EVTC Evertec Inc

Announces 2025 outlook

Announces acquisition of Nubity

EVERTEC, Inc. (NYSE: EVTC) (“Evertec” or the “Company”) today announced results for the fourth quarter and full year ended December 31, 2024.

Fourth Quarter 2024 Highlights and Recent Highlights

• Revenue increased 11% to $216.4 million, approximately 14.5% on a constant currency basis
• GAAP Net Income attributable to common shareholders increased 249.0% to $40.1 million, and increased 264.7% to $0.62 per diluted share
• Adjusted EBITDA increased 24% to $88.6 million and Adjusted earnings per common share increased 40.3% to $0.87
• Closed on acquisition of 100% of Nubity, Inc. ("Nubity") on November 19th

Full Year 2024 Highlights

• Revenue grew 22% to $845.5 million, approximately 23.5% on a constant currency basis
• GAAP Net Income attributable to common shareholders was $112.6 million an increase of 41%, or $1.73 per diluted share
• Adjusted EBITDA was $340.2 million an increase of 17% and Adjusted earnings per common share increased by 16.3% to $3.28
• $95.2 million returned to shareholders through share repurchases and dividends
• Closed on the acquisition of Grandata and Nubity
• Completed a $70 million accelerated share repurchase program

Mac Schuessler, President and Chief Executive Officer stated, "In 2024, we achieved record revenues by delivering strong results in our core markets while successfully integrating our largest acquisition, Sinqia. We continued to execute on our capital deployment plan, completing the acquisition of Nubity and Grandata as well as repurchasing our stock through the accelerated share repurchase program completed in 2024. Our focus for 2025 will be on optimizing margin, continuing to allocate capital thoughtfully and driving organic revenue growth.”

Fourth Quarter 2024 Results

Revenue. Total revenue for the quarter ended December 31, 2024 was $216.4 million, an increase of 11.2%, compared with $194.6 million in the prior year quarter as a result of organic growth across all of the Company's segments, the contribution from an additional month of Sinqia and the contribution from the Grandata and Nubity acquisitions. Merchant acquiring revenue benefited from an improvement in spread and sales volume growth and Payments Puerto Rico revenue continues to benefit from growth in transactions and ATH Movil. Revenue in Latin America reflected the contribution from acquisitions, continued organic growth across the region and incremental volumes from our GetNet Chile relationship which led to the recognition of a one-time incremental revenue in the quarter of $0.6 million. Business Solutions revenue increased as a result of projects completed throughout the year.

Net Income attributable to common shareholders. For the quarter ended December 31, 2024, GAAP Net Income attributable to common shareholders was $40.1 million or $0.62 per diluted share, an increase of $28.6 million, compared with $11.5 million or $0.17 per diluted share in the prior year. The increase was driven by the increase in revenues, the impact from a $8.9 million net gain in the quarter related to the sale of tax credits, lower selling, general and administrative expenses, lower depreciation and amortization and the benefit from a lower effective tax rate. These variances are partially offset by an increase in cost of revenues resulting from the incremental expenses related to the acquisitions completed throughout the year, an increase in costs of sales mainly related to the projects completed in Business Solutions and higher interest expense as a result of the incremental debt raised to finance the Sinqia acquisition.

Adjusted EBITDA and Adjusted EBITDA Margin. For the quarter ended December 31, 2024, Adjusted EBITDA was $88.6 million, an increase of $16.9 million when compared to the prior year quarter, driven by the increase in revenues and the contribution from the acquisitions. Adjusted EBITDA margin (Adjusted EBITDA as a percentage of total revenue) increased approximately 410 basis points to 40.9% compared with 36.8% in the prior year, as we drive incremental revenue and continue to focus on managing expenses.

Adjusted Net Income and Adjusted earnings per common share. For the quarter ended December 31, 2024, Adjusted Net Income was $56.0 million, an increase of 37% compared with $40.8 million in the prior year, almost entirely related to the increase in Adjusted EBITDA and a lower adjusted effective tax rate. Adjusted earnings per common share was $0.87, an increase of 40% compared with $0.62 in the prior year driven by the factors explained for Adjusted Net Income and a lower share count as a result of repurchases completed in 2024.

Full Year 2024 Results

Revenue. Total revenue for the year ended December 31, 2024 was $845.5 million, an increase of 22% compared with $694.7 million in the prior year. This reflects contributions from acquisitions and organic growth across all segments. The Latin America segment experienced a full-year contribution from the Sinqia acquisition completed in Q4 2023, with additional contributions from the Grandata and Nubity acquisitions completed in Q4 2024, along with organic growth in the region. Merchant acquiring revenue saw improvements due to better spread and sales volume growth. Payments Puerto Rico revenue increased due to ongoing transaction volume growth and contributions from ATH Movil Business. Business Solutions revenue benefited from completed projects, mainly for Popular.

Net Income attributable to common shareholders. For the year ended December 31, 2024, GAAP Net Income attributable to common shareholders was $112.6 million, or $1.73 per diluted share, an increase compared with $79.7 million or $1.21 per diluted share in the prior year, primarily driven by the higher revenues and the benefit from a lower effective tax rate. These were partially offset by higher depreciation and amortization and interest expense. The prior year also included the negative impact from the loss on foreign currency swap related to the Sinqia acquisition. Cost of revenues and selling, general and administrative expenses both increased primarily due to an increase in personnel costs driven by the added headcount from acquisitions. Interest expense increased from the prior year due to the same reason explained above for the quarter.

Adjusted EBITDA and Adjusted EBITDA Margin. For the year ended December 31, 2024, Adjusted EBITDA was $340.2 million, an increase of 17% compared to the prior year. The increase in Adjusted EBITDA primarily reflects the contribution from the Sinqia acquisition and the increase in revenues discussed above, partially offset by an increase in operating expenses. Adjusted EBITDA margin (Adjusted EBITDA as a percentage of total revenues) decreased 180 basis points to 40.2% compared with 42.0% in the prior year. The decrease in Adjusted EBITDA margin primarily reflects the addition of Sinqia, which contributes at a lower margin, as well as the impact of the $6.3 million adjustment for GetNet Chile in the prior year, compared with $2.4 million in the current year, which is 100% accretive to margin.

Adjusted Net Income and Adjusted earnings per common share. For the year ended December 31, 2023, Adjusted Net Income was $213.2 million, an increase of 15% compared with $185.5 million in the prior year. The increase was driven by the higher adjusted EBITDA and a decrease in Non-GAAP tax expense, partially offset by higher operating depreciation and amortization and higher cash interest expense, due to the incremental debt raised for the Sinqia acquisition. Adjusted earnings per common share were $3.28, an increase of 16.3% compared with $2.82 in the prior year. The increase was driven by the increase in Adjusted Net Income and a lower share count that reflects the impact from the share repurchases completed throughout the year.

Business Acquisition

On November 19, 2024, the Company acquired 100% of the share capital of 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. This transaction enhances our existing product offering and helps enable the Company to address our customer’s needs more fully. The Company plans on leveraging its existing client base in Puerto Rico and Latin America to accelerate the growth of this acquisition.

Stock Repurchase

For the full year 2024, the Company repurchased 2.4 million shares of its common stock at an average price of $34.90 for a total of $82.3 million. At December 31, 2024, the Company's share repurchase program had approximately $138 million remaining and authorized for future use through December 31, 2025. The Company may repurchase shares in the open market, through accelerated share repurchase programs, 10b5-1 plans, or in privately negotiated transactions, subject to business opportunities and other factors.

2025 Outlook

The Company's financial outlook for 2025 is as follows:

• Total consolidated revenue between $889 million and $899 million representing approximately 5.1% to 6.3% growth compared with $845 million in 2024 on a GAAP basis, or approximately 5.5% to 6.7% on a constant currency basis
• Adjusted earnings per common share between $3.34 to $3.45 representing approximately 1.8% to 5.2% growth as compared to $3.28 in 2024, or approximately 2.6% to 6.0% on a constant currency basis
• Capital expenditures are anticipated to be approximately $85 million
• Effective tax rate of approximately 6% to 7%

Earnings Conference Call and Audio Webcast

The Company will host a conference call to discuss its fourth quarter and full year 2024 financial results today at 4:30 p.m. ET. Hosting the call will be Mac Schuessler, President and Chief Executive Officer, and Joaquin Castrillo, Chief Financial Officer. The conference call can be accessed live over the phone by dialing (888) 338-7153 or for international callers by dialing (412) 317-5117. A replay will be available one hour after the end of the conference call and can be accessed by dialing (877) 344-7529 or (412) 317-0088 for international callers; the pin number is 1193493. The replay will be available through Wednesday, March 5, 2025. The call will be webcast live from the Company’s website at www.evertecinc.com under the Investor Relations section or directly at http://ir.evertecinc.com. A supplemental slide presentation that accompanies this call and webcast can be found on the investor relations website at ir.evertecinc.com and will remain available after the call.

About Evertec

EVERTEC, Inc. (NYSE: EVTC) is a leading full-service transaction processor and financial technology provider in Latin America, Puerto Rico and the Caribbean, providing a broad range of merchant acquiring, payment services and business process management services. Evertec owns and operates the ATH® network, one of the leading personal identification number (“PIN”) debit networks in Latin America. In addition, the Company manages a system of electronic payment networks and offers a comprehensive suite of services for core banking, cash processing and fulfillment in Puerto Rico, that process approximately six billion transactions annually. The Company also offers financial technology outsourcing in all the regions it serves. Based in Puerto Rico, the Company operates in 26 Latin American countries and serves a diversified customer base of leading financial institutions, merchants, corporations and government agencies with “mission-critical” technology solutions. For more information, visit www.evertecinc.com.

Use of Non-GAAP Financial Information

The non-GAAP measures referenced in this earnings release 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 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 at the end of this earnings release. 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. This measure is reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing their performance. For this reason, Adjusted EBITDA, as it relates to the Company's segments, is presented in conformity with Accounting Standards Codification 280, Segment Reporting, and 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. 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 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, non-compete agreements, among others; 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 position releases, 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.

Forward-Looking Statements

Certain statements in this earnings release constitute “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, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements contained in this press release other than statements of historical facts, including, without limitation, statements regarding our future results of operations and financial position, including our guidance for fiscal year 2025; our business strategies; objectives of management for future operations, including, among others, statements regarding our expected growth, international expansion and future capital expenditures; and expectations for and anticipated benefits of 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” are generally forward-looking in nature and not historical facts.

Various factors that could cause actual future results and other future events to differ materially from those estimated by management include, but are not limited to: 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; our dependence on our processing systems, technology infrastructure, security systems and fraudulent payment detection systems, as well as on our personnel and certain third parties with whom we do business, and the risks to our business if our systems are hacked or otherwise compromised; our ability to develop, install and adopt new software, technology and computing systems; a decreased client base due to consolidations and/or failures in the financial services industry; the credit risk of our merchant clients, for which we may also be liable; the continuing market position of the ATH network; 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 credit card associations, including any adverse changes in credit card association or network rules or fees; changes in the regulatory environment and changes in macroeconomic, market, international, legal, tax, political, or administrative conditions, including inflation or the risk of recession; the geographical concentration of our business in Puerto Rico, including our business with the government of Puerto Rico and its instrumentalities, which are facing severe political and fiscal challenges; additional adverse changes in the general economic conditions in Puerto Rico, whether as a result of the government’s debt crisis or otherwise, including the continued migration of Puerto Ricans to the U.S. mainland, which could negatively affect our customer base, general consumer spending, our cost of operations and our ability to hire and retain qualified employees; operating an international business in Latin America, Puerto Rico and the Caribbean, in jurisdictions with potential political and economic instability; the impact of foreign exchange rates on operations; our ability to protect our intellectual property rights against infringement and to defend ourselves against claims of infringement brought by third parties; our ability to comply with U.S. federal, state, local and foreign regulatory requirements; evolving industry standards and adverse changes in global economic, political and other conditions; our level of indebtedness and the impact of rising interest rates, restrictions contained in our debt agreements, including the secured credit facilities, as well as debt that could be incurred in the future; our ability to protect our IT systems and prevent a cybersecurity attack or breach to our information security; the possibility that we could lose our preferential tax rate in Puerto Rico; our ability to integrate Sinqia S.A. (“Sinqia”) successfully into the Company or to achieve expected accretion to our earnings per common share; any loss of personnel or customers in connection with the acquisition of Sinqia; any possibility of future catastrophic hurricanes, earthquakes and other potential natural disasters affecting our main markets in Latin America, Puerto Rico and the Caribbean; and the other factors set forth under "Part 1, Item 1A. Risk Factors," in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the Securities and Exchange Commission (the "SEC") on February 29, 2024, as any such factors may be updated from time to time in the Company’s filings with the SEC, including in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, to be filed with the SEC. The Company undertakes no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events unless it is required to do so by law.

 

EVERTEC, Inc.

Schedule 1: Unaudited Consolidated Statements of Income and Comprehensive (Loss) Income

 

 

 

Quarter ended December 31,

 

Year ended December 31,

(Dollar amounts in thousands, except share data)

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Revenues

 

$

216,395

 

 

$

194,621

 

 

$

845,486

 

 

$

694,709

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses

 

 

 

 

 

 

 

 

Cost of revenues, exclusive of depreciation and amortization shown below

 

 

103,990

 

 

 

98,607

 

 

 

406,416

 

 

 

336,756

 

Selling, general and administrative expenses

 

 

37,648

 

 

 

44,338

 

 

 

145,558

 

 

 

128,172

 

Depreciation and amortization

 

 

26,795

 

 

 

29,941

 

 

 

127,846

 

 

 

93,621

 

Total operating costs and expenses

 

 

168,433

 

 

 

172,886

 

 

 

679,820

 

 

 

558,549

 

Income from operations

 

 

47,962

 

 

 

21,735

 

 

 

165,666

 

 

 

136,160

 

Non-operating income (expenses)

 

 

 

 

 

 

 

 

Interest income

 

 

3,058

 

 

 

3,350

 

 

 

13,332

 

 

 

8,512

 

Interest expense

 

 

(17,381

)

 

 

(15,329

)

 

 

(74,733

)

 

 

(32,321

)

Loss on foreign currency remeasurement

 

 

(2,034

)

 

 

(939

)

 

 

(5,198

)

 

 

(8,276

)

Gain (loss) on foreign currency swap

 

 

—

 

 

 

5,160

 

 

 

—

 

 

 

(24,065

)

Earnings of equity method investment

 

 

1,032

 

 

 

1,148

 

 

 

4,298

 

 

 

4,976

 

Other income (loss), net

 

 

9,777

 

 

 

(2,387

)

 

 

16,261

 

 

 

367

 

Total non-operating expenses

 

 

(5,548

)

 

 

(8,997

)

 

 

(46,040

)

 

 

(50,807

)

Income before income taxes

 

 

42,414

 

 

 

12,738

 

 

 

119,626

 

 

 

85,353

 

Income tax expense

 

 

1,747

 

 

 

931

 

 

 

4,847

 

 

 

5,477

 

Net income

 

 

40,667

 

 

 

11,807

 

 

 

114,779

 

 

 

79,876

 

Less: Net income attributable to non-controlling interests

 

 

605

 

 

 

328

 

 

 

2,159

 

 

 

154

 

Net income attributable to EVERTEC, Inc.’s common stockholders

 

 

40,062

 

 

 

11,479

 

 

 

112,620

 

 

 

79,722

 

Other comprehensive (loss) income, net of tax

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(77,378

)

 

 

28,902

 

 

 

(152,851

)

 

 

38,328

 

Gain (loss) on cash flow hedges

 

 

8,481

 

 

 

(7,357

)

 

 

(74

)

 

 

(3,618

)

Unrealized (loss) income on change in fair value of debt securities available-for-sale

 

 

(3

)

 

 

16

 

 

 

(7

)

 

 

(15

)

Other comprehensive (loss) income, net of tax

 

$

(68,900

)

 

$

21,561

 

 

$

(152,932

)

 

$

34,695

 

Total comprehensive (loss) income attributable to EVERTEC, Inc.’s common stockholders

 

$

(28,838

)

 

$

33,040

 

 

$

(40,312

)

 

$

114,417

 

Net income per common share:

 

 

 

 

 

 

 

 

Basic

 

$

0.63

 

 

$

0.18

 

 

$

1.75

 

 

$

1.23

 

Diluted

 

$

0.62

 

 

$

0.17

 

 

$

1.73

 

 

$

1.21

 

Shares used in computing net income per common share:

 

 

 

 

 

 

 

 

Basic

 

 

63,613,215

 

 

 

65,067,316

 

 

 

64,286,725

 

 

 

64,932,114

 

Diluted

 

 

64,650,434

 

 

 

66,273,215

 

 

 

65,077,535

 

 

 

65,814,317

 

 

EVERTEC, Inc.

Schedule 2: Unaudited Consolidated Balance Sheets

 

(Dollar amounts in thousands, except share data)

 

December 31, 2024

 

December 31, 2023

Assets

 

 

 

 

Current Assets:

 

 

 

 

Cash and cash equivalents

 

$

273,645

 

 

$

295,600

Restricted cash

 

 

24,594

 

 

 

23,073

Accounts receivable, net

 

 

137,501

 

 

 

126,510

Settlement assets

 

 

31,942

 

 

 

51,467

Prepaid expenses and other assets

 

 

61,383

 

 

 

64,704

Total current assets

 

 

529,065

 

 

 

561,354

Debt securities available-for-sale, at fair value

 

 

913

 

 

 

2,095

Equity securities, at fair value

 

 

4,976

 

 

 

9,413

Investment in equity investees

 

 

29,472

 

 

 

21,145

Property and equipment, net

 

 

62,059

 

 

 

62,453

Operating lease right-of-use asset

 

 

10,131

 

 

 

14,796

Goodwill

 

 

726,901

 

 

 

791,700

Other intangible assets, net

 

 

430,885

 

 

 

518,070

Deferred tax asset

 

 

33,877

 

 

 

47,847

Derivative asset

 

 

4,338

 

 

 

4,385

Other long-term assets

 

 

24,994

 

 

 

27,005

Total assets

 

$

1,857,611

 

 

$

2,060,263

Liabilities and stockholders’ equity

 

 

 

 

Current Liabilities:

 

 

 

 

Accrued liabilities

 

$

124,553

 

 

$

129,160

Accounts payable

 

 

58,729

 

 

 

66,516

Contract liability

 

 

25,274

 

 

 

21,055

Income tax payable

 

 

8,981

 

 

 

3,402

Current portion of long-term debt

 

 

23,867

 

 

 

23,867

Current portion of operating lease liability

 

 

6,229

 

 

 

6,693

Settlement liabilities

 

 

32,027

 

 

 

47,620

Total current liabilities

 

 

279,660

 

 

 

298,313

Long-term debt

 

 

925,062

 

 

 

946,816

Deferred tax liability

 

 

44,810

 

 

 

87,916

Contract liability - long term

 

 

55,003

 

 

 

41,825

Operating lease liability - long-term

 

 

4,924

 

 

 

9,033

Derivative liability

 

 

1,351

 

 

 

900

Other long-term liabilities

 

 

27,540

 

 

 

40,084

Total liabilities

 

 

1,338,350

 

 

 

1,424,887

Redeemable non-controlling interests

 

 

43,460

 

 

 

36,968

Stockholders’ equity

 

 

 

 

Preferred stock, par value $0.01; 2,000,000 shares authorized; none issued

 

 

—

 

 

 

—

Common stock, par value $0.01; 206,000,000 shares authorized; 63,614,077 shares issued and outstanding at December 31, 2024 (December 31, 2023 - 65,450,799)

 

 

636

 

 

 

654

Additional paid-in capital

 

 

7,003

 

 

 

36,527

Accumulated earnings

 

 

599,608

 

 

 

538,903

Accumulated other comprehensive (loss) income, net of tax

 

 

(134,723

)

 

 

18,209

Total EVERTEC, Inc. stockholders’ equity

 

 

472,524

 

 

 

594,293

Non-controlling interest

 

 

3,277

 

 

 

4,115

Total equity

 

 

475,801

 

 

 

598,408

Total liabilities and equity

 

$

1,857,611

 

 

$

2,023,295

 

EVERTEC, Inc.

Schedule 3: Unaudited Consolidated Statements of Cash Flows

 

 

 

Years ended December 31,

(In thousands)

 

 

2024

 

 

 

2023

 

Cash flows from operating activities

 

 

 

 

Net income

 

$

114,779

 

 

$

79,876

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization

 

 

127,846

 

 

 

93,621

 

Amortization of debt issue costs and accretion of discount

 

 

4,739

 

 

 

2,307

 

Operating lease amortization

 

 

7,063

 

 

 

6,252

 

Loss on extinguishment of debt

 

 

—

 

 

 

1,433

 

Deferred tax benefit

 

 

(26,726

)

 

 

(16,144

)

Share-based compensation

 

 

30,275

 

 

 

25,732

 

Gain from sale of assets

 

 

(2,571

)

 

 

—

 

Loss on disposition of property and equipment and impairment of software

 

 

2,603

 

 

 

969

 

Earnings of equity method investments

 

 

(4,298

)

 

 

(4,976

)

Dividends received from equity method investment

 

 

3,364

 

 

 

3,497

 

Loss on foreign currency remeasurement

 

 

5,198

 

 

 

8,276

 

Other, net

 

 

(529

)

 

 

1,809

 

(Increase) decrease in assets:

 

 

 

 

Accounts receivable, net

 

 

(11,225

)

 

 

(6,850

)

Prepaid expenses and other assets

 

 

(865

)

 

 

(16,862

)

Other long-term assets

 

 

1,288

 

 

 

(5,383

)

(Decrease) increase in liabilities:

 

 

 

 

Accrued liabilities and accounts payable

 

 

(6,602

)

 

 

46,523

 

Income tax payable

 

 

6,199

 

 

 

(6,631

)

Contract liability

 

 

14,199

 

 

 

8,074

 

Operating lease liabilities

 

 

(7,359

)

 

 

(5,723

)

Other long-term liabilities

 

 

2,681

 

 

 

(4,606

)

Total adjustments

 

 

145,280

 

 

 

131,318

 

Net cash provided by operating activities

 

 

260,059

 

 

 

211,194

 

Cash flows from investing activities

 

 

 

 

Additions to software

 

 

(63,044

)

 

 

(63,524

)

Acquisition of customer relationship

 

 

—

 

 

 

—

 

Acquisitions, net of cash acquired

 

 

(34,030

)

 

 

(417,566

)

Property and equipment acquired

 

 

(25,384

)

 

 

(21,452

)

Proceeds from sales of property and equipment

 

 

5

 

 

 

24

 

Purchase of certificates of deposit

 

 

—

 

 

 

—

 

Proceeds from maturities of available-for-sale debt securities

 

 

1,102

 

 

 

1,048

 

Acquisition of available-for-sale debt securities

 

 

(793

)

 

 

(962

)

Purchase of equity securities

 

 

(132

)

 

 

—

 

Investment in equity method investee

 

 

(2,000

)

 

 

(5,500

)

Sale of investments

 

 

5,994

 

 

 

—

 

Net cash used in investing activities

 

 

(118,282

)

 

 

(507,932

)

Cash flows from financing activities

 

 

 

 

Debt issuance and repricing costs

 

 

(1,215

)

 

 

(10,481

)

Proceeds from issuance of long-term debt

 

 

—

 

 

 

651,000

 

Net (decrease) increase in short-term borrowings

 

 

—

 

 

 

(20,000

)

Repayments of short-terms borrowings for purchase of equipment and software

 

 

(2,479

)

 

 

(7,175

)

Dividends paid

 

 

(12,873

)

 

 

(13,025

)

Withholding taxes paid on share-based compensation

 

 

(9,970

)

 

 

(5,956

)

Repurchase of common stock

 

 

(82,293

)

 

 

(36,096

)

Repayment of long-term debt

 

 

(23,867

)

 

 

(154,280

)

Repayment of other financing agreement

 

 

(8,134

)

 

 

(717

)

Settlement activity, net

 

 

(8,641

)

 

 

13,096

 

Other financing activities, net

 

 

(3,088

)

 

 

—

 

Net cash (used in) provided by financing activities

 

 

(152,560

)

 

 

416,366

 

Effect of foreign exchange rate on cash, cash equivalents and restricted cash

 

 

(18,292

)

 

 

8,439

 

Net (decrease) increase in cash, cash equivalents and restricted cash

 

 

(29,075

)

 

 

128,067

 

Cash, cash equivalents, restricted cash, and cash included in settlement assets at beginning of the period

 

 

343,724

 

 

 

215,657

 

Cash, cash equivalents, restricted cash, and cash included in settlement assets at end of the period

 

$

314,649

 

 

$

343,724

 

Reconciliation of cash, cash equivalents, restricted cash, and cash included in settlement assets

 

 

 

 

Cash and cash equivalents

 

$

273,645

 

 

$

295,600

 

Restricted cash

 

 

24,594

 

 

 

23,073

 

Cash and cash equivalents included in settlement assets

 

 

16,410

 

 

 

25,051

 

Cash, cash equivalents, restricted cash, and cash included in settlement assets

 

$

314,649

 

 

$

343,724

 

 

EVERTEC, Inc.

Schedule 4: Unaudited Segment Information

 

 

Quarter Ended December 31, 2024

(In thousands)

Payment

Services -

Puerto Rico & Caribbean

 

Latin America Payments and Solutions

 

Merchant

Acquiring, net

 

Business

Solutions

 

Total Reportable Segments

 

Corporate and Other (1)

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

$

54,764

 

$

77,870

 

$

46,645

 

$

62,408

 

$

241,687

 

$

(25,292

)

 

$

216,395

Adjusted EBITDA

 

31,328

 

 

25,144

 

 

19,937

 

 

24,357

 

 

100,766

 

 

(12,156

)

 

 

88,610

__________________

(1)

Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment revenue eliminations predominantly reflect the $14.4 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 $4.4 million from Payment Services - Puerto Rico & Caribbean to Latin America Payments and Solutions.

 

Quarter Ended December 31, 2023

(In thousands)

Payment

Services -

Puerto Rico & Caribbean

 

Latin America Payments and Solutions

 

Merchant

Acquiring, net

 

Business

Solutions

 

Total Reportable Segments

 

Corporate and Other (1)

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

$

52,408

 

$

65,955

 

$

40,214

 

$

57,772

 

$

216,349

 

$

(21,728

)

 

$

194,621

Adjusted EBITDA

 

30,851

 

 

18,251

 

 

14,423

 

 

20,016

 

 

83,541

 

 

(11,843

)

 

 

71,698

____________________

(1)

Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment revenue eliminations predominantly reflect the $13.0 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring, intercompany software developments and transaction processing of $4.3 million from Latin America Payments and Solutions to both Payment Services- Puerto Rico & Caribbean and Business Solutions, and transaction processing and monitoring fees of $4.4 million from Payment Services - Puerto Rico & Caribbean to Latin America Payments and Solutions.

 

Year Ended December 31, 2024

(In thousands)

Payment

Services -

Puerto Rico & Caribbean

 

Latin America Payments and Solutions

 

Merchant

Acquiring, net

 

Business

Solutions

 

Total Reportable Segments

 

Corporate and Other (1)

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

$

214,749

 

$

302,784

 

$

180,500

 

$

243,975

 

$

942,008

 

$

(96,522

)

 

$

845,486

Adjusted EBITDA

 

121,390

 

 

79,681

 

 

72,632

 

 

102,669

 

 

376,372

 

 

(36,144

)

 

 

340,228

____________________

(1)

Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment revenue eliminations predominantly reflect the $57.6 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring, intercompany software developments and transaction processing of $21.1 million from Latin America Payments and Solutions to both Payment Services - Puerto Rico & Caribbean and Business Solutions, and transaction processing and monitoring fees of $17.8 million from Payment Services - Puerto Rico & Caribbean to Latin America Payments and Solutions.

 

Year Ended December 31, 2023

(In thousands)

Payment

Services -

Puerto Rico & Caribbean

 

Latin America Payments and Solutions

 

Merchant

Acquiring, net

 

Business

Solutions

 

Total Reportable Segments

 

Corporate and Other (1)

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

$

203,232

 

$

186,503

 

$

162,366

 

$

226,960

 

$

779,061

 

$

(84,352

)

 

$

694,709

Adjusted EBITDA

 

118,266

 

 

60,158

 

 

60,992

 

 

86,880

 

$

326,296

 

 

(34,325

)

 

 

291,971

____________________

(1)

Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment revenue eliminations predominantly reflect the $52.9 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring, intercompany software developments and transaction processing of $17.1 million from Latin America Payments and Solutions to both Payment Services- Puerto Rico & Caribbean and Business Solutions, and transaction processing and monitoring fees of $14.3 million from Payment Services - Puerto Rico & Caribbean to Latin America Payments and Solutions.

 

EVERTEC, Inc.

Schedule 5: Reconciliation of GAAP to Non-GAAP Operating Results

 

 

 

Quarter ended December 31,

 

Year ended December 31,

(Dollar amounts in thousands, except share data)

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net income

 

$

40,667

 

 

$

11,807

 

 

$

114,779

 

 

$

79,876

 

Income tax expense

 

 

1,747

 

 

 

931

 

 

 

4,847

 

 

 

5,477

 

Interest expense, net

 

 

14,323

 

 

 

11,979

 

 

 

61,401

 

 

 

23,809

 

Depreciation and amortization

 

 

26,795

 

 

 

29,941

 

 

 

127,846

 

 

 

93,621

 

EBITDA

 

 

83,532

 

 

 

54,658

 

 

 

308,873

 

 

 

202,783

 

Equity income(1)

 

 

(1,032

)

 

 

(1,148

)

 

 

(1,270

)

 

 

(1,945

)

Compensation and benefits (2)

 

 

8,458

 

 

 

7,796

 

 

 

31,644

 

 

 

29,312

 

Transaction, refinancing and other fees (3)

 

 

(4,382

)

 

 

9,453

 

 

 

(4,217

)

 

 

53,545

 

Loss on foreign currency remeasurement (4)

 

 

2,034

 

 

 

939

 

 

 

5,198

 

 

 

8,276

 

Adjusted EBITDA

 

 

88,610

 

 

 

71,698

 

 

 

340,228

 

 

 

291,971

 

Operating depreciation and amortization (5)

 

 

(15,735

)

 

 

(14,648

)

 

 

(61,467

)

 

 

(52,913

)

Cash interest expense, net (6)

 

 

(13,182

)

 

 

(12,711

)

 

 

(56,931

)

 

 

(24,286

)

Income tax expense (7)

 

 

(3,073

)

 

 

(3,183

)

 

 

(6,371

)

 

 

(29,038

)

Non-controlling interest (8)

 

 

(616

)

 

 

(353

)

 

 

(2,217

)

 

 

(257

)

Adjusted Net Income

 

$

56,004

 

 

$

40,803

 

 

$

213,242

 

 

$

185,477

 

Net income per common share (GAAP):

 

 

 

 

 

 

 

 

Diluted

 

$

0.62

 

 

$

0.17

 

 

$

1.73

 

 

$

1.21

 

Adjusted earnings per common share (Non-GAAP):

 

 

 

 

 

 

 

 

Diluted

 

$

0.87

 

 

$

0.62

 

 

$

3.28

 

 

$

2.82

 

Shares used in computing adjusted earnings per common share:

 

 

 

 

 

 

 

 

Diluted

 

 

64,650,434

 

 

 

66,273,215

 

 

 

65,077,535

 

 

 

65,814,317

 

____________________

(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, the elimination of multi-year non recurring gains recognized in connection with the sale of tax credits, realized gains from the change in fair market value of equity securities and the foreign currency swap loss.

(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 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.

 

EVERTEC, Inc.

Schedule 6: Outlook Summary and Reconciliation to Non-GAAP Adjusted Earnings per Share

 

 

 

 

 

 

 

 

 

 

 

Outlook 2024

 

 

2024

 

(Dollar amounts in millions, except per share data)

 

Low

 

 

 

High

 

 

Revenues

 

$

889

 

 

to

 

$

899

 

 

$

845

 

Earnings per Share (EPS) (GAAP)

 

$

1.93

 

 

to

 

$

2.05

 

 

$

1.73

 

Per share adjustment to reconcile GAAP EPS to Non-GAAP Adjusted EPS:

 

 

 

 

 

 

 

 

Share-based comp, non-cash equity earnings and other (1)

 

 

0.88

 

 

 

 

 

0.88

 

 

 

0.48

 

Merger and acquisition related depreciation and amortization (2)

 

 

0.58

 

 

 

 

 

0.58

 

 

 

1.02

 

Non-cash interest expense (3)

 

 

0.04

 

 

 

 

 

0.04

 

 

 

0.07

 

Tax effect of non-gaap adjustments (4)

 

 

(0.09

)

 

 

 

 

(0.10

)

 

 

(0.02

)

Total adjustments

 

 

1.41

 

 

 

 

 

1.40

 

 

 

1.55

 

Adjusted EPS (Non-GAAP)

 

$

3.34

 

 

to

 

$

3.45

 

 

$

3.28

 

Shares used in computing adjusted earnings per common share

 

 

 

 

 

 

65.0

 

 

 

65.1

 

____________________

(1)

Represents share-based compensation, the elimination of non-cash equity earnings from equity investments, severance and other adjustments to reconcile GAAP EPS to Non-GAAP EPS.

(2)

Represents depreciation and amortization expenses amounts generated as a result of M&A activity.

(3)

Represents non-cash amortization of the debt issue costs, premium and accretion of discount.

(4)

Represents income tax expense on non-GAAP adjustments using the applicable GAAP tax rate (anticipated at approximately 6% to 7%).

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250226268717/en/

Investor Contact Beatriz Brown-Sáenz (787) 773-5442 IR@evertecinc.com