EVTC — EVERTEC, Inc.

EVERTEC (EVTC) Q4 2025 Earnings Call Summary

1. Key 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.

2. Strategic 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.

3. Forward 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.

4. Challenges 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.

5. Notable 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.