Evertec(US:EVTC)2020-08-09 12:48Financial Data and Key Metrics Changes - Total revenue for Q2 2020 was $118 million, a decrease of 4% compared to 2019 [5][17] - Adjusted EBITDA was $50 million, a 13% decrease year-over-year [5][19] - Adjusted earnings per share was $0.38, down 25% from the previous year [5][23] - Year-to-date operating cash flow was $87 million, an increase of $11 million compared to the prior year [6][39] - Liquidity as of June 30 was $234 million [6][43] Business Line Data and Key Metrics Changes - Merchant Acquiring revenue decreased 8% year-over-year to approximately $24.8 million, but improved from a low of negative 33% in April to over 20% growth in June [24][25] - Payment Services Puerto Rico and the Caribbean segment revenue was $27.5 million, down approximately 10% year-over-year [28] - Payment Services LatAm segment revenue was $19.8 million, down approximately 6% year-over-year, impacted by FX fluctuations [32][34] - Business Solutions revenue increased approximately 1% to $55.5 million, driven by new services [36] Market Data and Key Metrics Changes - Transaction volumes in Puerto Rico improved throughout the quarter, ending at negative 6% for June from a low of negative 43% in April [28] - ATH Movil P2P transactions increased over 50% year-over-year, and ATH Movil business revenue surged more than 400% [10][52] Company Strategy and Development Direction - The company is focusing on product innovations and growth initiatives in Latin America despite the pandemic [4][15] - Continued investment in digital payment solutions is expected to drive future growth [10][65] - The company is pursuing new contracts with government agencies, such as the Department of Education, to enhance revenue streams [9][44] Management's Comments on Operating Environment and Future Outlook - Management noted that while the pandemic impacted results, there was a sequential improvement in business performance throughout the quarter [16][45] - The company is cautious about future forecasts due to ongoing uncertainty related to COVID-19 [43][60] - Management expressed optimism about the long-term shift towards digital payments and the potential for sustained growth in this area [65][66] Other Important Information - The company returned approximately $14 million to shareholders through share repurchases and dividends [6][41] - Adjusted effective tax rate for the quarter was 20.2%, with expectations of a higher rate in the second half of 2020 [22][57] Q&A Session Summary Question: Commentary on segment performance in July - Management noted that transactions have continued to improve in July, although at a slower pace compared to June [48][49] Question: Details on ATH Movil performance - ATH Movil saw a 50% increase in transactions, with a 400% increase in business revenue, indicating a significant shift towards digital payments [52][53] Question: Capital allocation and stock buyback plans - Management indicated a cautious approach to capital allocation, with a focus on maintaining a strong balance sheet amid ongoing pandemic uncertainties [55][56] Question: Future tax rate expectations - The higher tax rate is expected to be a temporary situation, with a return to normalized levels anticipated as business conditions stabilize [57][58] Question: Launch timeline for Santander Chile and Citibanamex - Management confirmed that both projects are on track for launch by the end of 2020, which is expected to contribute meaningfully to revenue [67][69]