EVERTEC (EVTC) Q4 2025 Earnings Call Summary

1Key Financial Results and Metrics

Q4 2025 Revenue: $244.8 million, up 13% year-over-year.

Full Year 2025 Revenue: Approximately $932 million, a 10% increase from 2024 (11% on a constant currency basis).

Adjusted EBITDA: Q4 at $98.8 million (40.3% margin), full year at $373.4 million (40.1% margin), both up 10% year-over-year.

Adjusted Net Income: Q4 at $59.5 million (up 6% YoY), full year at $233.2 million (up 9% YoY).

Adjusted EPS: Q4 at $0.93 (up 7% YoY), full year at $3.62 (up 10% YoY).

Operating Cash Flow: Approximately $227 million for the year.

Share Repurchases: $66 million in Q4; total of $82 million returned to shareholders for the year.

2Strategic Updates and Business Highlights

Acquisitions: Closed Tecnobank in Q4 2025; announced acquisition of Dimensa to enhance product offerings in Brazil.

Market Expansion: Over 40% of revenues now generated outside Puerto Rico, with significant growth in Latin America, particularly Brazil.

AI Integration: Initiatives in AI for risk management, fraud monitoring, and credit decisioning are underway, with operational improvements already noted.

Performance by Segment:

Latin America Payments & Solutions: Revenue grew 22% YoY, driven by acquisitions and organic growth.

Merchant Acquiring: Revenue increased 3% YoY, supported by higher sales volumes.

Payment Services Puerto Rico: Grew 3% YoY, with strong ATH Móvil performance.

Business Solutions: Revenue declined 7% YoY due to a 10% discount to Popular.

3Forward Guidance and Outlook

2026 Revenue Guidance: Expected between $1.024 billion and $1.036 billion, reflecting growth of 9.9% to 11.2% YoY.

Adjusted EPS Guidance: Expected growth of 6.1% to 9.4% from $3.62 in 2025.

Segment Expectations:

Merchant Acquiring: Mid-single-digit growth anticipated.

Payments Puerto Rico: Mid-single-digit growth expected.

Latin America Payments & Solutions: Anticipated growth in the mid-20s.

Business Solutions: Expected decline in low to mid-single digits due to the discount impact.

4Challenges and Points of Concern

Business Solutions Segment: Revenue decline attributed to the 10% discount to Popular, which is now fully embedded in the run rate.

Margin Pressures: Adjusted EBITDA margins are expected to be impacted by the mix of business and the discount to Popular.

Debt Levels: Net debt at year-end was $806 million, with a leverage ratio of approximately 2.08x, which remains within the targeted range but reflects ongoing debt management challenges.

5Notable Q&A Insights

Pipeline in Latin America: Management indicated a healthy pipeline with significant client wins, including Banco de Chile and Grupo Aval, expected to contribute to growth in 2026.

Dimensa Acquisition: Seen as an attractive opportunity for cross-selling and entering new verticals, particularly in insurance.

M&A Strategy: Continued focus on strategic acquisitions to enhance growth, with a disciplined approach to integration and capital allocation.

ATH Móvil Performance: Strong growth noted, but specific metrics were not disclosed, highlighting its importance as a competitive advantage in Puerto Rico. Overall, EVERTEC reported solid financial performance in 2025, with strategic acquisitions and a focus on organic growth positioning the company for continued success in 2026, despite some challenges in specific segments and margin pressures.