Core Viewpoint - Evertec (EVTC) has received an upgrade to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with near-term stock price movements [4][6]. - Institutional investors often rely on earnings estimates to determine the fair value of a company's shares, leading to stock price movements based on their buying or selling activities [4]. Business Outlook - The increase in 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 [5][10]. - For the fiscal year ending December 2025, Evertec is expected to earn $3.56 per share, with a 6.8% increase in the Zacks Consensus Estimate over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [7][9]. - Evertec's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10].

Financial Performance - Total revenues for Q3 2025 reached $228,587,000, a 7.5% increase from $211,795,000 in Q3 2024[18] - Net income attributable to EVERTEC, Inc.'s common stockholders for Q3 2025 was $32,861,000, compared to $24,678,000 in Q3 2024, reflecting a 33.5% year-over-year growth[18] - Operating income for Q3 2025 was $37,732,000, down from $41,541,000 in Q3 2024, reflecting a decrease of 9.0%[18] - 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%[18] - Net income for the quarter ending September 30, 2025, was $32,700,000, compared to $40,404,000 for the previous quarter[20] - Net income for the nine months ended September 30, 2025, was $107,524,000, an increase of 45% compared to $74,112,000 in 2024[23] - Net income available to common shareholders for the nine months ended September 30, 2025, was $106.029 million, compared to $72.558 million for the same period in 2024, reflecting a growth of approximately 46%[96] Assets and Liabilities - Total assets increased to $2,149,167,000 as of September 30, 2025, up from $1,857,611,000 at the end of 2024, representing a 15.6% growth[17] - Current assets rose to $744,420,000, a significant increase from $529,065,000 at the end of 2024, marking a 40.7% increase[17] - Long-term debt increased to $1,059,143,000 from $925,062,000, indicating a 14.5% rise[17] - Total stockholders' equity grew to $663,750,000 as of September 30, 2025, compared to $472,524,000 at the end of 2024, a 40.4% increase[17] - As of September 30, 2025, total debt amounted to $1,095,751,000, an increase of 13.5% from $965,343,000 on December 31, 2024[47] Cash Flow and Dividends - Cash and cash equivalents increased to $474,738,000 from $273,645,000, a growth of 73.5%[17] - Cash dividends declared on common stock were $3,199,000 for the quarter ending September 30, 2025, consistent with the previous quarters[20] - The company paid $47,477,000 in interest for the nine months ended September 30, 2025, down from $55,024,000 in 2024[123] - The Company declared quarterly cash dividends of $0.05 per share on February 20, May 2, and July 24, 2025, totaling $0.15 per share for the year[97] Acquisitions and Investments - The company completed the acquisition of Grandata, Inc. for $33.3 million, enhancing its product offerings in data analytics[37] - The acquisition of Nubity, Inc. was finalized for $11.0 million, focusing on cloud services and infrastructure management[38] - On October 1, 2025, the company acquired 75% of Tecnobank for BRL$787 million (approximately USD$148 million), enhancing its product offerings[124][125] - The Company purchased the remaining interest of approximately 40% in Homie Do Brasil Informatica for $5.2 million, classified as a financing activity[66] Segment Performance - The Payment Services - Puerto Rico & Caribbean segment generated revenues of $36.7 million, while the Latin America Payments and Solutions segment contributed $83.4 million, indicating strong performance across these segments[110] - Segment Adjusted EBITDA for the total reportable segments was $98.0 million for the three months ended September 30, 2025, compared to $92.8 million for the same period in 2024, reflecting an increase of about 5.5%[110] - The Merchant Acquiring segment's revenues included discount fees and membership fees charged to merchants, contributing significantly to the overall revenue growth[105] - The Business Solutions segment reported revenues driven by a full suite of business process management solutions, with a focus on core bank processing and managed services[106] - The Latin America Payments and Solutions segment's revenues are primarily driven by transaction processing, highlighting the importance of transaction volume in revenue generation[104] Expenses and Costs - The company experienced a decrease in depreciation and amortization expenses to $28,435,000 in Q3 2025 from $33,660,000 in Q3 2024, a reduction of 15.6%[18] - The company reported a decrease in depreciation and amortization expenses to $85,217,000 from $101,051,000, a reduction of approximately 16%[23] - Amortization expense for other intangibles for the nine months ended September 30, 2025 was $68.7 million, down from $84.2 million for the same period in 2024, indicating a decrease of 18.4%[45] Tax and Regulatory - As of September 30, 2025, the gross deferred tax asset was $98.4 million, while the gross deferred tax liability was $87.2 million, compared to $74.3 million and $79.9 million, respectively, as of December 31, 2024[93] - The current tax provision for the nine months ended September 30, 2025, was $27.119 million, an increase from $23.375 million in 2024[91] Other Financial Metrics - The balance of accumulated other comprehensive loss improved from $(134,723) at December 31, 2024, to $(48,374) at September 30, 2025[68] - The estimated aggregate amount of the transaction price allocated to unsatisfied or partially satisfied performance obligations was $724.8 million, expected to be recognized over the next 5 to 7 years[85] - The allowance for expected current credit losses on trade receivables was $2.619 million as of September 30, 2025, down from $2.856 million at the end of 2024[88] - A hypothetical 100 basis point increase in interest rates would increase annual interest expense by approximately $5.5 million based on outstanding debt as of September 30, 2025[209] - The company has three interest rate swap agreements to convert a portion of variable rate debt to fixed[210]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $228.6 million, an 8% increase year-over-year, with constant currency revenue also growing by 8% [8][13] - Adjusted EBITDA increased to $92.6 million, up approximately 6% year-over-year, with an adjusted EBITDA margin of 40.5% [8][15] - Adjusted EPS was $0.92, reflecting a 7% increase year-over-year, driven by strong adjusted EBITDA growth and lower interest expense [8][15] - Operating cash flow for the first nine months of the year was approximately $157 million, with liquidity at approximately $518.6 million as of September 30 [8][21] Business Line Data and Key Metrics Changes - Merchant acquiring revenue grew 3% year-over-year to $46.8 million, driven by higher sales volume [9][16] - Payment services in Puerto Rico grew 5% year-over-year to $55.2 million, primarily due to strong performance in ATH Móvil [9][17] - Latin America payments and solutions revenue increased 19% year-over-year to $90.4 million, with double-digit organic growth [10][18] - Business solutions revenue increased approximately 1% to $61.7 million, primarily due to projects completed during the quarter [19] Market Data and Key Metrics Changes - Economic conditions in Puerto Rico remained favorable, with an unemployment rate steady at 5.6% and strong consumer spending [9] - Latin America saw a robust pipeline and significant wins, including contracts with Banco de Chile and Financiaria O in Peru [10][11] Company Strategy and Development Direction - The company is focused on expanding its presence in Brazil through acquisitions, such as TechnoBank, which enhances its financial technology capabilities [11][12] - Continued investment in dynamic markets is a cornerstone of the company's strategy, aiming for diversification and growth [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, particularly in Latin America, and highlighted the successful integration of recent acquisitions [10][33] - The company anticipates strong top-line growth in 2026, supported by strategic priorities and cost initiatives [29] Other Important Information - A cybersecurity incident was reported, but it was contained and did not impact other products or services [5][6] - The company has a strong cash position, with net debt at $631.8 million and a weighted average interest rate of approximately 6.24% [21] Q&A Session Summary Question: Insights on LatAm growth and market resonance - Management noted durable growth in LatAm, with successful product scaling and significant deals like Banco de Chile [31][32] Question: Contribution from cost of living adjustments - CPI adjustments were discussed, with current caps and future expectations outlined [34][37] Question: Impact of government shutdown on Puerto Rican economy - No direct impact observed yet, but monitoring is ongoing due to reliance on federal funds [42] Question: Status of the cybersecurity incident and business momentum - No adverse impact on business momentum was reported, with systems now hardened [47][48] Question: Margin performance and expectations - Margins were in line with expectations, with a noted decline due to transaction volume dynamics [49][50] Question: Capital allocation and M&A appetite - The company is evaluating capital allocation, including potential share buybacks and M&A opportunities [52][56]

Third Quarter Earnings Conference Call November 6, 2025 Foward Looking Statements Certain statements in this presentation 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 ...

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 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]

Security Breach - Sinqia, a financial technology provider owned by Evertec, experienced a hacking incident [1] - The hackers attempted to steal approximately 420 million reais (approximately $77.4 million) [1] Impacted Institutions - Several Brazilian financial institutions, including HSBC's local operations, were targeted in the attack [1]

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].