Evertec(US:EVTC)2025-02-27 02:14Financial Data and Key Metrics Changes - Total revenue for 2024 was $845.5 million, a 22% increase year-over-year [8][25] - Adjusted EBITDA was $340.2 million, up approximately 17% year-over-year, with an adjusted EBITDA margin of 40.2% [10][26] - Adjusted EPS was $3.28, reflecting a 16% increase from the previous year [11][27] - Operating cash flows generated were approximately $260 million, with $95 million returned to shareholders through share repurchases and dividends [12][39] Business Line Data and Key Metrics Changes - Merchant Acquiring revenue grew by 11% due to pricing initiatives and increased sales volume [9] - Payments Puerto Rico revenue increased by 6%, driven by higher transaction volumes and strong performance from ATH Movil [9] - Business Solutions revenue grew by 7%, recognized from key projects that went into production [9] - LATAM revenue surged by 62% year-over-year, attributed to the full-year contribution of Sinqia and organic growth [10][17] Market Data and Key Metrics Changes - Economic conditions in Puerto Rico remained stable, with total employment at its highest since 2009 [13][14] - Passenger traffic at San Juan Airport grew approximately 9% year-over-year [15] - Puerto Rico received approximately $7 billion in reconstruction funds in 2024, with a similar amount expected for 2025 [16] Company Strategy and Development Direction - The company aims to focus on organic revenue growth, margin optimization, and capital allocation in 2025 [7] - Continued execution of acquisition strategy with two tuck-in deals closed in Q4, Grandata and Nubity [6] - The company is diversifying its revenue mix outside of Puerto Rico, with LATAM contributing approximately 33% of total revenue in 2024 [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about economic conditions in Puerto Rico supporting business growth through 2025 [16] - The company is focused on cost efficiency measures to offset a 10% discount on Popular services starting in Q4 2025 [11][47] - Management expects revenue growth for 2025 to be between $889 million to $899 million, reflecting a growth of 5.1% to 6.3% [42] Other Important Information - The company has a strong liquidity position of approximately $468 million as of December 31, 2024 [12][41] - The net debt position at year-end was $706.8 million, with a weighted average interest rate of approximately 6.45% [40][41] - Capital expenditures for 2024 were $88.4 million, with a target of approximately $85 million for 2025 [39][50] Q&A Session Summary Question: Thoughts on midterm guidance for growth profiles of segments - Management is currently focused on providing guidance for 2025 due to ongoing changes and integration efforts [54][56] Question: Update on Sinqia's growth and performance - Management noted that Sinqia's growth is reaccelerating, with a focus on technology upgrades and customer engagement [58][63] Question: Update on bringing EVERTEC's processing business into Brazil - Management is optimistic about small successes in payment products and is focused on improving existing businesses [68][70] Question: Contribution from pricing in Merchant segment growth - Pricing contributed approximately one-third to the growth, with expectations for a balanced contribution moving into 2025 [90][91] Question: State of the M&A market in Latin America - Management indicated a good M&A pipeline and a focus on smart deals for growth and diversification [92][94]