Currency Exchange Intl reports 31% rise in adjusted net income

On Thursday, Currency Exchange Intl (TSX: CXI ) discussed third-quarter financial results during its earnings call. The full transcript is provided below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

4 million for Q3 2026, driven by a substantial 54% growth in payments revenue, offsetting a 4% decline in banknotes revenue. 6 million, reflecting strategic focus on revenue diversification and cost management. The company continues to expand its agent network and customer base, adding 21 new financial institution clients and opening new branches, despite facing challenges such as temporary branch closures and weaker demand for exotic currencies. 6 million, primarily due to higher bank service charges, salaries, and IT costs, though strategic banking relationships are expected to help reduce future costs.

CEO Randolph Pinna expressed confidence in continued growth in both the banknotes and payments segments, citing strategic initiatives like expanding international customer base and strengthening banking relationships. Full Transcript OPERATOR Good morning, ladies and gentlemen, and welcome to the Currency Exchange Intl Q3 2026 Financial Results Conference Call. At this time, all lines are in listen-only mode, and following the presentation we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator.

This call is being recorded on Thursday, September 10, 2026. I would now like to turn the conference call over to Mr. Bill Matulis, Investor Relations. Please go ahead.

Bill Matulis, Investor Relations Thank you, Kelsey. Good morning, everyone. Welcome to the Currency Exchange Intl conference call to discuss the financial results for the third quarter of the 2026 fiscal year. Thank you for joining us.

With us today are President and CEO Randolph Pinna and Group CFO Gerhard Barnard. Gerhard will provide an overview of CXI's financial results and his latest perspective on the company's operations. Randolph will then provide his commentary on CXI strategic initiatives, sales efforts, and business activities, after which we'll open it up for your questions. Today's conference call is open to shareholders, prospective shareholders, and members of the investment community, including the media.

For those of you who may happen to leave our call before its conclusion, please be advised that this conference call will be recorded and then uploaded to CXI's investor relations website page along with the financial statements and MD&A. Please note that this conference call will include forward-looking information, which is based on a number of assumptions, and actual results could differ materially. Please refer to our financial statements and MD&A reports for more information about the factors that could cause these different results and the assumptions that we have made. With that, I'll turn the call over to Gerhard.

Gerhard, please go ahead. Gerhard S Barnard, Group Chief Financial Officer Thank you, Bill, and thank you to everyone for joining us today. Today I will review Currency Exchange Intl's financial performance for the third quarter and the first nine months of fiscal 2026. Unless otherwise indicated, all amounts are presented in US dollars and comparisons are against the same period last year, meaning the third quarter of 2026 compared to the third quarter of 2025.

Before I begin, a brief note on how Currency Exchange Intl discusses performance. We use both reported results prepared in accordance with IFRS accounting standards and certain adjusted non-GAAP measures. We believe the adjusted measures help explain the underlying performance of the business by excluding specific items that are non-recurring or introduce significant period-to-period volatility, such as stock-based compensation expense. However, adjusted results include close to $1 million of discontinued operations losses incurred by EBC in the normal course of business, EBC being Exchange Bank of Canada.

Full definitions and reconciliations are included in our financial statements and MD&A on page 24 and 25. Just to highlight that the third quarter continued to deliver substantial payments growth that more than offset the lower banknotes revenue and overall drove a 5% increase in total revenue. At the same time, higher bank service charges due to substantial volume increases and share price-related stock-based compensation increased reported operating expenses. Even with those increases, adjusted EBITDA increased 3% and adjusted net income increased 31%.

4 million. 2 million. 1 million, fairly consistent with last year and down about 1%. 5 million.

3 million, consistent with last year. 3 million because the prior-year quarter included a $1 million loss from EBC's discontinued operations. 6 million. 67 last year.

68. Now let's talk about revenue performance. 4 million was 5% higher than last year. As I mentioned, the payments business increased its revenue by 54%, representing 23% of our total revenue.

A year ago they represented 16% of our total revenue, so a huge growth there. 2 million, or 77% of our total revenue, compared to 84% last year. 4 million, or 25%. As we know, our cyclical trend is Q1, Q2 a little slower; Q3, Q4 we pick up speed with all the international traveling.

That sequential increase is consistent with the normal seasonality of our business, as banknotes activity is generally stronger from March to September. Now let's look at payments. 2 million. 8 billion last year.

Currency Exchange Intl processed 68,700 payment transactions during the quarter compared to roughly 51,700 in the prior period. The growth came from both sides of the customer base—continued onboarding of new clients and higher activity from existing clients from financial institutions and credit unions. Our investments in core banking integrations and scalable infrastructure continue to support this growth and advance our one provider, one platform strategy. Now, let's look at banknotes.

2 million. This decline was primarily driven by the impact of a temporary disruption from branch relocations and due to a decrease in the demand of exotic currencies with higher margins. Now excluding these effects, underlying revenue was fairly consistent with last year, as growth was constrained by economic and geopolitical conditions that contributed to a more moderate travel environment and lower activity in certain foreign currency transactions. Wholesale banknotes revenue remained broadly stable, declining by about $150,000, or 1%.

As mentioned, growth was constrained and the business was also affected by an unfavorable shift in the currency mix with the decrease in the demand for exotic currencies with higher margins. So we have exotic and travel currencies, and Randolph will speak a little bit more about that. These pressures were partly offset by growth in agent activity and business from newly onboarded domestic financial institutions and money services businesses. Wholesale banknotes represented 50% of total revenue compared to 53% last year.

During the quarter we added 21 new financial institution clients, continuing to expand our presence in the wholesale market. Direct-to-consumer channels: our online FX revenue—that’s our e-commerce drive—our e-commerce or online revenue decreased by $200,000, or 20%. Lower activity in certain exotic currencies, particularly Vietnamese dong, accounted for most of this specific decline. Now excluding that impact, activity was consistent with last year, although broader economic uncertainty continued to constrain our growth.

Online FX represented 4% of total revenue compared to 5% last year—so a small business segment growing substantially in the future. Revenue from company-owned branches decreased by $360,000, or 6%. The principal cause was the temporary closure of four established revenue-generating branches that are being relocated. We were basically forced by the stores to relocate our branch on their request.

That impact was partly offset by strong growth from the locations opened in 2025, and new and reopened branches take revenue catch-up for a year or so compared to a well-established branch and its revenue generation. Currency Exchange Intl opened two branches during this quarter, one in Newport Beach, California and one in South Park Mall in Charlotte, North Carolina. Those locations, as I said, are still ramping up and have not yet had enough time to replace the revenue from the temporarily closed branches. Excluding openings and closings, branch revenue increased modestly, although growth remained affected by weaker demand for exotic currencies.

As mentioned, at July 31st Currency Exchange Intl had 39 operating company-owned branches. We also expanded our agent network. Currency Exchange Intl now has 51 airport agent locations and about 480 non-airport agent locations. A new airport agent location opened at O'Hare International Airport during this quarter.

Now turning to operating expenses. 6 million. The largest drivers were bank service charges, salaries and benefits, stock-based compensation, and our IT cost. Operating expenses represent 65% of revenue compared to 62% last year.

Now let's deal with bank charges. Bank charges increased by almost three-quarters of a million to $955,000. There are two main reasons for this increase, as we've discussed last quarter as well. Firstly, the significant growth in payments transaction volumes resulted in higher processing cost.

Second, Currency Exchange Intl moved its payment processing activity away from EBC during the fourth quarter of 2025. Therefore, all related bank services charges are now recognized in continuing operations, while a significant portion of those costs were incurred through EBC's corresponding banking relations and remained in discontinued operations in the prior quarter. So for further clarity, in the same quarter last year, $488,000 of Currency Exchange Intl's bank charges were included through EBC's corresponding banking relations in discontinued operations. These bank charges were not included in Currency Exchange Intl's continuing operations.

Now adjusting—and this is important—adjusting for the impact of this $488,000 in bank charges, the increase over last year was $258,000. So we're adding the $488,000 back. Now that $258,000 is equivalent to the increase in wire transaction growth of roughly 17,000 wires. So as you can see, bank charges only increasing by pretty much the number of additional wires that's been sent quarter over quarter.

Other significant expense movements: salaries and wages increased by $207,000, or 3%. This increase reflects the full absorption of certain staff and director cost that had previously been shared by EBC, together with higher sales commission related to payments' growth. These increases were partly offset by headcount savings following the closure of our Miami vault. Information technology expenses increased about $215,000, or 29%.

This is primarily due to Currency Exchange Intl absorbing the full cost of certain software licenses that had been allocated to EBC last year. The increase also includes cost for compliance monitoring software intended to scale our compliance capabilities as the business continues to grow. Marketing and publicity increased by $100,000, close to 23%, as we continue to increase spending on digital customer acquisition and marketing execution through a performance marketing agency. Stock-based compensation increased roughly by $315,000 to $460,000.

This expense includes equity-settled stock options and cash-settled RSUs and DSUs. The increase primarily reflects the movement in Currency Exchange Intl's share price during the quarter. Because a significant portion of this expense is share-price sensitive and can create volatility, as I mentioned, this is excluded from adjusted profitability and earnings. 1 million, down about 1%.

5 million. 84—so fairly consistent with last year. 3 million. 68.

Interest revenue also contributed to the quarter's financial performance. At the end of the quarter, Currency Exchange Intl had $29 million invested in AAA-rated money market funds compared to no funds invested at the same time last year. Now let's quickly deal with the nine months performance. 2 million, or 6%, to close to $56 million.

1 million, supporting a $2 million, or 5%, decline in the banknotes revenue. 9 million, and adjusted EBITDA decreased by $340,000, or 2%. 4 million. 23.

7 billion, and payments for the nine months represents 25% of the total revenue compared to 17% last year. Banknotes revenue decreased 5%, and as I mentioned, this was primarily driven by a temporary disruption from branch renovations. Now nine-month expenses and adjusted results. 9 million, or 14%, to roughly $40 million.

1 million and, similar to the three-month analysis discussed previously, that increase reflected both payments volume growth and the transfer of Currency Exchange Intl's processing activity from EBC to Currency Exchange Intl's continuing operations. 2 million in salaries and benefits, $725,000 in stock-based compensation, and about $650,000 in information technology. Currency Exchange Intl has also spent an additional $300,000 on marketing in the last nine months. These increases were partly offset by a reduction in legal and professional fees; the prior period included costs associated with EBC's strategic review and other one-time advisory services.

4 million, down roughly 3%. 6 million compared to $7 million last year. 4 million were the reclassification of the cumulative foreign currency translation losses of EBC, as we've discussed in detail in the second quarter. Now let's look at the balance sheet.

The balance sheet remains strong and provides capacity to support seasonal working capital needs and growth priorities. At the end of the quarter, cash and cash equivalents totaled $105 million. 7 million in operating accounts, and, as mentioned, $29 million invested in AAA-rated money market funds. Now it is important to remember that cash is also the company's primary operating product.

As I like to call it, cash is our widget. A substantial portion of the operating cash balance consists of banknotes; depending on seasonality that could be between $50 million and $75 million, and those notes are held in our vaults, while operating bank accounts include customer settlement balances, accounts payable funding, and minimum balances maintained with certain banking partners. 3 million, and our $40 million revolving credit facility was completely undrawn at quarter-end. 2 million.