Financial Performance - Total revenue for Q3 2025 was $228.6 million, an increase of 8% compared to $211.8 million in Q3 2024[4] - GAAP Net Income attributable to common shareholders increased 33% to $32.9 million, or $0.51 per diluted share, up from $24.7 million, or $0.38 per diluted share in the prior year[5] - Adjusted EBITDA for Q3 2025 was $92.6 million, a 6% increase from the prior year, with an Adjusted EBITDA margin of 40.5%[6] - Adjusted Net Income rose 8% to $59.8 million, with Adjusted earnings per common share increasing 7% to $0.92[7] - Revenues for Q3 2025 reached $228,587,000, a 7.5% increase from $211,795,000 in Q3 2024[26] - Basic net income per share for Q3 2025 was $0.51, compared to $0.39 in Q3 2024, representing a 30.8% increase[26] - The company reported a total comprehensive income of $46,146,000 for Q3 2025, compared to $28,094,000 in Q3 2024, an increase of 64.3%[26] - Net income for the three months ended September 30, 2025, was $33,460,000, compared to $25,202,000 in the same period of 2024, an increase of 32.9%[42] - The company reported an adjusted net income of $59,784,000 for the three months ended September 30, 2025, compared to $55,419,000 in 2024, reflecting a growth of 7.5%[42] Revenue Outlook - The revised revenue outlook for 2025 is projected between $921 million and $927 million, representing growth of approximately 8.9% to 9.6%[14] - The company projects revenues for 2025 to be between $921 million and $927 million, with an expected adjusted EPS between $3.56 and $3.62[45] - Constant currency revenue growth is now expected to be between 10.0% to 11.0% for 2025[14] - Constant currency revenues for the three months ended September 30, 2025, were $227,933,000, compared to $211,795,000 in 2024, showing a growth of 7.6%[42] Assets and Liabilities - Total assets increased to $2,149,167,000 as of September 30, 2025, compared to $1,857,611,000 at the end of 2024, reflecting a growth of 15.6%[28] - Total liabilities increased to $1,441,150,000 as of September 30, 2025, from $1,338,350,000 at the end of 2024, marking a rise of 7.7%[29] - Cash and cash equivalents rose to $474,738,000, up from $273,645,000 at the end of 2024, indicating a significant increase of 73.5%[28] - Goodwill increased to $779,671,000 as of September 30, 2025, from $726,901,000 at the end of 2024, reflecting a growth of 7.2%[28] Operating Costs - Operating costs and expenses for Q3 2025 totaled $190,855,000, a 12% increase from $170,254,000 in Q3 2024[26] - Cash flows from operating activities for the nine months ended September 30, 2025, were $157,001,000, down from $184,897,000 in 2024, a decrease of 15.1%[31] Capital Expenditures and Tax Rate - Capital expenditures are expected to remain approximately $85 million for 2025[14] - The company anticipates a continued adjusted effective tax rate of approximately 6% to 7%[14] Acquisition - The acquisition of 75% of Tecnobank was completed on October 1, 2025, enhancing the company's presence in Brazil's fintech sector[9]

Core Insights - The financial sector is experiencing a trend of oversold stocks, presenting potential buying opportunities for undervalued companies [1][2] Company Summaries - **Morningstar Inc (NASDAQ:MORN)**: The company announced an acquisition of the Center for Research in Security Prices (CRSP). Its stock has decreased by approximately 8% over the past month, with a 52-week low of $210.02. The RSI value is 28.1, and shares closed at $214.51, reflecting a 1.8% increase [8] - **Evertec Inc (NYSE:EVTC)**: Recently appointed Joaquin Castrillo as COO and promoted Karla Cruz-Jusino to CFO. The stock has fallen around 12% in the last month, with a 52-week low of $29.38. The RSI value is 28.8, and shares closed at $29.87, showing a 0.9% increase [8] - **Saratoga Investment Corp (NYSE:SAR)**: Reported disappointing quarterly results but noted growth in NAV and strong return on equity. The stock has also decreased by about 12% over the past month, with a 52-week low of $21.10. The RSI value is 28.8, and shares closed at $21.72, up by 0.7% [8]

Core Insights - The article compares two Financial Transaction Services stocks, Evertec (EVTC) and RB Global (RBA), to determine which is more attractive to value investors [1] Group 1: Zacks Rank and Earnings Outlook - Evertec has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while RB Global has a Zacks Rank of 4 (Sell) [3] - The Zacks Rank system emphasizes companies with positive earnings estimate revisions, suggesting that EVTC is likely experiencing a more favorable earnings outlook [3] Group 2: Valuation Metrics - Evertec has a forward P/E ratio of 9.79, significantly lower than RB Global's forward P/E of 30.39 [5] - The PEG ratio for Evertec is 1.40, while RB Global's PEG ratio is 2.54, indicating that EVTC is expected to grow earnings at a more favorable rate relative to its price [5] - Evertec's P/B ratio is 3.55 compared to RB Global's P/B of 3.96, further supporting the valuation advantage of EVTC [6] Group 3: Overall Value Assessment - Based on various valuation metrics, Evertec holds a Value grade of A, while RB Global has a Value grade of C, indicating that EVTC is currently the superior value option [6]

Core Viewpoint - The comparison between Evertec (EVTC) and RB Global (RBA) indicates that EVTC presents a better value opportunity for investors in the Financial Transaction Services sector [1]. Group 1: Zacks Rank and Earnings Outlook - Evertec has a Zacks Rank of 1 (Strong Buy), while RB Global has a Zacks Rank of 4 (Sell), suggesting that EVTC is likely experiencing a more favorable earnings outlook [3]. - The Zacks Rank focuses on companies with positive earnings estimate revisions, which is a critical factor for investors [2]. Group 2: Valuation Metrics - EVTC has a forward P/E ratio of 10.54, significantly lower than RBA's forward P/E of 30.41, indicating that EVTC may be undervalued [5]. - The PEG ratio for EVTC is 1.50, while RBA's PEG ratio is 2.54, further suggesting that EVTC is a more attractive investment based on expected earnings growth [5]. - EVTC's P/B ratio is 3.82 compared to RBA's P/B of 3.96, reinforcing the notion that EVTC is relatively undervalued [6]. Group 3: Value Grades - Based on various valuation metrics, EVTC holds a Value grade of B, while RBA has a Value grade of C, indicating that EVTC is the preferred choice for value investors [6].

Core Viewpoint - Evertec (EVTC) has received an upgrade to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in a company's earnings picture, which is crucial for predicting near-term stock price movements [2][3]. - A strong correlation exists between earnings estimate revisions and stock price movements, with institutional investors using these estimates to determine fair value [3]. Business Improvement Indicators - Rising earnings estimates and the Zacks rating upgrade suggest an improvement in Evertec's underlying business, which could lead to higher stock prices as investors respond positively [4]. Importance of Earnings Estimate Revisions - Tracking earnings estimate revisions is essential for making informed investment decisions, and the Zacks Rank system effectively utilizes this data [5][6]. - The Zacks Rank system has a proven track record, with Zacks Rank 1 stocks averaging an annual return of +25% since 1988 [6]. Specifics on Evertec's Earnings Estimates - Evertec is projected to earn $3.49 per share for the fiscal year ending December 2025, indicating no year-over-year change [7]. - Over the past three months, the Zacks Consensus Estimate for Evertec has increased by 5.8% [7]. Zacks Rating System Overview - The Zacks rating system maintains a balanced distribution of "buy" and "sell" ratings across its universe of over 4,000 stocks, with only the top 5% receiving a "Strong Buy" rating [8][9]. - Evertec's upgrade to a Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, indicating strong potential for market-beating returns in the near term [9].

Core Viewpoint - Evertec (EVTC) is identified as a strong value stock, currently holding a Zacks Rank 2 (Buy) and a Value grade of A, indicating it is undervalued compared to its industry peers [4][9]. Valuation Metrics - EVTC has a P/E ratio of 10.24, significantly lower than the industry average of 21.27, suggesting it is undervalued [4]. - The PEG ratio for EVTC is 1.46, compared to the industry's average PEG of 1.77, indicating a favorable valuation when considering expected earnings growth [5]. - The P/B ratio for EVTC stands at 3.79, which is lower than the industry average of 8.42, further supporting the notion of undervaluation [6]. - EVTC's P/S ratio is 2.72, closely aligning with the industry's average of 2.73, indicating consistent revenue performance [7]. - The P/CF ratio for EVTC is 8.87, significantly lower than the industry average of 17.47, highlighting its strong cash flow outlook [8]. Investment Outlook - The combination of these valuation metrics suggests that Evertec is likely being undervalued at present, making it an attractive investment opportunity for value investors [9].

Core Insights - Evertec (EVTC) is currently rated as a Strong Buy with a Zacks Rank of 1, while RB Global (RBA) has a Zacks Rank of 4, indicating a Sell recommendation [3] - Value investors often utilize traditional metrics such as P/E ratio, P/S ratio, earnings yield, and cash flow per share to identify undervalued stocks [4] Valuation Metrics - EVTC has a forward P/E ratio of 10.05, significantly lower than RBA's forward P/E of 28.98, suggesting that EVTC may be undervalued [5] - The PEG ratio for EVTC is 1.43, while RBA's PEG ratio stands at 2.41, indicating that EVTC has a more favorable earnings growth outlook relative to its price [5] - EVTC's P/B ratio is 3.64 compared to RBA's P/B of 3.81, further supporting the notion that EVTC is a more attractive investment based on valuation metrics [6] Investment Recommendation - Based on the Zacks Rank and Style Scores, EVTC is positioned as the better investment option for value investors compared to RBA [7]

[Forward-Looking Statements](index=4&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section outlines forward-looking statements concerning future performance and strategies, which are inherently subject to significant risks and uncertainties - This report contains forward-looking statements regarding **future performance, business strategies, growth, and other operational objectives**, which are subject to significant risks and uncertainties[12](index=12&type=chunk) - Key risk factors that could cause actual results to differ materially include **reliance on Popular, Inc., IT system and data security risks, regulatory compliance challenges, geographical concentration in Puerto Rico, potential inability to realize merger benefits, and risks associated with substantial indebtedness and interest rate fluctuations**[13](index=13&type=chunk)[14](index=14&type=chunk) [Part I. FINANCIAL INFORMATION](index=6&type=section&id=Part%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the periods ended June 30, 2025, including balance sheets, income statements, and cash flows, with detailed explanatory notes [Unaudited Condensed Consolidated Financial Statements](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The company's total assets increased to $1.96 billion as of June 30, 2025, from $1.86 billion at year-end 2024, primarily due to an increase in goodwill; for the six months ended June 30, 2025, net income attributable to common stockholders rose to $73.2 million from $47.9 million in the prior-year period, while net cash provided by operating activities decreased significantly to $86.1 million from $131.3 million year-over-year Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $290,578 | $273,645 | | Goodwill | $771,403 | $726,901 | | Total Assets | $1,961,345 | $1,857,611 | | Total Long-term debt | $914,865 | $925,062 | | Total Liabilities | $1,304,641 | $1,338,350 | | Total Stockholders' Equity | $612,330 | $472,524 | Condensed Consolidated Income Statement Highlights (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $229,607 | $211,978 | $458,399 | $417,296 | | Income from Operations | $56,134 | $43,360 | $105,634 | $76,163 | | Net Income | $40,973 | $32,523 | $74,064 | $48,910 | | Diluted EPS | $0.62 | $0.49 | $1.13 | $0.73 | Condensed Consolidated Statement of Cash Flows (in thousands) | Cash Flow Activity | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $86,128 | $131,340 | | Net cash used in investing activities | ($42,680) | ($50,167) | | Net cash used in financing activities | ($40,325) | ($85,776) | [Notes to Unaudited Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of accounting policies, recent acquisitions, segment performance, and debt structure, including a significant revenue concentration with Popular, Inc - In late 2024, the company acquired Grandata, Inc., a data analytics company, for **$33.3 million** and Nubity, Inc., a cloud services provider, for **$11.0 million** to enhance its product offerings[33](index=33&type=chunk)[34](index=34&type=chunk) - Goodwill increased to **$771.4 million** as of June 30, 2025, from **$726.9 million** at year-end 2024, primarily due to **foreign currency translation adjustments of $44.0 million** and a measurement period adjustment of **$0.5 million** for prior year acquisitions[39](index=39&type=chunk) - Total debt stood at **$951.3 million** as of June 30, 2025, primarily consisting of a **$415.2 million Term A Loan** and a **$523.6 million Term B Loan**[43](index=43&type=chunk) - Popular, Inc. remains a key customer, accounting for approximately **31% of total revenues** for the six months ended June 30, 2025[74](index=74&type=chunk) - Subsequent to the quarter end, on July 24, 2025, the Board declared a quarterly cash dividend of **$0.05 per share**; on July 30, 2025, the Board increased the share repurchase authorization to **$150 million**[114](index=114&type=chunk)[115](index=115&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses revenue growth for Q2 and H1 2025, driven by organic expansion and acquisitions, alongside segment performance, liquidity, and non-GAAP financial measures, noting a decrease in operating cash flow [Results of Operations](index=34&type=section&id=Results%20of%20Operations) For Q2 2025, revenues increased 8% to $229.6 million, and income from operations grew 29% to $56.1 million compared to Q2 2024; for the first six months of 2025, revenues increased 10% to $458.4 million, and income from operations grew 39% to $105.6 million, attributed to organic expansion, pricing initiatives, and recent acquisitions, while depreciation and amortization expense decreased due to fully amortized intangible assets Q2 2025 vs. Q2 2024 Performance (in thousands) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenues | $229,607 | $211,978 | 8% | | Cost of Revenues | $110,060 | $97,481 | 13% | | SG&A Expenses | $35,104 | $38,187 | (8)% | | Income from Operations | $56,134 | $43,360 | 29% | H1 2025 vs. H1 2024 Performance (in thousands) | Metric | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenues | $458,399 | $417,296 | 10% | | Cost of Revenues | $224,669 | $199,929 | 12% | | SG&A Expenses | $71,314 | $73,813 | (3)% | | Income from Operations | $105,634 | $76,163 | 39% | - Revenue growth was driven by **organic expansion in all segments, pricing initiatives in Merchant Acquiring, increased ATH Movil revenue, and contributions from acquisitions completed in Q4 2024**[129](index=129&type=chunk)[136](index=136&type=chunk) - Depreciation and amortization expense decreased by **14% in Q2** and **16% in H1 2025**, primarily due to intangible assets that became fully amortized during the prior year[132](index=132&type=chunk)[139](index=139&type=chunk) [Segment Results of Operations](index=37&type=section&id=Segment%20Results%20of%20Operations) All four segments reported revenue growth in Q2 and H1 2025; Latin America Payments and Solutions saw the largest revenue increase, driven by organic growth and acquisitions, leading to a significant margin expansion; Merchant Acquiring benefited from improved spread and sales volume; Business Solutions revenue grew from new projects, though its Segment Adjusted EBITDA margin decreased due to higher costs Q2 2025 Segment Performance (in thousands) | Segment | Revenue | % Change (YoY) | Segment Adj. EBITDA | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | | Payment Services - PR & Caribbean | $56,421 | 4.1% | $33,028 | 5.3% | | Latin America Payments & Solutions | $86,055 | 15.2% | $23,350 | 33.4% | | Merchant Acquiring | $47,292 | 4.4% | $20,002 | 9.6% | | Business Solutions | $64,519 | 3.5% | $26,032 | (12.5)% | H1 2025 Segment Performance (in thousands) | Segment | Revenue | % Change (YoY) | Segment Adj. EBITDA | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | | Payment Services - PR & Caribbean | $111,578 | 4.1% | $64,466 | 4.5% | | Latin America Payments & Solutions | $169,830 | 14.1% | $48,245 | 42.7% | | Merchant Acquiring | $94,941 | 7.4% | $40,361 | 17.1% | | Business Solutions | $130,083 | 8.0% | $48,243 | (8.6)% | [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) The company's primary liquidity source is cash from operations, which was $86.1 million for H1 2025, a decrease from $131.3 million in H1 2024 due to working capital requirements; as of June 30, 2025, cash and cash equivalents were $290.6 million, with an additional $193.9 million available under the revolving credit facility, and management believes existing cash flows are adequate to meet liquidity needs for at least the next twelve months - As of June 30, 2025, the company had **$290.6 million in cash and cash equivalents** and **$193.9 million available for borrowing** under its Revolving Facility[160](index=160&type=chunk)[161](index=161&type=chunk) Cash Flow Summary (in thousands) | Cash Flow Activity | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Cash from Operations | $86,128 | $131,340 | | Cash used in Investing | ($42,680) | ($50,167) | | Cash used in Financing | ($40,325) | ($85,776) | - Capital expenditures for H1 2025 were **$42.3 million**, a decrease from **$56.3 million** in the same period of 2024[168](index=168&type=chunk) [Non-GAAP Measures](index=42&type=section&id=Non-GAAP%20Measures) The company uses non-GAAP measures like EBITDA, Adjusted EBITDA, and Adjusted Net Income to evaluate performance; for Q2 2025, Adjusted EBITDA was $92.6 million, up from $86.1 million in Q2 2024, and Adjusted Net Income was $57.7 million ($0.89 per diluted share) compared to $53.8 million ($0.83 per diluted share) in the prior year quarter, reflecting improved underlying profitability Non-GAAP Performance Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Adjusted EBITDA | $92,565 | $86,052 | $182,004 | $164,229 | | Adjusted Net Income | $57,665 | $53,815 | $113,925 | $101,819 | | Adjusted Diluted EPS | $0.89 | $0.83 | $1.76 | $1.55 | [Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from interest rate fluctuations, foreign currency exchange, and inflation; a hypothetical 100 basis point increase in interest rates would raise annual interest expense by approximately $4.1 million, which the company mitigates using three interest rate swap agreements, while foreign exchange risk stems from Latin American operations, and rising inflation could negatively impact input costs - A hypothetical **100 basis point increase** in interest rates on the company's variable-rate debt would increase annual interest expense by approximately **$4.1 million**[194](index=194&type=chunk) - The company uses **three interest rate swap agreements** to convert a portion of its variable-rate debt to fixed rates, hedging against interest rate risk[195](index=195&type=chunk) - Foreign exchange risk from operations in Latin America resulted in an **unfavorable foreign currency translation adjustment of $58.8 million** recorded in accumulated other comprehensive income as of June 30, 2025[198](index=198&type=chunk) [Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - Based on an evaluation by the CEO and CFO, the company's **disclosure controls and procedures were deemed effective** as of June 30, 2025[201](index=201&type=chunk) - No changes occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's **internal control over financial reporting**[202](index=202&type=chunk) [Part II. OTHER INFORMATION](index=47&type=section&id=Part%20II.%20OTHER%20INFORMATION) [Legal Proceedings & Risk Factors](index=47&type=section&id=Item%201.%20Legal%20Proceedings%20%26%20Item%201A.%20Risk%20Factors) The company is involved in ordinary course legal proceedings that are not expected to have a material adverse effect, and there have been no material changes to the risk factors previously disclosed in the company's 2024 Annual Report on Form 10-K - The company is party to various legal proceedings arising in the ordinary course of business, which management believes will **not have a material adverse effect** on the company[204](index=204&type=chunk) - There have been **no material changes to the risk factors** described in the Annual Report on Form 10-K for the year ended December 31, 2024[205](index=205&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=47&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the three months ended June 30, 2025, the company repurchased 101,890 shares of its common stock at an average price of $36.22 per share; subsequently, on July 30, 2025, the Board of Directors increased the share repurchase authorization to an aggregate of $150 million, effective through December 31, 2026 Share Repurchases for Q2 2025 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | 6/1/2025-6/30/2025 | 101,890 | $36.22 | - On July 30, 2025, the Board approved an increase to the share repurchase authorization, permitting future repurchases of up to an aggregate of **$150 million** worth of common stock by December 31, 2026[206](index=206&type=chunk) [Other Information and Exhibits](index=47&type=section&id=Other%20Items) This section confirms there were no defaults upon senior securities or mine safety disclosures, states that no director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the quarter, and provides a list of exhibits filed with the report - No defaults upon **senior securities** were reported for the period[207](index=207&type=chunk) - During the quarter, no director or officer adopted or terminated a **Rule 10b5-1 trading arrangement** or a non-Rule 10b5-1 trading arrangement[212](index=212&type=chunk) - The report includes a list of filed exhibits, such as the **CEO and CFO certifications pursuant to the Sarbanes-Oxley Act**[213](index=213&type=chunk)

Core Insights - Evertec reported revenue of $229.61 million for the quarter ended June 2025, reflecting an 8.3% increase year-over-year and a surprise of +3.48% over the Zacks Consensus Estimate of $221.88 million [1] - The company's EPS for the quarter was $0.89, up from $0.83 in the same quarter last year, with an EPS surprise of +3.49% compared to the consensus estimate of $0.86 [1] Revenue Breakdown - Payment Services - Puerto Rico & Caribbean generated $56.42 million, exceeding the three-analyst average estimate of $55.39 million, with a year-over-year change of +4.1% [4] - Payment Services - Latin America reported revenues of $86.06 million, surpassing the average estimate of $80.78 million, marking a year-over-year increase of +15.3% [4] - Corporate and Other revenues were reported at -$24.68 million, slightly better than the average estimate of -$25.32 million, with a year-over-year change of +0.6% [4] - Business Solutions revenues reached $64.52 million, compared to the average estimate of $63.29 million, reflecting a +3.5% year-over-year change [4] - Merchant Acquiring, net revenues were $47.29 million, slightly below the average estimate of $47.57 million, with a year-over-year increase of +4.4% [4] Stock Performance - Over the past month, Evertec's shares have returned -9.3%, contrasting with the Zacks S&P 500 composite's +3.4% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - Revenue for the second quarter was $230 million, an 8% increase over the prior year, while constant currency revenue was approximately $233 million, representing growth of 10% [5][11] - Adjusted EBITDA increased to $93 million, up approximately 8% year over year, with an adjusted EBITDA margin of 40.3% for the quarter [5][11] - Adjusted EPS of $0.89 was up 7% year over year, driven by strong adjusted EBITDA growth and lower interest expense [5][12] - Operating cash flow for the first half of the year was approximately $86 million, with $6.4 million returned to shareholders through dividends and $3.7 million in share repurchases [5][18] Business Line Data and Key Metrics Changes - Merchant Acquiring revenue grew 4% year over year to $47.3 million, with adjusted EBITDA of $20 million and an adjusted EBITDA margin of 42.3% [13] - Payment Services Puerto Rico revenue was $56.4 million, an increase of approximately 4% from the prior year, with adjusted EBITDA of $33 million and a margin of 58.5% [14] - Latin America Payments and Solutions revenue increased 15% year over year to $86.1 million, with adjusted EBITDA of $23.3 million, up approximately 33% from the prior year [15][16] - Business Solutions segment revenue increased approximately 4% to $64.5 million, with adjusted EBITDA of $26 million, down approximately 13% year over year [17] Market Data and Key Metrics Changes - The overall economic condition in Puerto Rico remains stable, with an unemployment rate near multi-decade lows of about 5.2% [8] - Passenger traffic in San Juan Airport was up approximately 11% year over year through April [8] - Latin America revenue increased 15% year over year or 20% on a constant currency basis, driven by organic growth and contributions from recent acquisitions [9] Company Strategy and Development Direction - The company plans to continue its share repurchase program, authorizing up to $150 million of shares to be repurchased through December 31, 2026 [9] - The company is focused on technology modernization, repricing initiatives, and margin optimization to drive growth [28][30] - The company expects to see gradual improvement in overall margins in the third quarter, with a reset lower in the fourth quarter due to a discount impacting revenue [24] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong performance in the first half of the year and an optimistic outlook for the second half, despite potential tariff impacts [34][35] - The company anticipates revenue growth of 6.6% to 7.6% for the full year, with adjusted EPS expected to grow between 4.87% from the previous year [20][21] - Management noted that the active pipeline for new business remains strong, with no significant pullback in demand due to macroeconomic factors [41][42] Other Important Information - The company’s liquidity remains strong at approximately $485 million as of June 30 [6][19] - The net debt position at quarter end was $673.6 million, with a net debt to trailing twelve-month adjusted EBITDA ratio of approximately 1.95 times [19] Q&A Session Summary Question: Update on strategic initiatives and their progress - Management highlighted that the entire segment grew double digits, with significant focus on technology modernization and repricing initiatives [28][30] Question: Outlook for the second half and macroeconomic impacts - Management indicated that the second half outlook is better than initially thought, with conservatism included regarding potential tariffs [34][35] Question: Insights on the active pipeline and business opportunities - Management confirmed a very active organic pipeline and expressed optimism about upcoming business wins, unaffected by tariff discussions [41][42] Question: Performance of ATH Mobile and growth drivers - Management noted that ATH Mobile's growth of 17% is driven by increased usage and network effects in Puerto Rico [43] Question: Acquisition strategy and focus areas - Management stated that they are actively looking for acquisition opportunities, particularly in Brazil, while integrating recent acquisitions [48][49] Question: Competitive advantages in Latin America - Management emphasized their proprietary technology, industry expertise, and local presence as key competitive advantages in Latin America [62][66]