[10-Q] EVERTEC, INC. Quarterly Earnings Report
Filing Impact
Filing Sentiment
Form Type
10-Q
EVERTEC (EVTC) posted solid second-quarter results. Revenue rose 8.3% YoY to $229.6 million, led by double-digit gains in Latin America Payments & Solutions (+14.6%) and steady growth in all other segments. Operating income climbed 29% to $56.1 million as cost discipline and lower depreciation drove the operating margin to 24.5% (vs. 20.4%). Net income attributable to common shareholders advanced 27% to $40.5 million; diluted EPS increased to $0.62 from $0.49.
For the first six months, revenue reached $458.4 million (+9.9%), with net income up 52.8% to $73.2 million and diluted EPS of $1.13 (+55%). Cash from operations was $86.1 million; capex and software investments totaled $42.3 million, producing $43.4 million of FCF.
Balance sheet highlights: cash & equivalents increased to $290.6 million, while net debt fell 2% to $648.3 million, lowering leverage to ~2.9× EBITDA (company-calculated). Stockholders’ equity expanded to $612.3 million, helped by $73 million of OCI gains from currency translation. Goodwill rose $44 million, reflecting the Grandata and Nubity acquisitions.
Strategic & risk items:
- Popular Inc. remains the largest customer (31% of revenue).
- Three interest-rate swaps hedge $550 million of variable-rate debt through 2027.
- Contracted backlog (performance obligations) totals $734.8 million over five years.
- Share count declined to 63.98 million after repurchases.
EVERTEC (EVTC) ha riportato risultati solidi nel secondo trimestre. I ricavi sono aumentati dell'8,3% su base annua, raggiungendo 229,6 milioni di dollari, trainati da una crescita a doppia cifra nei pagamenti e soluzioni in America Latina (+14,6%) e da una crescita costante in tutti gli altri segmenti. L'utile operativo è salito del 29% a 56,1 milioni di dollari, grazie alla disciplina nei costi e a una minore ammortizzazione, portando il margine operativo al 24,5% (rispetto al 20,4%). L'utile netto attribuibile agli azionisti ordinari è aumentato del 27% a 40,5 milioni di dollari; l'utile per azione diluito è salito a 0,62 dollari da 0,49 dollari.
Nei primi sei mesi, i ricavi hanno raggiunto 458,4 milioni di dollari (+9,9%), con un utile netto in crescita del 52,8% a 73,2 milioni di dollari e un utile per azione diluito di 1,13 dollari (+55%). La liquidità generata dalle operazioni è stata di 86,1 milioni di dollari; gli investimenti in capitale e software hanno totalizzato 42,3 milioni di dollari, producendo un flusso di cassa libero di 43,4 milioni di dollari.
Punti salienti del bilancio: la liquidità e equivalenti sono aumentati a 290,6 milioni di dollari, mentre il debito netto è diminuito del 2% a 648,3 milioni di dollari, riducendo la leva finanziaria a circa 2,9× EBITDA (calcolato dalla società). Il patrimonio netto è cresciuto a 612,3 milioni di dollari, favorito da 73 milioni di dollari di utili da altri componenti di patrimonio netto derivanti dalla traduzione valutaria. L'avviamento è aumentato di 44 milioni di dollari, riflettendo le acquisizioni di Grandata e Nubity.
Elementi strategici e di rischio:
- Popular Inc. rimane il cliente più grande (31% dei ricavi).
- Tre swap sui tassi di interesse coprono 550 milioni di dollari di debito a tasso variabile fino al 2027.
- Il backlog contrattuale (obblighi di prestazione) ammonta a 734,8 milioni di dollari in cinque anni.
- Il numero di azioni in circolazione è diminuito a 63,98 milioni dopo i riacquisti.
EVERTEC (EVTC) presentó resultados sólidos en el segundo trimestre. Los ingresos aumentaron un 8,3% interanual hasta 229,6 millones de dólares, impulsados por ganancias de dos dígitos en Pagos y Soluciones en América Latina (+14,6%) y un crecimiento constante en todos los demás segmentos. El ingreso operativo creció un 29% hasta 56,1 millones de dólares, gracias a la disciplina en costos y una menor depreciación, lo que elevó el margen operativo al 24,5% (frente al 20,4%). La utilidad neta atribuible a los accionistas comunes avanzó un 27% hasta 40,5 millones de dólares; las ganancias diluidas por acción aumentaron a 0,62 dólares desde 0,49 dólares.
En los primeros seis meses, los ingresos alcanzaron 458,4 millones de dólares (+9,9%), con una utilidad neta que subió un 52,8% hasta 73,2 millones de dólares y ganancias diluidas por acción de 1,13 dólares (+55%). El efectivo generado por operaciones fue de 86,1 millones de dólares; las inversiones en capital y software sumaron 42,3 millones de dólares, generando un flujo de caja libre de 43,4 millones de dólares.
Aspectos destacados del balance: el efectivo y equivalentes aumentaron a 290,6 millones de dólares, mientras que la deuda neta disminuyó un 2% a 648,3 millones de dólares, reduciendo el apalancamiento a aproximadamente 2,9× EBITDA (calculado por la empresa). El patrimonio neto creció a 612,3 millones de dólares, impulsado por 73 millones de dólares en ganancias por otros resultados integrales derivados de la traducción de divisas. El goodwill aumentó 44 millones de dólares, reflejando las adquisiciones de Grandata y Nubity.
Elementos estratégicos y riesgos:
- Popular Inc. sigue siendo el mayor cliente (31% de los ingresos).
- Tres swaps de tasas de interés cubren 550 millones de dólares de deuda a tasa variable hasta 2027.
- El backlog contratado (obligaciones de desempeño) suma 734,8 millones de dólares en cinco años.
- El número de acciones en circulación disminuyó a 63,98 millones tras recompras.
EVERTEC (EVTC)는 견고한 2분기 실적을 발표했습니다. 매출은 전년 대비 8.3% 증가한 2억 2,960만 달러로, 라틴 아메리카 결제 및 솔루션 부문이 14.6%의 두 자릿수 성장을 기록했고, 기타 모든 부문도 꾸준히 성장했습니다. 영업이익은 비용 절감과 감가상각비 감소에 힘입어 29% 증가한 5,610만 달러를 기록했으며, 영업이익률은 20.4%에서 24.5%로 상승했습니다. 보통주주 귀속 순이익은 27% 증가한 4,050만 달러였고, 희석 주당순이익(EPS)은 0.49달러에서 0.62달러로 증가했습니다.
상반기 매출은 4억 5,840만 달러(+9.9%), 순이익은 5,320만 달러(52.8% 증가), 희석 EPS는 1.13달러(+55%)를 기록했습니다. 영업활동 현금흐름은 8,610만 달러였으며, 설비투자 및 소프트웨어 투자에 4,230만 달러를 썼고, 그 결과 4,340만 달러의 잉여현금흐름(FCF)을 창출했습니다.
재무상태 주요 내용: 현금 및 현금성자산은 2억 9,060만 달러로 증가했고, 순부채는 2% 감소한 6억 4,830만 달러로, 레버리지는 약 2.9배 EBITDA(회사 계산 기준)로 낮아졌습니다. 자본총계는 6억 1,230만 달러로 늘었으며, 환율 변동에 따른 기타포괄손익(OCI) 7,300만 달러가 기여했습니다. 영업권은 Grandata와 Nubity 인수를 반영하여 4,400만 달러 증가했습니다.
전략 및 위험 요소:
- Popular Inc.는 여전히 최대 고객으로 전체 매출의 31%를 차지합니다.
- 세 건의 금리 스왑으로 5억 5,000만 달러의 변동금리 부채를 2027년까지 헤지하고 있습니다.
- 계약된 수주 잔고(이행 의무)는 5년간 총 7억 3,480만 달러입니다.
- 자사주 매입 후 주식 수는 6,398만 주로 감소했습니다.
EVERTEC (EVTC) a publié des résultats solides pour le deuxième trimestre. Le chiffre d'affaires a augmenté de 8,3 % en glissement annuel pour atteindre 229,6 millions de dollars, porté par des gains à deux chiffres dans les Paiements et Solutions en Amérique latine (+14,6 %) et une croissance régulière dans tous les autres segments. Le résultat d'exploitation a progressé de 29 % pour atteindre 56,1 millions de dollars, la discipline des coûts et une dépréciation moindre ayant porté la marge opérationnelle à 24,5 % (contre 20,4 %). Le résultat net attribuable aux actionnaires ordinaires a augmenté de 27 % pour atteindre 40,5 millions de dollars ; le BPA dilué est passé de 0,49 $ à 0,62 $.
Sur les six premiers mois, le chiffre d'affaires a atteint 458,4 millions de dollars (+9,9 %), avec un résultat net en hausse de 52,8 % à 73,2 millions de dollars et un BPA dilué de 1,13 $ (+55 %). Les flux de trésorerie provenant des opérations se sont élevés à 86,1 millions de dollars ; les investissements en immobilisations et logiciels ont totalisé 42,3 millions de dollars, générant un flux de trésorerie disponible de 43,4 millions de dollars.
Points forts du bilan : la trésorerie et équivalents ont augmenté à 290,6 millions de dollars, tandis que la dette nette a diminué de 2 % pour atteindre 648,3 millions de dollars, réduisant l'effet de levier à environ 2,9× l'EBITDA (calculé par la société). Les capitaux propres se sont accrus à 612,3 millions de dollars, aidés par 73 millions de dollars de gains OCI liés à la conversion de devises. Le goodwill a augmenté de 44 millions de dollars, reflétant les acquisitions de Grandata et Nubity.
Points stratégiques et risques :
- Popular Inc. reste le principal client (31 % du chiffre d'affaires).
- Trois swaps de taux d'intérêt couvrent 550 millions de dollars de dette à taux variable jusqu'en 2027.
- Le carnet de commandes contractuel (obligations de performance) s'élève à 734,8 millions de dollars sur cinq ans.
- Le nombre d'actions en circulation a diminué à 63,98 millions après des rachats.
EVERTEC (EVTC) hat solide Ergebnisse für das zweite Quartal vorgelegt. Der Umsatz stieg im Jahresvergleich um 8,3 % auf 229,6 Millionen US-Dollar, angetrieben durch zweistellige Zuwächse im Bereich Lateinamerika Payments & Solutions (+14,6 %) und stetiges Wachstum in allen anderen Segmenten. Das Betriebsergebnis stieg um 29 % auf 56,1 Millionen US-Dollar, da Kostendisziplin und geringere Abschreibungen die operative Marge auf 24,5 % (gegenüber 20,4 %) erhöhten. Der auf Stammaktionäre entfallende Nettogewinn stieg um 27 % auf 40,5 Millionen US-Dollar; das verwässerte Ergebnis je Aktie erhöhte sich von 0,49 auf 0,62 US-Dollar.
In den ersten sechs Monaten erreichte der Umsatz 458,4 Millionen US-Dollar (+9,9 %), der Nettogewinn stieg um 52,8 % auf 73,2 Millionen US-Dollar und das verwässerte Ergebnis je Aktie auf 1,13 US-Dollar (+55 %). Der operative Cashflow betrug 86,1 Millionen US-Dollar; Investitionen in Sachanlagen und Software beliefen sich auf 42,3 Millionen US-Dollar, was einen freien Cashflow von 43,4 Millionen US-Dollar erzeugte.
Bilanz-Highlights: Zahlungsmittel und Zahlungsmitteläquivalente stiegen auf 290,6 Millionen US-Dollar, während die Nettoverschuldung um 2 % auf 648,3 Millionen US-Dollar sank, wodurch die Verschuldungsquote auf etwa das 2,9-fache des EBITDA (laut Unternehmensberechnung) sank. Das Eigenkapital wuchs auf 612,3 Millionen US-Dollar, unterstützt durch 73 Millionen US-Dollar an OCI-Gewinnen aus Währungsumrechnungen. Der Firmenwert stieg um 44 Millionen US-Dollar, was die Übernahmen von Grandata und Nubity widerspiegelt.
Strategische und Risikopunkte:
- Popular Inc. bleibt der größte Kunde (31 % des Umsatzes).
- Drei Zinsswaps sichern 550 Millionen US-Dollar variabel verzinste Schulden bis 2027 ab.
- Der vertraglich gebundene Auftragsbestand (Leistungspflichten) beträgt 734,8 Millionen US-Dollar über fünf Jahre.
- Die Aktienanzahl sank nach Rückkäufen auf 63,98 Millionen.
Positive
- Revenue up 8.3% YoY to $229.6 million, beating prior-year growth rates.
- Operating margin expanded 410 bp to 24.5%, boosting profitability.
- Diluted EPS rose 26% YoY to $0.62; six-month EPS up 55%.
- Net debt reduced by $11 million; leverage below 3× EBITDA.
- Cash from operations $86 million comfortably funded capex and dividends.
Negative
- Popular Inc. concentration steady at 31% of revenue, posing renewal risk.
- Derivative liability increased to $5.1 million from $1.4 million, reflecting swap mark-to-market.
- Income tax expense quadrupled YoY to $4.1 million in Q2, tempering net gains.
- Goodwill rises $44 million; future impairment risk if acquisitions underperform.
Insights
TL;DR – Broad-based top-line growth and margin expansion drive double-digit EPS; leverage trending lower.
Revenue beat consensus on strength in Latin America, showing early pay-offs from Grandata and Nubity acquisitions. A 480 bp improvement in operating margin reflects easing depreciation and disciplined SG&A. Interest savings from term-loan repricing and swaps helped EPS. Net leverage below 3× gives room for buybacks or tuck-in deals. Key to the bull thesis is sustaining >8% organic growth while managing Popular concentration risk. Guidance not provided, but trend supports mid-teens FY25 EPS growth.
TL;DR – Cash build and modest debt reduction improve credit profile, but customer and FX risks persist.
Net debt/EBITDA drifted down with $12 million term-loan amortization and stronger EBITDA. Swaps fix 59% of floating exposure through 2027, limiting rate risk though derivative liability swung to $5.1 million. Contract liabilities declined, indicating some burn-off of upfront fees; future cash conversion remains healthy. Popular dependence (31% of sales) is a structural concentration concern; renewal terms beyond current MSAs will be critical. Overall risk profile modestly better QoQ.
EVERTEC (EVTC) ha riportato risultati solidi nel secondo trimestre. I ricavi sono aumentati dell'8,3% su base annua, raggiungendo 229,6 milioni di dollari, trainati da una crescita a doppia cifra nei pagamenti e soluzioni in America Latina (+14,6%) e da una crescita costante in tutti gli altri segmenti. L'utile operativo è salito del 29% a 56,1 milioni di dollari, grazie alla disciplina nei costi e a una minore ammortizzazione, portando il margine operativo al 24,5% (rispetto al 20,4%). L'utile netto attribuibile agli azionisti ordinari è aumentato del 27% a 40,5 milioni di dollari; l'utile per azione diluito è salito a 0,62 dollari da 0,49 dollari.
Nei primi sei mesi, i ricavi hanno raggiunto 458,4 milioni di dollari (+9,9%), con un utile netto in crescita del 52,8% a 73,2 milioni di dollari e un utile per azione diluito di 1,13 dollari (+55%). La liquidità generata dalle operazioni è stata di 86,1 milioni di dollari; gli investimenti in capitale e software hanno totalizzato 42,3 milioni di dollari, producendo un flusso di cassa libero di 43,4 milioni di dollari.
Punti salienti del bilancio: la liquidità e equivalenti sono aumentati a 290,6 milioni di dollari, mentre il debito netto è diminuito del 2% a 648,3 milioni di dollari, riducendo la leva finanziaria a circa 2,9× EBITDA (calcolato dalla società). Il patrimonio netto è cresciuto a 612,3 milioni di dollari, favorito da 73 milioni di dollari di utili da altri componenti di patrimonio netto derivanti dalla traduzione valutaria. L'avviamento è aumentato di 44 milioni di dollari, riflettendo le acquisizioni di Grandata e Nubity.
Elementi strategici e di rischio:
- Popular Inc. rimane il cliente più grande (31% dei ricavi).
- Tre swap sui tassi di interesse coprono 550 milioni di dollari di debito a tasso variabile fino al 2027.
- Il backlog contrattuale (obblighi di prestazione) ammonta a 734,8 milioni di dollari in cinque anni.
- Il numero di azioni in circolazione è diminuito a 63,98 milioni dopo i riacquisti.
EVERTEC (EVTC) presentó resultados sólidos en el segundo trimestre. Los ingresos aumentaron un 8,3% interanual hasta 229,6 millones de dólares, impulsados por ganancias de dos dígitos en Pagos y Soluciones en América Latina (+14,6%) y un crecimiento constante en todos los demás segmentos. El ingreso operativo creció un 29% hasta 56,1 millones de dólares, gracias a la disciplina en costos y una menor depreciación, lo que elevó el margen operativo al 24,5% (frente al 20,4%). La utilidad neta atribuible a los accionistas comunes avanzó un 27% hasta 40,5 millones de dólares; las ganancias diluidas por acción aumentaron a 0,62 dólares desde 0,49 dólares.
En los primeros seis meses, los ingresos alcanzaron 458,4 millones de dólares (+9,9%), con una utilidad neta que subió un 52,8% hasta 73,2 millones de dólares y ganancias diluidas por acción de 1,13 dólares (+55%). El efectivo generado por operaciones fue de 86,1 millones de dólares; las inversiones en capital y software sumaron 42,3 millones de dólares, generando un flujo de caja libre de 43,4 millones de dólares.
Aspectos destacados del balance: el efectivo y equivalentes aumentaron a 290,6 millones de dólares, mientras que la deuda neta disminuyó un 2% a 648,3 millones de dólares, reduciendo el apalancamiento a aproximadamente 2,9× EBITDA (calculado por la empresa). El patrimonio neto creció a 612,3 millones de dólares, impulsado por 73 millones de dólares en ganancias por otros resultados integrales derivados de la traducción de divisas. El goodwill aumentó 44 millones de dólares, reflejando las adquisiciones de Grandata y Nubity.
Elementos estratégicos y riesgos:
- Popular Inc. sigue siendo el mayor cliente (31% de los ingresos).
- Tres swaps de tasas de interés cubren 550 millones de dólares de deuda a tasa variable hasta 2027.
- El backlog contratado (obligaciones de desempeño) suma 734,8 millones de dólares en cinco años.
- El número de acciones en circulación disminuyó a 63,98 millones tras recompras.
EVERTEC (EVTC)는 견고한 2분기 실적을 발표했습니다. 매출은 전년 대비 8.3% 증가한 2억 2,960만 달러로, 라틴 아메리카 결제 및 솔루션 부문이 14.6%의 두 자릿수 성장을 기록했고, 기타 모든 부문도 꾸준히 성장했습니다. 영업이익은 비용 절감과 감가상각비 감소에 힘입어 29% 증가한 5,610만 달러를 기록했으며, 영업이익률은 20.4%에서 24.5%로 상승했습니다. 보통주주 귀속 순이익은 27% 증가한 4,050만 달러였고, 희석 주당순이익(EPS)은 0.49달러에서 0.62달러로 증가했습니다.
상반기 매출은 4억 5,840만 달러(+9.9%), 순이익은 5,320만 달러(52.8% 증가), 희석 EPS는 1.13달러(+55%)를 기록했습니다. 영업활동 현금흐름은 8,610만 달러였으며, 설비투자 및 소프트웨어 투자에 4,230만 달러를 썼고, 그 결과 4,340만 달러의 잉여현금흐름(FCF)을 창출했습니다.
재무상태 주요 내용: 현금 및 현금성자산은 2억 9,060만 달러로 증가했고, 순부채는 2% 감소한 6억 4,830만 달러로, 레버리지는 약 2.9배 EBITDA(회사 계산 기준)로 낮아졌습니다. 자본총계는 6억 1,230만 달러로 늘었으며, 환율 변동에 따른 기타포괄손익(OCI) 7,300만 달러가 기여했습니다. 영업권은 Grandata와 Nubity 인수를 반영하여 4,400만 달러 증가했습니다.
전략 및 위험 요소:
- Popular Inc.는 여전히 최대 고객으로 전체 매출의 31%를 차지합니다.
- 세 건의 금리 스왑으로 5억 5,000만 달러의 변동금리 부채를 2027년까지 헤지하고 있습니다.
- 계약된 수주 잔고(이행 의무)는 5년간 총 7억 3,480만 달러입니다.
- 자사주 매입 후 주식 수는 6,398만 주로 감소했습니다.
EVERTEC (EVTC) a publié des résultats solides pour le deuxième trimestre. Le chiffre d'affaires a augmenté de 8,3 % en glissement annuel pour atteindre 229,6 millions de dollars, porté par des gains à deux chiffres dans les Paiements et Solutions en Amérique latine (+14,6 %) et une croissance régulière dans tous les autres segments. Le résultat d'exploitation a progressé de 29 % pour atteindre 56,1 millions de dollars, la discipline des coûts et une dépréciation moindre ayant porté la marge opérationnelle à 24,5 % (contre 20,4 %). Le résultat net attribuable aux actionnaires ordinaires a augmenté de 27 % pour atteindre 40,5 millions de dollars ; le BPA dilué est passé de 0,49 $ à 0,62 $.
Sur les six premiers mois, le chiffre d'affaires a atteint 458,4 millions de dollars (+9,9 %), avec un résultat net en hausse de 52,8 % à 73,2 millions de dollars et un BPA dilué de 1,13 $ (+55 %). Les flux de trésorerie provenant des opérations se sont élevés à 86,1 millions de dollars ; les investissements en immobilisations et logiciels ont totalisé 42,3 millions de dollars, générant un flux de trésorerie disponible de 43,4 millions de dollars.
Points forts du bilan : la trésorerie et équivalents ont augmenté à 290,6 millions de dollars, tandis que la dette nette a diminué de 2 % pour atteindre 648,3 millions de dollars, réduisant l'effet de levier à environ 2,9× l'EBITDA (calculé par la société). Les capitaux propres se sont accrus à 612,3 millions de dollars, aidés par 73 millions de dollars de gains OCI liés à la conversion de devises. Le goodwill a augmenté de 44 millions de dollars, reflétant les acquisitions de Grandata et Nubity.
Points stratégiques et risques :
- Popular Inc. reste le principal client (31 % du chiffre d'affaires).
- Trois swaps de taux d'intérêt couvrent 550 millions de dollars de dette à taux variable jusqu'en 2027.
- Le carnet de commandes contractuel (obligations de performance) s'élève à 734,8 millions de dollars sur cinq ans.
- Le nombre d'actions en circulation a diminué à 63,98 millions après des rachats.
EVERTEC (EVTC) hat solide Ergebnisse für das zweite Quartal vorgelegt. Der Umsatz stieg im Jahresvergleich um 8,3 % auf 229,6 Millionen US-Dollar, angetrieben durch zweistellige Zuwächse im Bereich Lateinamerika Payments & Solutions (+14,6 %) und stetiges Wachstum in allen anderen Segmenten. Das Betriebsergebnis stieg um 29 % auf 56,1 Millionen US-Dollar, da Kostendisziplin und geringere Abschreibungen die operative Marge auf 24,5 % (gegenüber 20,4 %) erhöhten. Der auf Stammaktionäre entfallende Nettogewinn stieg um 27 % auf 40,5 Millionen US-Dollar; das verwässerte Ergebnis je Aktie erhöhte sich von 0,49 auf 0,62 US-Dollar.
In den ersten sechs Monaten erreichte der Umsatz 458,4 Millionen US-Dollar (+9,9 %), der Nettogewinn stieg um 52,8 % auf 73,2 Millionen US-Dollar und das verwässerte Ergebnis je Aktie auf 1,13 US-Dollar (+55 %). Der operative Cashflow betrug 86,1 Millionen US-Dollar; Investitionen in Sachanlagen und Software beliefen sich auf 42,3 Millionen US-Dollar, was einen freien Cashflow von 43,4 Millionen US-Dollar erzeugte.
Bilanz-Highlights: Zahlungsmittel und Zahlungsmitteläquivalente stiegen auf 290,6 Millionen US-Dollar, während die Nettoverschuldung um 2 % auf 648,3 Millionen US-Dollar sank, wodurch die Verschuldungsquote auf etwa das 2,9-fache des EBITDA (laut Unternehmensberechnung) sank. Das Eigenkapital wuchs auf 612,3 Millionen US-Dollar, unterstützt durch 73 Millionen US-Dollar an OCI-Gewinnen aus Währungsumrechnungen. Der Firmenwert stieg um 44 Millionen US-Dollar, was die Übernahmen von Grandata und Nubity widerspiegelt.
Strategische und Risikopunkte:
- Popular Inc. bleibt der größte Kunde (31 % des Umsatzes).
- Drei Zinsswaps sichern 550 Millionen US-Dollar variabel verzinste Schulden bis 2027 ab.
- Der vertraglich gebundene Auftragsbestand (Leistungspflichten) beträgt 734,8 Millionen US-Dollar über fünf Jahre.
- Die Aktienanzahl sank nach Rückkäufen auf 63,98 Millionen.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended June 30, 2025 or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
COMMISSION FILE NUMBER 001-35872
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. employer identification number) | ||||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||
(787 ) 759-9999
(Registrant’s telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated filer | ☐ | ||||||||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
Emerging growth company | ||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
At July 24, 2025, there were 63,982,005 outstanding shares of common stock of EVERTEC, Inc.
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| Page | ||||||||
| Part I. FINANCIAL INFORMATION | ||||||||
| Item 1. | Financial Statements | |||||||
Unaudited Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024 | 1 | |||||||
Unaudited Condensed Consolidated Statements of Income and Comprehensive Income (Loss) for the three and six months ended June 30, 2025 and 2024 | 3 | |||||||
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2025 and 2024 | 4 | |||||||
Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and 2024 | 5 | |||||||
Notes to Unaudited Condensed Consolidated Financial Statements | 7 | |||||||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 26 | ||||||
| Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 39 | ||||||
| Item 4. | Controls and Procedures | 40 | ||||||
Part II. OTHER INFORMATION | 41 | |||||||
| Item 1. | Legal Proceedings | 41 | ||||||
| Item 1A. | Risk Factors | 41 | ||||||
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 41 | ||||||
| Item 3. | Defaults Upon Senior Securities | 41 | ||||||
| Item 4. | Mine Safety Disclosures | 41 | ||||||
| Item 5. | Other Information | 41 | ||||||
| Item 6. | Exhibits | 42 | ||||||
SIGNATURES | 43 | |||||||
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FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Report”) contains “forward-looking statements” within the meaning of, and subject to the protection of, the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical fact contained in this Report, including, without limitation, statements regarding our position as a leader within our industry; our future results of operations and financial position; our business strategies; objectives of management for future operations, including, among others, statements regarding our expected growth, international expansion and future capital expenditures; the impact of market conditions and other macroeconomic factors on our business, financial condition and results of operations; the timing and declaration of future dividends; the sufficiency of our cash and cash equivalents; our future capital expenditures and debt service obligations; and the expectations, anticipated benefits of and costs associated with acquisitions, are forward-looking statements.
Words such as “believes,” “expects,” "anticipates," "intends," "projects," “estimates,” and “plans” and similar expressions of future or conditional verbs such as "will," "should," "would," "may," and "could" or the negatives of these terms or variations of them or similar terminology are generally forward-looking in nature and not historical facts. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and may involve significant risks and uncertainties, and that actual results may vary materially from those in the forward-looking statements as a result of various factors. Among the factors that significantly impact our business and could impact our business in the future are:
•our reliance on our relationship with Popular, Inc. (“Popular”) for a significant portion of our revenues pursuant to our second Amended and Restated Master Services Agreement (“A&R MSA”) with them, and as it may impact our ability to grow our business;
•our ability to renew our client contracts on terms favorable to us, including but not limited to the current term and any extension of the A&R MSA with Popular and Amended and Restated Independent Sales Organization Sponsorship and Services Agreement (the “A&R ISO Agreement”) with Banco Popular;
•our reliance on our information technology systems, employees and certain suppliers and counterparties, and certain failures or disruptions in those systems or chains could materially adversely affect our operations;
•the risk of security breaches or other confidential data theft from our systems;
•our ability to recruit, retain and develop qualified personnel;
•fraud by merchants or others;
•the credit risk of our merchant clients, for which we may also be liable;
•our use of artificial intelligence (“AI”) and machine learning tools and the evolving regulatory framework governing such technology;
•a decreased client base due to consolidations and/or failures in the financial services industry;
•our ability to comply with existing and future rules and regulations in the jurisdictions in which we operate;
•a reduction in consumer confidence, whether as a result of a global economic downturn or otherwise, which leads to a decrease in consumer spending;
•our dependence on payment card network or other network rules, standards or fees;
•the geographical concentration of our business in Puerto Rico, including our business with the government of Puerto Rico and its instrumentalities, which are facing fiscal challenges and the effects of potential natural disasters;
•risks associated with our presence in international markets, including global political, social and economic instability;
•operating an international business in Latin America, Puerto Rico and the Caribbean, in jurisdictions with potential political and economic instability;
•the impact of exposure to foreign exchange fluctuations and capital controls on our costs, earnings and the value of some of our assets; our ability to protect our intellectual property rights against infringement and to defend ourselves against potential intellectual property infringement claims and the potential impact on our business of such claims, whether or not correct;
•the possibility that we could lose our preferential tax rate in Puerto Rico;
•the possibility that we may not realize the anticipated benefits of our merger with Sinqia;
•the effect of purchases of our common stock pursuant to our stock repurchase plan on the value of our common stock; and
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•the impact of our leverage on our ability to raise additional capital, that our leverage may limit our ability to react to changes in the economy or our industry, expose us to interest rate risk and prevent us from meeting our obligations with respect to our substantial indebtedness, and that we and our subsidiaries may be able to incur significant additional indebtedness, which could further increase such risks.
The forward-looking statements in this Report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements are subject to a number of important factors that could cause actual results to differ materially from those in the forward-looking statements, and should, therefore, be considered in light of various factors, including those set forth under Part 1, Item 1A. "Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission (the “SEC”) on March 3, 2025 and in Part I, Item 2.“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Report, as may be updated in our subsequent filings with the SEC. These forward-looking statements speak only as of the date of this Report, and, except as may be required by law, we do not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this Report or to reflect the occurrence of unanticipated events. Additionally, certain information we may disclose (either herein or elsewhere) is informed by the expectations of various stakeholders or third-party frameworks and, as such, may not necessarily be material for purposes of our filings under U.S. federal securities laws, even if we use “material” or similar language in discussing such matters.
WHERE YOU CAN FIND MORE INFORMATION
All reports we file with the SEC are available free of charge via the Electronic Data Gathering Analysis and Retrieval (EDGAR) System on the SEC’s website at www.sec.gov. We also provide copies of our SEC filings at no charge upon request and make electronic copies of our reports available for download through our website at www.evertecinc.com as soon as reasonably practicable after filing such material with the SEC.
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EVERTEC, Inc. Unaudited Condensed Consolidated Balance Sheets
(In thousands, except share information)
1
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| June 30, 2025 | December 31, 2024 | |||||||||||||
| Assets | ||||||||||||||
| Current Assets: | ||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Restricted cash | ||||||||||||||
| Accounts receivable, net | ||||||||||||||
| Settlement assets | ||||||||||||||
| Prepaid expenses and other assets | ||||||||||||||
| Total current assets | ||||||||||||||
| Debt securities available-for-sale, at fair value | ||||||||||||||
| Equity securities, at fair value | ||||||||||||||
| Investments in equity investees | ||||||||||||||
| Property and equipment, net | ||||||||||||||
| Operating lease right-of-use asset | ||||||||||||||
| Goodwill | ||||||||||||||
| Other intangible assets, net | ||||||||||||||
| Deferred tax asset | ||||||||||||||
| Derivative asset | ||||||||||||||
| Other long-term assets | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| Liabilities and stockholders’ equity | ||||||||||||||
| Current Liabilities: | ||||||||||||||
| Accrued liabilities | $ | $ | ||||||||||||
| Accounts payable | ||||||||||||||
| Contract liability | ||||||||||||||
| Income tax payable | ||||||||||||||
| Current portion of long-term debt | ||||||||||||||
| Current portion of operating lease liability | ||||||||||||||
| Settlement liabilities | ||||||||||||||
| Total current liabilities | ||||||||||||||
| Long-term debt | ||||||||||||||
| Deferred tax liability | ||||||||||||||
| Contract liability - long term | ||||||||||||||
| Operating lease liability - long-term | ||||||||||||||
| Derivative liability | ||||||||||||||
| Other long-term liabilities | ||||||||||||||
| Total liabilities | ||||||||||||||
| Commitments and contingencies (Note 14) | ||||||||||||||
| Redeemable non-controlling interests | ||||||||||||||
| Stockholders’ equity | ||||||||||||||
Preferred stock, par value $ | ||||||||||||||
Common stock, par value $ | ||||||||||||||
| Additional paid-in capital | ||||||||||||||
| Accumulated earnings | ||||||||||||||
| Accumulated other comprehensive loss, net of tax | ( | ( | ||||||||||||
| Total stockholders’ equity | ||||||||||||||
| Non-redeemable non-controlling interest | ||||||||||||||
| Total equity | ||||||||||||||
| Total liabilities and equity | $ | $ | ||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2
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EVERTEC, Inc. Unaudited Condensed Consolidated Statements of Income and Comprehensive Income (Loss)
(In thousands, except per share information)
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Operating costs and expenses | ||||||||||||||||||||||||||||||||||||||
| Cost of revenues, exclusive of depreciation and amortization | ||||||||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||||||||||||||
| Total operating costs and expenses | ||||||||||||||||||||||||||||||||||||||
| Income from operations | ||||||||||||||||||||||||||||||||||||||
| Non-operating income (expenses) | ||||||||||||||||||||||||||||||||||||||
| Interest income | ||||||||||||||||||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Gain (loss) on foreign currency remeasurement | ( | |||||||||||||||||||||||||||||||||||||
| Earnings from equity investees | ||||||||||||||||||||||||||||||||||||||
| Other income, net | ||||||||||||||||||||||||||||||||||||||
| Total non-operating expenses | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Income before income taxes | ||||||||||||||||||||||||||||||||||||||
| Income tax expense | ||||||||||||||||||||||||||||||||||||||
| Net income | ||||||||||||||||||||||||||||||||||||||
| Less: Net income attributable to non-controlling interest | ||||||||||||||||||||||||||||||||||||||
| Net income attributable to EVERTEC, Inc.’s common stockholders | ||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax of $( | ||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | ( | ( | ||||||||||||||||||||||||||||||||||||
| (Loss) gain on cash flow hedges | ( | ( | ||||||||||||||||||||||||||||||||||||
| Unrealized gain (loss) on change in fair value of debt securities available-for-sale | ( | |||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||
| Total comprehensive income (loss) attributable to EVERTEC, Inc.’s common stockholders | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||
| Net income per common share - basic attributable to EVERTEC, Inc.’s common stockholders | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Net income per common share - diluted attributable to EVERTEC, Inc.’s common stockholders | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
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EVERTEC, Inc. Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity
(In thousands, except share information)
| Number of Shares of Common Stock | Common Stock | Additional Paid-in Capital | Accumulated Earnings | Accumulated Other Comprehensive Income (loss) | Non-Controlling Interest (excluding Redeemable Non-Controlling Interest) | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||
| Share-based compensation recognized | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Restricted stock units delivered | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Cash dividends on common stock, $ | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Adjustment of redeemable noncontrolling interest to redemption value | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||
| Share-based compensation recognized | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | ( | ( | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Restricted stock units delivered | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Cash dividends on common stock, $ | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Adjustment of redeemable noncontrolling interest to redemption value | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||
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| Number of Shares of Common Stock | Common Stock | Additional Paid-in Capital | Accumulated Earnings | Accumulated Other Comprehensive Income (loss) | Non-Controlling Interest (excluding Redeemable Non-Controlling Interest) | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2023 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
| Share-based compensation recognized | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | ( | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Restricted stock units delivered | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Cash dividends on common stock, $ | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Adjustment of redeemable noncontrolling interest to redemption value | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Excise tax on repurchase of common stock | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2024 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||
| Share-based compensation recognized | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Restricted stock units delivered | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Cash dividends on common stock, $ | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Adjustment of redeemable noncontrolling interest to redemption value | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Reversal of excise tax on repurchase of common stock | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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EVERTEC, Inc. Unaudited Condensed Consolidated Statements of Cash Flows
(In thousands)
| Six months ended June 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Cash flows from operating activities | ||||||||||||||
| Net income | ||||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
| Depreciation and amortization | ||||||||||||||
| Amortization of debt issue costs and accretion of discount | ||||||||||||||
| Operating lease amortization | ||||||||||||||
| Deferred tax benefit | ( | ( | ||||||||||||
| Share-based compensation | ||||||||||||||
| Gain on sale of equity securities | ( | |||||||||||||
| Earnings of equity investees | ( | ( | ||||||||||||
| (Gain) loss on foreign currency remeasurement | ( | |||||||||||||
| Other, net | ( | ( | ||||||||||||
| (Increase) decrease in assets: | ||||||||||||||
| Accounts receivable, net | ( | |||||||||||||
| Prepaid expenses and other assets | ( | ( | ||||||||||||
| Other long-term assets | ( | |||||||||||||
| (Decrease) increase in liabilities: | ||||||||||||||
| Accrued liabilities and accounts payable | ( | |||||||||||||
| Income tax payable | ( | |||||||||||||
| Contract liability | ( | |||||||||||||
| Operating lease liabilities | ( | ( | ||||||||||||
| Other long-term liabilities | ( | |||||||||||||
| Total adjustments | ||||||||||||||
| Net cash provided by operating activities | ||||||||||||||
| Cash flows from investing activities | ||||||||||||||
| Additions to software and other intangible assets | ( | ( | ||||||||||||
| Property and equipment acquired | ( | ( | ||||||||||||
| Acquisition of available-for-sale debt securities | ( | |||||||||||||
| Payments for non-compete agreements | ( | |||||||||||||
| Proceeds from maturities of available-for-sale debt securities | ||||||||||||||
| Purchase of equity securities | ( | ( | ||||||||||||
| Proceeds from sale of equity securities | ||||||||||||||
| Net cash used in investing activities | ( | ( | ||||||||||||
| Cash flows from financing activities | ||||||||||||||
| Acquisition of redeemable non-controlling interest | ( | |||||||||||||
| Withholding taxes paid on share-based compensation | ( | ( | ||||||||||||
| Dividends paid | ( | ( | ||||||||||||
| Repurchase of common stock | ( | ( | ||||||||||||
| Repayment of long-term debt | ( | ( | ||||||||||||
| Settlement activity, net | ||||||||||||||
| Other financing activities, net | ( | ( | ||||||||||||
| Net cash used in financing activities | ( | ( | ||||||||||||
| Effect of foreign exchange rate on cash, cash equivalents and restricted cash | ( | |||||||||||||
| Net increase (decrease) in cash, cash equivalents, restricted cash and cash included in settlement assets | ( | |||||||||||||
| Cash, cash equivalents, restricted cash and cash included in settlement assets at the beginning of the period | ||||||||||||||
| Cash, cash equivalents, restricted cash, and cash included in settlement assets at end of the period | $ | $ | ||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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Notes to Unaudited Condensed Consolidated Financial Statements
Note 1 - The Company and Basis of Presentation and Recent Accounting Pronouncements | 8 | ||||
Note 2 - Business Acquisition | 8 | ||||
Note 3 – Property and Equipment, net | 10 | ||||
Note 4 - Goodwill and Other Intangible Assets | 10 | ||||
Note 5 - Debt and Short-Term Borrowings | 11 | ||||
Note 6 - Financial Instruments and Fair Value Measurements | 12 | ||||
Note 7 - Redeemable Non-Controlling Interests | 14 | ||||
Note 8 - Equity | 14 | ||||
Note 9 - Share-based Compensation | 15 | ||||
Note 10 - Revenues | 18 | ||||
Note 11 - Current Expected Credit Losses | 18 | ||||
Note 12 - Income Tax | 19 | ||||
Note 13 - Net Income per Common Share | 20 | ||||
Note 14 - Commitments and Contingencies | 20 | ||||
Note 15 - Segment Information | 20 | ||||
Note 16 - Supplemental Statement of Cash Flows Information | 24 | ||||
Note 17 - Subsequent Events | 24 | ||||
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Note 1 – The Company and Basis of Presentation and Recent Accounting Pronouncements
The Company
EVERTEC, Inc. and its subsidiaries (collectively the “Company” or “EVERTEC”) is a leading full-service transaction processing business and financial technology provider in Latin America and the Caribbean. The Company is based in Puerto Rico and provides a broad range of merchant acquiring, payment processing and business process management services across 26 countries in the region. EVERTEC owns and operates the ATH network, which we believe is one of the leading personal identification number (“PIN”) debit networks in the Caribbean and Latin America. In addition, EVERTEC provides a comprehensive suite of services for core bank processing and cash processing in Puerto Rico and technology outsourcing in the regions the Company serves. EVERTEC serves a broad and diversified customer base of leading financial institutions, merchants, corporations, and government agencies with solutions that are essential to their operations, enabling them to issue, process and accept transactions securely.
Basis of Presentation
The unaudited condensed consolidated financial statements of EVERTEC have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. The preparation of the accompanying unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited condensed consolidated financial statements. Actual results could differ from these estimates.
Recently issued accounting pronouncements not adopted
In May 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2025-03 Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity to update Business Combinations (Topic 805) and Consolidation (Topic 810). The amendments in this update require an entity involved in an acquisition transaction that include an exchange of equity interests when the acquiree is a variable interest entity to consider the factors in paragraphs 805-10-55-12 through 55-15 to determine which entity is the accounting acquirer. The amendments in this update are effective for fiscal years beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company will apply the updated guidance prospectively upon the effective date.
In May 2025, the FASB issued ASU 2025-04 Clarifications to Share-Based Consideration Payable to a Customer amending Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606). The amendment updates the master glossary definition of the term performance condition for share-based consideration payable to a customer. The revised definition incorporates conditions that are based on the volume or monetary amount of a customer’s purchases of goods or services. The revised definition also incorporates performance targets based on purchases made by other parties that purchase the Company’s goods or services from the grantor’s customers. The revised definition of the term performance condition cannot be applied to awards granted to employees and nonemployees in exchange for goods or services to be used or consumed in the Company’s own operations. The amendments in this update are effective for fiscal years beginning after December 15, 2026. The amendments in this update permit a company to apply the new guidance on either a modified retrospective or a retrospective basis. Early adoption is permitted. The Company will apply the updated guidance upon the effective date.
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Note 2 – Business Acquisition
On October 31, 2024, the Company signed and closed an agreement to acquire 100 % of the share capital of Grandata, Inc ("Grandata"). Grandata is a data analytics company operating in Mexico that specializes in leveraging behavioral data to provide credit risk insights, with a focus on underbanked populations. The aggregate purchase price was $33.3 million and the acquisition enhances the Company's existing product offerings. The Company accounted for this transaction as a business combination and, in accordance with ASC 805-10-25-15, the Company is allowed a period, not to exceed 12 months from the acquisition date, to adjust the provisional amounts recognized for a business combination. The preliminary purchase price allocation is as follows:
| Assets/Liabilities (at fair value) | |||||
| ( In thousands) | |||||
| Cash and cash equivalents | $ | ||||
| Accounts receivable, net | |||||
| Prepaid expenses and other assets | |||||
| Preliminary goodwill | |||||
| Other intangible assets, net | |||||
| Total assets acquired | |||||
| Accounts payable | |||||
| Accrued liabilities | |||||
| Income tax payable | |||||
| Deferred tax liability | |||||
| Total liabilities assumed | |||||
| Additional paid-in capital | |||||
| Total liabilities and equity | $ | ||||
The following table details the major groups of intangible assets acquired and the weighted average amortization period for these assets:
| Amount | Weighted-average life | ||||||||||
| (Dollar amounts in thousands) | |||||||||||
| Customer relationships | $ | ||||||||||
| Trademark | |||||||||||
| Software packages | |||||||||||
| Total | $ | ||||||||||
On November 19, 2024, the Company signed and closed an agreement to acquire 100 % of the share capital of Nubity, Inc ("Nubity"). Nubity is a cloud services provider based in Mexico, specializing in AWS cloud infrastructure management, DevOps, and cloud-native application solutions for clients across Latin America. The aggregate purchase price was $11.0 million and the acquisition enhances the Company's existing product offering.
The Company accounted for this transaction as a business combination and, in accordance with ASC 805-10-25-15, the Company is allowed a period, not to exceed 12 months from the acquisition date, to adjust the provisional amounts recognized for a business combination. The Company received net assets with a value of $0.3 million and identified intangible assets other than goodwill for which a portion of the purchase price must be allocated. The purchase price was allocated to the following intangible assets: $4.4 million to customer relationships and $0.4 million to trademarks. Goodwill in connection with this transaction is preliminarily estimated at approximately $7.4 million, after recording deferred tax liabilities of approximately $1.4 million in connection with the intangible assets recognized.
The following table details the major groups of intangible assets acquired and the weighted average amortization period for these assets:
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| Amount | Weighted-average life | ||||||||||
| (Dollar amounts in thousands) | |||||||||||
| Customer relationships | $ | ||||||||||
| Trademark | |||||||||||
| Total | $ | ||||||||||
Goodwill in connection with both acquisitions is attributable to the Latin America Payments and Solutions segment, refer to Note 4- Goodwill and Other Intangible Assets for further details. None of the goodwill is deductible for income tax purposes.
The results of operations for both Grandata and Nubity were not material to the Company's unaudited condensed consolidated statement of income and comprehensive income (loss) for the quarter and six-month period ended June 30, 2025.
Note 3 – Property and Equipment, net
Property and equipment, net consisted of the following:
| (Dollar amounts in thousands) | Useful life in years | June 30, 2025 | December 31, 2024 | |||||||||||||||||
| Buildings | $ | $ | ||||||||||||||||||
| Data processing equipment | ||||||||||||||||||||
| Furniture and equipment | ||||||||||||||||||||
| Leasehold improvements | ||||||||||||||||||||
| Less - accumulated depreciation and amortization | ( | ( | ||||||||||||||||||
| Depreciable assets, net | ||||||||||||||||||||
| Land | ||||||||||||||||||||
| Property and equipment, net | $ | $ | ||||||||||||||||||
Depreciation and amortization expense related to property and equipment for the three and six months ended June 30, 2025 amounted to $5.5 million and $11.0 million, compared to $5.4 million and $11.1 million for the corresponding periods in 2024.
Note 4 – Goodwill and Other Intangible Assets
The changes in the carrying amount of goodwill, allocated by reporting unit, were as follows (see Note 15):
| (In thousands) | Payment Services - Puerto Rico & Caribbean | Latin America Payments and Solutions | Merchant Acquiring, net | Business Solutions | Total | |||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Measurement period adjustment for prior year acquisitions | ||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | ||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Goodwill is tested for impairment on an annual basis as of August 31, or more often if events or changes in circumstances indicate there may be impairment. The Company may test for goodwill impairment using a qualitative or a quantitative analysis. In a qualitative analysis, the Company assesses whether it is "more likely than not" that the fair value of a reporting unit is less than its carrying amount. In the quantitative analysis, the Company compares the estimated fair value of the reporting units to their carrying values, including goodwill. The Company performed a quantitative assessment for the Latin America Payments and Solutions reporting unit and a qualitative assessment for the Payments Services - Puerto Rico & Caribbean, Merchant Acquiring, net and Business Solutions reporting units as of August 31, 2024. No
The carrying amount of other intangible assets at June 30, 2025 and December 31, 2024 was as follows:
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| June 30, 2025 | ||||||||||||||||||||||||||
| (Dollar amounts in thousands) | Useful life in years | Gross amount | Accumulated amortization | Net carrying amount | ||||||||||||||||||||||
| Customer relationships | $ | $ | ( | $ | ||||||||||||||||||||||
| Trademarks | ( | $ | ||||||||||||||||||||||||
| Software packages | ( | $ | ||||||||||||||||||||||||
| Non-compete agreement | ( | $ | ||||||||||||||||||||||||
| Other intangible assets, net | $ | $ | ( | $ | ||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||
| (Dollar amounts in thousands) | Useful life in years | Gross amount | Accumulated amortization | Net carrying amount | ||||||||||||||||||||||
| Customer relationships | $ | $ | ( | $ | ||||||||||||||||||||||
| Trademarks | ( | |||||||||||||||||||||||||
| Software packages | ( | |||||||||||||||||||||||||
| Non-compete agreement | ( | |||||||||||||||||||||||||
| Other intangible assets, net | $ | $ | ( | $ | ||||||||||||||||||||||
Amortization expense related to other intangibles for the three and six months ended June 30, 2025 amounted to $22.8 million and $45.8 million, compared to $27.6 million and $56.3 million for the corresponding periods in 2024.
The estimated amortization expense of the other intangible balances outstanding at June 30, 2025, for the remainder of 2025 and the years thereafter is as follows:
| (In thousands) | ||||||||
| Remaining 2025 | $ | |||||||
| 2026 | ||||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| Thereafter | ||||||||
Note 5 – Debt and Short-Term Borrowings
Debt at June 30, 2025 and December 31, 2024 was as follows:
| (In thousands) | June 30, 2025 | December 31, 2024 | ||||||||||||
2027 Term A Loan bearing interest at a variable interest rate (SOFR plus applicable margin(1)(2)) | $ | $ | ||||||||||||
2030 Term B Loan bearing interest at a variable interest rate (SOFR plus applicable margin(1)(3)) | ||||||||||||||
| Deferred consideration from business combinations | ||||||||||||||
Note payable due on September 1, 2030(1) | ||||||||||||||
| Total debt | $ | $ | ||||||||||||
(1)Net of unaccreted discount and unamortized debt issue costs, as applicable.
(2)Subject to a minimum rate ("SOFR floor") of 0.00 2.00
Secured Credit Facilities
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On December 1, 2022, EVERTEC and EVERTEC Group, entered into a credit agreement with a syndicate of lenders and Truist Bank, as administrative agent and collateral agent, providing for a $415.0 million term loan A facility (the “TLA Facility”) that matures on December 1, 2027, and a $200.0 million revolving credit facility (the “Revolving Facility”) that matures on December 1, 2027 (the “Credit Agreement”). On October 30, 2023, EVERTEC and EVERTEC Group entered into a first amendment to the Credit Agreement with a syndicate of lenders and Truist, as administrative agent and collateral agent, providing for (i) additional term A loans in the amount of $60.0 million and a new tranche of term loan B commitments in the amount of $600.0 million maturing October 30, 2030 (the “TLB Facility”). On May 16, 2024 and November 26, 2024, EVERTEC and EVERTEC Group entered into second and third amendments to its Credit Agreement, each providing for a pricing reduction to its TLB Facility. Unless otherwise indicated, the terms and conditions detailed below apply to both TLA Facility and TLB Facility (together, the “Term Loan Facilities”).
At June 30, 2025, the unpaid principal balance of the TLA Facility and TLB Facility were $417.7 million and $540.0 million, respectively. The additional borrowing capacity for the Revolving Facility at June 30, 2025 was $193.9 million, considering letters of credit issued. The Company issues letters of credit against the Revolving Facility which reduce the additional borrowing capacity of the Revolving Facility.
Deferred Consideration from Business Combinations
As part of the Company’s merger and acquisition activities, the Company may enter into agreements by which a portion of the purchase price is financed directly by the seller. At June 30, 2025 and December 31, 2024, the unpaid principal balance of these agreements amounted to $6.5 million and $9.9 million, respectively. Obligations bear interest at rates ranging from 5.6 % to 12.9 % with maturities ranging from October 2025 through March 2027. The current portion of the deferred consideration is included in accounts payable and the long-term portion is included in other long-term liabilities on the Company's unaudited condensed consolidated balance sheet.
Note Payable
In September 2023, EVERTEC Group entered into a non-interest bearing financing agreement amounting to $10.1 million to purchase software and maintenance which the Company recorded on a discounted basis using an implied interest of 6.9 %. As of June 30, 2025, the outstanding principal balance of the note payable on a discounted basis was $6.0 million. The current portion of the note is included in accounts payable and the long-term portion is included in other long-term liabilities on the Company's unaudited condensed consolidated balance sheet.
Interest Rate Swaps
As of June 30, 2025, the Company has three interest rate swap agreements which convert a portion of the interest rate payments on the Company's Facilities from variable to fixed. The interest rate swaps are used to hedge the market risk from changes in interest rates corresponding with the Company's variable rate debt. The interest rate swaps are designated as cash flow hedges and are considered highly effective. Cash flows from the interest rate swaps are included in the accrued liabilities and accounts payable line item in the Company's unaudited condensed consolidated statements of cash flows. Changes in the fair value of the interest rate swaps are recognized in other comprehensive income (loss) until the gains or losses are reclassified to earnings. Gains or losses reclassified to earnings are presented within interest expense in the accompanying unaudited condensed consolidated statements of income and comprehensive income (loss).
| Swap Agreement | Effective date | Maturity Date | Notional Amount | Variable Rate | Fixed Rate | |||||||||||||||||||||||||||
| 2023 Swap | November 2024 | December 2027 | $ | 1-month SOFR | ||||||||||||||||||||||||||||
| 2024 Swap | March 2024 | October 2027 | $ | 1-month SOFR | ||||||||||||||||||||||||||||
| 2024 Swap | March 2024 | October 2027 | $ | 1-month SOFR | ||||||||||||||||||||||||||||
At June 30, 2025, the carrying amount of the derivatives included on the Company's unaudited condensed consolidated balance sheet was an asset of $0.2 million and a liability of $5.1 million. At December 31, 2024, the carrying amount of the derivatives was an asset of $4.3 million and a liability of $1.4 million. The fair value of these derivatives are estimated using Level 2 inputs in the fair value hierarchy on a recurring basis. Refer to Note 8 - Equity for disclosure of gains (losses) recorded on cash flow hedging activities.
During the three and six months ended June 30, 2025, the Company reclassified gains of $0.8 million and $1.5 million, from accumulated other comprehensive income (loss) into interest expense compared to gains of $2.4 million and $4.1 million for the corresponding periods in 2024. Based on expected SOFR rates, the Company expects to reclassify gains of $0.4 million from accumulated other comprehensive income (loss) into interest expense over the next 12 months.
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Note 6 – Financial Instruments and Fair Value Measurements
Recurring Fair Value Measurements
The following table presents assets and liabilities measured at fair value on a recurring basis at June 30, 2025 and December 31, 2024:
| June 30, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | Level 2 | Level 3 | Measured at NAV | Total | Level 2 | Level 3 | Measured at NAV | Total | |||||||||||||||||||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||||||||||||||||||||||||||
Debt securities AFS | $ | $ | $ | — | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||||||||||||||||
Equity securities | |||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Debt Securities Available for Sale ("AFS")
Costa Rica government obligations are held by a trust in the Costa Rica National Bank as a collateral requirement for settlement activities. The Company may substitute securities as needed but must maintain certain levels of collateral based on transaction volumes. During the six month period ended June 30, 2025, $1.0 million in debt securities matured and the Company purchased $0.6 million. No debt securities were sold during the six month period ended June 30, 2025. Debt securities amounting to $0.4 million matured during the six-month period ended June 30, 2024. A provision for credit losses was not required for either June 30, 2025 or 2024. The current portion of debt securities, if any, is included as part of prepaid and other assets on the unaudited condensed consolidated balance sheets.
The fair value of debt securities is estimated based on observable inputs through corroboration with market data at the measurement date, therefore classified as a Level 2 asset within the fair value hierarchy.
Interest rate swaps
The fair value of the Company's interest rate swaps are estimated using Level 2 inputs under the fair value hierarchy. Refer to Note 5 - Debt and Short-term Borrowings for additional information related to the derivative instruments.
Equity Securities Measured at Net Asset Value (NAV)
At June 30, 2025 and 2024, the Company holds mutual funds classified as equity securities on the Company's unaudited condensed consolidated balance sheet that are measured at fair value using the NAV per share, or its equivalent, as a practical expedient. Mutual funds consist of investments in venture capital strategies and start-ups with a focus on privately held technology companies. The NAV is based on the fair value of the underlying net assets owned by the mutual funds and the relative interest of each participating investor in the fair value of the underlying assets.
Financial assets and liabilities not measured at fair value
The following table presents the carrying value and estimated fair value for financial instruments at June 30, 2025 and December 31, 2024:
| June 30, 2025 | December 31, 2024 | |||||||||||||||||||||||||
| (In thousands) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||||||||||
| Financial liabilities: | ||||||||||||||||||||||||||
| 2027 Term A Loan Facility | $ | $ | $ | $ | ||||||||||||||||||||||
| 2030 Term B Loan Facility | $ | $ | $ | $ | ||||||||||||||||||||||
The fair value of the term loans at June 30, 2025 and December 31, 2024 was obtained using prices provided by third party service providers. Their pricing is based on various inputs such as market quotes, recent trading activity in a non-active market
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Note 7 – Redeemable Noncontrolling Interests
At June 30, 2025, redeemable noncontrolling interests ("RNCI") consist of interests in consolidated subsidiaries for which the Company has entered into separate option contracts by which the Company has the right to purchase the remaining non-controlling interests through a call option and the non-controlling interest holder has the right to sell the non-controlling interest to the Company through a put option.
| Percentage of redeemable noncontrolling interest | Earliest exercise date | Formula of redemption value | |||||||||||||||
| Rosk Software S.A. | March 15, 2026 | Variable multiple of gross sales dependent upon EBITDA margin attained times percentage of ownership | |||||||||||||||
| Compliasset Software e Solucoes Digitais LTDA. | March 15, 2026 | Variable multiple of net sales dependent upon EBITDA margin attained plus working capital, plus net debt times percentage of ownership | |||||||||||||||
| Lote45 Participacoes S.A. | January 1, 2027 | Variable multiple of net sales dependent upon EBITDA margin attained plus net debt minus BRL$ | |||||||||||||||
Given certain provisions within the option contracts, the Company has classified the RNCI as mezzanine equity on the Company's unaudited condensed consolidated balance sheets. RNCI are adjusted quarterly, if necessary, to their estimated redemption value. Adjustments to the redemption value impact stockholders' equity. The following table presents changes in RNCI:
| (In thousands) | Redeemable noncontrolling interests | ||||||||||
| June 30, 2025 | December 31, 2024 | ||||||||||
| Beginning balance | $ | $ | |||||||||
| Net income attributable non-controlling interests | |||||||||||
| Acquisition of shares from non-controlling interest | ( | ||||||||||
| Adjustment of redeemable non-controlling interests to redemption value | |||||||||||
| Dividends declared on redeemable non-controlling interests | ( | ||||||||||
| Distributions from redeemable non-controlling interests | ( | ||||||||||
| Foreign currency translation adjustments | ( | ||||||||||
| Ending balance | $ | $ | |||||||||
Note 8 – Equity
Accumulated Other Comprehensive Loss
The following table provides a summary of the changes in the balances of accumulated other comprehensive loss for the six months ended June 30, 2025:
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| (In thousands) | Foreign Currency Translation Adjustments | Cash Flow Hedges | Unrealized Gains (Losses) on Debt Securities AFS | Total | ||||||||||||||||||||||
| Balance - December 31, 2024, net of tax | $ | ( | $ | $ | $ | ( | ||||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | ( | |||||||||||||||||||||||||
| Effective portion reclassified to net income | ( | ( | ||||||||||||||||||||||||
| Balance - June 30, 2025, net of tax | $ | ( | $ | ( | $ | $ | ( | |||||||||||||||||||
Share Repurchase
On March 6, 2024, the Company entered into an accelerated share repurchase agreement (the “ASR”) with Bank of America, N.A. to repurchase an aggregate of $70 million of the Company’s common stock, par value $0.01 per share. In connection with the launch of the ASR, on March 8, 2024, the Company paid Bank of America, N.A., an aggregate of $70 million and received approximately 1.5 million shares of the Company’s common stock. On July 9, 2024, the Company completed the ASR transaction. In connection with the settlement of the ASR, the Company received 467,362 shares, in addition to the 1,516,793 shares received in March of 2024. No cash was exchanged as part of the settlement of the ASR. All of the shares received as part of the ASR were retired.
Note 9 – Share-based Compensation
Long-term Incentive Plan ("LTIP")
During the periods ended March 31, 2023, 2024 and 2025, the Compensation Committee (the "Compensation Committee") of the Company's Board of Directors ("Board") approved grants of restricted stock units (“RSUs”) to executives and certain employees pursuant to the 2023 LTIP, 2024 LTIP and 2025 LTIP, respectively, all under the terms of the Company's 2022 Equity Incentive Plan. Under the LTIPs, the Company granted RSUs to eligible participants as time-based awards and/or performance-based awards.
The vesting of the RSUs is dependent upon service and/or performance conditions as defined in the award agreements. Employees that received time-based awards with service conditions are entitled to receive a specific number of shares of the Company’s common stock on the vesting date if the employee provides services to the Company through the vesting date. Time-based awards generally vest over a period of three years in substantially equal installments commencing on the grant date and ending on February 24 of each year for the 2023 LTIP, February 28 of each year for the 2024 LTIP and February 28 of each year for the 2025 LTIP. In 2023, the Company also granted time-based awards with a three year service vesting period which will cliff vest on February 24, 2026.
For the performance-based awards under the 2023 LTIP, 2024 LTIP, and 2025 LTIP, the Compensation Committee established adjusted earnings before interest, income taxes, depreciation and amortization ("Adjusted EBITDA") as the primary performance measure while maintaining focus on total shareholder return through the use of a market-based total shareholder return ("TSR") performance modifier. The Adjusted EBITDA measure is based on annual Adjusted EBITDA targets and can result in a payout between 0 % and 200 %, depending on the performance level. The TSR modifier adjusts the shares earned based on the Adjusted EBITDA performance upwards or downwards (+/- 25 %) based on the Company’s relative TSR at the end of the three-year performance period as compared to the companies in the Russell 2000 Index. The Adjusted EBITDA performance measure will be calculated for the one-year period commencing on January 1 of the year of the grant and ending on December 31 of the same year, relative to the goals set by the Compensation Committee for this same period. The shares earned will be subject to an additional two-year service vesting period and will vest on February 24, 2026 for the 2023 LTIP and February 28, 2027 for the 2024 LTIP and February 28, 2028 for the 2025 LTIP. Unless otherwise specified in the award agreement, or in an employment agreement, awards are forfeited if the employee voluntarily ceases to be employed by the Company prior to vesting.
The following table summarizes nonvested RSUs activity for the six months ended June 30, 2025:
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| Nonvested RSUs | Shares | Weighted-average grant date fair value | ||||||||||||
| Nonvested at December 31, 2024 | $ | |||||||||||||
| Granted | ||||||||||||||
| Vested | ( | |||||||||||||
| Forfeited | ( | |||||||||||||
| Nonvested at June 30, 2025 | $ | |||||||||||||
For the three and six months ended June 30, 2025, the Company recognized $7.3 million and $14.5 million of share-based compensation expense, compared with $7.7 million and $15.0 million for the corresponding period in 2024.
Note 10 – Revenues
Disaggregation of Revenue
The Company disaggregates revenue from contracts with customers into primary geographical markets, nature of the products and services, and timing of transfer of goods and services. The Company's operating segments are determined by the nature of the products and services the Company provides and the primary geographical markets in which the Company operates. Revenue disaggregated by segment is discussed in Note 15 - Segment Information.
In the following tables, revenue for each segment, excluding intersegment revenues, is disaggregated by timing of revenue
recognition for the periods indicated.
| Three months ended June 30, 2025 | ||||||||||||||||||||||||||||||||
| (In thousands) | Payment Services - Puerto Rico & Caribbean | Latin America Payments and Solutions | Merchant Acquiring, net | Business Solutions | Total | |||||||||||||||||||||||||||
| Timing of revenue recognition | ||||||||||||||||||||||||||||||||
| Products and services transferred at a point in time | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Products and services transferred over time | $ | |||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Three months ended June 30, 2024 | |||||||||||||||||||||||||||||
| (In thousands) | Payment Services - Puerto Rico & Caribbean | Latin America Payments and Solutions | Merchant Acquiring, net | Business Solutions | Total | ||||||||||||||||||||||||
| Timing of revenue recognition | |||||||||||||||||||||||||||||
| Products and services transferred at a point in time | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Products and services transferred over time | |||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | |||||||||||||||||||||||||
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| Six months ended June 30, 2025 | |||||||||||||||||||||||||||||
| (In thousands) | Payment Services - Puerto Rico & Caribbean | Latin America Payments and Solutions | Merchant Acquiring, net | Business Solutions | Total | ||||||||||||||||||||||||
| Timing of revenue recognition | |||||||||||||||||||||||||||||
| Products and services transferred at a point in time | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Products and services transferred over time | |||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | |||||||||||||||||||||||||
| Six months ended June 30, 2024 | |||||||||||||||||||||||||||||
| (In thousands) | Payment Services - Puerto Rico & Caribbean | Latin America Payments and Solutions | Merchant Acquiring, net | Business Solutions | Total | ||||||||||||||||||||||||
| Timing of revenue recognition | |||||||||||||||||||||||||||||
| Products and services transferred at a point in time | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Products and services transferred over time | |||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | |||||||||||||||||||||||||
Revenue concentration with a single customer, Popular, as a percentage of total revenues for the quarters ended June 30, 2025 and 2024 was approximately 31 % and 32 %, respectively. For the both the six months ended June 30, 2025 and 2024 this percentage was approximately 31 44.9 million and $37.5 million, respectively.
Contract Balances
Contract assets of the Company arise when the Company has a contract with a customer for which revenue has been recognized (i.e., goods or services have been transferred), but the customer payment is subject to a future event (i.e., satisfaction of additional performance obligations). Contract assets will be considered a receivable when the rights to consideration of the Company become unconditional (i.e., the Company has a present right to payment). Contract assets at June 30, 2025 and December 31, 2024 amounted to $14.1 million and $11.4 million, respectively. The current portion of contract assets is recorded as part of prepaid expenses and other assets, and the long-term portion is included in other long-term assets in the unaudited condensed consolidated balance sheets.
Contract liability and Contract liability- long term, at June 30, 2025 amounted to $23.6 million and $51.1 million, respectively. Contract liability and Contract liability- long term, at December 31, 2024 amounted to $25.3 million and $55.0 million, respectively. Contract liability is mainly comprised of upfront fees for implementation or set up activities, including fees invoiced in pre-production periods in connection with hosting services, as well as amounts related to contracts entered into concurrently with the close of the sale to Popular of certain assets in exchange for 4.6 million shares of EVERTEC common stock in fiscal year 2022. Contract liability may also arise when consideration is received or due in advance from customers prior to performance. During the three and six month period ended June 30, 2025, the Company recognized revenue of $8.0 million and $18.4 million, respectively that was included in the contract liability at December 31, 2024. During the three and six months ended June 30, 2024, the Company recognized revenue of $7.2 million and $15.0 million, respectively, that was included in the contract liability at December 31, 2023.
Transaction price allocated to the remaining performance obligations
Revenues from recurring transaction-based and processing services represent the majority of the Company’s total revenue. The Company recognizes revenues from recurring transaction-based and processing services over time at the amounts in which the Company has right to invoice, which corresponds directly to the value to the customer of the Company’s performance completed to date.
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The Company has elected to apply the practical expedient permitted under ASC 606, when applicable. Under this practical expedient, the Company is not required to disclose information about remaining performance obligations if the performance obligation is part of a contract with an original expected duration of one year or less or if the Company recognizes revenue at the amount which it has a right to invoice. The Company also applies the practical expedient for variable consideration when the variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation.
For contracts excluded from the application of the practical expedients noted above, the estimated aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially satisfied at June 30, 2025 was $734.8 million, which is expected to be recognized over the next 5 years.
Note 11 – Current Expected Credit Losses
Allowance for Current Expected Credit Losses
Trade receivables from contracts with customers are financial assets analyzed by the Company under the expected credit loss model. To measure expected credit losses, trade receivables are grouped based on shared risk characteristics (i.e., the relevant industry sector and customer's geographical location) and days past due (i.e., delinquency status), while considering the following:
•Customers in the same geographical location share similar risk characteristics associated with the macroeconomic environment of their country.
•The Company has two main industry sectors: private and government. The private pool is comprised mainly of leading financial institutions, merchants and corporations, while the governmental pool is comprised of government agencies. The governmental customers possess different risk characteristics than private customers because although all invoices are due 30 days after issuance, governmental customers usually pay within 60 to 90 days after issuance.
•The expected credit loss rate is likely to increase as receivables move to older aging buckets. The Company used the following aging categories to estimate the risk of delinquency status: (i) 0 days past due; (ii) 1-30 days past due; (iii) 31-60 days past due; (iv) 61-90 days past due; and (v) over 90 days past due.
The credit losses of the Company’s trade receivables have been historically low and most balances are collected within one year. Therefore, the Company determined that the expected loss rates should be calculated using the historical loss rates adjusted by macroeconomic factors. The historical rates are calculated for each of the aging categories used for pooling trade receivables. To determine the collected portion of each bucket, the collection time of each trade receivable is identified, to estimate the proportion of outstanding balances per aging bucket that ultimately will not be collected. This is used to determine the expectation of losses based on the history of uncollected trade receivables once the specific past due period is surpassed. The historical rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of customers to settle the receivables by applying a country risk premium as the forward-looking macroeconomic factor. Specific reserves are established for certain customers for which collection is doubtful.
Rollforward of the Allowance for Expected Current Credit Losses
The following table provides information about the allowance for expected current credit losses on trade receivables for the six months ended June 30, 2025 and the year ended December 31, 2024:
| (In thousands) | June 30, 2025 | December 31, 2024 | ||||||||||||
| Balance at beginning of period | $ | $ | ||||||||||||
| Current period provision for expected credit losses | ||||||||||||||
| Write-offs | ( | ( | ||||||||||||
| Recoveries of amounts previously written-off | ||||||||||||||
| Balance at end of period | $ | $ | ||||||||||||
The Company does not have a delinquency threshold for writing-off trade receivables. The Company has a formal process for the review and approval of write-offs.
Impairment losses on trade receivables are presented as net impairment losses within cost of revenue, exclusive of depreciation and amortization in the unaudited condensed consolidated statements of income and comprehensive income (loss). Subsequent
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recoveries of amounts previously written-off, when applicable, are credited against the allowance for expected current credit losses within accounts receivable, net on the unaudited condensed consolidated balance sheets.
Note 12 – Income Tax
The components of income tax expense for the three and six months ended June 30, 2025 and 2024, respectively, consisted of the following:
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
| (In thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Current tax provision | $ | $ | $ | $ | ||||||||||||||||||||||
| Deferred tax benefit | ( | ( | ( | ( | ||||||||||||||||||||||
| Income tax expense | $ | $ | $ | $ | ||||||||||||||||||||||
The Company conducts operations in Puerto Rico, the United States, and certain countries in Latin America. As a result, the income tax expense includes the effect of taxes paid to the government of Puerto Rico as well as foreign jurisdictions. The following table presents the components of income tax expense for the three and six months ended June 30, 2025 and 2024, and its segregation based on location of operations:
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||
| (In thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| Current tax provision | |||||||||||||||||||||||||||||
| Puerto Rico | $ | $ | $ | $ | |||||||||||||||||||||||||
| United States | |||||||||||||||||||||||||||||
| Foreign countries | |||||||||||||||||||||||||||||
| Total current tax provision | $ | $ | $ | $ | |||||||||||||||||||||||||
| Deferred tax benefit | |||||||||||||||||||||||||||||
| Puerto Rico | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
| United States | ( | ( | |||||||||||||||||||||||||||
| Foreign countries | ( | ( | ( | ( | |||||||||||||||||||||||||
| Total deferred tax benefit | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
Taxes payable to foreign countries by EVERTEC’s subsidiaries are paid by such subsidiary and the corresponding liability and expense will be presented in EVERTEC’s unaudited condensed consolidated financial statements.
As of June 30, 2025, the Company had $184.9 million of unremitted earnings from foreign subsidiaries, compared to $165.2 million as of December 31, 2024. The Company has not recognized a deferred tax liability on undistributed earnings for the Company’s foreign subsidiaries because these earnings are intended to be indefinitely reinvested.
As of June 30, 2025, the gross deferred tax asset amounted to $89.7 million and the gross deferred tax liability amounted to $85.9 million, compared to $74.3 million and $79.9 million, respectively, as of December 31, 2024. As of June 30, 2025, and December 31, 2024, there is a valuation allowance against the gross deferred tax asset of approximately $5.9 million and $5.3 million, respectively.
The Company estimates that it is reasonably possible that the liability for uncertain tax position created from acquisitions in foreign jurisdictions will decrease by approximately $2.5 million in the next 12 months as a result of the expiration of the statute of limitations.
Income tax expense differs from the amount computed by applying the Puerto Rico statutory income tax rate to the income before income taxes as a result of the following:
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| Six months ended June 30, | ||||||||||||||
| (In thousands) | 2025 | 2024 | ||||||||||||
| Computed income tax at statutory rates | $ | $ | ||||||||||||
| Differences in tax rates due to multiple jurisdictions | ||||||||||||||
| Effect of income subject to tax-exemption grant | ( | ( | ||||||||||||
| Unrecognized tax expense | ( | |||||||||||||
| Excess tax benefits on share-based compensation | ( | |||||||||||||
| Other, net | ( | |||||||||||||
| Income tax expense | $ | $ | ||||||||||||
Note 13 – Net Income Per Common Share
The reconciliation of the numerator and the denominator of net income per common share is as follows:
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
| (In thousands, except per share information) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Net income available to EVERTEC, Inc.’s common shareholders | $ | $ | $ | $ | ||||||||||||||||||||||
| Weighted average common shares outstanding | ||||||||||||||||||||||||||
Weighted average potential dilutive common shares (1) | ||||||||||||||||||||||||||
| Weighted average common shares outstanding - assuming dilution | ||||||||||||||||||||||||||
| Net income per common share - basic | $ | $ | $ | $ | ||||||||||||||||||||||
| Net income per common share - diluted | $ | $ | $ | $ | ||||||||||||||||||||||
(1)Potential common shares consist of common stock issuable under RSUs awards using the treasury stock method.
On February 20, 2025, the Company's Board declared quarterly cash dividends of $0.05 per share of common stock, which was paid on March 21, 2025 to stockholders of record as of March 3, 2025. On May 2, 2025, the Board declared a regular quarterly cash dividend of $0.05 per share which was paid on June 6, 2025 to stockholders of record as of the close of business on May 13, 2025.
Note 14 – Commitments and Contingencies
EVERTEC is a defendant in a number of legal proceedings arising in the ordinary course of business. Based on the opinion of legal counsel and other factors, management believes that the final disposition of these matters will not have a material adverse effect on the business, results of operations, financial condition, or cash flows of the Company. The Company has identified certain claims in which a loss may be incurred, but in the aggregate the loss would be inconsequential. For other claims, where the proceedings are in an initial phase, the Company is unable to estimate the range of possible loss, if any, at this time, but management believes that any loss related to such claims will not be material.
Note 15 – Segment Information
The Company operates in four operating and reportable business segments: Payment Services - Puerto Rico & Caribbean, Latin America Payments and Solutions, Merchant Acquiring, and Business Solutions based upon organization of the Company by the nature of products and services provided to customers and geography.
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The Payment Services - Puerto Rico & Caribbean segment revenues are comprised of revenues related to providing access to the ATH debit network and other card networks to financial institutions, including related services such as authorization, processing, management and recording of ATM and point of sales (POS) transactions, and ATM management and monitoring. The segment revenues also include revenues from card processing services (such as credit and debit card processing, authorization and settlement and fraud monitoring and control to debit or credit issuers), payment processing services (such as payment and billing products for merchants, businesses and financial institutions), ATH Movil (person-to-person) and ATH Business (person-to-merchant) digital transactions and EBT (which principally consist of services to the government of Puerto Rico for the delivery of benefits to participants). For ATH debit network and processing services, revenues are primarily driven by the number of transactions processed. Revenues are derived primarily from network fees, transaction switching and processing fees, and the leasing of POS devices. For card issuer processing, revenues are primarily dependent upon the number of cardholder accounts on file, transactions and authorizations processed, the number of cards embossed and other processing services. For EBT services, revenues are primarily derived from the number of beneficiaries on file.
The Latin America Payments and Solutions segment payment revenues consist of revenues related to providing access to the ATH network of ATMs and other card networks to financial institutions, including related services such as authorization, processing, management and recording of ATM and POS transactions, and ATM management and monitoring. The segment revenues also include revenues from card processing services (such as credit and debit card processing, authorization and settlement and fraud monitoring and control to debit or credit issuers), payment processing services (such as payment and billing products for merchants, businesses and financial institutions), as well as licensed software solutions for risk and fraud management and card payment processing. For network and processing services, revenues are primarily driven by the number of transactions processed. Revenues are derived primarily from transaction switching, processing fees, and the leasing of POS devices. For card issuer processing, revenues are primarily dependent upon the number of cardholder accounts on file, transactions and authorizations processed, the number of cards embossed, and other processing services. Solutions revenues consist of (a) licensing, support and maintenance (“subscription”), implementation and customization of software used to provide financial products in areas such as core banking, credit, investments, payments, foreign exchange, mutual funds, pension funds and consortium, in addition to software used to execute processes such as digital onboarding, digital signature and digital collection; and (b) outsourcing of mission critical IT services. Revenues are based on monthly fixed fees and, in several cases, variable fees based on usage.
The Merchant Acquiring segment consists of revenues from services that allow merchants to accept electronic methods of payment. In the Merchant Acquiring segment, revenues include a discount fee and membership fees charged to merchants, debit network fees and rental fees from POS devices and other equipment, net of credit card interchange and assessment fees charged by credit cards associations (such as VISA or MasterCard) or payment networks. The discount fee is generally a percentage of the transaction value. EVERTEC also charges merchants for other services that are unrelated to the number of transactions or the transaction value.
The Business Solutions segment consists of revenues from a full suite of business process management solutions in various product areas such as core bank processing, network hosting, managed services and managed security services, IT professional services, business process outsourcing, item processing, cash processing, and fulfillment. Core bank processing and network services revenues are derived in part from a recurrent fixed fee and from fees based on the number of accounts on file (i.e., savings or checking accounts, loans, etc.), server capacity usage or computer resources utilized. Revenues from other processing services within the Business Solutions segment are generally volume-based and depend on factors such as the number of accounts processed. In addition, EVERTEC is a reseller of hardware and software products and these resale transactions are generally non-recurring.
The Company’s Chief Operating Decision Maker ("CODM") is the President and Chief Executive Officer (“CEO”). The CODM uses revenue and Segment Adjusted EBITDA to evaluate segment performance and allocate resources, and regularly reviews performance at the segment level against budget and forecast when making decisions about the allocation of resources to each segment. Segment Adjusted EBITDA reviewed by the CODM is calculated as EBITDA further adjusted to exclude certain non-cash unrealized items and unusual expenses such as: share-based compensation, restructuring related expenses, fees and expenses from corporate transactions such as M&A activity and financing, equity investment income net of dividends received, and the impact from non-cash unrealized gains and losses on foreign currency remeasurement for assets and liabilities in non-functional currency. Segment Adjusted EBITDA is presented in conformity with ASC Topic 280, Segment Reporting, given that it is used by the CODM for purposes of evaluating performance and allocating resources.
Expense information that is regularly provided to the CODM on a consolidated financial statement basis include personnel costs, professional fees, equipment expenses and cost of sales, adjusted primarily for the impact of share-based compensation, restructuring related expenses, and fees and expenses from corporate transactions such as M&A activity and financing.
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The Company does not report assets or other balance sheet information to the CODM on a segment basis as the Company’s CODM does not assess performance, make strategic decisions, or allocate resources based on this information. No segment expense information is regularly provided to the CODM and therefore the Company does not report significant segment expenses.
The following tables set forth information about the Company’s operations by its four reportable segments for the periods indicated:
| Three Months Ended June 30, 2025 | |||||||||||||||||||||||||||||||||||
| (In thousands) | Payment Services - Puerto Rico & Caribbean | Latin America Payments and Solutions | Merchant Acquiring, net | Business Solutions | Total Reportable Segments | ||||||||||||||||||||||||||||||
| Total revenues | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Intersegment revenues | |||||||||||||||||||||||||||||||||||
Total segment revenues(1) | |||||||||||||||||||||||||||||||||||
Less: Other segment items(2) | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
| Segment Adjusted EBITDA | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
(1)Total segment revenues include intersegment revenues eliminated on a consolidated basis. Intersegment revenue eliminations predominantly reflect the $14.8 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring, intercompany software developments and transaction-processing of $6.4 million from Latin America Payments and Solutions to both Payment Services- Puerto Rico & Caribbean and Business Solutions, and transaction-processing and monitoring fees of $3.5 million from Payment Services - Puerto Rico & Caribbean to Latin America Payments and Solutions.
(2)For each reportable segment, other segment items category includes: cost of revenues and selling, general and administrative expenses, exclusive of depreciation and amortization. These amounts are adjusted to exclude certain items such as: share-based compensation costs, severance payments, equity investment income net of dividends received, foreign currency remeasurement for assets and liabilities in non-functional currency, and expenses from corporate transactions as defined in the Credit Agreement to determine Segment Adjusted EBITDA.
| Three Months Ended June 30, 2024 | |||||||||||||||||||||||||||||
| (In thousands) | Payment Services - Puerto Rico & Caribbean | Latin America Payments and Solutions | Merchant Acquiring, net | Business Solutions | Total Reportable Segments | ||||||||||||||||||||||||
| Total revenues | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Intersegment revenues | |||||||||||||||||||||||||||||
Total segment revenues(1) | |||||||||||||||||||||||||||||
Less: Other segment items(2) | ( | ( | ( | ( | ( | ||||||||||||||||||||||||
| Segment Adjusted EBITDA | |||||||||||||||||||||||||||||
(1)Total segment revenues include intersegment revenues eliminated on a consolidated basis. Intersegment revenue eliminations predominantly reflect the $14.2 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring, intercompany software developments and transaction-processing of $5.2 million from Latin America Payments and Solutions to both Payment Services - Puerto Rico & Caribbean and Business Solutions, and transaction-processing and monitoring fees of $5.2 million from Payment Services - Puerto Rico & Caribbean to Latin America Payments and Solutions.
(2)For each reportable segment, other segment items category includes: cost of revenues and selling, general and administrative expenses, exclusive of depreciation and amortization. These amounts are adjusted to exclude certain items such as: share-based compensation costs, severance payments, equity investment income net of dividends received, foreign currency remeasurement for assets and liabilities in non-functional currency, and expenses from corporate transactions as defined in the Credit Agreement to determine Segment Adjusted EBITDA.
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| Six months ended June 30, 2025 | |||||||||||||||||||||||||||||||||||
| (In thousands) | Payment Services - Puerto Rico & Caribbean | Latin America Payments and Solutions | Merchant Acquiring, net | Business Solutions | Total Reportable Segments | ||||||||||||||||||||||||||||||
| Total revenues | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Intersegment revenues | |||||||||||||||||||||||||||||||||||
Total segment revenues(1) | |||||||||||||||||||||||||||||||||||
Less: Other segment items(2) | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
| Segment Adjusted EBITDA | |||||||||||||||||||||||||||||||||||
(1)Total segment revenues include intersegment revenues eliminated on a consolidated basis. Intersegment revenue eliminations predominantly reflect the $29.2 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring, intercompany software developments and transaction-processing of $11.9 million from Latin America Payments and Solutions to both Payment Services - Puerto Rico & Caribbean and Business Solutions, and transaction-processing and monitoring fees of $7.0 million from Payment Services - Puerto Rico & Caribbean to Latin America Payments and Solutions.
(2)For each reportable segment, other segment items category includes: cost of revenues and selling, general and administrative expenses, exclusive of depreciation and amortization. These amounts are adjusted to exclude certain items such as: share-based compensation costs, severance payments, equity investment income net of dividends received, foreign currency remeasurement for assets and liabilities in non-functional currency, and expenses from corporate transactions as defined in the Credit Agreement to determine Segment Adjusted EBITDA.
| Six months ended June 30, 2024 | |||||||||||||||||||||||||||||||||||
| (In thousands) | Payment Services - Puerto Rico & Caribbean | Latin America Payments and Solutions | Merchant Acquiring, net | Business Solutions | Total Reportable Segments | ||||||||||||||||||||||||||||||
| Total revenues | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Intersegment revenues | |||||||||||||||||||||||||||||||||||
Total segment revenues(1) | |||||||||||||||||||||||||||||||||||
Less: Other segment items(2) | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
| Segment Adjusted EBITDA | |||||||||||||||||||||||||||||||||||
(1)Total segment revenues include intersegment revenues eliminated on a consolidated basis. Intersegment revenue eliminations predominantly reflect the $28.8 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring, intercompany software developments and transaction-processing of $9.2 million from Latin America Payments and Solutions to both Payment Services - Puerto Rico & Caribbean and Business Solutions, and transaction-processing and monitoring fees of $9.7 million from Payment Services - Puerto Rico & Caribbean to Latin America Payments and Solutions.
(2)For each reportable segment, other segment items category includes: cost of revenues and selling, general and administrative expenses, exclusive of depreciation and amortization. These amounts are adjusted to exclude certain items such as: share-based compensation costs, severance payments, equity investment income net of dividends received, foreign currency remeasurement for assets and liabilities in non-functional currency, and expenses from corporate transactions as defined in the Credit Agreement to determine Segment Adjusted EBITDA.
The reconciliation of Segment Adjusted EBITDA to consolidated income before income taxes is as follows:
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| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
| (In thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Segment Adjusted EBITDA | $ | $ | $ | $ | |||||||||||||||||||
| Elimination of intersegment revenues | ( | ( | ( | ( | |||||||||||||||||||
Other corporate expenses(1) | |||||||||||||||||||||||
Compensation and benefits(2) | ( | ( | ( | ( | |||||||||||||||||||
Transaction, refinancing and other fees(3) | |||||||||||||||||||||||
| Earnings of equity method investments, net of dividends received | |||||||||||||||||||||||
Gain (loss) on foreign currency remeasurement(4) | ( | ||||||||||||||||||||||
| Interest income | |||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||||||||
| Depreciation and amortization | ( | ( | ( | ( | |||||||||||||||||||
| Income before income taxes | $ | $ | $ | $ | |||||||||||||||||||
(1)The other corporate expenses category consists of corporate overhead expenses and other non-operating expenses that are not included in the reportable segment, as well as intersegment eliminations.
(2)Primarily represents share-based compensation and severance payments.
(3)Primarily represents fees and expenses associated with corporate transactions as defined in the Credit Agreement and the elimination of unrealized earnings from equity investments, net of dividends received.
(4)Represents non-cash unrealized gains (losses) on foreign currency remeasurement for assets and liabilities denominated in non-functional currencies.
Note 16 – Supplemental Statement of Cash Flows Information
Supplemental statement of cash flows information is as follows:
| Six Months Ended June 30, | ||||||||||||||
| (In thousands) | 2025 | 2024 | ||||||||||||
| Supplemental disclosure of cash flow information: | ||||||||||||||
| Cash paid for interest | $ | $ | ||||||||||||
| Cash paid for income taxes | ||||||||||||||
| Supplemental disclosure of non-cash activities: | ||||||||||||||
| Payable due to vendor related to equipment and software acquired | ||||||||||||||
| Right-of-use assets obtained in exchange for operating lease liabilities | ||||||||||||||
| Non-cash investing activities | ||||||||||||||
| Trade-in of equipment | ||||||||||||||
Reconciliation of cash, cash equivalents, restricted cash and cash included in settlement assets as presented on the cash flow statement was as follows:
| June 30, | ||||||||||||||
| (In thousands) | 2025 | 2024 | ||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Restricted cash | ||||||||||||||
| Cash and cash equivalents included in settlement assets | ||||||||||||||
| Cash, cash equivalents, restricted cash and cash included in settlement assets | ||||||||||||||
Note 17 – Subsequent Events
On July 24, 2025, the Board declared a regular quarterly cash dividend of $0.05 per share on the Company’s outstanding shares of common stock. The dividend is expected to be paid on September 5, 2025 to stockholders of record as of the close of business on August 4, 2025. The Board anticipates declaring this dividend in future quarters on a regular basis; however future declarations of dividends are subject to the Board’s approval and may be adjusted as business needs or market conditions change.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) covers: (i) the results of operations for the three and six months ended June 30, 2025 and 2024 and (ii) the financial condition as of June 30, 2025. You should read the following discussion and analysis in conjunction with the audited consolidated financial statements (the “Audited Consolidated Financial Statements”) and related notes for the year ended December 31, 2024, included in the Company’s Annual Report on Form 10-K as filed with the SEC on March 3, 2025 and with the unaudited condensed consolidated financial statements (the “Unaudited Condensed Consolidated Financial Statements”) and related notes appearing elsewhere herein. This MD&A contains forward-looking statements that involve risks and uncertainties. Our actual results may differ from those indicated in the forward-looking statements. See “Forward-Looking Statements” for a discussion of the risks, uncertainties and assumptions associated with these statements.
Except as otherwise indicated or unless the context otherwise requires, (a) the terms “EVERTEC,” “we,” “us,” “our,” “our Company” and “the Company” refer to EVERTEC, Inc. and its subsidiaries on a consolidated basis and, (b) the term “EVERTEC Group” refers to EVERTEC Group, LLC and its predecessor entities and their subsidiaries on a consolidated basis. EVERTEC Inc.’s subsidiaries include EVERTEC Group; ; EVERTEC Intermediate Holdings, LLC; EVERTEC Dominicana, SAS; Evertec Chile Holdings SpA; Evertec Chile SpA; Evertec Chile Global SpA; Evertec Chile Servicios Profesionales SpA; Tecnopago España SL; Paytrue S.A.; Caleidon; S.A.; Evertec Brasil Solutions Informática S.A. ("EVERTEC BR"); EVERTEC Panamá, S.A.; EVERTEC Costa Rica, S.A. (“EVERTEC CR”); Zunify Payments Ltda; EVERTEC Guatemala, S.A.; Evertec Colombia, SAS;, EVERTEC USA, LLC; OPG Technology Corp.; Evertec Placetopay, SAS ("PlacetoPay"); BBR Chile, SpA and BBR Perú, S.A.C.,(collectively "BBR"); Paysmart Pagamentos Eletronicos Ltda, Issuer Holding Ltda. and Issuer Instituição de Pagamentos Ltda (collectively "paySmart"); EVERTEC México Servicios de Procesamiento, S.A. de C.V.; Sinqia S.A.,Torq. Inovação Digital Ltda, Sinqia Tecnologia Ltda., Homie do Brasil Informática S.A., Rosk Software S.A., Lote 45 Participações S.A., and Compliasset S.A. (collectively "Sinqia"); Grandata, Inc., Grandata Mexico, S.A. de C.V., Grandata USA, Inc. and Big Data Analytics SA (collectively "Grandata"); and Nubity S.R.L., Nubity Inc. and Nubity Cloud, S.A.P.I. de C.V. (collectively "Nubity"). Neither EVERTEC nor EVERTEC Intermediate Holdings, LLC conducts any operations other than with respect to its indirect or direct ownership of EVERTEC Group.
Except as otherwise indicated or unless the context otherwise requires, (a) the terms “EVERTEC,” “we,” “us,” “our,” “our Company” and “the Company” refer to EVERTEC, Inc. and its subsidiaries on a consolidated basis and, (b) the term “EVERTEC Group” refers to EVERTEC Group, LLC and its predecessor entities and their subsidiaries on a consolidated basis. EVERTEC Inc.’s subsidiaries include EVERTEC Group; ; EVERTEC Intermediate Holdings, LLC; EVERTEC Dominicana, SAS; Evertec Chile Holdings SpA; Evertec Chile SpA; Evertec Chile Global SpA; Evertec Chile Servicios Profesionales SpA; Tecnopago España SL; Paytrue S.A.; Caleidon; S.A.; Evertec Brasil Solutions Informática S.A. ("EVERTEC BR"); EVERTEC Panamá, S.A.; EVERTEC Costa Rica, S.A. (“EVERTEC CR”); Zunify Payments Ltda; EVERTEC Guatemala, S.A.; Evertec Colombia, SAS;, EVERTEC USA, LLC; OPG Technology Corp.; Evertec Placetopay, SAS ("PlacetoPay"); BBR Chile, SpA and BBR Perú, S.A.C.,(collectively "BBR"); Paysmart Pagamentos Eletronicos Ltda, Issuer Holding Ltda. and Issuer Instituição de Pagamentos Ltda (collectively "paySmart"); EVERTEC México Servicios de Procesamiento, S.A. de C.V.; Sinqia S.A.,Torq. Inovação Digital Ltda, Sinqia Tecnologia Ltda., Homie do Brasil Informática S.A., Rosk Software S.A., Lote 45 Participações S.A., and Compliasset S.A. (collectively "Sinqia"); Grandata, Inc., Grandata Mexico, S.A. de C.V., Grandata USA, Inc. and Big Data Analytics SA (collectively "Grandata"); and Nubity S.R.L., Nubity Inc. and Nubity Cloud, S.A.P.I. de C.V. (collectively "Nubity"). Neither EVERTEC nor EVERTEC Intermediate Holdings, LLC conducts any operations other than with respect to its indirect or direct ownership of EVERTEC Group.
Overview
EVERTEC is a leading full-service transaction-processing business and financial technology provider in Latin America, Puerto Rico and the Caribbean, providing a broad range of merchant acquiring, payment services and business solutions. We believe we are one of the largest merchant acquirers in Latin America based on total number of transactions and we also believe we are the largest merchant acquirer in the Caribbean. We serve 26 countries out of 24 offices, including our headquarters in Puerto Rico. We own and operate the ATH network, which we believe is one of the leading debit networks in Brazil. We process over ten billion transactions annually through a system of electronic payment networks in Puerto Rico and Latin America and provide a comprehensive suite of services for core banking, cash processing, fulfillment in Puerto Rico and a "one stop shop" set of products for the financial sector in Latin America, which include solutions such as core banking, investments, asset management, pension funds and consortium. Additionally, we offer managed services, managed security services and payment transactions fraud monitoring to all the regions where we do business. We serve a diversified customer base of leading financial institutions, merchants, corporations, and government agencies with “mission-critical” technology solutions that enable them to issue, process and accept transactions securely. We believe our business is well-positioned to continue to expand across the fast-growing Latin America region.
We are differentiated, in part, by our diversified business model, which enables us to provide our varied customer base with a broad range of transaction-processing services from a single source across numerous channels and geographic markets. We believe this capability provides several competitive advantages that will enable us to continue to penetrate our existing customer base with complementary new services, gain new customers, develop new sales channels, and enter new markets. We believe these competitive advantages include:
•Our ability to provide competitive products;
•Our ability to provide in one package a range of services that traditionally had to be sourced from different vendors;
•Our ability to serve customers with disparate operations in several geographies with technology solutions that enable them to manage their business as one enterprise; and
•Our ability to capture and analyze data across the transaction-processing value chain and use that data to provide value-added services that are differentiated from those offered by pure-play vendors that serve only one portion of the transaction-processing value chain (such as only merchant acquiring or only payment services).
Our broad suite of services spans the entire payment processing value chain and includes a range of front-end customer-facing solutions such as the electronic capture and authorization of transactions at the point-of-sale for both card present transactions and card-not-present transactions, as well as back-end support services such as the clearing and settlement of transactions and
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account reconciliation for card issuers. These include: (i) merchant acquiring services, which enable point of sales (“POS”) and e-commerce merchants to accept and process electronic methods of payment such as debit, credit, prepaid and electronic benefit transfer (“EBT”) cards; (ii) payment processing services, which enable financial institutions and other issuers to manage, support and facilitate the processing for credit, debit, prepaid, automated teller machines (“ATM”) and EBT card programs; and (iii) business process management solutions, which provide “mission-critical” technology solutions such as core bank processing, as well as IT outsourcing and cash management services to financial institutions, corporations and governments. We provide these services through scalable, end-to-end technology platforms that we manage and operate in-house and that generate significant operating efficiencies that enable us to maximize profitability.
We sell and distribute our services primarily through a proprietary direct sales force with established customer relationships. We continue to pursue joint ventures and merchant acquiring alliances. We benefit from an attractive business model, the hallmarks of which are recurring revenue, scalability, significant operating margins and moderate capital expenditure requirements. Our revenue is predominantly recurring in nature because of the mission-critical and embedded nature of the services we provide. In addition, we generally enter into multi-year contracts with our customers. We believe our business model should enable us to continue to grow our business organically in the primary markets we serve without significant incremental capital expenditures.
Factors and Trends Affecting the Results of Our Operations
The ongoing migration from cash and paper methods of payment to electronic payments continues to benefit the transaction- processing industry globally. We continue to believe that the penetration of electronic payments in the markets in which we operate is significantly lower relative to the U.S. market, which, together with the ongoing shift from cash and paper methods of payment to electronic payments will continue to generate growth opportunities for our business. For example, the adoption of banking products, including electronic payments, in the Latin America and Caribbean region is lower relative to the mature U.S. and European markets. We believe that the unbanked and underbanked population in our markets will continue to shrink, and therefore drive incremental penetration and growth of electronic payments in Puerto Rico and other Latin America regions. We also benefit from the outsourcing of technology systems and processes trend for financial institutions and government. Many medium- and small-size institutions in the Latin American markets in which we operate have outdated systems and updating these IT legacy systems is financially and logistically challenging, which presents a business opportunity for us.
In recent years, consumer preference has accelerated its shift away from cash and paper payment methods, noting increased demand for omni-channel payment services that facilitate cashless and contactless transactions. The ongoing migration to digital payment methods continues to benefit the transaction-processing industry globally. Technologies such as contactless payments, QR codes, tap to pay, mobile commerce, “e-wallets” and advanced and smart POS devices continue to drive the shift away from cash and other traditional payment methods. The Company has benefited from an increase in transaction volumes for these types of payment solutions. As consumers and merchants increase demand for contactless and mobility-based solutions, the Company has continued to innovate and invest, expanding the footprint and functionality of digital solutions such as Placetopay, our e-commerce gateway platform, our wallet ATH Movil and ATH Business, and Paystudio our issuing and acquiring processing platform. Additionally, aligned with this trend, the Company has also developed software to take advantage of Brazil's fastest instant money transfer system, PIX. We believe that the ongoing shift to digital payments will continue to generate substantial growth opportunities for our business.
Our payment businesses also generally experience moderate increased activity during the traditional holiday shopping periods and around other nationally recognized holidays, which follow consumer spending patterns.
Finally, our financial condition and results of operations are, in part, dependent on the economic and general conditions of the geographies in which we operate. Rising interest rates, inflationary pressures, foreign currency fluctuations, new or increased tariffs or the imposition of other trade barriers and economic uncertainty in the markets in which we operate may affect consumer confidence, which could result in a decrease in consumer spending and an impact to our financial results.
Relationship with Popular
On September 30, 2010, EVERTEC Group entered into a 15-year Master Service Agreement ("MSA"), and several related agreements with Popular. On July 1, 2022, we modified and extended the main commercial agreements with Popular, including obtaining a 10-year extension of the Merchant Acquiring Independent Sales Organization Agreement, a 5-year extension of the ATH Network Participation Agreement and a 3-year extension of the MSA (as amended, the "A&R ISO Agreement"). The A&R ISO Agreement, which defines our merchant acquiring relationship with Popular, now includes revenue sharing provisions with Popular. The MSA modifications also include the elimination of the exclusivity requirement, the inclusion of annual MSA minimums through September 30, 2028, a 10% discount on certain MSA services beginning in October of 2025 and adjustments to the CPI pricing escalator clause. On the same date, we also sold to Popular certain assets in exchange for 4.6
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million shares of EVERTEC common stock owned by Popular (collectively with the contract amendments, the "Popular Transaction"). On August 15, 2022, through a secondary offering, Popular sold its remaining shares of EVERTEC common stock. EVERTEC is no longer deemed a subsidiary of Popular under the Bank Holding Company Act. Popular continues to be the Company’s largest customer and for the six months ended June 30, 2025 approximately 31% of our revenues were generated from this relationship.
Results of Operations
Comparison of the three months ended June 30, 2025 and 2024
| Three months ended June 30, | |||||||||||||||||||||||||||||||||||||||||
| In thousands | 2025 | 2024 | Variance | ||||||||||||||||||||||||||||||||||||||
| Revenues | $ | 229,607 | $ | 211,978 | $ | 17,629 | 8 | % | |||||||||||||||||||||||||||||||||
| Operating costs and expenses | |||||||||||||||||||||||||||||||||||||||||
| Cost of revenues, exclusive of depreciation and amortization | 110,060 | 97,481 | 12,579 | 13 | % | ||||||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | 35,104 | 38,187 | (3,083) | (8) | % | ||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 28,309 | 32,950 | (4,641) | (14) | % | ||||||||||||||||||||||||||||||||||||
| Total operating costs and expenses | 173,473 | 168,618 | 4,855 | 3 | % | ||||||||||||||||||||||||||||||||||||
| Income from operations | $ | 56,134 | $ | 43,360 | $ | 12,774 | 29 | % | |||||||||||||||||||||||||||||||||
Revenues
Total revenue for the three months ended June 30, 2025 was $229.6 million, an increase of 8% compared with $212.0 million in in the prior year quarter driven by organic growth in all of the Company's segments and the contribution from the acquisitions completed in the fourth quarter of 2024. Merchant acquiring revenue benefited from an improvement in spread as we continue to benefit from pricing initiatives implemented in the prior year. Payments Puerto Rico revenue benefited from increased revenues from ATH Movil, and transaction growth. Latin America revenue benefited from continued organic growth across the entire region and the contribution from acquisitions completed in the prior year. Business Solutions revenue increased as a result of projects completed throughout the prior year and an increase in IT consulting services.
Cost of Revenues
Cost of revenues, exclusive of depreciation and amortization, for the three months ended June 30, 2025 amounted to $110.1 million, an increase of $12.6 million or 13% when compared to the same period in the prior year. This increase was primarily related to an increase in cloud services, increased cost of sales, an increase in software maintenance expense, higher professional fees related to strategic projects and an increase in personnel costs, partially due to the increased headcount from acquisitions completed in the fourth quarter of the prior year, partially offset by the reversals of contingency accruals.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the three months ended June 30, 2025 amounted to $35.1 million, a decrease of $3.1 million or 8% when compared to the same period in the prior year. This decrease was mainly driven by lower professional fees.
Depreciation and Amortization
Depreciation and amortization expense for the three months ended June 30, 2025 amounted to $28.3 million, a decrease of $4.6 million or 14% when compared to the same period in the prior year. The decrease was primarily driven by intangible assets that became fully amortized during the prior year.
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Non-Operating Expenses
| Three months ended June 30, | |||||||||||||||||||||||||||||||||||||||||
| In thousands | 2025 | 2024 | Variance | ||||||||||||||||||||||||||||||||||||||
| Interest income | $ | 3,079 | $ | 3,218 | $ | (139) | (4) | % | |||||||||||||||||||||||||||||||||
| Interest expense | (16,719) | (18,709) | 1,990 | (11) | % | ||||||||||||||||||||||||||||||||||||
| Gain on foreign currency remeasurement | 1,348 | 2,404 | (1,056) | (44) | % | ||||||||||||||||||||||||||||||||||||
| Earnings from equity investees | 867 | 1,096 | (229) | (21) | % | ||||||||||||||||||||||||||||||||||||
| Other income, net | 334 | 2,255 | (1,921) | (85) | % | ||||||||||||||||||||||||||||||||||||
| Total non-operating expenses | $ | (11,091) | $ | (9,736) | $ | (1,355) | 14 | % | |||||||||||||||||||||||||||||||||
Non-operating expenses for the three months ended June 30, 2025 increased by $1.4 million to $11.1 million when compared to the same period in the prior year. The increase was mainly related to a $1.9 million decrease in other income, net, mostly driven by a decrease in the prior year in the estimated payout of deferred consideration from business combinations, and a decrease in foreign currency remeasurement gain of $1.1 million in the current year quarter. These were partially offset by a decrease in interest expense of $2.0 million driven by a lower interest rate and the debt repricing completed in the prior year.
Income Tax Expense
| Three months ended June 30, | |||||||||||||||||||||||||||||||||||||||||
| In thousands | 2025 | 2024 | Variance | ||||||||||||||||||||||||||||||||||||||
| Income tax expense (benefit) | $ | 4,070 | $ | 1,101 | $ | 2,969 | 270 | % | |||||||||||||||||||||||||||||||||
Income tax expense for the three months ended June 30, 2025 amounted to $4.1 million, compared to an income tax expense in the prior year quarter of $1.1 million. The effective tax rate for the period was 9.0%, compared with 3.3% in the prior year period. The increase in the effective tax rate was primarily driven by growth in Latin America jurisdictions, which have higher tax rates, and lower interest expense driven by a lower interest rate and the debt repricing completed in the prior year, coupled with the non-recurring reversal of a potential liability for uncertain tax positions as a result of the expiration of the statute of limitation during the prior year.
Comparison of the six months ended June 30, 2025 and 2024
| Six months ended June 30, | |||||||||||||||||||||||||||||||||||||||||
| In thousands | 2025 | 2024 | Variance | ||||||||||||||||||||||||||||||||||||||
| Revenues | $ | 458,399 | $ | 417,296 | $ | 41,103 | 10 | % | |||||||||||||||||||||||||||||||||
| Operating costs and expenses | |||||||||||||||||||||||||||||||||||||||||
| Cost of revenues, exclusive of depreciation and amortization | 224,669 | 199,929 | 24,740 | 12 | % | ||||||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | 71,314 | 73,813 | (2,499) | (3) | % | ||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 56,782 | 67,391 | (10,609) | (16) | % | ||||||||||||||||||||||||||||||||||||
| Total operating costs and expenses | 352,765 | 341,133 | 11,632 | 3 | % | ||||||||||||||||||||||||||||||||||||
| Income from operations | $ | 105,634 | $ | 76,163 | $ | 29,471 | 39 | % | |||||||||||||||||||||||||||||||||
Revenues
Total revenue for the six months ended June 30, 2025 was $458.4 million, an increase of 10% compared with $417.3 million in the prior year period for the same reasons explained above for the quarter. Merchant acquiring and Payments Puerto Rico revenue growth was driven by the same factors explained above for the quarter. Latin America revenues were positively impacted by the contribution from acquisitions completed in the prior year, continued organic growth across the region, and the benefit from pricing initiatives. Business Solutions revenue increased as a result of projects completed throughout the prior year, an increase in IT consulting services and an increase in hardware and software sales.
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Cost of Revenues
Cost of revenues, exclusive of depreciation and amortization, for the six months ended June 30, 2025 amounted to $224.7 million, an increase of $24.7 million or 12% when compared to the same period in the prior year. This increase was primarily related to the increase in cost of sales in connection with hardware and software sales, an increase in personnel costs, partially due to the increased headcount from acquisitions completed in the fourth quarter of the prior year, higher professional fees related to strategic projects and an increase in cloud services, partially offset by the reversal of contingency accruals.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the six months ended June 30, 2025 amounted to $71.3 million, a decrease of $2.5 million or 3% when compared to the same period in the prior year. This decrease was mainly driven by lower professional fees, partially offset by an increase in personnel costs.
Depreciation and Amortization
Depreciation and amortization expense for the six months ended June 30, 2025 amounted to $56.8 million, a decrease of $10.6 million or 16% when compared to the same period in the prior year. The decrease was primarily driven by intangible assets that became fully amortized during the prior year.
Non-Operating Expenses
| Six months ended June 30, | |||||||||||||||||||||||||||||||||||||||||
| In thousands | 2025 | 2024 | Variance | ||||||||||||||||||||||||||||||||||||||
| Interest income | $ | 6,330 | $ | 6,578 | $ | (248) | (4) | % | |||||||||||||||||||||||||||||||||
| Interest expense | (33,707) | (38,648) | 4,941 | (13) | % | ||||||||||||||||||||||||||||||||||||
| Gain (loss) on foreign currency remeasurement | 515 | (2,052) | 2,567 | (125) | % | ||||||||||||||||||||||||||||||||||||
| Earnings from equity investees | 2,944 | 2,167 | 777 | 36 | % | ||||||||||||||||||||||||||||||||||||
| Other income, net | 554 | 6,095 | (5,541) | (91) | % | ||||||||||||||||||||||||||||||||||||
| Total non-operating expenses | $ | (23,364) | $ | (25,860) | $ | 2,496 | (10) | % | |||||||||||||||||||||||||||||||||
Non-operating expenses for the six months ended June 30, 2025 decreased by $2.5 million to $23.4 million when compared to the same period in the prior year. The decrease was mainly related to a decrease in interest expense of $4.9 million driven by a lower interest rate and the debt repricing completed in the prior year and a decrease in foreign currency remeasurement losses of $2.6 million, as the current year has a gain compared with losses in the prior year. This impact was partially offset by a decrease in Other income, net as the prior year included realized gains of $2.8 million from changes in fair value of equity securities, while no such gains were recognized in the current year. Additionally, the prior year benefited from a decrease in the estimated payout of deferred consideration related to business combinations.
Income Tax Expense
| Six months ended June 30, | |||||||||||||||||||||||||||||||||||||||||
| In thousands | 2025 | 2024 | Variance | ||||||||||||||||||||||||||||||||||||||
| Income tax expense | $ | 8,206 | $ | 1,393 | $ | 6,813 | 489 | % | |||||||||||||||||||||||||||||||||
Income tax expense for the six months ended June 30, 2025 amounted to $8.2 million, compared to $1.4 million in the prior year. The effective tax rate for the period was 9.0%, compared with 2.8% in the prior year period. The increase in the effective tax rate was primarily driven by growth in Latin America jurisdictions, which have higher tax rates, lower interest expense driven by a lower interest rate and the debt repricing completed in the prior year, a non-recurring discrete item recorded during the current year, coupled with the non-recurring reversal of a potential liability for uncertain tax positions as a result of the expiration of the statute of limitation during the prior year.
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Segment Results of Operations
The Company has four operating and reportable business segments: Payment Services - Puerto Rico & Caribbean, Latin America Payments and Solutions, Merchant Acquiring, and Business Solutions based upon organization of the Company by the nature of products and services provided to customers and geography.
The Payment Services - Puerto Rico & Caribbean segment revenues are comprised of revenues related to providing access to the ATH debit network and other card networks to financial institutions, including related services such as authorization, processing, management and recording of ATM and POS transactions, and ATM management and monitoring. The segment revenues also include revenues from card processing services (such as credit and debit card processing, authorization and settlement and fraud monitoring and control to debit or credit issuers), payment processing services (such as payment and billing products for merchants, businesses and financial institutions), ATH Movil (person-to-person) and ATH Business (person-to-merchant) digital transactions and EBT (which principally consist of services to the government of Puerto Rico for the delivery of benefits to participants). For ATH debit network and processing services, revenues are primarily driven by the number of transactions processed. Revenues are derived primarily from network fees, transaction switching and processing fees, and the leasing of POS devices. For card issuer processing, revenues are primarily dependent upon the number of cardholder accounts on file, transactions and authorizations processed, the number of cards embossed and other processing services. For EBT services, revenues are primarily derived from the number of beneficiaries on file.
The Latin America Payments and Solutions segment payment revenues consist of revenues related to providing access to the ATH network of ATMs and other card networks to financial institutions, including related services such as authorization, processing, management and recording of ATM and POS transactions, and ATM management and monitoring. The segment revenues also include revenues from card processing services (such as credit and debit card processing, authorization and settlement and fraud monitoring and control to debit or credit issuers), payment processing services (such as payment and billing products for merchants, businesses and financial institutions), as well as licensed software solutions for risk and fraud management and card payment processing. For network and processing services, revenues are primarily driven by the number of transactions processed. Revenues are derived primarily from transaction switching, processing fees, and the leasing of POS devices. For card issuer processing, revenues are primarily dependent upon the number of cardholder accounts on file, transactions and authorizations processed, the number of cards embossed, and other processing services. Solutions revenues consist of (a) licensing, support and maintenance (“subscription”), implementation and customization of software used to provide financial products in areas such as core banking, credit, investments, payments, foreign exchange, mutual funds, pension funds and consortium, in addition to software used to execute processes such as digital onboarding, digital signature and digital collection; and (b) outsourcing of mission critical IT services. Revenues are based on monthly fixed fees and, in several cases, variable fees based on usage.
The Merchant Acquiring segment consists of revenues from services that allow merchants to accept electronic methods of payment. In the Merchant Acquiring segment, revenues include a discount fee and membership fees charged to merchants, debit network fees and rental fees from POS devices and other equipment, net of credit card interchange and assessment fees charged by credit cards associations (such as VISA or MasterCard) or payment networks. The discount fee is generally a percentage of the transaction value. EVERTEC also charges merchants for other services that are unrelated to the number of transactions or the transaction value.
The Business Solutions segment consists of revenues from a full suite of business process management solutions in various product areas such as core bank processing, network hosting, managed services and managed security services, IT professional services, business process outsourcing, item processing, cash processing, and fulfillment. Core bank processing and network services revenues are derived in part from a recurrent fixed fee and from fees based on the number of accounts on file (i.e., savings or checking accounts, loans, etc.), server capacity usage or computer resources utilized. Revenues from other processing services within the Business Solutions segment are generally volume-based and depend on factors such as the number of accounts processed. In addition, EVERTEC is a reseller of hardware and software products and these resale transactions are generally non-recurring.
The Company’s Chief Operating Decision Maker ("CODM") is the President and Chief Executive Officer (“CEO”). The CODM uses revenue and Segment Adjusted EBITDA to evaluate segment performance and allocate resources, and regularly reviews performance at the segment level against budget and forecast when making decisions about the allocation of resources to each segment. Segment Adjusted EBITDA reviewed by the CODM is calculated as EBITDA further adjusted to exclude certain non-cash unrealized items and unusual expenses such as: share-based compensation, restructuring related expenses, fees and expenses from corporate transactions such as M&A activity and financing, equity investment income net of dividends received, and the impact from non-cash unrealized gains and losses on foreign currency remeasurement for assets and liabilities
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in non-functional currency. Segment Adjusted EBITDA is presented in conformity with ASC Topic 280, Segment Reporting, given that it is used by the CODM for purposes of evaluating performance and allocating resources.
Expense information that is regularly provided to the CODM on a consolidated financial statement basis include personnel costs, professional fees, equipment expenses and cost of sales, adjusted primarily for the impact of share-based compensation, restructuring related expenses, and fees and expenses from corporate transactions such as M&A activity and financing.
The Company does not report assets or other balance sheet information to the CODM on a segment basis as the Company’s CODM does not assess performance, make strategic decisions, or allocate resources based on this information. No segment expense information is regularly provided to the CODM and therefore the Company does not report significant segment expenses.
The following tables set forth information about the Company’s operations by its four reportable segments for the periods indicated below.
Comparison of the three months ended June 30, 2025 and 2024
Payment Services - Puerto Rico & Caribbean
| Three months ended June 30, | |||||||||||||||||
| In thousands | 2025 | 2024 | |||||||||||||||
| Revenues | $56,421 | $54,199 | |||||||||||||||
| Segment Adjusted EBITDA | 33,028 | 31,358 | |||||||||||||||
| Segment Adjusted EBITDA Margin | 58.5 | % | 57.9 | % | |||||||||||||
Payment Services - Puerto Rico & Caribbean segment revenues for the three months ended June 30, 2025 increased by $2.2 million to $56.4 million when compared to the same period in the prior year. The increase in revenues was primarily driven by continued growth from ATH Movil, primarily ATH Business, as well as transaction growth partially offset by lower revenue from services provided to the Latin America Payments and Solutions segment. Segment Adjusted EBITDA increased by $1.7 million to $33.0 million, driven by revenue growth, which was partially offset by higher infrastructure and maintenance expenses.
Latin America Payments and Solutions
| Three months ended June 30, | |||||||||||||||||
| In thousands | 2025 | 2024 | |||||||||||||||
| Revenues | $86,055 | $74,669 | |||||||||||||||
| Segment Adjusted EBITDA | 23,350 | 17,500 | |||||||||||||||
| Segment Adjusted EBITDA Margin | 27.1 | % | 23.4 | % | |||||||||||||
Latin America Payments and Solutions segment revenues for the three months ended June 30, 2025 increased by $11.4 million to $86.1 million when compared to the same period in the prior year, driven by organic revenue growth across the region and the contribution from acquisitions completed in the fourth quarter of 2024, which are contributing at a higher margin, partially offset by the impact from foreign currency exchange and client attrition. Segment Adjusted EBITDA increased by $5.9 million primarily driven by the increase in revenues and a decrease in charges from the Payments Puerto Rico segment due to the decrease in transactions processed.
Merchant Acquiring
| Three months ended June 30, | |||||||||||||||||
| In thousands | 2025 | 2024 | |||||||||||||||
| Revenues | $47,292 | $45,319 | |||||||||||||||
| Segment Adjusted EBITDA | 20,002 | 18,248 | |||||||||||||||
| Segment Adjusted EBITDA Margin | 42.3 | % | 40.3 | % | |||||||||||||
Merchant Acquiring segment revenues for the three months ended June 30, 2025 increased by $2.0 million to $47.3 million when compared to the same period in the prior year. The revenue increase was primarily driven by an improvement in spread
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driven by pricing initiatives implemented in the prior year and sales volume growth. Segment Adjusted EBITDA increased by $1.8 million to $20.0 million driven by the increase in revenues, partially offset by processing costs as a result of higher transactions and an increase in revenue sharing expense.
Business Solutions
| Three months ended June 30, | |||||||||||||||||
| In thousands | 2025 | 2024 | |||||||||||||||
| Revenues | $64,519 | $62,336 | |||||||||||||||
| Segment Adjusted EBITDA | 26,032 | 29,769 | |||||||||||||||
| Segment Adjusted EBITDA Margin | 40.3 | % | 47.8 | % | |||||||||||||
Business Solutions segment revenues for the three months ended June 30, 2025 increased by $2.2 million to $64.5 million as compared to the prior year period. This increase was primarily driven by projects completed in the prior year, mainly for Popular, and an increase in IT consulting services in the current year quarter. Segment Adjusted EBITDA decreased by $3.8 million as compared to the prior year period primarily due to an increase in cost of sales, an increase in software maintenance and cloud expenses and incremental professional fees for strategic projects.
Comparison of the six months ended June 30, 2025 and 2024
Payment Services - Puerto Rico & Caribbean
| Six months ended June 30, | |||||||||||||||||
| In thousands | 2025 | 2024 | |||||||||||||||
| Revenues | $111,578 | $107,230 | |||||||||||||||
| Segment Adjusted EBITDA | 64,466 | 61,710 | |||||||||||||||
| Segment Adjusted EBITDA Margin | 57.8 | % | 57.5 | % | |||||||||||||
Payment Services - Puerto Rico & Caribbean segment revenues for the six months ended June 30, 2025 increased by $4.3 million to $111.6 million when compared to the same period in the prior year, primarily due to the same factors explained above for the quarter. Segment Adjusted EBITDA increased by $1.1 million to $64.5 million, driven by revenue growth, which was partially offset by higher infrastructure, maintenance and programming expenses.
Latin America Payments and Solutions
| Six months ended June 30, | |||||||||||||||||
| In thousands | 2025 | 2024 | |||||||||||||||
| Revenues | $169,830 | $148,885 | |||||||||||||||
| Segment Adjusted EBITDA | 48,245 | 33,797 | |||||||||||||||
| Segment Adjusted EBITDA Margin | 28.4 | % | 22.7 | % | |||||||||||||
Latin America Payments and Solutions segment revenues for the six months ended June 30, 2025 increased by $20.9 million to $169.8 million when compared to the same period in the prior year, driven by organic revenue growth, which benefited from pricing initiatives, the contribution from acquisitions completed in the fourth quarter of 2024, which are contributing at a higher margin, and non-recurring revenue recognized in the first half of the year, partially offset by the impact from foreign currency exchange and client attrition. Segment Adjusted EBITDA increased by $14.4 million primarily driven by the same factors explained above for the quarter and higher reversals of contingency accruals.
Merchant Acquiring
| Six months ended June 30, | |||||||||||||||||
| In thousands | 2025 | 2024 | |||||||||||||||
| Revenues | $94,941 | $88,418 | |||||||||||||||
| Segment Adjusted EBITDA | 40,361 | 34,468 | |||||||||||||||
| Segment Adjusted EBITDA Margin | 42.5 | % | 39.0 | % | |||||||||||||
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Merchant Acquiring segment revenues for the six months ended June 30, 2025 increased by $6.5 million to $47.3 million when compared to the same period in the prior year. The revenue increase was primarily driven by the same factors explained above for the quarter. Segment Adjusted EBITDA increased by $5.9 million to $20.0 million driven by the increase in revenues, partially offset by an increase in revenue sharing expense as well as processing costs as explained above for the quarter.
Business Solutions
| Six months ended June 30, | |||||||||||||||||
| In thousands | 2025 | 2024 | |||||||||||||||
| Revenues | $130,083 | $120,464 | |||||||||||||||
| Segment Adjusted EBITDA | 48,243 | 52,808 | |||||||||||||||
| Segment Adjusted EBITDA Margin | 37.1 | % | 43.8 | % | |||||||||||||
Business Solutions segment revenues for the six months ended June 30, 2025 increased by $9.6 million to $64.5 million as compared to the prior year period. This increase was primarily driven by projects completed in the prior year, mainly for Popular, an increase in hardware and software sales and an increase in IT consulting services. Segment Adjusted EBITDA decreased by $4.6 million as compared to the prior year period primarily due to prior year period primarily due to an increase in cost of sales driven by the increase in hardware and software sales, an increase in software maintenance and cloud expenses and incremental professional fees for strategic projects.
Liquidity and Capital Resources
As of June 30, 2025, there were no material changes to our primary short-term and long-term requirements for liquidity and capital resources as disclosed in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operation” of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 3, 2025. Our principal source of liquidity is cash generated from operations, and our primary liquidity requirements are the funding of working capital needs, capital expenditures, acquisitions, dividend payments, share repurchases and debt service. We also have a $200.0 million Revolving Facility, of which $193.9 million was available for borrowing as of June 30, 2025. The Company issues letters of credit against our Revolving Facility which reduce our availability of funds to be drawn.
As of June 30, 2025, we had cash and cash equivalents of $290.6 million, of which $229.8 million resides in our subsidiaries located outside of Puerto Rico for purposes of (i) funding the respective subsidiary’s current business operations and (ii) funding potential future investment outside of Puerto Rico. We intend to reinvest these funds outside of Puerto Rico, and based on our liquidity forecast, we will not need to repatriate this cash to fund the Puerto Rico operations or to meet debt-service obligations. However, if in the future we determine that we no longer need to maintain cash balances within our foreign subsidiaries, we may elect to distribute such cash to the Company in Puerto Rico. Distributions from the foreign subsidiaries to Puerto Rico may be subject to tax withholding and other tax consequences. Additionally, our credit agreement imposes certain restrictions on the distribution of dividends from subsidiaries.
Our primary use of cash is for operating expenses, working capital requirements, capital expenditures, acquisitions, dividend payments, share repurchases, debt service, and other transactions as opportunities present themselves.
Based on our current level of operations, we believe our existing cash flows from operations and the available secured Revolving Facility will be adequate to meet our liquidity needs for at least the next twelve months from the date of this Report. However, our ability to fund future operating expenses, dividend payments, capital expenditures, mergers and acquisitions, and our ability to make scheduled payments of interest, to pay principal on or refinance our indebtedness and to satisfy any other of our present or future debt obligations will depend on our future operating performance, which may be affected by general economic, financial and other factors beyond our control.
| Six months ended June 30, | ||||||||||||||
| (In thousands) | 2025 | 2024 | ||||||||||||
| Cash provided by operating activities | $ | 86,128 | $ | 131,340 | ||||||||||
| Cash used in investing activities | (42,680) | (50,167) | ||||||||||||
| Cash used in financing activities | (40,325) | (85,776) | ||||||||||||
| Effect of foreign exchange rate on cash, cash equivalents and restricted cash | 15,205 | (10,234) | ||||||||||||
| Net increase (decrease) in cash, cash equivalents, restricted cash and cash included in settlement assets | $ | 18,328 | $ | (14,837) | ||||||||||
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Net cash provided by operating activities for the six months ended June 30, 2025 was $86.1 million compared to $131.3 million for the same period in the prior year, driven by working capital requirements.
Net cash used in investing activities for the six months ended June 30, 2025 was $42.7 million compared to $50.2 million for the same period in the prior year and a result of a decrease of $14.0 million in additions to software and purchases of property, plant and equipment, partially offset by proceeds from the sale of equity securities in the prior year of $5.9 million, while none in the current year.
Net cash used in financing activities for the six months ended June 30, 2025 was $40.3 million compared to $85.8 million for the same period in the prior year, as the prior year included cash used to fund the accelerated share repurchase program of $70 million in addition to a decrease in other financing activities of $2.8 million. During the current year period there was a decrease in cash provided from settlement activities of $19.5 million and the Company exercised the right to acquire the remaining non-controlling interest in a company in Brazil for $5.2 million.
Capital Resources
Our principal capital expenditures are for hardware and computer software (purchased and internally developed) and additions to our property and equipment. During the six months ended June 30, 2025 and 2024, we invested approximately $42.3 million and $56.3 million in our capital resources, respectively. Generally, we fund capital expenditures with cash generated from operations and, if necessary, borrowings under our Revolving Facility.
Dividend Payments
On February 20, 2025, the Company's Board declared quarterly cash dividends of $0.05 per share of common stock, which was paid on March 21, 2025 to stockholders of record as of March 3, 2025. On May 2, 2025, the Board declared a regular quarterly cash dividend of $0.05 per share which was paid on June 6, 2025 to stockholders of record as of the close of business on May 13, 2025. On July 24, 2025, our Board declared a regular quarterly cash dividend of $0.05 per share on the Company’s outstanding shares of common stock. The dividend is expected to be paid on September 5, 2025 to stockholders of record as of the close of business on August 4, 2025. The Board anticipates declaring this dividend in future quarters on a regular basis; however future declarations of dividends are subject to the Board’s approval and may be adjusted as business needs or market conditions change.
Financial Obligations
Secured Credit Facilities
On December 1, 2022, EVERTEC and EVERTEC Group, entered into a credit agreement with a syndicate of lenders and Truist Bank, as administrative agent and collateral agent, providing for a $415.0 million term loan A facility (the “TLA Facility”) that matures on December 1, 2027, and a $200.0 million revolving credit facility (the “Revolving Facility”) that matures on December 1, 2027 (the “Credit Agreement”). On October 30, 2023, EVERTEC and EVERTEC Group entered into a first amendment to the Credit Agreement with a syndicate of lenders and Truist, as administrative agent and collateral agent, providing for (i) additional term A loans in the amount of $60.0 million and a new tranche of term loan B commitments in the amount of $600.0 million maturing October 30, 2030 (the “TLB Facility”). On May 16, 2024 and November 26, 2024, EVERTEC and EVERTEC Group entered into second and third amendments to its Credit Agreement, each providing for a pricing reduction to its TLB Facility. Unless otherwise indicated, the terms and conditions detailed below apply to both TLA Facility and TLB Facility (together, the “Term Loan Facilities”).
At June 30, 2025, the unpaid principal balance of the TLA Facility and TLB Facility were $417.7 million and $540.0 million, respectively. The additional borrowing capacity for the Revolving Facility at March 31, 2025 was $193.9 million, considering letters of credit issued. The Company issues letters of credit against the Revolving Facility which reduce the additional borrowing capacity of the Revolving Facility.
Deferred Consideration from Business Combinations
As part of the Company’s merger and acquisition activities, the Company may enter into agreements by which a portion of the purchase price is financed directly by the seller. At June 30, 2025 and December 31, 2024, the unpaid principal balance of these agreements amounted to $6.5 million and $9.9 million, respectively. Obligations bear interest at rates ranging from 5.6% to 12.9% with maturities ranging from October 2025 through March 2027. The current portion of the deferred consideration is included in accounts payable and the long-term portion is included in other long-term liabilities on the Company's unaudited condensed consolidated balance sheet.
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Note Payable
In September 2023, EVERTEC Group entered into a non-interest bearing financing agreement amounting to $10.1 million to purchase software and maintenance which the Company recorded on a discounted basis using an implied interest of 6.9%. As of June 30, 2025, the outstanding principal balance of the note payable on a discounted basis was $6.0 million. The current portion of the note is included in accounts payable and the long-term portion is included in other long-term liabilities on the Company's unaudited condensed consolidated balance sheet.
Interest Rate Swaps
As of June 30, 2025, the Company has three interest rate swap agreements which convert a portion of the interest rate payments on the Company's Term Loan Facilities from variable to fixed. The interest rate swaps are used to hedge the market risk from changes in interest rates corresponding with the Company's variable rate debt. The interest rate swaps are designated as cash flow hedges and are considered highly effective. Cash flows from the interest rate swaps are included in the accrued liabilities and accounts payable line item in the Company's unaudited condensed consolidated statements of cash flows. Changes in the fair value of the interest rate swaps are recognized in other comprehensive income (loss) until the gains or losses are reclassified to earnings. Gains or losses reclassified to earnings are presented within interest expense in the accompanying unaudited condensed consolidated statements of income and comprehensive income (loss).
| Swap Agreement | Effective date | Maturity Date | Notional Amount | Variable Rate | Fixed Rate | |||||||||||||||||||||||||||
| 2023 Swap | November 2024 | December 2027 | $250 million | 1-month SOFR | 3.375% | |||||||||||||||||||||||||||
| 2024 Swap | March 2024 | October 2027 | $150 million | 1-month SOFR | 4.182% | |||||||||||||||||||||||||||
| 2024 Swap | March 2024 | October 2027 | $150 million | 1-month SOFR | 4.172% | |||||||||||||||||||||||||||
At June 30, 2025, the carrying amount of the derivatives included on the Company's unaudited condensed consolidated balance sheet was an asset of $0.2 million and a liability of $5.1 million. At December 31, 2024, the carrying amount of the derivatives was an asset of $4.3 million and a liability of $1.4 million. The fair value of these derivatives are estimated using Level 2 inputs in the fair value hierarchy on a recurring basis. Refer to Note 8 for disclosure of gains (losses) recorded on cash flow hedging activities.
During the three and six months ended June 30, 2025, the Company reclassified gains of $0.8 million and $1.5 million, respectively, from accumulated other comprehensive income (loss) into interest expense compared to gains of $1.7 million and $4.1 million, respectively, for the corresponding period in 2024. Based on expected SOFR rates, the Company expects to reclassify gains of $0.4 million from accumulated other comprehensive income (loss) into interest expense over the next 12 months.
Covenant Compliance
As of June 30, 2025, the total secured net leverage ratio was 1.95 to 1.00. As of the date of filing of this Report, no event has occurred that constitutes an Event of Default or Default.
In this Report, we refer to the term “Adjusted EBITDA” to mean EBITDA as so defined and calculated in a substantially consistent manner for purposes of determining compliance with the total secured net leverage ratio based on the financial information for the last twelve months at the end of each quarter.
Net Income Reconciliation to EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per common share (Non-GAAP Measures)
The non-GAAP measures referenced in this Report are supplemental measures of the Company’s performance and are not required by, or presented in accordance with, accounting principles generally accepted in the United States of America (“GAAP”). They are not measurements of the Company’s financial performance under GAAP and should not be considered as alternatives to total revenue, net income or any other performance measures derived in accordance with GAAP or as alternatives to cash flows from operating activities, as indicators of operating performance or as measures of the Company’s liquidity. In addition to GAAP measures, management uses these non-GAAP measures to focus on the factors the Company believes are pertinent to the daily management of the Company’s operations and believes that they are also frequently used by analysts, investors and other stakeholders to evaluate companies in our industry. These measures have certain limitations in that they do not include the impact of certain expenses that are reflected in our condensed consolidated statements of operations that
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are necessary to run our business. Other companies, including other companies in our industry, may not use these measures or may calculate these measures differently than as presented herein, limiting their usefulness as comparative measures.
Reconciliations of the non-GAAP measures to the most directly comparable GAAP measure are included below. These non-GAAP measures include EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per common share, each as defined below.
EBITDA is defined as earnings before interest, taxes, depreciation and amortization.
Adjusted EBITDA is defined as EBITDA further adjusted to exclude certain non-cash items and unusual expenses such as: share-based compensation, restructuring related expenses, fees and expenses from corporate transactions such as M&A activity and financing, equity investment income net of dividends received, and the impact from unrealized gains and losses on foreign currency remeasurement for assets and liabilities in non-functional currency. Segment Adjusted EBITDA which is the measure reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing their performance, is presented in conformity with Accounting Standards Codification 280, Segment Reporting, and for this reason is excluded from the definition of non-GAAP financial measures under the Securities and Exchange Commission's Regulation G and Item 10(e) of Regulation S-K. See Note 15 – Segment Information for further information. The Company’s presentation of Adjusted EBITDA is substantially consistent with the equivalent measurements that are contained in the secured credit facilities in testing EVERTEC Group’s compliance with covenants therein such as the secured leverage ratio. Adjusted EBITDA Margin is defined as Adjusted EBITDA as a percentage of total revenues.
Adjusted Net Income is defined as Adjusted EBITDA less: operating depreciation and amortization expense, defined as GAAP Depreciation and amortization less amortization of intangibles related to acquisitions such as customer relationships, trademarks; cash interest expense defined as GAAP interest expense, less GAAP interest income adjusted to exclude non-cash amortization of debt issue costs, premium and accretion of discount; income tax expense which is calculated on adjusted pre-tax income using the applicable GAAP tax rate, adjusted for uncertain tax positions, tax true-ups, windfall from share-based compensation, unrealized gains and losses from foreign currency remeasurement, among others; and non-controlling interests, net of amortization for intangibles created as part of the purchase.
Adjusted Earnings per common share is defined as Adjusted Net Income divided by diluted shares outstanding.
The Company uses Adjusted Net Income to measure the Company’s overall profitability because the Company believes it better reflects the comparable operating performance by excluding the impact of the non-cash amortization and depreciation that was created as a result of merger and acquisition activity. In addition, in evaluating EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per common share, you should be aware that in the future the Company may incur expenses such as those excluded in calculating them.
A reconciliation of net income to EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per common share is provided below:
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| Three months ended June 30, | Six months ended June 30, | Twelve months ended | |||||||||||||||||||||||||||
| (In thousands, except per share information) | 2025 | 2024 | 2025 | 2024 | June 30, 2025 | ||||||||||||||||||||||||
| Net income | $ | 40,973 | $ | 32,523 | 74,064 | 48,910 | $ | 139,933 | |||||||||||||||||||||
| Income tax expense | 4,070 | 1,101 | 8,206 | 1,393 | 11,660 | ||||||||||||||||||||||||
| Interest expense, net | 13,640 | 15,491 | 27,377 | 32,070 | 56,708 | ||||||||||||||||||||||||
| Depreciation and amortization | 28,309 | 32,950 | 56,782 | 67,391 | 117,237 | ||||||||||||||||||||||||
| EBITDA | 86,992 | 82,065 | 166,429 | 149,764 | 325,538 | ||||||||||||||||||||||||
Equity income (1) | (867) | (1,096) | (2,944) | (2,167) | (2,047) | ||||||||||||||||||||||||
Compensation and benefits (2) | 7,974 | 7,601 | 19,594 | 15,591 | 35,647 | ||||||||||||||||||||||||
Transaction, refinancing and other (3) | (186) | (114) | (560) | (1,011) | (3,764) | ||||||||||||||||||||||||
Gain on foreign currency remeasurement (4) | (1,348) | (2,404) | (515) | 2,052 | 2,631 | ||||||||||||||||||||||||
| Adjusted EBITDA | 92,565 | 86,052 | 182,004 | 164,229 | 358,005 | ||||||||||||||||||||||||
Operating depreciation and amortization (5) | (16,904) | (14,644) | (33,524) | (29,439) | (65,552) | ||||||||||||||||||||||||
Cash interest expense, net (6) | (13,031) | (14,422) | (25,995) | (29,841) | (53,085) | ||||||||||||||||||||||||
Income tax expense (7) | (4,446) | (2,526) | (7,643) | (2,064) | (11,950) | ||||||||||||||||||||||||
Non-controlling interest (8) | (519) | (645) | (917) | (1,066) | (2,068) | ||||||||||||||||||||||||
| Adjusted net income | $ | 57,665 | $ | 53,815 | $ | 113,925 | $ | 101,819 | $ | 225,350 | |||||||||||||||||||
| Net income per common share (GAAP): | |||||||||||||||||||||||||||||
| Diluted | $ | 0.62 | $ | 0.49 | $ | 1.13 | $ | 0.73 | |||||||||||||||||||||
| Adjusted Earnings per common share (Non-GAAP): | |||||||||||||||||||||||||||||
| Diluted | $ | 0.89 | $ | 0.83 | $ | 1.76 | $ | 1.55 | |||||||||||||||||||||
| Shares used in computing adjusted earnings per common share: | |||||||||||||||||||||||||||||
| Diluted | 64,870,358 | 65,150,744 | 64,808,817 | 65,699,385 | |||||||||||||||||||||||||
1)Represents the elimination of non-cash equity earnings from our equity investments, net of dividends received.
2)Primarily represents share-based compensation and severance payments.
3)Represents fees and expenses associated with corporate transactions as defined in the Credit Agreement, recorded as part of selling, general and administrative expenses and the elimination of realized gains from the change in fair market value of equity securities.
4)Represents non-cash unrealized gains (losses) on foreign currency remeasurement for assets and liabilities denominated in non-functional currencies.
5)Represents operating depreciation and amortization expense, which excludes amounts generated as a result of merger and acquisition activity.
6)Represents interest expense, less interest income, as they appear on the unaudited condensed consolidated statements of income and comprehensive income (loss), adjusted to exclude non-cash amortization of the debt issue costs, premium and accretion of discount.
7)Represents income tax expense calculated on adjusted pre-tax income using the applicable GAAP tax rate, adjusted for certain discrete items.
8)Represents the non-controlling equity interests, net of amortization for intangibles created as part of the purchase.
Critical Accounting Estimates
Our unaudited condensed consolidated financial statements are prepared in accordance with GAAP. In connection with the preparation of our financial statements, we are required to make estimates and assumptions about future events and apply judgments that affect the reported amounts of certain assets and liabilities, and in some instances, the reported amounts of revenues and expenses during the period. We base our assumptions, estimates, and judgments on historical experience, current events, and other factors that management believes to be relevant at the time our unaudited condensed consolidated financial statements are prepared. However, because future events are inherently uncertain and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material. For a description of the Company’s critical accounting estimates, refer to “Part II—Item 7-Management’s Discussion and Analysis of
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Financial Condition and Results of Operations-Critical Accounting Estimates” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on March 3, 2025.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risks arising from our normal business activities. These market risks principally involve the possibility of changes in interest rates that will adversely affect the value of our financial assets and liabilities or future cash flows and earnings, foreign currency exchange risk that may result in unfavorable foreign currency translation adjustments and inflation. Market risk is the potential loss arising from adverse changes in market rates and prices. The following analysis provides quantitative and qualitative information regarding these risks.
Interest Rate Risks
Interest rate risk is highly sensitive due to many factors, including U.S. monetary and tax policies, U.S. and international economic factors and other factors beyond our control.
We issued floating-rate debt which is subject to fluctuations in interest rates. Our secured credit facilities accrue interest at variable rates and are subject to a floor or a minimum rate. Based upon a sensitivity analysis of our outstanding debt on June 30, 2025, a hypothetical 100 basis point increase in interest rates over our floor on our debt balances outstanding as of June 30, 2025, under the secured credit facilities, would increase our annual interest expense by approximately $4.1 million. The impact on future interest expense as a result of future changes in interest rates will depend largely on the gross amount of our borrowings at that time.
As of June 30, 2025, the Company has three interest rate swap agreements which convert a portion of the interest rate payments on the Company's Term Loan Facilities from variable rate debt to fixed.
The interest rate swap exposes us to credit risk in the event that the counterparty to the swap agreement does not or cannot meet its obligations. The notional amount is used to measure interest to be paid or received and does not represent the amount of exposure to credit loss. The loss would be limited to the amount that would have been received, if any, over the remaining life of the swap. The counterparties to the swaps are major U.S. based financial institutions and we expect all counterparties to be able to perform its obligations under the swaps. We use derivative financial instruments for hedging purposes only and not for trading or speculative purposes.
See Note 5 of the Unaudited Condensed Consolidated Financial Statements appearing elsewhere in this report for additional information related to the secured credit facilities.
Foreign Exchange Risk
We conduct business in certain countries in Latin America for which we have determined that the functional currency is other than the U.S. dollar. Given this, our operating results are exposed to volatility due to fluctuations in exchange rates for the countries' functional currencies. Non-functional currency transactions are remeasured into the functional currency which results in a foreign exchange gain or loss recorded through Other income (expenses) in the unaudited condensed consolidated statements of income and comprehensive income (loss). For the six months ended June 30, 2025, the Company recognized non-cash unrealized foreign currency remeasurement gains of $0.5 million compared to losses of $2.1 million for the same period in 2024. For subsidiaries whose functional currency is other than the U.S. dollar, their assets and liabilities are translated into U.S. dollars at exchange rates at the balance sheet date, and revenues and expenses are translated using average exchange rates in effect during the period. The resulting foreign currency translation adjustments are reported in accumulated other comprehensive (loss) income in the unaudited condensed consolidated balance sheets. As of June 30, 2025, the Company had $58.8 million in an unfavorable foreign currency translation adjustment as part of accumulated other comprehensive income (loss) compared with an unfavorable foreign currency translation adjustment of $138.0 million as of December 31, 2024.
Inflation Risk
While it is difficult to accurately measure the impact of inflation on our results of operations and financial condition, we believe the effects of inflation, if any, on our historical results of operations and financial condition have been immaterial. General inflation in the geographies in which we operate has risen to levels that have not been experienced in recent years, however, inflation has historically had a minimal net effect on our operating results given that overall inflation has been offset by sales and cost reduction actions. Rising prices for input costs, including wages and benefits, occupancy and general administrative costs, could potentially have a negative impact on our results of operations and financial condition which may not be readily
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recoverable from our customers. In addition, inflation has led to enhanced volatility on foreign currency exchange rates. While we proactively try to mitigate these rising costs, we may not be able to fully offset these impacts, which could result in negative effect on our results of operation. Thus, we cannot assure you that our results of operations and financial condition will not be materially impacted by inflation in the future.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of the Chief Executive Officer and the Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Report. Based upon their evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that as of June 30, 2025, the Company’s disclosure controls and procedures were effective.
Changes in Internal Control Over Financial Reporting
There were no changes in the Company’s internal control over financial reporting (as such term is defined in Rule 13a -15(f) and Rule 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
We are, from time to time, party to various claims and legal proceedings arising in the ordinary course of our business. See Part I, Item 1 “Financial Statements (Unaudited) - Note 14, Commitments and Contingencies,” incorporated herein by reference, for a discussion of material legal proceedings.
Item 1A. Risk Factors
There have been no material changes to the risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 3, 2025. For a discussion of the potential risks and uncertainties related to us, see "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following table summarizes repurchases of the Company’s common stock in the three month period ended June 30, 2025:
| Period | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of a publicly announced program (1) | Approximate dollar value of shares that may yet be purchased under the program | ||||||||||||||||||||||
| 6/1/2025-6/30/2025 | 101,890 | 36.22 | 101,890 | |||||||||||||||||||||||
| 101,890 | 101,890 | $ | 150,000,000 | |||||||||||||||||||||||
(1) On July 30, 2025 the Board approved an increase to Evertec’s existing share repurchase authorization to permit future repurchases of up to an aggregate of $150 million worth of shares of the Company’s common stock, par value $0.01 per share by December 31, 2026. Under the repurchase program, the Company may repurchase shares in the open market, through accelerated share repurchase programs, Rule 10b5-1 plans, or in privately negotiated transactions, subject to business opportunities and other factors.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
(a) Disclosure in lieu of reporting on a Current Report on Form 8-K.
None.
(b) Material changes to the procedures by which security holders may recommend nominees to the board of directors.
None.
(c) Insider trading arrangements and policies.
During the three months ended June 30, 2025, no director or officer of the Company, as defined in Rule 16a-1(f) of the Exchange Act, adopted or terminated a “Rule 10b5-1 trading arrangement” intended to satisfy the affirmative defense of Rule 10b5-1(c) or a “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
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Item 6. Exhibits
| 3.1 | Third Amended and Restated Certificate of Incorporation of EVERTEC, Inc., dated as of May 25, 2023 (incorporated by reference to Exhibit 3.1 of EVERTEC, Inc.’s Current Report on Form 8-K filed on June 1, 2023, File No. 001-35872). | |||||||
| 3.2 | Amended and Restated Bylaws of EVERTEC, Inc., dated as of May 25, 2023 (incorporated by reference to Exhibit 3.2 of EVERTEC, Inc.’s Current Report on Form 8-K filed on June 1, 2023, File No. 001-35872). | |||||||
| 10.1*+ | Form of Restricted Stock Unit Award Agreement for grant of restricted stock units for directors under the EVERTEC, Inc. 2022 Incentive Award Plan, dated May 22, 2025, by and between EVERTEC, Inc. and the director (applicable to Frank G. D'Angelo, Kelly Barrett, Olga Botero, Virginia Gambale, Jorge A. Junquera, Iván Pagán, Aldo J. Polak, Alan H. Schumacher, and Brian J. Smith). | |||||||
| 10.2*+ | Form of Restricted Stock Unit Award Agreement for grant of restricted stock units for Karla M. Cruz- Jusino under the EVERTEC, Inc. 2022 Incentive Award Plan, dated February 28,2025. | |||||||
| 10.3*+ | Form of Restricted Stock Unit Award Agreement for grant of restricted stock units for Karla M. Cruz-Jusino under the EVERTEC, Inc. 2022 Incentive Award Plan, dated February 28, 2025. | |||||||
| 31.1* | CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
| 31.2* | CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
| 32.1** | CEO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| 32.2** | CFO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| 101.INS XBRL* | Inline Instance document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
| 101.SCH XBRL* | Inline XBRL Taxonomy Extension Schema Document | |||||||
| 101.CAL XBRL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.DEF XBRL* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
| 101.LAB XBRL* | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
| 101.PRE XBRL* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| 104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||
* Filed herewith.
** Furnished herewith.
+ This exhibit is a management contract or a compensatory plan or arrangement.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| EVERTEC, Inc. (Registrant) | ||||||||
| Date: July 31, 2025 | By: | /s/ Morgan Schuessler | ||||||
| Morgan Schuessler Chief Executive Officer (Principal Executive Officer) | ||||||||
| Date: July 31, 2025 | By: | /s/ Joaquin A. Castrillo-Salgado | ||||||
| Joaquin A. Castrillo-Salgado Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | ||||||||
43
FAQ
How much did EVTC earn per share in Q2 2025?
Diluted EPS was $0.62, up from $0.49 in Q2 2024.
What drove EVERTEC’s revenue growth this quarter?
Strong performance in Latin America Payments & Solutions (+14.6%) and solid gains across other segments lifted total revenue 8.3%.
What is EVERTEC’s current net debt and leverage?
Net debt stands at $648 million; management indicates leverage of roughly 2.9× EBITDA after Q2.
How significant is Popular Inc. to EVERTEC’s business?
Popular contributed 31% of total revenue in both Q2 and the first half of 2025.
Did EVERTEC repurchase any shares in 2025?
Yes, the company bought back ~102 k shares for $3.7 million during Q2; total shares outstanding fell to 63.98 million.
What is the size of EVERTEC’s backlog of contracted revenue?
Remaining performance obligations total $734.8 million, expected to be recognized over five years.
Evertec Inc
NYSE:EVTC
EVTC Rankings
EVTC Latest News
Jul 30, 2025
EVERTEC Reports Second Quarter 2025 Results
Jul 24, 2025
EVERTEC Declares Quarterly Dividend on Common Stock
May 7, 2025
EVERTEC Reports First Quarter 2025 Results
EVTC Latest SEC Filings
Jul 30, 2025
[8-K] EVERTEC, INC. Reports Material Event
Jul 24, 2025
[8-K] EVERTEC, INC. Reports Material Event
Jun 23, 2025
[Form 4] EVERTEC, INC. Insider Trading Activity
Jun 20, 2025
[144] EVERTEC, INC. SEC Filing
EVTC Stock Data
2.08B
63.15M
0.78%
104.86%
2.95%
Software - Infrastructure
Services-computer Processing & Data Preparation
United States
RIO PIEDRAS