Evertec(US:EVTC)2024-05-02 01:24Financial Data and Key Metrics Changes - Total revenue for Q1 2024 was $205.3 million, a 28% increase year-over-year, driven by strong growth in the Latin America segment and a full quarter contribution from Sinqia [57][61] - Adjusted EBITDA was $78.2 million, up approximately 16% compared to the prior year, with an adjusted EBITDA margin of 38.1%, down from the previous year [67][57] - Adjusted EPS for the quarter was $0.72, reflecting a 4% year-over-year increase [5][57] Business Line Data and Key Metrics Changes - Payment Services in Puerto Rico and Caribbean segment revenue was $53 million, a 10% increase year-over-year, driven by transaction growth of 7% and a 27% increase in ATH Móvil transactions [6][58] - Merchant Acquiring net revenue increased by approximately 7% year-over-year to $43.1 million, with sales volume up 6% [14] - Latin America Payments & Solutions revenue was $74.2 million, up approximately 110% year-over-year, reflecting contributions from Sinqia and organic growth [15] Market Data and Key Metrics Changes - The unemployment rate in Puerto Rico remained low at 5.7%, with employment levels at 1.1 million, the highest since 2009 [64] - Airport arrivals in Puerto Rico increased over 10% year-over-year in Q1 [64] Company Strategy and Development Direction - The company is focused on integrating Sinqia while delivering strong results from payment businesses in Puerto Rico and Latin America [50] - There is an emphasis on technology modernization and customer-centric initiatives, with plans to invest in platforms to enhance offerings and capture market share [65][66] - The company aims to optimize margins and improve operational efficiencies across all segments [30][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the supportive macro environment in Puerto Rico, which is expected to aid growth [85][64] - The company raised the lower end of its revenue outlook for 2024, now expecting a range of $846 million to $854 million, representing growth of approximately 22% to 23% [17][71] - Management acknowledged the challenges in the integration of Sinqia but remains optimistic about long-term growth potential [39][40] Other Important Information - The net debt position at the end of the quarter was approximately $793 million, with a net debt to trailing 12-month adjusted EBITDA ratio of approximately 2.51x [8] - The company returned approximately $3 million to shareholders through dividends and entered into a $70 million accelerated share repurchase program [4] Q&A Session Summary Question: What are the updated thoughts on the accretion opportunities for Sinqia? - Management remains excited about Sinqia and is focused on execution discipline, with a new leadership structure aimed at improving sales and implementation processes [73][74] Question: Can you provide color on the segment guidance changes? - Merchant Acquiring was moved up to mid-single digits growth, while LATAM was adjusted down to low 70s growth due to various market factors [76] Question: How does the technology spending and demand environment look in Brazil? - Brazil is described as a dynamic market with significant technology spending, and the company is focused on repricing contracts and improving margins [90][91] Question: What is the confidence level regarding the macroeconomic environment in Puerto Rico? - Management acknowledges the uncertainty in the economy but believes the current supportive factors are beneficial for growth [92][94]