Currency Exchange International (TSE:CXI) reported first-quarter fiscal 2026 net income of $1.5 million, up about $700,000, or 88%, from the prior quarter, as the company highlighted strong growth in its payments business and continued progress in winding down its Canadian banking subsidiary.
Management said quarterly revenue was maintained at a consistent level while results reflected $1.7 million of net income from continuing operations and a net loss of about $200,000 from discontinued operations tied to Exchange Bank of Canada (EBC). The quarter included non-recurring items, including restructuring charges of about $140,000 related to the closure of CXI’s Miami vault and about $36,000 of severance costs in the discontinued Canadian operations.
Continuing vs. discontinued operations and EBC wind-down
Barnard said EBC has formally applied for approval from Canada’s Minister of Finance to discontinue under the Bank Act. Management expects the required regulatory approvals will be granted during the second fiscal quarter of the current year, after which the company plans to liquidate EBC’s remaining assets and liabilities and distribute the net assets to CXI as sole shareholder. As of Jan. 31, 2026, net assets directly associated with EBC were approximately $4.7 million.
EBC’s discontinued operations posted a net loss of $226,000 in the quarter, which Barnard attributed mostly to final payroll expenses and benefits, compared with a net loss of almost $900,000 in the first quarter of the prior year.
Quarterly profitability and non-GAAP adjustments
Barnard said reported results included stock-based compensation, restructuring costs, and other non-recurring items. During the quarter, management updated its non-GAAP approach and began excluding stock-based compensation expense from adjusted results, citing the non-cash nature of the expense and historical volatility tied to stock price movements. Stock-based compensation was CAD 356,000 in the current quarter, compared with CAD 74,000 in the prior period.
Excluding stock-based compensation, restructuring, and non-recurring charges, adjusted net income from continuing operations increased to $2.1 million, up 29%, while adjusted net income for the group increased to $1.9 million, up 84%. The company reported adjusted diluted earnings per share of $0.32, which Barnard said was close to a 100% increase over the prior period.
For the quarter compared with the same quarter in 2025, Barnard said revenue was roughly unchanged at about CAD 15.5 million. Operating expenses rose to CAD 12.2 million, an increase of CAD 580,000, or 5%. Reported EBITDA declined to CAD 3.3 million (down CAD 543,000, or 14%), while adjusted EBITDA was unchanged at CAD 3.8 million.
Revenue mix: payments growth offsets banknotes decline
Management described a shift in the revenue mix during the quarter, as payments growth offset declines in the banknotes segment. Payments revenue increased $1.4 million, or 49%, supported by a 46% increase in trading volume activity. Barnard cited continued investment in core banking system integrations and scalable growth capabilities, onboarding of new customers, and increased transaction volumes from existing financial institution and credit union clients. He also said CXI recently revised the fee structure of certain service offerings to align pricing with market trends.
Business trading volumes were $2.22 billion in the quarter, compared with about $1.47 billion in the prior quarter, and payments rose to 27% of total revenue from 18% in the prior quarter.
Banknotes revenue declined $1.4 million, or 11%, led by a significant decline in wholesale banknotes, followed by the OnlineFX platform and company-owned branches. Banknotes represented 41% of total revenue in the quarter, down from 47% in the same quarter last year.
- Wholesale banknotes: Barnard said wholesale volumes were moderately lower than a year ago. While CXI continued onboarding new customers, activity from existing customers declined amid a slowdown in inbound travel—particularly from Canada—and increased costs sourcing certain currencies such as the Mexican peso, which adversely affected demand from some money services business (MSB) customers.
- OnlineFX: Revenue fell about $250,000, or 24%, due to lower demand for “exotic” foreign currencies—primarily the Iraqi dinar—partially offset by a slight increase in travel currencies such as the euro and Mexican peso. CXI added Nevada as a state where OnlineFX operates.
- Company-owned branches: Revenue decreased about $100,000, or 3%, impacted by the temporary closure of three stores due to relocations and the permanent closure of the Santa Monica location in the third quarter of 2025. Two newer locations opened in Scottsdale, Arizona and Woodbury, New York during the second half of 2025, but management said they did not yet fully offset the decline from closed stores.
Expenses, FX gains, and cash position
Operating expenses increased, in part, as costs previously shared with EBC were fully assumed by CXI following the bank’s exit. Variable costs within operating expenses—including postage, shipping, bank charges, sales commission, and incentive compensation—totaled $3.4 million compared with $2.5 million, a 34% increase. The ratio of total operating expenses to revenue rose to 79% from 75% a year earlier.
Bank service charges increased significantly, which Barnard tied primarily to the payments business. He said nearly 17,000 additional payments were made in the quarter, with payment transaction volumes rising to nearly 60,000 from 34,000 in the prior quarter, driving higher wire processing costs. He also noted that CXI transitioned payment processing activity away from EBC in the fourth quarter of 2025, resulting in 100% of related bank fees being recorded in continuing operations in the current quarter.
Foreign exchange gains were nearly $820,000 in the quarter, compared with a loss of roughly $280,000 a year earlier, driven primarily by foreign currency inventory appreciation against the U.S. dollar—particularly the euro and Mexican peso—along with unhedged currencies and certain foreign bank currency balances.
Interest revenue was supported by the investment of roughly $34 million in excess cash into AAA-rated money market funds at quarter end, compared with $0 in the first quarter of 2025. Barnard said the increase reflected higher excess cash available for daily investment due to reduced EBC working capital requirements and increased cash flow generation. CXI reported an effective tax rate of 25% versus 40% in the same quarter last year, with the prior-year rate impacted by stock price-driven changes affecting deferred tax assets.
On the balance sheet, management reported net working capital of $74 million, total equity of $84 million, and an unused $40 million line of credit. CXI reported cash of $96 million, plus approximately $5 million held at EBC, for total cash slightly exceeding $101 million. Banknote inventory held in transit, vaults, ATMs, and consignment locations totaled $49.2 million at quarter end.
Strategy: store additions, wholesale pipeline, AI tools, and buybacks
President and CEO Randolph Pinna said banknote activity has been pressured by reduced travel amid geopolitical conditions, with softness tied in part to inbound travel sentiment. He described the situation as temporary and said the outbound travel portion of the wholesale business remains “normal” and “solid.”
On the consumer side, Pinna said CXI is selectively adding stores in key markets and is relocating three stores after landlords closed shopping malls and converted them to housing. He also said the company opened a new store in Charlotte, North Carolina, which he described as a new market for the consumer unit, and is expanding OnlineFX by adding states and expanding digital marketing.
In wholesale, Pinna said the company’s pipeline is “full,” with new bank clients signed to add additional bank branches. He also described efforts to expand relationships by offering OnlineFX to bank clients and selectively adding inventory on consignment. He outlined a dedicated sales effort targeting non-financial institutions, including MSBs and specialty retailers such as grocery stores and select agent locations, and he mentioned potential opportunities with retail stock brokerage shops.
Pinna said CXI recently signed an agreement with a global remittance business and began a pilot with 100 locations in the New York area, with plans to add another 150 locations primarily in Florida and the southeastern U.S. He also said CXI is piloting the partner’s remittance service in 16 of its retail stores to generate additional traffic and fee income.
On the earnings call’s lone Q&A, management addressed bank service charges, noting costs were tied to higher transaction volumes and that the company continues to evaluate strategic banking partners and payment “rails,” including stablecoins, though management said stablecoins have not yet indicated much improvement in pricing. Pinna also said CXI has implemented an internal “CXI FX AI tool” for management reporting and has presented an AI policy to its board covering risks and appropriate use.
Management also reiterated its focus on shareholder returns through operating efficiencies and share repurchases. Barnard said CXI acquired and canceled 151,000 common shares during the quarter under its Normal Course Issuer Bid, totaling $2.5 million.
Pinna closed by inviting shareholders to the company’s annual meeting, scheduled to be held at CXI’s headquarters in Orlando on March 24.
About Currency Exchange International (TSE:CXI)
Currency Exchange International Corp operates as a money service business and provides currency exchange, wire transfer, and cheque cashing services at its locations in the United States and Canada. The company earns maximum revenue from the United States of America. The company earns revenue in the form of Commission and Fee income.
