even though we're at 3.5x as profitable, with a lot less shares, probably a stock that should have proportionately been 35 to 40, it never rose above 27 and it was languishing in the low 20s. So we began that process to figure out if there was a better opportunity to maximize our shareholder value for the company. And we went through an extensive process. We hired FT Partners, who is very well known in the fintech industry. Steve McLaughlin and group, and we have a couple of their team members here today. And it was -- we talked to strategics and we talk to financial sponsors. And in going through that process, the conclusion in where we got was there wasn't a better opportunity to maximize shareholder value for our shareholders better than remaining a public company. And there are those that will certainly argue that. I can think of a few right now that if in the room would more than argue. They might chase me out of the room, but we have security here. But they -- but today at 15 stock, but we believe that here we are with a company that there was of $75 million or $70-plus million in cash, it's got all the infrastructure needed to do all the digital business it needs to do. I got it, there's a behemoth out there and we know the name of it, but we don't think we need to spend that kind of money. And so we think that the best opportunity for the return for our shareholders today based on the level of interest we had was to remain a public company and we suspended the process. Now suspending the process means that if somebody is so interested and wants to come in and tender an offer to us as any time that would maximize our shareholders' value, then we certainly would listen to that but we're not actively out seeking strategic relationships today. Our team, this team, which has created a great company and creating great results on a day-to-day basis, along with hundreds of others need to focus back on the business and need to drive our business, and that's our primary focus to drive revenue, to drive profit and to more balance our company for the future with our digital side of the house, remaining strong at retail and that digital and retail with that omnichannel approach that we'll move into, giving us the opportunity to be able to provide additional services that no one today is providing to our customers, particularly in Latin America. So that's where we are today.

I guess, Marcelo, you said what you don't want to do is attack or cannibalize your existing retail customer base. And I get you have to sort of meet them where they are and when they're ready, that's the time. But I also heard you say, look, the unit economics of digital are better. You've got retail customers who are using debit cards. It sounds like someone who's ready, and so I wonder how you think about channel tension, whether it's kind of on the team here and how your own incentives are or between agents versus digital. Could you sort of walk into that and why it doesn't make sense to just go after your incumbent retail base?

[indiscernible] The first part of that. So there's no channel tension here. I mean everyone is focused on the same thing, which is building the most profitable company and raising shareholder value. So there's no disincentive for anybody if digital gets bigger, and there's no incentive for anybody vice versa. The challenge that we have in retail is a very small segment of our consumers that use a debit card at retail. And there really isn't much in our estimation that we can do to drive consumers who aren't banked to becoming banked. We can do some of the things, the offerings that we have to get them banked, and Marcelo will talk more about that. But the one challenge that we do have is that today, the retail business is $600 million, and it brings down probably the bulk of the $120 million we made last year and what you do risk is if you look a little bit too aggressive in retail, we do risk our business at retail. There are a lot of small opportunistic guys who are not known probably to you folks, good companies, private companies that would leverage that to talk to the retailer and say, look, they're trying to move all the business to digital. So we have to be careful about how we do it. And today, in most cases, the risk is not really worth the reward because it's such a small channel of retailer -- of consumers at retail that are using debit cards. I mean most of our retailers don't use -- have any debit card transactions. Some do have some. The part where there's a lot of debit card transactions and maybe you heard that in the presentation, is in U.K. our store there that we bought 94% or 95% of those transactions are done with some of the debit card. But here in the U.S., I think it's -- what's the percent?

Less than 2%.

Less than 2% of our wires. So Marcelo, I'll turn it back to you.

No, no, perfect. The other thing that I just want to highlight is -- and we heard that from other people as well. It's not about this competition between digital and retail. And it seems that everybody who looks at the industry just look or your retail or your digital. First, there is a synergy between both, as Bob well said. Second, the greatest opportunities, how can I leverage this 9,000 locations to distribute other products that nobody else can? So per Bob's comment, I might take the risk to convert 10% of that agent to digital and lose the other 90%. It doesn't look like good business, no matter how effective the digital is. On the other hand, if I can keep engaged with that agent, where other companies are not engaged with that agent anymore and make that agent as a distribution channel for all the products that we mentioned, maybe not tomorrow, maybe not next week, but in a few months, that starts to make more sense. So the goal is to make more money out of each consumer that I acquire, no matter the channel instead of creating this competition between channels that I think is how we are being misread by investors and by the industry all the time.

And indeed, one other thing to add to that. We do believe there are ways that we were discussing and looking at to cut the retailer in for a piece of the digital and something that could be imminent ultimately, where they make a smaller amount, but they still own a bit of that transaction and it's better than that transaction migrating completely to digital and then not. And for us, it's a lot cheaper than paying a $50 customer acquisition cost. And then the unit economics are really strong. So we're looking at ways to do that, but we've got to work, as Marcelo and I'm both saying, we got to move slowly on that or carefully, at least cautiously because it's $110 million probably of our EBITDA this year is coming from our retail business.

Remember, digital native companies has nothing to lose, right? Everything is a blue ocean for them. We have a lot to lose if we don't make this movement properly and strategically.

I really appreciate it. Just to get a better understanding of both the revenue recognition and also the kind of more entire scope of the marketing investment. I understand the revenue is reported net of discounts and promotions. And just wondering with the scale up in the digital, increase in the mix, is there going to be a higher level of discounts and promotions as kind of netted out of your revenue target? And just -- I guess just for the revenue target, it doesn't matter to the -- like half my numbers you show up there, it's the net revenue, but I guess just to get a better understanding of the total scale of the marketing investment over the next couple of years, if you can comment on that, it would be helpful.

I don't think the profile of discounts and promotions impacting and flowing to that number is going to move materially versus the way you look at it.

When we talk about gross margin per transaction today, every discount that we offer, BRL 0.10 or $1 is included in the COGS part. So when we say that we make 11 end up at 6, discounts are there. As we are investing more in digital marketing discounts is a part of the attraction. But again, it's compounded in the cost. So it will not change whatever we presented here today.

We will transition to the cocktail hour. Thank you very much. Thank you.