MoneyGram International, Inc. today reported financial results for its fourth quarter and full year ending December 31, 2019. MoneyGram continued to expand its strategic partnership with Ripple as the first money transfer company to scale the use of blockchain capabilities.
Alex Holmes, Chairman and CEO stated:
“This was a pivotal year for us as we continued to execute our digital transformation and deliver a differentiated experience to our customers. Throughout the year we launched innovative product solutions, invested in new technology, renewed key partner relationships, led the industry in consumer protection and re-established our competitive position in the market. The combination of our efforts is resonating with consumers around the world. Our direct-to-consumer digital business achieved strong growth rates and international markets continued to outperform, which enabled us to return to transaction growth in the month of December. Importantly, we also delivered record online digital transaction growth during the 2019 holiday season and reported Adjusted EBITDA for the fourth quarter that exceeded our expectations.”
Contra Expense vs revenue expense (seen in bold below) the difference is that revenue expenses represent money that flows out of a company as it does business, while contra revenues represent money that never comes in, or that comes in but turns around and goes right back where it came from.
- Revenue was $323.7 million, a decline of 6% from the fourth quarter 2018. Revenue excludes $8.9 million of benefit from Ripple, which will be accounted for as a contra expense rather than revenue based on a recent consultation with the Securities and Exchange Commission.
- At the time the Company issued fourth quarter guidance, it assumed Ripple market development fees would be accounted for as revenue, consistent with the third quarter treatment. As a result of the change, the Ripple financial benefit of $8.9 million in the fourth quarter and $2.4 million in the third quarter is now accounted for as offset to operating expenses, in Transaction and Operations Support and is no longer included in revenue.
- Global Funds Transfer segment revenue was $299.7 million, down 6% from the fourth quarter of the prior year. Within the segment, money transfer revenue was $285.9 million, a decline of 6%, and bill payment revenue was $13.8 million.
- Investment revenue was $12.4 million, a decline of $1.6 million from the fourth quarter in 2018.
- Total operating expenses were $311.0 million, an improvement of $21.1 million over the fourth quarter of 2018. This is an improvement of 6% from 2018’s fourth quarter.
- Net loss was $11.9 million compared with $12.5 million for the fourth quarter of 2018.
- Adjusted EBITDA was $57.6 million compared with $60.0 million in the previous year’s fourth quarter. Adjusted EBITDA margin improved to 17.8% from 17.4% in the fourth quarter of 2018.
- Diluted loss per share was $0.16 and adjusted diluted income per share was $0.01.
- Adjusted Free Cash Flow was $19.8 million.
The WrathofKahneman has summed it up very nicely for us as well.
MGI Q4 report is out:
• Ripple provided $8.9m in benefits in Q4, $11.3m in 2019.
• These “benefits” not part of revenue after consultation w/ SEC (!) reclassified Ripple benefit as contra expense
• +39% yoy online tx’s
• Higher than expected earnings
— WrathofKahneman (@WKahneman) February 25, 2020