In 2023, Digital operations propel Intermex against Mexico's challenges
Intermex, a leading player in the cross-border payments industry, has announced a more conservative revenue forecast for 2024. The company expects a decline in market activity in Mexico, but several growth drivers could offset this trend.
Factors Affecting Intermex's Revenue Growth Projection for 2024
The decline in total revenues by 6.1% is primarily due to a reduction in service fees from a lower number of transactions, indicating pressure on transaction volume in Intermex's core business. However, this downward trend is partially offset by robust growth in digital transaction volume. Year-over-year digital growth stands at around 70%, increasing to about 80% in April 2025.
Intermex's strategic focus on the U.S. to Latin America remittance corridor, particularly Mexico and Guatemala, which account for about 80% of its gross margin, is supported by proprietary technology and strong partnerships. The company is also investing $2.5 million in digital product marketing in the first half of 2025 to drive further traction in the digital transfer channel and support revenue diversification.
Expense control measures, such as only a 1% increase in salaries and benefits, are helping Intermex manage costs amid revenue pressures. However, one-time transaction costs of $2.2 million related to merger and acquisition activity, notably the pending acquisition by Western Union, weigh on profit margins but may lead to synergies and growth opportunities post-merger.
The Pending Western Union Acquisition
The acquisition by Western Union is expected to create opportunities to leverage Intermex's operational expertise to drive targeted and sustainable retail growth, which could affect future revenue positively.
Financial Performance in 2023
For the full year 2023, Intermex's adjusted EBITDA was $120 million, a 14% increase. The EBITDA margin for Q4 2023 was 19.4%, and the company recorded revenues of $171.8 million for Q4 2023, representing an 11% increase from the same quarter in the previous year. The EBITDA margin for the full year 2023 was 18.2%.
2024 Revenue Guidance and Q1 Projections
Intermex forecasts a revenue growth of 3-7% in 2024, with a projected range of $681m to $702m. The company's projected revenue for Q1 2024 is between $150 million and $155 million, representing a 3-7% increase from the same quarter in the previous year.
Joe Baker, who is likely associated with the company or the article, has a LinkedIn profile, suggesting a professional connection. Intermex has also released a free account offer for access to research and analysis on cross-border payments globally.
In summary, while Intermex faces near-term revenue headwinds from fewer transactions and margin pressure due to M&A costs, digital transaction growth, strategic corridor focus, marketing investments, and the pending Western Union acquisition present growth drivers for 2024. The interplay of transaction volume trends and successful digital channel expansion will be critical determinants.
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