On Thursday, Currency Exchange Intl (TSX:CXI) discussed third-quarter financial results during its earnings call. The full transcript is provided below.
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Summary
Currency Exchange Intl reported a 5% increase in total revenue to $22.4 million for Q3 2026, driven by a substantial 54% growth in payments revenue, offsetting a 4% decline in banknotes revenue.
Adjusted EBITDA rose by 3% to $8.5 million, and adjusted net income surged by 31% to $5.6 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.
Operating expenses increased by 11% to $14.6 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%. The main highlights of the third quarter are: revenue increased by $1.1 million, roughly 5%, to $22.4 million. Payments revenue increased by about $1.8 million, or 54%, to close to $5.2 million, while banknotes revenue decreased by $700,000, or 4%, to $17.2 million. Reported EBITDA was $8.1 million, fairly consistent with last year and down about 1%. Adjusted EBITDA increased by $220,000, or 3%, to $8.5 million.
Net income from continuing operations was $5.3 million, consistent with last year. Reported group net income increased by $1 million, or 24%, to $5.3 million because the prior-year quarter included a $1 million loss from EBC’s discontinued operations. Adjusted group net income increased by $1.3 million, or 31%, to $5.6 million. Diluted earnings per share was $0.87 compared to $0.67 last year. Adjusted diluted earnings per share were $0.93 compared to $0.68.
Now let’s talk about revenue performance. Total revenue of $22.4 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. Banknotes represented $17.2 million, or 77% of our total revenue, compared to 84% last year. Now compared to the second quarter of 2026, revenue increased by $4.4 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. Payments revenue increased by $1.8 million, or 54%, to $5.2 million. As mentioned, business trading volume increased 33% to $2.4 billion, up from $1.8 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. Banknotes revenue, as I said, decreased $700,000, or 4%, to roughly $17.2 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. Operating expenses increased by $1.4 million, or 11%, to $14.6 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.
Now let’s look at our reported EBITDA at $8.1 million, down about 1%. After adjusting for stock-based compensation and the applicable prior-year items, as mentioned, adjusted EBITDA increased 3% to $8.5 million. Net income from continuing operations was $5.3 million, consistent with last year, and basic and diluted earnings per share from continuing operations were $0.89 and $0.87 respectively, compared to $0.85 and $0.84—so fairly consistent with last year.
Reported group net income increased 24% to $5.3 million. Now, important to note, the prior-year quarter included a $1 million loss from discontinued operations, and on an adjusted basis the Group net income increased 31% to $5.6 million, and adjusted earnings per share increased to $0.93 from $0.68. 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. Over the nine months, revenue increased by $3.2 million, or 6%, to close to $56 million. Payments revenue increased by $5.2 million, or almost 60% over the last nine months, to $14.1 million, supporting a $2 million, or 5%, decline in the banknotes revenue. Reported EBITDA decreased by $1 million, or 6%, to $15.9 million, and adjusted EBITDA decreased by $340,000, or 2%. Net income from continuing operations for the nine months decreased by $244,000, or 3%, to $9.4 million.
Adjusted Group net income increased by $2.2 million, or 29%, to almost $10 million, and adjusted diluted earnings per share increased to $1.66 from $1.23. Now for the nine-month period, payments business trading volume increased 40% to roughly $6.6 billion from $4.7 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. Operating expenses for the nine-month period increased by $4.9 million, or 14%, to roughly $40 million. The most significant increase was the bank services charges, which rose by $2.1 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.
Other noticeable increases over this nine-month period included $1.2 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.
Reported net income from continuing operations was $9.4 million, down roughly 3%. And as mentioned, reported group net income for this nine-month period was $2.6 million compared to $7 million last year. The current year’s group results included the $6.8 million loss from continued operations, of which $6.4 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. This includes roughly $65 million of banknotes in transit, in our vaults, at tills, and at consignment locations, $11.7 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.
Working capital increased to $85 million, total equity is at $90.3 million, and our $40 million revolving credit facility was completely undrawn at quarter-end. Now for the first nine months, reported cash flow from operating activities was an inflow of roughly $8.2 million. Adjusted operating cash flow, which removes specific non-cash items and volatile working capital movements, created an inflow of $13.7 million compared to $12.3 million last year.
We also continue to focus on return of capital to our shareholders. During the nine-month period, Currency Exchange Intl repurchased and cancelled 241,700 common shares for $4.2 million under its normal course issuer bid, or share buyback. Now to summarize, Q3 demonstrated the strength of our diversified model. Payments delivered another quarter of substantial organic growth. Banknotes performance continued to be affected by shifting demand for higher-margin exotics, branch relocation activity, and a more moderate travel environment.
We continue to add wholesale customers, expand our agent footprint, and invest in our direct-to-consumer platform. Currency Exchange Intl’s strong liquidity and capital position allows us the flexibility to support seasonal demand, continue investing in the business and AI and financial institutions integrations, and pursue our strategic priorities across both payments and banknotes. And with that, I’ll turn it over to our CEO, Randolph Pinna.
Randolph Pinna, President and CEO
Thank you, Gerhard. Thank you, everybody, for joining on this early morning. I appreciate everybody’s support, and I feel that this was a good quarter. I want to start: one of our shareholders, a longtime shareholder that runs a successful fund in Montreal, has always given me the advice to bring out what he called the elephant in the room. So the biggest product that CXI offers is currency exchange, the physical banknotes. And the reality is, based on geopolitical situations—two wars that have been going on for too long—inflation, and other concerns has reduced the banknote activity for the group.
It is noticed in our stores, it’s noticed in our online store, it’s noticed at our wholesale bank customers. The fact is that we remain flat is actually a positive note, knowing that we’ve added additional transacting locations. As Gerhard said, we’ve added additional agents, some other bank branches, we’ve expanded our online store to other states. And so we’ve continued to grow our banknote business in spite of a tougher—or as Gerhard called it, a moderate—travel airtime.
We noticed that the biggest effect is on inbound travel. There are especially places like Canada where the locals are choosing other destinations instead of us at this time. We do feel that’s a temporary measure. So longer term, when things get back to more normal, we are excited to know that we have additional states to service. We have additional branches to take care of, and we feel we’re in a great situation to take advantage of any rebound in the travel industry.
With all of this, we are continuing to focus our banknote business while our payments focus is very good and clear, and we’ll talk about that next. But on banknotes itself, our plan is to continue to add additional locations, additional agents, and diversify our client type to some select non-financial institution retailers such as national brands—maybe grocery stores or regular retail stores—that will appreciate the complementary advantage of offering currency exchange, generating them new income as well as increasing their existing store sales.
We’ve identified several industry types besides grocery stores, for example, that we see as opportunistic where clients will naturally want to do their currency exchange with their current relationship. We are also selectively beginning to expand international customers. Banks in certain select jurisdictions are interested in doing currency exchange with an established U.S. processor of cash and payments. And so we are carefully expanding our international as we go forward with some select customers.
We are very happy with our banknote business right now and we do feel we will continue to be the leader of foreign currency exchange for both banks and non-banks in the U.S. on a go-forward basis. Moving to payments. We see that this is a very good result for our business. We’re very pleased. I have to give a shout-out to Wade Bracy, who’s the Managing Director of the entire wholesale unit, as well as Chris Johnson, our lead vice president leading the entire sales team and the implementation team.
To begin with on payments, what’s new this year is our software as a service. We have established a direct relationship with the Federal Reserve Bank, and we are now connected to the FedLine. This enables us to utilize our current rails that are very often in place at banks for currency exchange or checks that now can actually use us for all of their payments. We can connect them to the Federal Reserve for domestic payments. And of course, we’re the foreign currency exchange processor for foreign wire payments.
And so we’re continuing to see this grow. We’re adding on new banks every month to our domestic offering, which increases our fee income as well as gives us some more foreign currency wire transfers as well. So we are very pleased with this growth, and we anticipate additional growth on that over the months ahead. We will continue to focus on integrations as well, tapping into existing flows of wire transfers, typically on core banking software systems.
But there are other opportunities as well. And so, as you’ve seen, Chris and Wade are very focused on growing our existing customer revenues by improving our technology and our capabilities—notably SWIFT, with our SWIFT GPI. As well as we have now, our treasury unit has established two new wholesale correspondent relationships which will lower those wire fees that Gerhard was talking about. Because it is expensive to send wires to foreign banks, all the rails need to be compensated.
But with our higher volume now we have been able to onboard a global wholesale bank, which I’m very pleased with, and this will help us on a go-forward basis on our current flows. Most importantly is Chris Johnson and the entire sales team have been successful in expanding our customer base, getting new opportunities for us to process wire transfers, and this is a focus for us going forward. So in summary, I feel the company’s doing very well on the banknote side—growing and diversifying our revenue types, our customer types—and we are continuing to diversify our overall revenues by expanding our payments software services, our wire hub as we call it, for doing both domestic processing as well as FX processing. So with that being said, I’d like to open it up. Questions? I just remind you, if you could just ask one and maybe a follow-up question, just to allow others to get their questions in, and then requeue if you have more than that. So thank you.
OPERATOR
Thank you, ladies and gentlemen. We’ll now begin the question-and-answer session. Should you have a question, please press star followed by 1 on your touchtone phone. You will hear prompts that your hand has been raised. Should you wish to decline from the polling process, please press star followed by 2. If you are using a speakerphone, please lift the handset before pressing any keys. And again, just as a reminder, we do ask everybody to stick to two questions.
If you wish to ask another one, please press star 1. Your first question comes from Robin Cornwell from Catalyst Equity. Please go ahead.
Robin Cornwell, Catalyst Equity
Hi, good morning and a great quarter. My first question is on the EBITDA margin for payments. Could you discuss a little bit more as to how your transaction volumes are increasing substantially, but also the probably size of each transaction is maybe getting bigger, and if the individual transactions do get larger and larger, are you able to maintain your EBITDA margin?
Gerhard S Barnard, Group Chief Financial Officer
Thank you for that question, Robyn. We are actually able to increase our EBITDA margin in the payments-specific product line. If you look at our financials a few quarters ago, we were able to publish that specific segment report which clearly indicates that we’re pretty much above the 20% EBITDA margin at this point in time. Important to notice, when we look at payments back and forth, we do international and, as Randolph said, domestic payments.
There is a transaction fee when we do the foreign exchange. So euros to U.S. dollars—obviously there’s a foreign exchange, there’s a FX fee—and then we also do U.S. to U.S. wires. So in short, if you look at our wire business, the size of the transaction, if it’s U.S. to U.S., is at a fee. It doesn’t necessarily increase our revenue on the foreign exchange side for that. But overall, the gross margin of the payments business is basically affected by the banknote charges, by the charges of wire fees as well as commissions paid.
And our new signed-on correspondent banks will assist in negotiating bank charges or wire fees down over the next quarter or two.
Robin Cornwell, Catalyst Equity
So basically you expect the margins can be pretty well maintained with higher volumes.
Gerhard S Barnard, Group Chief Financial Officer
We’re very happy with the margins in the payments business, and as we continue to manage the cost, which is mostly the wire fees, with enhanced correspondent and international banking relationships, that would contribute positively to the EBITDA margin.
Robin Cornwell, Catalyst Equity
Okay, great, thank you. My second question is, you mentioned the new wholesale bank relationship with a very large global bank. I wondered if you could expand on this relationship and how it’s progressing, how you see it progressing, and also whether or not this is an exclusive. In other words, sometimes when you do big relationship deals with global banks, they kind of get you into an exclusivity. Maybe you could expand on that whole relationship.
Randolph Pinna, President and CEO
Sure. It’s a new—I’ll take that, Gerhard. First of all, I wanted to give a shout-out to both Gerhard and Katie Davis in the finance unit for establishing this relationship. Wade was also involved, I was involved, but it is a global bank, so they process for other banks around the world, of course, and other FX providers. It was a volume thing where we’re now large enough. The Exchange Bank of Canada relationship that was in existence prior helped us with this team.
So no, there’s not an exclusivity where we have to do X volume with them. With the improved pricing we will want to do a little more. We do have respect for our current banks as well, so we’re not wanting to just move and put everything into one basket. But it is a new global bank relationship. They’re based in Europe, and I don’t have permission to mention their name, so I have to keep that confidential. It’s a well-known processor of FX around the world, and we’re just very pleased to have that relationship.
We’ve also expanded domestically here in North America with another bank as well. As we continue to focus on what you were asking about—the margin on processing payments—is done by revenue: how much do we charge, and then how much does it cost for me to execute. And while we’ve done better with this SWIFT automation and recognition on the best way to move and convert money and when to convert money is on one end, the cost to move that money is the other.
And so again, Katie and Gerhard have executed on their strategic goal of diversifying and improving the alternatives we have for the processing rails that we can use. And so to finish that question: no, we didn’t have to say, you get 90% of our volume or anything like that. There’s no exclusivity there. And certainly it’s not in the reverse, because they are a processor for tons of institutions around the world. So we’re just happy to be a member of them.
And I’ll be seeing them at the big conference in Miami later this month to shake hands in person, which we’ve already done when we signed our deal. Hopefully that answered your question, Robin.
Robin Cornwell, Catalyst Equity
Okay, that’s great. Thank you. That’s all from me.
Randolph Pinna, President and CEO
Thank you, Robin.
OPERATOR
Thank you. And your next question comes from Jason Siniski. Please go ahead.
Randolph Pinna, President and CEO
Hey, Jason.
Jason Siniski
Hey guys. Good morning. I just wanted to first follow up on the payments questions that Robin was asking. I think, if I’m not mistaken, it does look like the EBITDA for that segment was kind of flattish year over year. So in other words, the margins compressed. Gerhard, is that just related to the bank charge issue, you know, with the closure of EBC, or why did the margins compress for the segment year over year?
Gerhard S Barnard, Group Chief Financial Officer
Yeah, you’re right. Hello, Jason. Yes, that is better. I think that will sort itself out the moment we have these bank charges from discontinued to continued operations out of our numbers, out of our reported numbers. So. Yes.
Jason Siniski
Okay. Because I’m just trying to understand that going forward. So it sounds like, you know, this initiative you just discussed with the global correspondent bank, that should help you get your costs down. Is there also an operating leverage component to the payments business where, as you continue to grow revenue, you should just naturally see margin expansion as you leverage your fixed costs?
Gerhard S Barnard, Group Chief Financial Officer
Yeah. And Jason, I think you touched on what Randolph also mentioned is the largest cost for us in the payments business is the fees related to sending the wires. So as we continue to address that with international and correspondent banking relationships, the second largest cost is our commission paid to our sales teams, which we’re very happy to do because they continue to grow this business. So we’re addressing the one charge that really goes straight down to the bottom line, and that is the cost of sending a wire.
Jason Siniski
Right. Okay. So it sounds to me like this year there was kind of a one-time issue with the EBC closure and your cost to fulfill the wire effectively going up for that reason. But going forward it sounds like that obviously won’t be an issue and you should actually really get the cost to fulfill to go down. So you should presumably see EBITDA grow faster than revenue in the payments business going forward.
Randolph Pinna, President and CEO
Yeah, I would agree with that, Jason, because we don’t need another Wade or someone like that. We may have to hire an additional person in the processing unit, but the heavier cost will be spread out as the business continues to grow. And simultaneously we’re driving down the physical cost of each transaction. So yes, I’m comfortable with saying that we should see an improved margin over time as it continues to grow.
Jason Siniski
Okay, that’s helpful. And the second question I wanted to ask was just kind of big picture. So the company’s reported, I think, $1.65 of adjusted EPS year to date. Last year in Q4 you did about $0.70. I mean, assuming there was nothing unusual in the Q4 last year, I mean you’re tracking to something like $2.30, $2.40, $2.50 of EPS for this year. That’s in U.S. dollars, obviously. So even before you reflect the excess capital that you’ve talked about before, the stock looks like it’s trading at under 10 times earnings.
So my questions on this are twofold. One, putting together everything you’ve talked about with some of the softness you’ve seen in banknotes, what we just talked about with the payments business, it feels like the outlook for EPS is to grow going forward. So maybe confirm that it doesn’t feel like there’s anything unusual that would cause EPS not to grow from here. And then the second part of that is just on the buyback. If I look at SEDI, it looks like you have a limit on the buyback of $27 Canadian, which with the EPS you’re reporting, I mean, that’s like, I don’t know, eight times earnings or something, again not even reflecting the excess capital. So the question is, am I right that there’s a limit on the buyback to $27 Canadian? And if so, why do you have a limit at that level? It just seems like a very low valuation for the company.
Randolph Pinna, President and CEO
So the first question, Jason, was about do I feel if there’s going to be.
Jason Siniski
Yeah, basically, Randolph.
Randolph Pinna, President and CEO
Yes. There’s nothing that we’re aware of that is going to have us not perform as we typically do each quarter. So that’s the easiest question to answer is that we’re confident that this fourth quarter, which we’ve already started, is similar to a fourth quarter that we’ve always had. And as Gerhard said at the beginning of the call, the third and fourth are our better quarters of the year, whereas the first and second are the more softer ones in the year.
And so I’m comfortable confirming that we’re expecting a normal fourth quarter which could, like we’ve seen this whole year, have softer than normal banknote activity due to the wars and, you know, some personal sentiment about coming down south to America from Canada, for example. But it should be a decent quarter. Normal. We don’t forecast publicly these numbers, but I don’t have any knowledge of any critical thing that’s going to change it. You know, if we have a third war or something, then something could deviate.
But I suspect that things will be similar to how they’ve been this whole year in both categories, payments and in banknotes.
Jason Siniski
Okay, and then the second question just on the buyback. So it does appear that you have this $27 Canadian limit and just basically asking how you arrived at that given the low implied price-to-earnings multiple plus the excess capital that you’re holding.
Randolph Pinna, President and CEO
Well, we are keen on buying back stock. We’re limited by how much we can buy per day. And each quarter the board reviews that buyback and approves additional funds for the buyback. And based on the trading or the opportunities, if there’s a block or anything, then we can participate in that. So our move towards buyback has not changed.
Jason Siniski
All right. Okay, thanks.
OPERATOR
Thank you. And there are no further questions at this time. You may proceed with your conference.
Randolph Pinna, President and CEO
Okay, well, I just want to thank everybody again for their support of Currency Exchange Intl. As always, Gerhard and I, along with Bill, are happy to have any follow-up calls and discuss what’s been publicly discussed here. So please reach out to Bill or us if you want, and we look forward to seeing you at our next call, if not sooner. Thank you.
OPERATOR
Have a good day.
Ladies and gentlemen, this does conclude your conference call for today. We thank you very much for your participation and you may now disconnect. Have a great day, everyone.
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