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]

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 liquidity remaining strong at approximately $485 million as of June 30 [5][6] Business Line Data and Key Metrics Changes - Merchant Acquiring revenue grew 4% year over year to $47.3 million, driven by improved spread and sales volume growth [13] - Payment Services Puerto Rico revenue was $56.4 million, an increase of approximately 4% from the prior year, primarily driven by ATH Mobile and POS transaction growth [14] - Latin America Payments and Solutions revenue increased 15% year over year or 20% on a constant currency basis, benefiting from organic growth and acquisitions [15] - Business Solutions segment revenue increased approximately 4% to $64.5 million, primarily due to projects completed in the prior year [17] Market Data and Key Metrics Changes - The unemployment rate in Puerto Rico remains stable at about 5.2%, and passenger traffic in San Juan Airport was up approximately 11% year over year [6] - In Latin America, the company experienced strong performance in Brazil and Chile, with continued organic growth and contributions from recent acquisitions [15][16] Company Strategy and Development Direction - The company plans to continue focusing on technology modernization, repricing initiatives, and margin optimization to drive growth [28][30] - A refresh of the share repurchase program was approved, allowing the company to repurchase up to $150 million of its common stock through December 31, 2026 [9] - The company expects to return cash to shareholders through dividends and share repurchases while investing in long-term growth opportunities [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to convert opportunities in the active pipeline into wins over the next quarters [8] - The outlook for the second half of the year is better than initially thought, with expectations of continued strong performance in Latin America [34] - 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 [21][25] Other Important Information - The company’s net debt position at quarter end was $673.6 million, with a weighted average interest rate of approximately 6.55% [20] - The effective tax rate for the quarter was 7.1%, with expectations of a gradual improvement in overall margin [12][24] 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, with conservatism included regarding potential tariff impacts [34][36] Question: Insights on the active pipeline and business opportunities - Management confirmed a very active organic pipeline and expressed optimism about upcoming announcements [40][42] Question: Performance of ATH Mobile and its growth drivers - Management noted that ATH Mobile's growth of 17% is driven by increased usage and network effects in Puerto Rico [44] Question: Competitive advantages in Latin America - Management emphasized proprietary technology, industry expertise, and a strong local presence as key competitive advantages [63][67]

Financial Performance - Total revenue reached $229.6 million, reflecting an 8% year-over-year growth, or 10% on a constant currency basis[10] - Adjusted EBITDA was $92.6 million, an 8% increase year-over-year, with an adjusted EBITDA margin of 40.3%[10] - Adjusted EPS grew by 7% year-over-year to $0.89[10] - Operating cash flow was approximately $86.1 million[9] Segment Performance - Merchant Acquiring revenue increased by 4% year-over-year to $47.3 million, with adjusted EBITDA up 10% to $20.0 million[23, 14] - Payment Services in Puerto Rico and the Caribbean saw a 4% revenue increase to $56.4 million, with adjusted EBITDA up 5% to $33.0 million[25, 14] - Latin America Payments and Solutions experienced a 15% revenue growth to $86.1 million, or 20% on a constant currency basis, with adjusted EBITDA up 33% to $23.3 million[28, 19] - Business Solutions revenue grew by 4% year-over-year to $64.5 million, but adjusted EBITDA decreased by 13% to $26.0 million[30, 14] Liquidity and Capital Allocation - The company returned $6.4 million to shareholders through dividends and executed $3.7 million in share repurchases[11] - Liquidity stood at $484.5 million as of June 30, 2025[11] Outlook - The company projects revenue between $901 million and $909 million, representing a GAAP growth of 6.6% to 7.6%[40] - Adjusted EPS is projected to be between $3.44 and $3.52, reflecting a growth of 4.8% to 7.0%[40]

[EVERTEC Second Quarter 2025 Earnings Release](index=1&type=section&id=EVERTEC%20Second%20Quarter%202025%20Earnings%20Release) [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) The company reported strong organic revenue growth, with total revenue up 8% and net income up 27% Q2 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $229.6M | $212.0M | +8% | | Constant Currency Revenue | $232.9M | - | +10% | | GAAP Net Income (attributable to common shareholders) | $40.5M | $31.9M | +27% | | GAAP Diluted EPS | $0.62 | $0.49 | +27% | | Adjusted EBITDA | $92.6M | $86.1M | +8% | | Adjusted Net Income | $57.7M | $53.8M | +7% | | Adjusted Diluted EPS | $0.89 | $0.83 | +7% | - **Revenue growth** was driven by organic expansion across all segments and contributions from acquisitions completed in late 2024[4](index=4&type=chunk) - Growth was driven by **improved spreads** and **higher sales volume** in Merchant Acquiring, increased **ATH Movil revenue**, and broad organic growth in Latin America[4](index=4&type=chunk) - The increase in **GAAP Net Income** was primarily due to **higher revenues**, lower depreciation and amortization, and reduced SG&A and interest expenses[5](index=5&type=chunk) [Shareholder Returns](index=2&type=section&id=Shareholder%20Returns) The company repurchased $3.7 million in stock and increased its share repurchase authorization to $150 million - In Q2 2025, the company repurchased **101,890 shares** at an average price of $36.22 per share, for a total of **$3.7 million**[9](index=9&type=chunk) - On July 30, 2025, the Board of Directors increased the total share repurchase authorization to **$150 million** and extended the program through December 31, 2026[10](index=10&type=chunk) [Full Year 2025 Outlook](index=2&type=section&id=2025%20Outlook) The company raised its full-year 2025 guidance, projecting revenue growth of 6.6% to 7.6% Revised Full Year 2025 Financial Outlook | Metric | 2025 Outlook | 2024 Actual | YoY Growth | | :--- | :--- | :--- | :--- | | Revenue | $901M - $909M | $845M | 6.6% - 7.6% | | Constant Currency Revenue Growth | - | - | 7.8% - 8.7% | | Adjusted EPS | $3.44 - $3.52 | $3.28 | 4.8% - 7.0% | | Constant Currency Adjusted EPS Growth | - | - | 6.3% - 8.5% | | Capital Expenditures | ~$85M | - | (No change) | | Adjusted Effective Tax Rate | ~6% - 7% | - | (No change) | [Financial Statements](index=5&type=section&id=Financial%20Statements) This section provides unaudited consolidated statements of income, balance sheets, and cash flows for Q2 2025 [Consolidated Statements of Income](index=5&type=section&id=Schedule%201%3A%20Unaudited%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income%20(Loss)) Q2 2025 vs Q2 2024 Income Statement Highlights (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenues | $229,607 | $211,978 | | Income from operations | $56,134 | $43,360 | | Income before income taxes | $45,043 | $33,624 | | Net income attributable to common stockholders | $40,465 | $31,901 | | Diluted EPS | $0.62 | $0.49 | [Consolidated Balance Sheets](index=6&type=section&id=Schedule%202%3A%20Unaudited%20Consolidated%20Balance%20Sheets) Balance Sheet Highlights (in thousands) | Line Item | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $290,578 | $273,645 | | Total current assets | $570,643 | $529,065 | | Total assets | $1,961,345 | $1,857,611 | | Total liabilities | $1,304,641 | $1,338,350 | | Total stockholders' equity | $612,330 | $472,524 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Schedule%203%3A%20Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) Six Months Ended June 30 Cash Flow Summary (in thousands) | Cash Flow Activity | 2025 | 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) | [Segment Performance](index=10&type=section&id=Schedule%204%3A%20Unaudited%20Segment%20Information) All business segments contributed to growth, with Latin America showing the highest revenue increase Q2 2025 Segment Revenue and Adjusted EBITDA (in thousands) | Segment | Revenue Q2 2025 | Revenue Q2 2024 | Adj. EBITDA Q2 2025 | Adj. EBITDA Q2 2024 | | :--- | :--- | :--- | :--- | :--- | | Payment Services - Puerto Rico & Caribbean | $56,421 | $54,199 | $33,028 | $31,358 | | Latin America Payments and Solutions | $86,055 | $74,669 | $23,350 | $17,500 | | Merchant Acquiring, net | $47,292 | $45,319 | $20,002 | $18,248 | | Business Solutions | $64,519 | $62,336 | $26,032 | $29,769 | [GAAP to Non-GAAP Reconciliation](index=12&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliation) This section details the reconciliation of GAAP measures like Net Income and EPS to their non-GAAP counterparts Q2 2025 Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Line Item | Amount | | :--- | :--- | | Net income | $40,973 | | (+) Income tax expense | $4,070 | | (+) Interest expense, net | $13,640 | | (+) Depreciation and amortization | $28,309 | | **EBITDA** | **$86,992** | | (+/-) Other adjustments | $5,573 | | **Adjusted EBITDA** | **$92,565** | Q2 2025 Reconciliation of GAAP EPS to Adjusted EPS | Line Item | Per Share Amount | | :--- | :--- | | Diluted EPS (GAAP) | $0.62 | | (+) Adjustments | $0.27 | | **Adjusted EPS (Non-GAAP)** | **$0.89** | [Important Disclosures](index=2&type=section&id=Important%20Disclosures) This section defines the non-GAAP measures used and outlines forward-looking statements and associated risks - The company uses non-GAAP measures to supplement GAAP results for a better view of operating performance[13](index=13&type=chunk)[15](index=15&type=chunk) - **Adjusted EBITDA** excludes items such as share-based compensation, M&A transaction fees, and unrealized foreign currency gains/losses[18](index=18&type=chunk) - Forward-looking statements are subject to risks including the company's relationship with **Popular, Inc**, IT disruptions, and regional economic stability[23](index=23&type=chunk)[24](index=24&type=chunk)

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Evertec, with a focus on how actual results compare to estimates impacting stock price [1][2] Earnings Expectations - Evertec is expected to report quarterly earnings of $0.86 per share, reflecting a +3.6% year-over-year change [3] - Revenues are projected to be $221.88 million, which is a 4.7% increase from the previous year [3] Estimate Revisions - The consensus EPS estimate has been revised down by 0.35% over the last 30 days, indicating a reassessment by analysts [4] - A positive Earnings ESP of +1.16% suggests analysts have recently become more optimistic about Evertec's earnings prospects [12] Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive reading is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [10] - Evertec currently holds a Zacks Rank of 3, indicating a likelihood of beating the consensus EPS estimate [12] Historical Performance - In the last reported quarter, Evertec exceeded the expected earnings of $0.81 per share by delivering $0.87, resulting in a +7.41% surprise [13] - The company has beaten consensus EPS estimates in each of the last four quarters [14] Industry Comparison - Paypal, a competitor in the financial transaction services industry, is expected to report earnings of $1.3 per share, reflecting a +9.2% year-over-year change, with revenues projected at $8.1 billion, up 2.7% [18] - Paypal has a positive Earnings ESP of +0.32% and a Zacks Rank of 2, indicating a strong likelihood of beating consensus EPS estimates [19]

Core Insights - Evertec (EVTC) has a strong track record of beating earnings estimates, particularly in the last two quarters with an average surprise of 14.12% [1] - The company reported earnings of $0.81 per share for the most recent quarter, falling short of the expected $0.87, resulting in a surprise of 7.41% [2] - In the previous quarter, Evertec exceeded expectations by reporting $0.87 per share against a consensus estimate of $0.72, achieving a surprise of 20.83% [2] Earnings Estimates and Predictions - Earnings estimates for Evertec have been trending higher, supported by its history of earnings surprises [5] - The stock currently has a positive Zacks Earnings ESP of +1.16%, indicating bullish sentiment among analysts regarding its near-term earnings potential [8] - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) suggests a high likelihood of another earnings beat in the upcoming report [8] Earnings ESP and Market Behavior - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 or better have a nearly 70% chance of producing a positive surprise [6] - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, reflecting the latest analyst revisions [7] - A negative Earnings ESP can diminish predictive power but does not necessarily indicate an earnings miss [9]

Financial Performance - Revenues for Q1 2025 were $228,792 thousand, an increase of 11.4% compared to $205,318 thousand in Q1 2024[19] - Net income attributable to EVERTEC, Inc.'s common stockholders for Q1 2025 was $32,703 thousand, up 104.3% from $15,979 thousand in Q1 2024[19] - Operating income for Q1 2025 was $49,500 thousand, representing a 50.8% increase from $32,803 thousand in Q1 2024[19] - Net income for Q1 2025 was $33,091,000, compared to $16,387,000 in Q1 2024, representing a 102% increase[23] - Net income per common share - basic for Q1 2025 was $0.51, compared to $0.25 in Q1 2024, reflecting a 104% increase[19] - Segment Adjusted EBITDA for the three months ended March 31, 2025, was $98.903 million, compared to $85.908 million for the same period in 2024, reflecting a growth of about 15.1%[108] Assets and Liabilities - Total assets increased to $1,917,501 thousand as of March 31, 2025, compared to $1,857,611 thousand at the end of 2024, reflecting a growth of 3.2%[18] - The total liabilities decreased slightly to $1,332,385 thousand as of March 31, 2025, from $1,338,350 thousand at the end of 2024[18] - As of March 31, 2025, total debt amounted to $956.65 million, a slight decrease from $965.34 million at December 31, 2024[42] - The Company has a total of $423.6 million in unpaid principal balance for the TLA Facility and $540.0 million for the TLB Facility as of March 31, 2025[46] Cash Flow and Investments - Cash flows from operating activities decreased to $37,643,000 in Q1 2025 from $40,702,000 in Q1 2024, a decline of 5.1%[23] - Total cash, cash equivalents, and restricted cash at the end of Q1 2025 was $307,618,000, down from $337,587,000 at the end of Q1 2024[23] - The company’s net cash used in investing activities was $22,324,000 in Q1 2025, slightly higher than $21,994,000 in Q1 2024[23] Acquisitions - The Company acquired 100% of Grandata, Inc for an aggregate purchase price of $33.3 million, enhancing its product offerings in data analytics focused on underbanked populations[32] - The Company also acquired Nubity, Inc for $11.0 million, a cloud services provider specializing in AWS cloud infrastructure management[32] - Goodwill related to both acquisitions is preliminarily estimated at approximately $7.4 million for Nubity and $13.77 million for Grandata, with no goodwill deductible for income tax purposes[33][35] Shareholder Returns - The company declared a quarterly cash dividend of $0.05 per share, paid on March 21, 2025[89] - The company paid cash dividends of $3,181,000 in Q1 2025, compared to $3,273,000 in Q1 2024[23] Risk Factors - The company highlighted the potential risks associated with its merger with Sinqia and the impact of leverage on its financial flexibility[16] - Rising input costs, including wages and benefits, could negatively impact the company's results of operations and financial condition[177] - The company is facing a rising interest rate environment, which has adversely affected its cost of funding and increased volatility in foreign currency exchange rates[177] Revenue Segmentation - The Payment Services - Puerto Rico & Caribbean segment generated revenues of $37.299 million for the three months ended March 31, 2025, up from $33.944 million in 2024, indicating an increase of approximately 7.0%[100][102] - The Latin America Payments and Solutions segment reported revenues of $78.280 million for the three months ended March 31, 2025, compared to $70.147 million in 2024, marking an increase of around 11.6%[100][102] - The Merchant Acquiring segment's revenues were $47.649 million for the three months ended March 31, 2025, up from $43.099 million in 2024, which is an increase of approximately 10.5%[100][102] - Business Solutions segment revenues increased to $65.564 million for the three months ended March 31, 2025, from $58.128 million in 2024, reflecting a growth of about 12.7%[100][102] Foreign Currency and Interest Rates - The company recognized non-cash unrealized foreign currency remeasurement losses of $0.8 million, a decrease from losses of $4.5 million for the same period in 2024[176] - As of March 31, 2025, the company had an unfavorable foreign currency translation adjustment of $91.3 million, improved from an unfavorable adjustment of $138.0 million as of December 31, 2024[176] - A hypothetical 100 basis point increase in interest rates would increase annual interest expense by approximately $4.1 million based on the company's outstanding debt as of March 31, 2025[171]