International Money Express, Inc. (IMXI) Q3 2021 Earnings Report, Transcript and Summary

Greetings. Welcome to the International Money Express Inc. Third Quarter 2021 Earnings Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. Please note, this conference is being recorded. I will now turn the conference over to your host, Mike Gallentine. You may begin.

Good morning, everyone and welcome to our quarterly earnings call. I would like to remind everyone that today's call includes forward-looking statements, including our updated 2021 guidance, and actual results may differ materially from expectations. For additional information on International Money Express, which we refer to as Intermex or the company, please refer to the company's SEC filings, including the risk factors described therein. All forward-looking statements on this call are based on assumptions and beliefs as of today, and you should not rely on our forward-looking statements as predictions of future events. Please refer to Slide 2 of our presentation for a description of certain forward-looking statements. The company undertakes no obligation to update such information, except as required by applicable law. On this conference call, we discuss certain non-GAAP financial measures. Information required under Regulation G under the Securities and Exchange Act with respect to such non-GAAP financial measures is included in the presentation slides, in our earnings press release, our quarterly Form 10-Q, and our Annual Report Form 10-K, including reconciliation of certain non-GAAP financial measures to the appropriate GAAP measures. These can be obtained in the Investors section of our website at intermexonline.com. Presenting on today's call will be our Chairman, Chief Executive Officer, and President, Bob Lisy; Chief Financial Officer, Andras Bende. Also on the call today is Joseph Aguilar, Chief Operating Officer; and Randy Nilsen, Chief Revenue Officer. Let me now turn the call over to Bob.

Good morning and thank you for joining us today. We are proud to announce another quarter of very strong growth across all of our operating and financial metrics. Let me highlight some of these accomplishments on Slide 3 Compared to third quarter of 2020, revenues grew 26.3% to $120.7 million, total dollar cent grew 36%. Net income was $11.5 million, an increase of 21.2%. Adjusted net income of $15.7 million, an increase of 28.3% and adjusted EBITDA increased 19.8% to $22.9 million. As has been the theme since we have been a publicly traded company, we again generated a record number of remittances during the third quarter with more than $10.5 million while transferring $4.7 billion for our customers. Underlying this performance, I want to commend the entire Intermex team, both in the U.S. and abroad. The Intermex brand continues to gain more traction each quarter. Our market share increased to a record high in our core markets of Mexico, Guatemala, El Salvador, and Honduras capturing a share of 21.8% as we grew 40% more than what was already a very robust market. The company's omnichannel strategy continues to meet our customers' needs while delivering strong financial results for our shareholders. We have spoken about it before, but particularly for those who may be new to our call, it is always worth highlighting. Intermex employs a growth strategy that focuses on the consumer and meeting their needs efficiently, effectively with a constant focus on security and timeliness. We provide choices for our consumers for what we believe to be the best retail and online product and service in the marketplace, enabling consumers to choose whatever is the best method for them to send and for their beneficiaries to receive money. On the send side, we partnered with engaged, carefully vetted top-quality group of retail agents located where our customers live and work. Both our agents and Intermex strive to provide the best quality of service in the industry. Same time, for those consumers who prefer to initiate remittances through their laptop or their smartphone, we continuously work to improve and expand our online digital business offering. Additionally, Intermex consumers can choose to send them retail by using cash or debit card or online by using debit card, credit card or ACH. On the payout side or receive side, we have thoughtfully assembled a network that delivers wires more efficiently and effectively than ever before while providing consumers with more options than any other competitor. Our customers and beneficiaries can receive money digitally into their bank accounts loaded on a mobile wallet, paid out at an ATM, or they may pick up cash over the counter at one of our convenient payment locations. Importantly, all of these funds are available in minutes. We believe our strategy is a major differentiator for Intermex, particularly when considering the widely differing demographics of those who send and receive money throughout the world. We believe that the cash option remains critically important in Latin American corridor where the vast majority of wires are sent and received in cash. One of the biggest opportunities that remains for the company is our retail digital business. There are hundreds of ZIP codes throughout the country that are either underserved or unserved by Intermex. This means we do not have a retailer in the ZIP code or we have fewer retailers in the ZIP code than would be optimal. We feel confident that we are in the best position to exploit these opportunities through our best-in-class retail sales force. A disproportionate share of these ZIP codes are found in California and in the Western states and are expected to produce significant numbers of wires. We have a tremendous opportunity for organic growth in the Western states, along with plenty of organic opportunity remaining even in our most established states. For the quarter, our agent base increased 13% over the prior year period, with most agents added in California West. Our agent growth helped deliver 19% increase in unique customers this quarter compared with the prior year period. We finished the quarter with 2.7 million unique customers who transferred with us. Our relationship with the 4 million customers who trust and value our service is a tremendous asset for the company. We will be able to market additional products like our card products that I will talk about later, and of course, our digital service to these consumers. In the third quarter, our customers sent money more frequently and also sent larger amounts. As I mentioned earlier, we delivered more than 10.5 million transactions, an increase of 23% over the third quarter of 2020. This is also the largest number of remittances ever sold by the company in one quarter and as a result, our principal sent increased 36% to $4.7 billion in the quarter again, the most of the company has ever sent in a quarter. With our expanding agent network, Intermex continues to capture market share, fueled by exceptional growth in transactions across our core markets of Mexico, Guatemala, Honduras, El Salvador as well as emerging markets. You can see illustrated on the next slide. We now have achieved a 21.8% market share in our combined core markets. We did this with a growth rate 40% faster than the total market for this period. Shown on Slide 6, emerging markets, such as Dominican Republic, Ecuador, and Nicaragua, among others, also continued to experience robust growth during the quarter. The one-year growth in these markets was similar to that in our core markets. The emerging markets had much more difficult comp versus last year. In total, our emerging markets grew transactions by 23% compared to third quarter of 2020. However, looking past the impact of the pandemic in 2020, our two-year growth rate for the third quarter is 66% for emerging markets and 39% for our four core markets. Both are very strong performances considering the overall market. While growing a very highly profitable base of retail agents and growing remittances at retail much faster than market, Intermex is also continuing to invest in our digital app and furthering our presence online. On the next slide, you will see the continued penetration of our digital online initiative with transactions increasing 71% compared to the prior year period. Based on the definition of some of our industry competitors, who defined a digital transaction as a transaction where either sided remittance is cashless, Intermex processes more than 23% of its transactions digitally. These remittances were either initiated cashless transactions on the send side or resettle cashless on the receive side. During the quarter, transactions that were deposited directly into a bank account increased 37% compared with the prior year period. Transactions processed through the use of a debit card at retail, although a small percentage of our overall wires, grew at 78% year-over-year. These transactions will continue to increase as the number of retailers who accept debit cards has expanded. Lastly, another key pillar of our growth strategy is our card product category. Card Direct, Prepaid MasterCard and Payroll MasterCard. We have been enhancing our system's infrastructure to efficiently and effectively support these products while adding field sales and support personnel to expand our presence in the market to drive meaningful contribution to future revenue and profitability growth. Before I turn the call over to Andras, I'll conclude by saying Intermex continues to execute at a very high level. That execution has led to significant gains in market share, strong growth in revenue, adjusted EBITDA, and net income. This has all been accomplished while we have simultaneously invested in the future of our company through the development of our new products. Third quarter represents another period in which Intermex has met or exceeded market expectations for revenue, adjusted EBITDA, and net income. Having now been a public company for 13 quarters, we have now met or exceeded our EBITDA and net income expectation for 13 consecutive quarters. We are confident in our ability to continue to execute our multichannel plan, which provides and fuels consumer choice, ultimately resulting in the company's continued growth and strong performance in what we believe is a tremendous growth opportunity that lies ahead. With that, I will turn the call over to our CFO, Andras Bende.

Thanks, Bob and good morning to everyone. Moving to Slide 8, let's walk through the third quarter results in a bit more detail. As Bob highlighted, it's been another quarter of strong execution in all areas of the business with plenty of new milestones achieved across our key measures. In the quarter, revenues were up significantly at 26% versus the prior year quarter, finishing at just under $121 million. Behind that strong growth were a few key factors, we had a 19% increase in customer count and a 13% increase in active agents. So our payments ecosystem and network of clients continues to grow and grow. This has helped us drive remittance transactions up 23%. Our customers sent more often in larger amounts, pushing total remittance principal up 36% versus last year. Those larger amounts also produced a revenue tailwind for us from the FX component we earned on those transactions. GAAP net income for the quarter was $11.5 million, up over 21% versus the prior year period. Our strong top line was the key driver with lower depreciation, amortization, and interest expense also contributing to a solid bottom line results. These improvements were partially offset by higher salaries and general spending related to new product initiatives like card, investment in digital, and enhancements and modernization of our technology. It's worth mentioning that within net income, we did have to work through two unusual headwinds this quarter; one, in line with our technology and software upgrades, we recorded an impairment of about $1 million in the quarter for capitalized software related to code we will no longer utilize; and two, a small banking institution that we use was put into liquidation by the Mexico Bank regulator resulting in a $2 million reserve for company deposits held there. Excluding the software write-off in the bank reserve, along with other certain noncash expenses, adjusted net income increased 28% to just under $16 million, which you can see on the next page. Our strong growth in revenues, partially offset by growth in operating expenses drove adjusted EBITDA, up 20% to $23 million. Adjusted EBITDA margin for the quarter was 19%, our second quarter in a row of 19% plus margins. A year ago, margins were higher, although at that time, we are benefiting from an extraordinarily lean stretch of cost management as we're managing through what was still a great deal of uncertainty from COVID. Those savings last year accentuate this year's investment in digital card and the retail front end, all of which positioned us well for 2022. Moving on to Slide 10, given the strength of our third quarter results, our execution trajectory in an incredibly valuable and growing payments ecosystem, we're again increasing our full year 2021 guidance for revenues and adjusted EBITDA and narrowing our net income and adjusted net income ranges. We now expect revenue to be between $450 million and $455 million, GAAP net income between $44 million and $45 million, adjusted net income between $52 million and $53 million, and adjusted EBITDA between $84 million and $85 million. We continue to balance revenue growth and profitability while simultaneously investing for the future of our company, especially in technology, talent, and marketing. Our expectation for a strong finish to the second half is allowing us to accelerate many of these investments and position us for, what we feel will be, another standout year in 2022. With that, let me turn the call back to the operator for questions.

Thank you. [Operator Instructions]. Our first question is from David Scharf with JMP Securities. Please proceed with your question.

Great, good morning everybody. Thanks for taking my questions. Terrific results again. And Bob, I guess, first question, just it's really more macro commentary or speculation on your part, some of the larger providers or Western Union and MoneyGram, both kind of remarked that demand didn't come in quite as strong or the outlook is expected largely a function of the Delta surge and supply chain issues. But they actually called -- they did call out Latin America as sort of one of the few bright spots. So definitely in the right place at the right time. Is there anything in particular we ought to be focusing on either in the headlines or just paying attention to on your biggest core markets, just kind of curious whether or not this kind of growth can be sustained if there are any sort of macro headwinds on the horizon we should be paying attention to in your biggest corridors?

So, good morning. Thank you for the question. I think the first thing is, I'd like to say, is be careful when you look at -- you mentioned Western Union, so I'll follow suit with that. When you're talking about the Latin American corridor, they're usually referring to that as inter Latin America. So they're not referring to U.S. When they talk about U.S. headed to Latin America, they're talking usually about U.S. outbound. So just -- that's just one thing. And in some of the, I'm not an expert on anyone else's business, but in some of our competitors, they suffered such a downturn internal Latin America last year, being really in the throes of COVID that they're lapping very, very easy numbers. So you might want to look at the two-year trend on those. But I'm not sure about other's businesses, we want to focus on ours. That's what we do. We're not seeing any real challenge that hasn't existed before. It's all about our execution. It's about our superior technology at retail or selective process for picking retail agents. It's about knowing where our customers are, providing the very best service in the world for them, picking up our customer service line in four seconds, consumers continue to move towards our brand. Some of the larger competitors you mentioned really are not necessarily even in contention where those consumers are because they do business through large box stores, and they haven't really modified their model over time. So all of those things have been working for us. We don't see anything on the horizon that looks like a huge reversal. Obviously, no one can look at the future and continue to project 25% revenue increases. And as you heard from our discussion, we now are talking about our -- keep in mind, we talk about our growth in transactions. When you look at the two-year trend, it's even -- it equally or even more spectacular because we had a good third quarter last year. So if you look at two years, we've grown our core market almost 40%, 39% plus two years over 2021 over 2019. Our emerging markets are up 66%. So we continue to have consumers choosing at retail and also choosing online. Our online business is growing, but -- and that's just a factor of all those conditions that I talked about. So we're not seeing anything that would indicate this is a temporary situation. At the same time, we're not about ready to state the 25% revenue growth is going to be into perpetuity. Obviously, that's a tough one to continue to attain forever.

Got it. Got it. I appreciate the clarification. One follow-up. You had some brief comments on kind of Card Direct. We've been hearing for a number of years’ kind of plans to roll out prepaid products, either in retail or with employers. Can you give a little more granular update on kind of where you are on that front and maybe...?

Yes. Well, we have been rolling it out with employers. We don't talk a lot about it as we do most of our anything, even our retail money transfer business in great detail, particularly a new sort of vertical for us, but we've been rolling it out. We're building a sales force that rolls up underneath Randy Nilsen, you know is our Chief Revenue Officer. We've got folks in the field now selling to employers the payroll card. And as you know, we feel like we've got a little bit of a shortcut to those employers since we process those checks. We're not check but we process checks through our check reconciliation for our product. So we know who are the employers who create a lot of checks that end up at our retailers. So that's really underway, and it's growing for us nicely. Where the second piece of that is a retail card product, which is more a general purpose card that can be converted into a MasterCard or MasterCard Debit Card in the long term with the individual reusing it, reloading it, and that will be rolled out sometime in fourth or early first quarter, we haven't really picked. There's just a lot goes on around the holidays and stuff like that. So those are doing well. And we think that there'll be -- they're important because they're a bridge product. A lot of our consumers, who we talked about for years, have not really been empowered with the ability to do transactions in a cashless way. So we believe that we'll also empower a lot of our consumers to be able to if they choose to go online and access our online product, but also to be accessed you're sending transactions from retail through a card-based, debit-based transaction at retail.

Got it, great. Thank you.

Our next question is from Mark Palmer with BTIG. Please proceed with your question.

Yes, thank you. Good morning and thanks for taking my question. Excellent quarter again. If you could talk a bit about capital allocation priorities, you've now got over $125 million of cash on your balance sheet, you've got the full access to your credit line, what are you seeing in the environment in terms of opportunities for potential acquisitions and barring that, what are you thinking with regard to deployment of some of that cash?

Yes. I think it's -- I'll answer your question first about what are we seeing in terms of opportunities. We've been very active on the M&A front, recognizing that our kind of underlying financial discipline, we're not going to put ourselves in a position where we're going to either overpay or over lever and there's a lot of that going on in the market. So we're having to be very selective. But I'd say we're being very active, we've been in connection with a lot of avenues that would work for the company and we will be able to share more soon. But I think that we like on the M&A front, we like -- obviously, our core and what we're excellent at, we like opportunities to expand there, into markets where we're not as penetrated and we want to be. Also where we have opportunity from an outbound perspective from the U.S., where their markets, particularly West of the Mississippi where we may be able to acquire into and have more of a presence, those are kind of top of mind. I think, in addition to that, there are a lot of adjacencies in our space, where we could -- where we have opportunity, where synergies where they could be either from a technology perspective, a customer perspective, or a product perspective, but not exactly what we do, but there's enough overlap where we would see a lot of benefits. So I think from an M&A perspective, that's first in line. I think you would have noticed the share buyback that we announced this quarter. And what I would say about that is we have to kind of take that in conjunction with what we announced earlier this year in terms of the refinancing. So that was all around flexibility. So we have a much larger credit line, much better terms that's what we did earlier this year. And in this last quarter, we took a look at creating the flexibility for us to return capital to shareholders when it made sense. And so we have the buyback program there. It's of a size that's meaningful and I would say that we're -- we are and will be opportunistic in terms of when and where we activate that buyback. But we have been talking about a buyback with the Board for some time and I think after the last quarter, when we really had out of the park results, and we didn't necessarily see the market react the way we expected. We just realized as a Board and the company that there was a lot of value there and initiating a buyback made sense.

Thank you and I have one more question, which just pertains to the pricing environment. And Bob, you had said that you're not really seeing some of the challenges in your business that we've heard about from others in the space. What are you seeing on the pricing front?

I think we're seeing relatively the same as we've always seen. There's always going to be a pressure point and I'm going to talk about retail primarily right now. I assume that's where the question is directed towards. We're always going to see the small guys that are desperate in certain regional areas, be aggressive related to both agent commissions and discounting in the form mostly of increased exchange, increased pesos, increased quetzals per dollar. But I don't think it's heightened at all. I think it kind of comes in ebbs and flows. And it's hard for some of them to sustain because some of them have gotten to a place where based on scale, that's really difficult to discount. So we're seeing our margins, now some of that is buoyed by the fact that we've had higher principal amounts, but we're seeing really good solid margins, particularly in our core, particularly in our markets where there is an exchange component, which would be primarily Mexico and Guatemala. So price compression for us is something we deal with, but not in a way that is hindering us from driving profitability or continuing to drive the EBITDA margins that we'd like. Randy is here as well and I don't know, Randy, if there's anything you want to add to that?

Yes, I would just add to that, to Bob's point, we see it, we feel it every day from the little smaller companies. But our sales team, I think, is very, very good at selling through that and talking to our agents and consumers about all the other solutions and benefits we're bringing so that we don't have to compete on price or take part in the price compression.

Thank you very much.

[Operator Instructions]. Our next question is from Timothy Chiodo with Credit Suisse. Please proceed with your question.

Thanks a lot for taking the question. Slide 7 and the comments there, I thought were really helpful, and I think you very accurately called out that the definition of digital send can be different across platforms and sometimes it includes in-store on one end of that or investing [ph] cash. The mix that you shared of the 23% in Q3 for total digital as a send or receive, are you able to provide any context on the portion of those that are digital on both sides? And then as a brief follow-up, just any comments around the marketing approach for the online customers, how that might differ, how you plan to expand those efforts? Thanks a lot.

Yes. I mean we won't disclose in great detail. I'll give you a little bit more around it that the bigger part of that, the bigger share of that is transactions deposited into bank accounts on the other side of the border, which would be considered digital because they're digital on one side, cashless on one side. So that would be the bigger part of that. We're not really -- haven't really disclosed the different components of that, but that's the bigger side of it. What was the other part of the question?

The marketing approach for online transactions, how -- clearly how it differs in your approach to attracting customers?

Well, I think the online approach differs in many ways. Our conduit to the consumer retail is through the right retailer and the right neighborhood where we know consumers are, and we know competitors are, so we know wires are there. And it's about us being in that same area with a very superior product that differentiates itself. So it's really simple. And the customer acquisition cost is much lower. We've talked about that before, and I won't go into the numbers on that. On the online side, it's very much an online social media marketing kind of product. Today, we don't really market to our existing customer base, which we talked about quarterly how many people that is. But on an annual basis, that's over 4 million customers. And today, because of the vibrancy of our retail business, because it's been growing revenue at 25% thereabouts year-over-year, we're not going and trying to convert those consumers. We're bringing consumers to online separate and apart from that. There's a couple of things that we're doing that we won't disclose and how we'll market to consumers who have been at retail. But again, we're not going to try to market to our retail customers that are customers of our retail agents and bring them to online. We never really think that's a productive process. We think that we offer -- as we speak about often, the omnichannel approach. Our approach is not to try to force people into actions that may not be in their best interest or at least what they want to do today or in the best interest or what wants to happen from their receiver south of the border. That's why we offer things like mobile wallets and over-the-counter and bank deposits and credit cards, debit cards accepted at retail. So from our perspective, the way that we'll market through our online business is very much through social media and online marketing. And there's a real process for that. There's been a lot of people doing that, not just with remittances, but all kinds of online, and there's a great history of that and a lot of agencies out there to help us. We picked a really good company to help us with that marketing, and that's the way we'll bring people today, at least initially. If we start to see a degradation of retail, and for those that had their concerns about the degradation of retail, we're not seeing it now. I mean, 25% growth in revenue in the quarter; 39% growth, two-year growth in our transactions; for our core, 66% growth in our emerging markets. If we started to see a degradation, our approach would modify and our approach would be more aggressive towards the retail consumer. But today, the retail consumer is more profitable than the online consumer by far. It's one of the reasons when you look at some of the folks that have recently gone public that their profitability isn't near, what the people that are retail is. So we're not trying to convert people to online or are not ready to be online, incur that extra cost to incur -- to bring them there and then drive that lower margin per transaction today that would be part of that. So the approach will be very much those that are there and shopping for online, we want to be very much a strong competitor in that process, and we'll continue to go after them in that traditional online marketing way going against the other online providers.

Excellent, thank you for all that context. We appreciate it.

Thanks.

Our next question is from Alex Markgraff with KeyBanc. Please proceed with your question.

Hey team, thanks for taking my question. Can you talk about some of the progress with the upgrades and enhancements around your IT infrastructure, just maybe provide some detail as to what exactly has been done to date and some of the benefits that you're seeing from this some of the early benefits? Thank you.

We have a number of projects, and I'm not sure what you're focused on exactly. And I'm not sure what we may have told you, can you be a little bit more specific. I mean, we're in the process of updating our core product at retail, both software and hardware. We're in the process, final stages of our new application online. That will be -- is in testing now and will be available to our consumers as a very big upgrade to our online app. It will be a native app, probably either late in fourth quarter or early first. So we have a number of things that are going on. We've -- over the last few years, we've probably tripled our spend on technology, both in-house and with vendors on the outside. So it's a huge focus for us. We've always been -- if you take away for a minute and not think about the new frontier of online, and I'll deal with that in a second, but when you think about retail, we've always been the cutting-edge guys, the fastest, most reliable technology, the easiest to use. And that differentiator, we are working hard to continue to keep with our new upgrade of all of our core business at retail, again, along with a big upgrade for all of our top agents with new hardware at retail. And then when it comes to the online business, we're in the final stages really, in the testing stages internally of our new native app, and that will be rolled out either late this quarter or early next quarter for our consumers, and we think that will be a best-in-class. We think that, that provides us the combination that's rare in the industry today. Our world-class back end with a front end that competes very handily with anyone. We've had time to be able to look and observe and look at what we think are the best factors relative to the online business, and we've been building that into that app. And we're going to combine that with the fact that when you actually dial our customer service and other things like that, you get somebody before you get tired of waiting, like in four or five seconds, which is not what you get with probably any other provider, but especially the online guys.

And Alex, this is Andras. So I'd just add, it's less exciting. But obviously, we're investing in cybersecurity as well. That's something that's top of mind with us and investors, so we're putting appropriate money to work there, too.

Great. Thank you, that answers the question. I appreciate the detail.

Our last question is from Mike Grondahl with Northland Securities. Please proceed with your question.

Hey, guys. My congratulations to -- on another strong quarter. Bob, any expansion or updates on the sales force, anything to call out there?

Yes. I'm going to ask Randy to answer that, and I'll add some color if needed. But Randy, do you want to go ahead?

Sure. Well, good morning Mike. We've had several upgrades in terms of sales leadership positions that we're thrilled about over the last few months. We've -- as Bob mentioned in his opening comments, we've identified literally hundreds of unserved ZIP codes around the country. We've basically conjoined -- taking those ZIP codes and made them districts and hired now 13 additional sales folks to work those unserved districts. So we know there are hundreds of agents, opportunities in those ZIP codes. Thousands -- hundreds of thousands of wires that we're not reaching today, those consumers because we didn't have the agents in place. So with that additional sales team, we've added them in September, a couple of them in October, and we're out of the gates really quickly here in terms of their contributions and what they're adding to our agent network.

That's great to hear. Bob, any thoughts or insights just on 36% principal growth, how do you think about that going forward?

Part of that is buoyed by our transactional growth, right. Part of it is that some of the countries that grew faster are countries with higher principal, so there is some movement, right, some shifts change there. But another piece of it is that the economics of remittances have changed a bit. The average remittance has gone up, particularly in our case, we've always been a company that is at the higher end of the average principal amounts. We think that's partly due to that when someone is sending a larger amount of money, I'm not talking about ones that are raise flags, but $500, $600, $700, that those are the ones that we get because of the surety that it gets there on time, and we've got great customer service and all the rest of it. But there's clearly a component that's there based on the economic conditions and based on the stimulus that have been out there, it's hard to pinpoint what percentage of our consumers are benefited directly, but I believe they've all benefited directly or indirectly. What I mean by that, they may be recipients of a government stimulus, but if they weren't, they worked for someone that was a beneficiary of a government stimulus. Somebody got an X number of dollars and decided to finally put the deck on the back of their house or do the landscaping or whatever. So the economic activity has been greatly increased. We also have a bit of a thought process that says that, as our economy has heated up, at least in terms of activity and in terms of cash in the system, some of the recipient countries are still lagging and suffering a bit from COVID or the second wave or Delta or what have you. And as a result, there's a greater need that exists south of the border and more cash north of the border. So that's buoying that average send amount. But behind that, let's not lose sight on the fact that there's tremendous transaction growth that's also there that's driven that 36% amount of principal growth. We don't necessarily rely on that. As you see a lot of the projections that we've had over time are kind of modified. But now we've started to see that now for succession of quarters, and typically in the past, we haven't seen that come back to its origins, what we've seen is a plateauing and that's what we probably expect, although we're not depending on that as we project our future numbers.

Got it, got it, great. Well, hey congratulations again.

Thank you.

Thank you. We have reached the end of the question-and-answer session, and I will now turn the call over to Bob Lisy for closing remarks.

Thank you all again for joining us for the third quarter. We look forward to talking to you, well not too soon because it will be fourth quarter, so it'll be next year. But thanks again for your time and attention. We'll talk to you soon. Have a great day.

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.