Evertec Inc (EVTC) Q2 2025 Earnings Call Highlights: Strong Revenue Growth and Strategic ...
Adjusted EBITDA: $93 million, up 8% year over year; margin at 40.3%.
Adjusted EPS: $0.89, a 7% increase year over year.
Operating Cash Flow: $86 million for the first half of the year.
Liquidity: Approximately $485 million as of June 30.
Merchant Acquiring Revenue: Grew 4% year over year to $47.3 million.
Payment Services Puerto Rico Revenue: $56.4 million, up 4% year over year.
Latin America Revenue: $86.1 million, up 15% year over year; 20% increase on a constant currency basis.
Business Solutions Revenue: $64.5 million, up 4% year over year.
Net Debt: $673.6 million at quarter end.
Adjusted Net Income: $57.7 million, a 7% increase year over year.
Share Repurchase Program: Authorized up to $150 million through December 31, 2026.
2025 Revenue Outlook: Expected between $901 million and $909 million, growth of 6.6% to 7.6%.
2025 Adjusted EPS Outlook: Expected growth between 4.8% and 7% from 2024.
Warning! GuruFocus has detected 5 Warning Signs with EVTC.
Release Date: July 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Evertec Inc (NYSE:EVTC) reported an 8% increase in revenue for the second quarter, reaching $230 million, with constant currency revenue growing by 10%.
Adjusted EBITDA increased by 8% year over year to $93 million, with a margin of 40.3%, aligning with company expectations.
The company returned cash to shareholders through $6.4 million in dividends and $3.7 million in share repurchases, maintaining strong liquidity at approximately $485 million.
Revenue in Latin America increased by 15% year over year, or 20% on a constant currency basis, driven by organic growth and contributions from recent acquisitions.
The Board of Directors approved a refresh of the share repurchase program, authorizing up to $150 million in repurchases through December 31, 2026.
Negative Points
Adjusted EBITDA margin decreased by 30 basis points from the previous year due to last year's margin being positively impacted by one-time revenues.
Higher tax expenses and operating depreciation and amortization partially offset the growth in adjusted EBITDA.
The Business Solutions segment saw a 13% decrease in adjusted EBITDA, with margins down 750 basis points due to the absence of a highly accretive, non-recurring project from the prior year.
The company anticipates a reset in overall margin in the fourth quarter due to a 10% discount to Popular MSA services, impacting revenue and adjusted EBITDA.
Foreign currency headwinds, particularly from the Brazilian reais, impacted constant currency revenue growth.
Q & A Highlights
Q: Can you provide an update on the progress of the initiatives in Brazil, particularly with Sinqia? A: Morgan Schuessler, President and CEO, explained that the segment grew double digits this quarter, with Sinqia outperforming expectations. The focus has been on modernizing technology and repricing legacy contracts, which are multi-year initiatives. These efforts have started to show benefits, contributing to the strong performance this quarter and expected to continue into the next year.
Q: How does the second-half outlook compare to initial expectations, and what macro factors are considered? A: Joaquin Castrillo, CFO, noted that the outlook is better than initially thought, partly due to lower FX headwinds. While some conservatism is included due to tariff uncertainties, the overall performance, especially in Latin America, has exceeded expectations. The guidance reflects these factors, with some expected slowdowns in Q4 due to specific discounts.
Q: What is driving the strong growth in ATH Movil revenue? A: Joaquin Castrillo highlighted that ATH Movil's 17% revenue growth is driven by increased usage and network effects in Puerto Rico. The platform, initially for small businesses, is now being adopted by medium and larger businesses, contributing to higher transaction volumes.
Q: Can you discuss the competitive advantages Evertec holds in Latin America? A: Morgan Schuessler emphasized Evertec's proprietary technology, industry expertise, and local presence as key competitive advantages. The company offers customized solutions and has a strong reputation, which helps in securing long-term partnerships with financial institutions in the region.
Q: How is the M&A pipeline shaping up, and are there plans for significant acquisitions? A: Morgan Schuessler stated that while they are not focused on large transformational deals like Sinqia, the company is in a good position to pursue strategic acquisitions. The focus remains on deals similar in size to Grandata and Nubity, which align with their growth strategy.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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